One of the frustrating things about the \u201clean revolution\u201d that has occurred in manufacturing and other sectors over the last 20 years or so has been the misappropriation of the term \u201clean\u201d.<\/p>\n
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I have heard countless business leaders refer to their operation as being \u201clean\u201d or \u201cleaned up\u201d, when in many cases all that has been done is a progressive or sometimes catastrophic cutting of overhead to reduce costs. This is exemplified by the traditional focus on maintaining \u00a0\u201cdirect\u201d workers \u2013 those that are directly employed doing \u201cproductive activity\u201d and the hacking into \u201cindirects\u201d who support and sometimes supervise these employees.<\/p>\n
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This is often done with no analysis of how processes work within the company. So it\u2019s often the case that the \u201cindirect\u201d is dispensed with but the jobs they do are not.\u00a0 Not surprisingly it falls upon the \u201cdirects\u201d to now do these tasks and lo and behold productivity of these employees drops and quality suffers. Additionally, \u00a0more often than not, delivery deadlines are missed and customer relations suffer.<\/p>\n
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Of course it\u2019s much easier to optimize processes and improve efficiency in growth times when a business is trying to do more with the same resource. It\u2019s much more difficult, and emotionally draining, to do it when a business is trying to deliver the same with less resource.<\/p>\n
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One of the key rules drilled in to me during my initial journey into \u201clean\u201d was \u201cif your customer knew you were doing this- would they be prepared to pay you to do it?\u201d<\/p>\n
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It\u2019s a good example because it focuses on what \u201clean\u201d is really about. It\u2019s about focusing on the productive and therefore valuable things your customer is prepared to pay for and removing the wasteful things that they would not be.<\/p>\n
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For those not familiar with the concept, the world leaders in lean- Toyota (in fact it\u2019s often called the Toyota model) characterise waste or \u201cmuda\u201d in seven ways.<\/p>\n
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Transportation<\/strong><\/p>\n Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. as well as being a cost for no added value. Transportation does not make any transformation to the product that the consumer is willing to pay for<\/em>.<\/p>\n An example of this was a company I once saw shipping items 80 miles away to a sister plant for a couple of tasks and then shipping them all the way back again. Moving the process to the main factory eliminated this. However it\u2019s surprising how far things can move in one factory or office.<\/p>\n Inventory<\/strong><\/p>\n Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Any of these three items not being actively processed to add value is waste.<\/em><\/p>\n Of course this stuff also takes up productive waste. One often sees stores full of stuff waiting to go out on the shop floor.\u00a0 Think of all of those brochures sitting in the office or storeroom because it was \u201ccheaper\u201d to buy 2000. Multiply that several times and see how much stuff a business has paid for and<\/span> how much productive space it\u2019s occupying. Modern supermarkets are a great example of how to get this right. Goods inwards and store space is kept to a minimum. Products are delivered on a \u201cjust \u2013in-time\u201d basis. When things arrive they go straight out into the shop to be sold.<\/p>\n Motion<\/strong><\/p>\n In contrast to transportation, which refers to damage to products and transaction costs associated with moving them, motion refers to the damage that the production process inflicts on the entity that creates the product, either over time or during discrete events.<\/em><\/p>\n This could be wear and tear on equipment, RSI for workers or accidents and specific injuries on site<\/p>\n Waiting<\/strong><\/p>\n Whenever goods are not in transport or being processed, they are waiting. In traditional processes, a large part of an individual product’s life is spent waiting to be worked on.<\/em><\/p>\n This doesn\u2019t only include physical components or goods, it could include emails in the inbox \u2013 or worse a \u201cfolder\u201d or paper piling up in the in tray!<\/p>\n Over-processing<\/strong><\/p>\n Over-processing occurs any time more work is done on a piece than what is required by the customer. This also includes using tools that are more precise, complex, or expensive than absolutely required.<\/em><\/p>\n Doing more than the customer expected and sometimes more than they actually wanted and using a sledgehammer to crack a nut!<\/p>\n Over-production<\/strong><\/p>\n Overproduction occurs when more product is produced than is required at that time by your customers. One common practice that leads to this muda is the production of large batches, as often consumer needs change over the long times large batches require. Overproduction is considered the worst muda because it hides and\/or generates all the others. Overproduction leads to excess inventory, which then requires the expenditure of resources on storage space and preservation, activities that do not benefit the customer.<\/em><\/p>\n A good example of this is the clothing retailers who work hard to guess what lines will sell well and sometimes get it catastrophically wrong (I\u2019m sure that lime green double breasted cardigan would sell- now we have 10000 of them!). They are under massive pressure from on-line retailers constantly monitoring demand and placing small orders for small batches to suppliers and delivering what the customer wants quickly and<\/span> has the advantage of constantly updating their range of clothing on offer. Instead of \u201cjust in time\u201d , overproduction is \u201cjust in case\u201d!<\/p>\n Defects<\/strong><\/p>\n Whenever defects occur, extra costs are incurred reworking the part, rescheduling production, etc.<\/em><\/p>\n <\/p>\n Pretty self explanatory- why would a customer pay for you to fix the part they ordered or rework the document, correct the spelling mistakes etc? A hidden aspect is the effect on morale when employees are constantly having to fix things that should have been made correctly. One can think of the old days of British Leyland where cars went into a holding bay after they came off of the line for rework and fixing- totally non-value adding.<\/p>\n <\/p>\n <\/p>\n There is an \u201ceighth waste\u201d often referred to which is the waste of human talent. In fact it\u2019s the waste that often hinders the resolution of the other seven wastes. Management that are prepared to \u201clet go\u201d and allow their employees to put their energies into innovating and creatively solving problems often reap the rewards.<\/p>\n <\/p>\n The key is to address wasteful processes and procedures and change the way the business does things. Often those employed in the business have recognized this for years but have not been given the chance to change things.<\/p>\n <\/p>\n It\u2019s been proven that the techniques used to eliminate these wastes not only improve the bottom line performance of businesses, regardless of their sector. It also improves delivery performance and makes the company more marketable.<\/p>\n <\/p>\n Having recently joined Fedden USP as Board Advisor\u00a0 http:\/\/www.fedden-usp.co.uk<\/a> I will be regularly blogging on how businesses can improve and detailing experiences of how this has happened in the work place.<\/p>\n","protected":false},"excerpt":{"rendered":" One of the frustrating things about the \u201clean revolution\u201d that has occurred in manufacturing and other sectors over the last 20 years or so has been the misappropriation of the term \u201clean\u201d. I have heard countless business leaders refer … Continue reading