Focusing Lean Efforts in a Down Economy
Written by: Yaron Lew and Ronald Landau
As the economy is grinding to a halt, many companies tend to question the need for continued Lean efforts. The most obvious question is why companies should continue to push continuous improvement efforts if demand is falling and it can now be satisfied even with less efficient operations? The answer, of course, is that productivity gains will enable companies to meet market demand while operating resources less, thus reducing cost, increasing asset utilization when staffed and improving profitability. But what is the best way to focus improvement efforts and ensure that they lead to overall business improvement?
Take for example Kaizen which is one of the most popular tools in the Lean improvement toolbox. Kaizen has been used repeatedly to drive Lean improvements in companies around the globe. However, one of the problems with Kaizen is that there is no good Lean method for selecting where to conduct it and ensure that its local improvements will translate into global improvements. Sure, if we go down every Line, Cell or process step and Kaizen every one of them, we may eventually obtain total process improvement, but this is not guaranteed and it will take tremendous amount of time and effort that companies don’t have right now.
This article will briefly explain how a holistic process management methodology such as Flow Management Technology can work together with Lean to quickly improve a company’s overall process and guide where to conduct focused improvement events so their contribution will impact the overall business performance.
What is a Kaizen?
Kaizen usually refers to an event conducted over a period of three to five days packed with intense improvement activities directed at a specific area of a business. It may be called a Blitz, 5 Days and One Night, Gemba Kaizen, System Kaizen, Spot Kaizen or Breakthrough Kaizen.
Whatever the name, it embodies the elimination of waste (muda) in its many forms. The ones applicable to an event include
1. Waste of time
2. Waste in moving materials
3. Waste from process complexity
4. Waste from doing something several times to get it correct
5. Waste from excess motion
6. Waste from scrap and rework
7. Under utilization of people
The techniques used in an event may include 5S, redesign of
Physical Layout (Cell Design or combining operations), Visual Controls, Visual
Management, Changeover/Setup improvement (SMED), Mistake Proofing (Poka-Yoke),
Six Sigma, TPM, etc. Regardless of which ones are employed, a multi-disciplined
team is charged with coming up with how the improvement will be made and then
accomplishing it. There is a focus on
simplicity, avoiding capital expenditures,
improving worker productivity and gaining savings in time, space and labor output.
Flow Management Technology is a methodology for improving businesses and organizations. Flow Management Technology views organizations as flow systems and product flow as fluid flow through pipes. In a manufacturing organization it views development, marketing, sales, order receipt, manufacturing and all the way through to shipment as a series of interconnected processes. These interconnected processes form a piping system that needs to flow the product from beginning to end in the fastest and smoothest way.
One of the key elements of Flow Management Technology is the examination, analysis and understanding of process disruptions. Every individual processes, as well as the total system, is subject to chaotic behavior due to disruptions and the presence of Murphy as in Murphy’s Law. Disruptions are caused by the absence of any of the dependencies needed by a resource to convert its input into output. By their nature, disruptions are random and dynamic, or in other words - chaotic. The first step towards overcoming the adverse, cumulative effect of this chaotic phenomenon is an analysis of the process, its interfaces and the resources’ capacities.
From the analysis of the flow process, the resources capacity and disruptions, a Flow Model is designed to provide the tools, the measurements and the focus for managing the overall flow. In developing the Flow Model, disruptions are accounted for in two fashions. For every day, frequent disruptions, Protective Capacity is reserved. Think of Protective Capacity as a provision for catching up after a disruption occurs. The amount reserved is a function of how much time disruptions consume from each resource on a shift or daily basis. Since every resource is subject to shift/daily disruptions, every resource needs to have Protective Capacity. In most cases, Protective Capacity can be obtained by conducting improvement activities to reduce resource’s disruptions. The implementation of designed Protective Capacity will lead to rapid process flow without any excess inventory.
The other types of disruptions are ones that happen less frequently, but when they occur, they last a long time. Because the cost of reserving capacity for these infrequent disruptions can be prohibitive, they are accounted for by adding time buffers at strategic points in the flow. These time buffers need to be sufficient so that when there are severe “Murphy” on time performance is still achieved.
Another key element in the Flow Model design is determining which few processes will be Flow Valves. The Valves are strategic scheduling points to synchronize the flow to meet on time demand and to gear up the system efficiency. Typically, their location is designated taking into account and understanding the parameters that influence the system’s flow such as assembly, disassembly or outside processing.
All of the elements of the Flow Model allow the system to perform reliably in terms of on time delivery, to have no excess in process inventory, to have increased throughput capability and the shortest lead-time. Overall process measurements act as high frequency feedback loops to monitor performance and point out, in real time, where disruptions are starting to hurt system performance and where improvement efforts should be directed.
Flow Management Technology and Kaizen work together to improve an organization’s well being and profitability in the same fashion as a symphony orchestra continually works to improve audience appreciation. In a symphony orchestra we find a conductor, a string section, woodwinds, horns and percussion. Each section is made up of smaller building blocks (i.e. the string section can have violins, violas, cellos and bass; the horns have trumpets, French horns, trombones, baritones and tuba(s), etc.). We can look at each individual musical instrument (a violin for example), as a machine; all the violins as a bank of same machines; the string section as a department and the orchestra as a plant.
The conductor conducts rehearsals to practice and identify where changes are needed. From the rehearsals, he determines the priority and sequence of what he wants to change and an appreciation of the benefit of each change to the overall sound of the music. The conductor doesn’t show the musician how to make the change. He explains what the desired result is. The musician(s) and the musician’s teacher work on how to get the desired effect. At each concert, the conductor is the one who brings it all together to produce the desired sound.
The conductor has the knowledge and experience to understand what makes a great program, what the make up of the orchestra should be for each piece in the program and how to get the orchestra to produce the sound he wants. Even though each musician has sheet music and there have been rehearsals, the conductor is on the podium for every piece of music, directing, sensing the audience and bringing the music to life.
Flow Management Technology is the overall process conductor, getting the best out of the system as the conductor gets the best out of the orchestra. Flow Management Technology determines the best way to flow product to the customer, on time, with the shortest lead-time, least cost and with the maximum utilization of people and equipment. After analyzing the process, resources and disruptions, a Flow Model is designed that includes the design of the flow, statements of capacities, statements of Protective Capacity, location and size of time buffers, location of scheduling control points, scheduling methodology and lead-time design. By looking at the operation as a flow system and constantly measuring performance, Flow Management Technology acts as a conductor and provides focus and priority for when and where to conduct improvement activities. Just like the conductor works to get the most out of the musicians, Flow Management looks to get the most out of the system.
When the conductor wants more from either a musician or an area, improvement activities are requested or scheduled. This is the equivalent of a Kaizen event triggered by Flow Management. This event might include one or more of the following: Cell Design, Setup reduction, 5S, process change, maintenance or any other Muda (waste) reduction activity. What is important is not the technique or group of techniques used in a Kaizen event, but whether or not it eliminated the causes of Muda. If it did, it was a successful event, part of the overall Kaizen initiative of continuous improvement. The elimination of a cause of disruption will reduce the provisions for Protective Capacity and/or reduce some of the time in the time buffers which in turn will increase capacity, lower cost and reduce lead time.
Implementing Flow Management Technology will enable companies to effectively manage the overall flow and focus the direction and priorities of continuous improvement efforts. Flow Management Technology will provide the direction and Kaizen events will attack and eliminate the causes of disruptions. This is what makes the combination of Flow Management Technology and Kaizen a very powerful and quick way to increase profitability and drive long term success even in a down economy. The symphony orchestra may sound good, but with the right improvement pointers and follow-up activities it can sound even better.