o To help enable process improvement for better performance--do it better, cheaper, faster.
o A collection of activities that takes one or more kinds of input and creates an output that is of value to the customer." - Hammer and Champy, in Reengineering the Corporation
Typical potential process improvement areas are:
Non-productive asset. Assets kept working are more productive, but only if the output is actually needed and soon. The classic asset misuse is "keeping machines or people busy" even though the results aren't needed. This wastes investment by inflating inventory, tying up material, space, capital, manpower and equipment resources. It is often aggravated by misapplication of metrics. For example a production manager who is measured by raw unit production "efficiency" measures is likely to commit this "sin." If assets cannot be kept productive under this rule, then divestiture, replacement or outsourcing should be considered, as feasible. New metrics may also be needed.
The total elapsed time to produce one unit. This includes all delays including elapsed set-up, queue, move, inspection, rework and also the actual processing time. Typical processes have 60-95% idle time, while product is not actually being worked on. Therefore the greatest cycle time reduction opportunities are normally, but not always, in delay time. Lost time may be recovered by balancing operations, reducing: storage time, handling, waiting for approvals, queues, handoffs, inspection, etc. Shorter cycle times usually improve competitiveness by cutting costs and response time.
The ability of the process to meet the desired quality and speed at an acceptable cost.
Important performance indicator to be measured. Examples: Inventory turns, cycle time. Metrics should be meaningful to the level of the people held accountable. For instance, "average plant level cycle time" is not meaningful to a team responsible for assembling a certain model computer disc drive. They need their own metric.
Production unit designed to make one product/service line or process. Ideally, all resources needed to complete a product or process are contained in the cell. Cells may be arranged as component/assembly feeders to final assembly test cells. Functionally-oriented cells have resulted in improvements, but product or process cells have generally shown superior results.
Any portion of an activity performed, resource assigned or utilized that is not absolutely essential to meeting the mission/objectives of a legitimate process.
Manufacturing process with as much waste as possible eliminated. A Lean Manufacturing manifesto and body of knowledge has been created and is available through the Agility Forum. This is having a profound influence on current thinking.
INPUTS TO THE PROCESS
External to the Process
Don't jump right into the detailed guts of the process. Start at the top, with the product or service to be provided. Make sure it is defined to meet customers' expectations--technical specifications, service requirements, quality and pricing. First make sure you're working on the right process, with the right objectives! The biggest, easiest improvements often occur right here, before even getting into the actual process in question.
"Frame the process"--Look at things external to the process first. Before you do anything, make sure you know what you need the process to do. There should be a clear, simple, strong overall mission statement. Examples: "Eyeglasses in one hour," (Lenscrafters) or... "When it [your package] absolutely, positively has to be there overnight." (FedEx). Don't waste time improving the wrong process with the wrong mission or approach. As you break the process down into lower levels of detail, each piece may not satisfy the overall mission statement, but it should be clear what role it plays in doing that. Accomplish this by formulating simple objectives for each piece.
The mission statement potentially has enormous power to improve the process. For example, a while back, we were brainstorming the warehouse "process" with a client. The "owner'" of the process stated that her "mission" was to receive material, move it to inspection, store it, issue it to production on work order kits when requested, replace shortages and rejections, move finished goods to inspection and stores and "generate paperwork" (how's that for a mission?). After much discussion, the new mission agreed upon was to ensure that material was safeguarded, provided to production as needed and then accounted for. This triggered a flood of changes, questioning the very existence of warehouses, inspection, work orders, kits, etc. The company ended up starting to certify key suppliers, using supplier-managed inventories, eliminating most work orders, using kanbans, pull systems, point of use storage and much smaller warehouses, inspection and overhead.
o Decide on scope of change, process boundaries. Are you reengineering the whole company, one process, several products, a department? Are you looking for a complete redesign or major improvements in the current approach or just incremental enhancements?
o Formulate objectives and metrics--Preferably quantifiable and measurable. More important ones will be assigned quantifiable metrics, such as cycle time minutes, or defects for significant attributes. Don't set them and measure them unless they are important, because it takes valuable resources and time just to do that. Most metrics will fall into speed, cost and time categories. Others may relate to flexibility, innovation and compliance/safety. Still others may meet quality of life and even aesthetic objectives. Metrics themselves are non-value-added activities, to be used only when needed.
o Analyze process inputs and outputs--Study inputs and outputs to see if they are appropriate and what improvements could be made. Also decide if the cycle time is acceptable for competitive purposes, regardless of how easy or difficult it would be to improve it.
o Estimate Improvements--For principal metrics. Do this at the start and again after the internal process has been analyzed. For each one of the performance improvements, write up how you will accomplish it. When work actually starts on improvement planning, other ways will be probably also be found.
Now you're ready to look at the internal process steps. . .
Internal to the Process
Analyze the overall process flow, preferably using pictorial charts and problem identification techniques. Repeatedly walk through the process physically with employees, customers, suppliers, consultants, objective bystanders and learn all you can about what is right and wrong. This seems to work better when one performs the external steps first. Look for continuity, search for gaps or redundancy, delays and defect generation. It helps to do a map of the area, superimposing activity, paper and material movement.
Finally, it is also helpful to prepare a summary of activities chart, showing: responsible person, cycle time consumed, delays, inspection, movement, wasted time, defect generation, process Takt time, value-added component, non-value-added, probable reduction and whether step is needed under current conditions, wait time, defects produced, resources consumed, applicable policies, procedures and instructions. The number and complexity of worksheets used is a function of the complexity of the process and the mindsets of thosadaptable people you can afford. You can't afford weak people.
o Employ cheaper materials, or maybe even better, more expensive materials that reduce defects, improve quality, reduce overall costs.
o Reduce costs (most of the above reduce costs).
o Use OPM (Other People's Money)- "leverage" their inventory, capital equipment, technology, organization, knowledge.
- Set up supplier partnerships/contracts.
o Outsource where practical, in-source where you are clearly better.
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