We’ve been involved in many improvement projects which generally can be categorised into the following objectives:
- Increasing throughput
- Reducing cycle times
- Increasing productivity (doing more with less)
- Increasing availability (outside of this article)
- Reducing costs
There are of course many more types of projects we’ve been involved in however the majority of projects have fallen into the above categories.
The above categories hold one thing in common, that is ‘FLOW’. What do I mean by flow? It is the smooth movement of information, parts etc along a process without disruption to its progress. We’ve prepared a You-Tube screen cast to help you understand the concept of flow and the impact bottlenecks have on flow click here for our you tube video.
Lets look at each one of the project objectives and determine how Flow helps to achieve the objectives:
Increasing throughput:
Throughput is defined as the rate at which we produce ‘goal units’. A goal unit can be anything that is the process output. The output could be a processed sales order, a purchase order, product, noting that it can be both transactional and operational in nature. By reducing the obstructions in our process we will speed up the flow of our process which in turn leads to more units. We are assuming we can sell these goal units -let’s assume we can. By reducing the obstructions in our process thereby increasing flow we must be increasing throughput.
Reduced Cycle Time:
If we increase the rate at which our process flows through the process from start to finish the cycle time must be reduced
Increased Productivity:
Productivity is defined as rate of output per unit of input or ‘producing more with less’. If we increase flow in the process, we can produce more and therefore by definition productivity will also have increased.
Reduced Costs:
By increasing flow, we have two options. Make use of the increased flow and produce more units in a given time or Produce the same volumes in a shorter time. Depending on the process, this will allow manpower to be moved elsewhere in the business or to focus on improving the process further.
Flow:
If creating flow generates such great results, that is , increased throughput, reduced costs and increased productivity, the following flow principles should be applied:
- Improving Flow is the primary objective
- The primary objective needs to be translated into a mechanism that guides the operation when not to produce
- Abolish local efficiencies
- A focus mechanism to balance flow needs to be in place.
We have already talked about principle one.
Principle Two
Principle two and three go hand in hand. With principle two we know from previous blog posts that the bottleneck governs the rate of output of the process, and that producing any more than that rate upstream of the bottleneck will end up with increased Work in Progress. That increased Work in Progress will appear in front of the bottleneck. Downstream processes will only be able to work at the pace of the bottleneck. This results in a need for a mechanism to stop production when production is not needed.
Principle Three:
A production or transactional process is never perfectly balanced (assuming the process steps are not connected in some way). In most processes it is difficult to increase capacity.
In any process some process steps have shorter cycle times than others and if every process operated to maximise local efficiency then the result is a large build up of Work in Process which hinders flow and increases costs. The abolition of local efficiency mindset also abolishes the idea ‘that an idle resource is a major waste’. To maximise flow some resources will be idle some of the time. Many businesses have trouble with this principle as people are told that in order to maximise performance we need to maximise efficiency.
We can recall a manufacturing company which produced electrical distribution switchgear. The switchgear was produced on a typical high inventory manufacturing line. We broke up the manufacturing line, went each operator having to build one distribution switchgear unit per day. This resulted in a reduction in factory space from 3 factories to one factory, Inventory reduced from one large factory to 100 square metres store, and an improvement to an time delivery percentage approaching 100%, and an increase in productivity of 25% for three years in a row -the best performance in the multi-national corporation. However it was the sense of calm that pervaded the shop floor that was most noticeable. There was less chaos and while we still had problems, management had to get used to operators being ‘idle’ .
Principle Four:
A focusing mechanism to balance flow is required rather than balancing capacities. Capacities are never perfectly matched and it is very difficult to even out the capacity. We feel it is more productive to focus on the flow. What do we mean by focus on the flow? Look for interruptions to the flow -all the annoying things that stop or hinder the smooth operation of the flow. By focusing on flow it is easier to deal with the interruptions to that flow.
In the manufacturing environment you can see the flow disruptions, then you are able to perform a quick cause and effect analysis to overcome the flow interruption.
But you’re not in manufacturing and theres nothing to see? This is more difficult but by mapping the process and asking the operators for all the interruptions to the flow you will find the areas you need to work on. You also may have data that will help you to understand what interruptions need to be eliminated however remember to focus on the bottleneck first.
A mechanism is required to identify where to focus. Once the focus area is identified we need to focus on balancing the flow.
Remembering, to improve any process, you need to focus on the flow of that process. Focusing on flow will greatly enhance your ability to get results. Most processes are complicated and it’s the ability to find the critical areas to focus on, amongst all of the noise of the process that will yield great results.
If you would like to learn more we have an upcoming course ‘Jumpstart your productivity system’ or you can contact us for further help (click here). Don’t forget to go to our you tube channel (link) and subscribe to watch our latest videos.