INDICADORES DE DESEMPEÑO CONVIVENCIA Y PAZ

Departmental responsibilities

Estimated Annual Improvement to the Metrics

You should set annual improvement goals for each of the metrics, indicating the estimated improvement for productivity, quality, inventory and WIP, floor space use, and throughput time. By what percentage does the company want to increase productivity and reduce floor space? What goals would be considered reasonable and obtainable? Managers should all agree that goals should be attainable but challenging, thereby ensuring that substantial improvement is made and justifying the effort.

Productivity

Productivity improves when products are built with minimal effort—for example, less labor, fewer tools, fewer workstations, less documentation, and less material. First, sample data should be collected from the targeted assembly line or process to reveal the current state of operation. Lean manufacturing is all about data—collecting, analyzing, and improving upon it. Improvement decisions are based on the current state, and therefore it's crucial to gather information on the current state of business processes.

There are several ways to collect this data, including time and motion studies, waste analysis, process mapping, and value stream mapping. This data will reveal waste removal opportunities in overproduction, overprocessing, wait time, inventory, defects, transportation, and motion—the so- called seven deadly wastes. Once you've identified a type of waste, you can determine the reason for

it as well as the amount of time spent creating it.

After you make these critical measurements, you make logical decisions on methods for removal. Accurate metrics allow you to determine better staffing and workstation requirements for a specific process.

Of course, you may make mistakes when performing waste-reduction metrics, but it is reasonable to assume that overall plant productivity can be improved by 20 to 30 percent over the course of a year. If you practice the suggestions outlined in this book, this rate of improvement is doable.

Quality

After lean processes are implemented, it is easy to see remarkable improvements in quality. Simply implementing 5S and adopting good organizational practices can result in a major decrease in problems related to quality, and that equates to lowered costs. Quality is not inspected into a product; relying on an end-of-line or end-of-process inspection or test does not ensure that quality is built into the product. The responsibility for quality lies with those who fabricate and assemble the parts. Line operators are the manufacturing floor's first line of defense in the fight for outstanding quality. Quality should be designed into the manufacturing process, requiring line operators to check for critical quality attributes throughout the build process. This concept is called quality at the source.

A small series of incoming and outgoing checks should become standard for each worker. It is important not to overload line workers with excessive quality checks, but having them check certain aspects of the product throughout the process is critical. Of course, other variables, such as material from suppliers, office errors, training, and machine capabilities, affect the quality of a product. However, the concept of quality at the source can be applied companywide and not only on the production floor.

As the line operators (or any other employees) prepare to perform work, they should always begin by checking the work of the preceding operation. When that is complete, they should perform their own work and then check their work. As these checks are conducted throughout the process, the likelihood of a defect occurring is significantly reduced. Implementation of quality at the source can result in an 80 percent improvement in quality, depending on the metric.

Be aggressive in your goals for quality. A 70 to 90 percent improvement in quality on the shop floor within one year is a good benchmark, depending, of course, on the number of lines and other manufacturing processes in operation.

A machine shop in North Carolina realized a dramatic improvement in overall plant quality. In this case, quality was measured by scrap cost. The organization analyzed its top ten scrap items and then implemented a process in which machine operators and assemblers performed a check on those items, depending on their work content. That one simple improvement decreased scrap costs by 90 percent. That's impressive!

Inventory and Work in Process

Reducing inventory takes time and involves numerous people and departments. It also depends on established relationships with suppliers and other outside vendors, including sister plants. However, you can take several actions that will make a positive impact on inventory kept on the floor.

Reducing workstations and overall line length will help reduce the amount of inventory stored within your manufacturing processes. Fewer workstations equates to fewer parts and WIP. The closer you can get to single piece flow, the better. However, many types of manufacturing industries cannot use single piece flow. The alternative for these businesses is controlled batches, in which a certain amount of WIP is allocated in the space between each process or workstation.

Using single piece flow or controlled batches allows you to better estimate the number of parts required for a work area. Avoid storing huge pallets or totes for parts in the work area, because that uses valuable space. For example, if a line must produce 40 units per day and it requires one wire harness, don't store 500 wire harnesses in the work space. Leave that quantity in the stockroom or common storage areas.

You can create annual goals for WIP reduction based on how many lines will be physically shortened. I have witnessed WIP reduced by 70 percent following the successful implementation of single piece flow. Any improvement goal should be based on how many processes will be transformed into leaner, smoother operations. With a full lean implementation, it is possible to realize a 30 to 40 percent reduction in WIP and inventory in a single year.

Floor Space

Manufacturing companies often use more floor space than they really need. Setting a goal for reduction can be a little more aggressive because improvements in floor space are generally greater than improvements in productivity. Keep in mind that all of the metrics discussed in this chapter are intertwined; each affects others. After you perform a comprehensive waste analysis and take steps to reduce waste, floor space will be considerably reduced due to removal of unnecessary workbenches, tools, chairs, conveyors, and so on, and therefore productivity will be significantly improved.

Floor space can also be reduced through the implementation of 5S (sort, straighten, scrub, standardize, and sustain). Sort is defined as removing all unnecessary items from the work area, and it is the first step in implementing 5S. Unnecessary items take up valuable floor space that can be used for value-added production space. The goal you create for floor space reduction is contingent on how successful you are in removing all the unneeded items in the production area and also on how well the space is organized and maintained. Data collection and 5S will become two vital components in the early stages of your lean journey. A 30 to 40 percent reduction in floor space use is attainable.

Throughput Time

Long assembly lines breed waste and provide space for items to accumulate. Throughput time is significantly reduced when lines are shorter. Granted, all the necessary people, parts, and tools need to be in place, but the longer the line, the greater the throughput time. Reduction of floor space and reduction of throughput time go hand in hand. There is a systematic approach to waste analysis: get the status of the current state of the work content, and perform time studies. This data is a necessary starting point for making improvements that can eventually shrink the physical length of all manufacturing processes.

It is also important to identify how parts and material are presented to the workstations and the overall line. Storing too many unnecessary parts in an area increases the length of the line. Adding a

materials handler to the process increases labor cost, but it reduces line costs overall and positively affects both quality and delivery. The cost of this indirect labor is far less than storing more inventory on the floor, something that results in extended delivery dates. As with floor space, you can set a goal of reducing throughput time 30 to 40 percent for the first year.