The hidden factory is a well-known subject of discussion for everyone who deals with Six Sigma, TQM, or simply with the ISO 9001 certification. Whenever products or services do not satisfy requirements set by customers or by the organi-zation itself, a non-conformity is generated, with its relatedCosts Of Poor Quality (COPQ), classified as following:
1. Prevention and appraisal costs;
2. Internal and external defectiveness.
Therefore the hidden factory is the factory where people rework product/services and redo activities. To reduce the aforementioned costs, extra focus must be concentrated on prevention investments, to which the investment costs of managing Kaizen Workshops (discussed in the fifth chapter) must be added. Table2.4lists most of the items connected to the aforementioned categories.
The COPQ are divided in internal and external costs, depending on when they are identified (internally or by a customer), but the company also has appraisal costs, which, against common belief, are not really useful and usually hide other problems and decrease value added. The cost of the incoming inspection of materials from suppliers, for example, often compensates for the poor quality of the supplier’s work. Basically, the seven types of waste described by Lean can be found within the categories of internal defectiveness.
External Defectiveness Costs.
• Loss of customer revenue;
• Management of complaints and returned products;
• Reworking, reassembling, selecting and rechecking products from customers;
• Penalties for non-conformities;
• Legal actions;
• Management of products in warranty;
• Product recall.
The most frequent causes of defects can, once again, be grouped into the 4 M, in other words:
• Materials and products;
• Poor working methods, poor instructions and procedures;
• Unaware and unqualified manpower;
• Inadequate machines and equipment.
Thus, eliminating these defects can be done by:
• Increasing staff awareness and training on quality and critical characteristics;
• Designing mistake proofing orpoka-yoke;
• Designing machines for detecting defects (Jidoca or autonomation);
• Editing procedures and instructions;
• Preventive analysis of the possibility of defects (e.g. FMEA, FTA);
• Revising control plans.
Table 2.4 Prevention, appraisal and defectiveness costs Prevention costs (Investments)
Improvement programs (Kaizen Workshops for Lean, Six Sigma teams, TQM teams for improvement, etc.)
Quality management staff (not including quality inspection) Quality management software, ERP costs
Quality management and laboratory instrumentation amortization (Research and Development, prototypes, preventive tests, etc.)
External laboratories for preventive checks
Penalties for damage responsibility for defect products Process identification, process management documentation Training and creating awareness
External consultancies for Lean Six Sigma Defining targets and goals for improvement Quality planning
Data analysis and system reviewing Measuring customer satisfaction Measuring processes and self-assessment
QFD, FMEA and FTA processes, defining reliability goals, reviewing and checking design and development, DFM, DFA, etc.
Identification and traceability of products
Studying reproducibility and repeatability of measures Problem solving and managing preventive actions Appraisal costs
Testing and inspection staff
Measuring equipment and device calibration staff Measuring equipment and device amortization Inspection software
Conducting inspection visits of suppliers to maintain qualification Calibration and management of measuring equipment
Internal defectiveness (including Lean wastes) Staff who manage defects
Amortization of equipment and machines dedicated to rework Product rework
Scraps
Depreciation of products or services
(continued)
2.3 Classifying the Types of Waste 25
It is however useful to remember that the root cause has to be continually found to reduce defects and inefficiency. Inspections that take place only when non-conformities have been generated contain the problem but they usually do not actually solve it. Table2.5is an example of a waste evaluation checklist.
2.3.4.1 Transportation
Excessive inventories inevitably lead to increased transportation activity. In manufacturing, conveyances or transportations mainly concern the moving of products from one warehouse to another, or from a warehouse to an activity of the process. Usually transportations means moving between a warehouse or a stock accumulation point to another, or from a warehouse to an activity of the process.
Examples of Unnecessary Transportations in Services. In one of the biggest French hospitals transportation waste is, for example, the moving of patients from one department to another, crossing areas that have not been sanitized. By moving patients across unhygienic areas, the clinical risk of hospital-induced infections increases.
Within an Italian city council, citizens that have concluded one process must then walk half a kilometer to reach another office site.
In most European airports, baggage moves along a long conveyor belt to finally be loaded onto the main conveyor belt. This long conveyor belt often jams and thus slows down operations. To avoid this, baggage could simply be manually loaded onto the main conveyor belt.
The causes of transportation are usually:
• A poor layout design;
• Too large lots;
• Workers with poor or limited skills;
• Accepting that conveyance/handling is inevitably part of the process.
Usually redesigning the layout reduces transportations. The following Lean tools may help in this:
Table 2.4 (continued)
Selecting and rechecking products Management of corrective actions Breakdowns, small stops, reduced speed Setup and adjustments
Increase in stock and handling costs Excess of motions
Surpluses or shortages of staff, excessive turnover, absenteeism Conducting inspections/audit after the production of non-conformities Conducting inspections/audit after supplier non-conformities Accidents at work
Environmental accidents
• Analyzing the flow with VSM and spaghetti-chart;
• U-cells;
• Using multi-skilled workers.
The following checklist (Table2.6) is an example of assessment of the type of waste.
2.3.4.2 Overprocessing
Waste during production generally refers to activities within the process that could be unnecessary or not requested by the customers. This should not, however, be confused with overproduction linked to necessary activities that produce more than requested. For example, a worker operating a machine creates overproduction when he or she produces products that gather in WIP because the next worker is not ready to process them. However, the activity of the machine is not unnecessary. If the next worker blocks and checks half way through the process then this leads to overprocessing waste. By accurately designing the production or service process using clear procedures and instructions, this type of waste can be eliminated; it is important, however, that when the activity has been identified and standardized, all staff should be well informed of this. Often a team for improvement may modify production flow, design new instructions and procedures, but neglect to inform staff who continue to work as before. Among the reasons for overprocessing within the process the following are important:
• Inadequate process designing;
• Inadequate activity analysis;
Table 2.5 A typical checklist for defectiveness evaluation Defectiveness assessment checklist
Process: Auditor: Date
# Description of waste Yes No Waste evaluationa Cause
1 Complaints from customers 2 General defects during the process 3 Defects linked to human mistakes 4 Defects linked to supplied material 5 Defects linked to machines and equipment 6 Defects linked to methods
7 Instruction/procedure details 8 Control plan details
9 Operators’ awareness regarding quality 10 Poka-yoke and Jidoca
Total
a0¼ evident uncontrolled waste; 1 ¼ evident waste, no improvements; 2 ¼ reduced waste, improvements ongoing; 3¼ reduced waste, continuous workshops, positive performance indicators; 5¼ waste eliminated, process stabilized, positive indicators for at least 6 months
2.3 Classifying the Types of Waste 27
• Incomplete activity standardization;
• Inadequate tools, machines and automations;
• Working with inadequate material.
Thus, removing waste can be done as follows:
• Redesigning the process;
• Reviewing the activity;
• Automating tasks;
• Revising and issuing instructions and procedures;
• Applying methods such as value analysis (VA) and value engineering (VE).
Table2.7is an example of a waste evaluation checklist.
Table 2.6 A typical checklist for evaluating waste in conveyance/handling Transportation assessment checklist
Process: Auditor: Date
# Description of waste Yes No Waste evaluationa Cause
1 Inventory accumulating during transport 2 Changing method of transport during the path 3 Distance between one activity and another 4 Transport needs manual assistance 5 WIP among activities/processes
6 The previous and/or next activity is in a different area Total
a0¼ evident uncontrolled waste; 1 ¼ evident waste, no improvements; 2 ¼ reduced waste, improvements ongoing; 3¼ reduced waste, continuous workshops, positive performance indicators; 5¼ waste eliminated, process stabilized, positive indicators for at least 6 months
Table 2.7 A typical checklist for evaluation of overprocessing during processes Overprocessing within the process assessment checklist
Process: Auditor: Date
# Description of waste Yes No Waste evaluationa Cause
1 Is there an identified flowchart?
2 Unnecessary activities being performed 3 Activities that can be automated
4 Activities that can be removed without damaging the quality of the product
5 Activities that can be removed without affecting lead-time
6 Are flow, instructions and specifications well known?
Total
a0¼ evident uncontrolled waste; 1 ¼ evident waste, no improvements; 2 ¼ reduced waste, improvements ongoing; 3¼ reduced waste, continuous workshops, positive performance indicators; 5¼ waste eliminated, process stabilized, positive indicators for at least 6 months
2.3.4.3 Waiting
Waiting time concerns not only the workers’ activities, but also a machine’s operations. Within the manufacturing industry, as in public administration, it is quite common to see workers stationary at the machines, waiting for them to finish an operation, as it is for the start of a meeting to be delayed because a document has yet to arrive, or doctors having to wait for a report from another department. The worst-case scenario is downtime linked to having to look for tools or documents that are not ready. Waiting is probably the type of waste most accepted. Except in the case of massive machine downtime, usually connected to the system breaking down, it is usually considered inevitable. A worker waiting in front of a machine is often believed to be the supervisor of that machine, and in many cases it stays forgotten that the worker could, in the meantime, perform another activity. The main causes of waiting are:
• Lack of balance between activities;
• Poor preventive maintenance;
• Production in big lots;
• Lack of order and cleanliness;
• Lack of procedures and instructions.
Removing these causes can be done as following:
• Leveling production;
• Improving layout;
• Preventive and predictive maintenance;
• Order and cleanliness (5S);
• Quick changeover;
• Mistake-proofing systems (poka yoke).
The following checklist (Table2.8) is an example of waste type assessment.
Table 2.8 A typical checklist for waiting evaluation Waiting assessment checklist
Process: Auditor: Date
# Description of waste Yes No Waste evaluationa Cause
1 Average waiting time before starting an activity 2 Average waiting time during machine work 3 Equipment availability
4 Balancing activities with those previous 5 Activity standardization
6 Preventive maintenance 7 Adequacy of amount of workers Total
a0¼ evident uncontrolled waste; 1 ¼ evident waste, no improvements; 2 ¼ reduced waste, improvements ongoing; 3¼ reduced waste, continuous workshops, positive performance indicators; 5¼ waste eliminated, process stabilized, positive indicators for at least 6 months
2.3 Classifying the Types of Waste 29