Managing Throughput and Reducing Lead Times: Start by Stopping
November 13, 2013
If thinking about reducing your lead times by managing throughput more efficiently seems daunting, remember that a journey of a thousand miles begins with a single step. In this case, the first step is asking yourself a basic question: “How many pieces of what we’re manufacturing should we make today?” It sounds easy enough. But actually, the answer can stump many manufacturers.
The human tendency is to think, “How many CAN we make today? That’s what we should make.” But what you can be doing and what you should be doing are not necessarily the same – especially when you’re looking to cut waste out of processes so throughput levels climb.
You have to really concentrate on what your customer is demanding of you today. Even better, what is demanded in each hour of today? If you can align your processes to meet that demand, smoothly, hour by hour, your throughput will improve. The results will be:
- more/freed-up capacity, which you can put to work as you bring in more new business
- improved customer satisfaction levels as your on-time deliveries improve
- faster order-to-cash cycles as processes and deliveries accelerate
Take a Break for Perspective
We all have a human tendency to get sucked in and start working on what’s right in front of us begging for attention. But with a Lean Manufacturing mindset, you need to stay proactive and ask yourself consistently, “What else could I be doing with my time to increase productivity?” This question should be part of our standard daily work activity, even if it’s something you do for just 15 minutes every day. Step back, observe what’s really going on, and see what opportunities you can take leverage. This kind of thinking can really improve your lead time.
Day by the Hour Board
Visualize your Demand
Do you have a system in place to manage existing demand and help improve it? CONNSTEP uses the Lean tool of Visual Management to help companies effectively manage demand. This tool can help anyone, from the CEO to a machine operator, to visually manage processes. When you can visualize whether your production is on track or not, then you can make small adjustments as required. Knowing how many jobs are in any department at any given time, and when they will be completed is essential. Then, if production slows, you’re instantly on top of things. You never want to wait until the end of the day, or worse, to find out you’re behind.
The more visual we can make the process, the more manageable it becomes. Having a file on your computer to print out and check against is simply not good enough. You want to know if you’re hitting your targets or not, at a glance, and why. We recommend creating a Day By the Hour Board at each individual machine, or one that takes care of a whole department. With one line for every hour, it can be posted where operators and lead people can easily see what’s going on each hour.
What if you’re a “job shop” that does something different every day? Well, you still need to know how you’re doing with throughput. Think of it this way: what if there were no scoreboard during a soccer match? Wouldn’t the players be confused if they never knew how much time was left in the game?
Whether done electronically at the end of a line or manually with a whiteboard, the Day by the Hour Board keeps you on top of your process. If a certain machine breaks down every day and it’s on the visual board, you can clearly see there’s a problem. Or if materials are found to be defective every other day, then you know you have a problem to solve – perhaps you need a Total Productive Maintenance plan. Seeing this problem solving opportunity keeps you in a proactive and more productive stance.
You have tons of orders coming in – but you don’t know what is due today – then you really can’t get a good sense of your true capacity. When you know your demand and your capacity, you can make an informed decision on what work to release for production. While it’s normal to try to batch production runs, maybe you need to consider breaking some batches apart to spread the work more evenly – meeting the same demand, but with a steadier work flow. Having a system in place to manage and release workflow to manufacturing that satisfies the required time horizon for the amount of work required makes processes much more manageable. Knowing your demand and capacity precisely will give you the discipline to release optimum amounts of work and avoid flooding the operation with big releases all at once.
Bottom-Line Costs vs. Top Line Results
If you focus only on reducing costs, you may not necessarily reduce lead time – something your customer certainly would value. Lean Manufacturing focuses on customer value. And if you tell your employees you’re instituting Lean Manufacturing because you want to improve your bottom line, some may think improving throughput will mean their job will be eliminated. But less waste means more capacity, which helps increase the top line: revenue!
Freeing up just one hour per day could lead to additional production capacity and that could lead to additional orders. When it once took five days to get an order out, but now it takes only three, you’ve become more competitive! Low lead times are a true competitive advantage.
The bottom line certainly benefits from increasing throughput. Equally compelling motivation to improve your processes can be found by stopping, thinking, and looking up to your top line as well.
To create your own Day by the Hour Board, click here.
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