There are many reasons for wanting to cut lead-times, and many benefits when you do. Mostly it’s to do with competitive advantage. How long does it take your customer to obtain a similar product or service to yours, from a low-cost economy like China? If it’s 6-8 weeks you really don’t want to be taking longer than this! Help your customers to reduce their inventory costs and/or their own lead-times. Get really slick and transform your operations from Make to Stock to Make to Order!

 You’ll improve customer service, reduce working capital (cash tied up), free up lots of space and get rid of lots of wasteful activities. It’s an area where Lean tools and techniques can make a huge difference very quickly.

So – how to do it:

First: map your process and measure the time taken for each activity. At its simplest, observe the process and simply list each activity. For more detail, use Value Stream Mapping. Distinguish between value-added tasks (those things that the customer will pay for) and non-value-added tasks (waste). Remember always to look out for The Seven Wastes (muda).

Calculate the total lead-time and the percentage of lead-time that is spent on value-added activities. It’s likely to be less than 5% in most manufacturing businesses. Next, look at where the non-value-added time is.  Concentrate on the biggest time-wasters – often waiting time.

If you’re batching products, cut the batch sizes – just do it! Get back to the root causes for batching:

• If it’s because of set-up and change-over times then use set-up reduction techniques (SMED) to cut these.
• If it’s to make up for poor quality then get back to the root causes, inspect at source then apply mistake-proofing techniques and aim for zero inspection.
• If it’s to make up for machine breakdowns then start measuring OEE (Overall Equipment Effectiveness), train operators in basic maintenance, annalyse the major causes of downtime and brainstorm improvements.

As with all improvement activities use the Improvement Cycle: Plan-Do-Check-Act. Work out what you want to improve, how and why. Make the improvements then review the effect. Work out how to do it better next time. Do it better and do it again. Keep going!

Most of all – train the people, work as a team, measure the results, recognise those who contribute, and sell the benefits to your customers and employees.

… and start now!

A number of recent conversations reminded me how often a simple measure like OEE is misused and misunderstood. Since OEE can be very useful, a recap might be in order:

The purpose of OEE (Overall Equipment Effectiveness) is to provide a single measure that indicates how much good output we get from a particular piece of plant or equipment. In fact it’s a compound of three separate measures, all multiplied together to arrive at an overall percentage figure. These three measures are: Availability, Performance and Quality. Let’s look at each of these in turn, and then consider how to use the information.

Availability: of the total time that the plant or machinery could be running, what percentage of this time does it actually run? Time is eaten up by maintenance (planned and unplanned), break times for operators, set-up’s and changeovers and other reasons. Think carefully about how you will specify the total time: there are 168 hours in a week – will you use this as your baseline or the 7 1/2 hours per day for five days that is your normal working week? If you intend to run the machine for only part of the time or “as required” would it be sensible to use a “planned hours” figure as the baseline? Another couple of things to think about: most of us are familiar with muda, the Japanese word for waste, but not as many people think about muri or “overwork”. Overworking people or machines is counterproductive. Running plant and machinery 24/7 can disproprotionately reduces its working life and increase the likelihood of breakdown. Increasing availability means looking at improved scheduling (can be as simple as arranging operator breaks so that the machine isn’t switched off for lunch), reducing set-up and changeover times (using SMED), and introducing Total Productive Maintenance (TPM).

Performance: another measure that sounds simple but can often provoke argument. The idea is simply to compare actual speed or run rate with the “ideal” or rated speed. There can be a lot of “accepted wisdom” (usually B***S***) about “maximum” speeds – the simplest improvement is sometimes to simply crank it up! In complex situations where there are many interacting variables, consider using Design of Experiments to establish the optimum running conditions. Where possible, replace “adjusting” by “setting” and consider “centre lining” – establish mid-point or centre-line settings, to minimise the effect of “drift”.

Quality: here we’re looking at “Right First Time”, “First Time Through”, “First Time Pass”, Rolled Throughput Yield or similar – what perecentage of “perfection” are we acheving at the first attempt?

So now for some general points about using OEE:

Only measure OEE if you need to improve it – usually when you need more output. Remember: measure to improve – “you don’t fatten a pig just by weighing it!”.

The main purpose of an OEE measure is to improve the output of a specific piece of plant and equipment over time. It measures good output and identifies exactly where to improve. Concentrate on this rather than on pointless comparisons with other plant and equipment, other factories or other industries.

Generally, we always recommend that you use “tough” measures – compare where you are against the maximum possible or “ideal” situation, don’t simply work within your current constraints. It’s always easy to fudge the figures – don’t! Far better to improve from a true 30% to a true 35% than kid yourself that all’s well at an “untrue” 85%.

 So – take a close look at those bottlenecks, measure the OEE and use your problem-solving skills and Lean tools to improve things!

Most companies don’t find it too difficult to implement the first three stages of 5S / workplace organisation, but many find it hard to sustain and improve once the initial energy has dissipated. I recently heard one plant manager joke that his company had achieved 15S – they’d repeated the first 3S’s five times now! So a couple of tips:

Provide awareness training to everyone involved. Emphasise that 5S is not housekeeping – it’s about making everyone’s job easier and more efficient.

Set an example – start with the plant manager or Managing Director. Demonstrate that Top Level Commitment.

Standardise: get the people who work in the area to agree the minimum standard that they can guarantee to sustain. This might be pretty basic to start with – a few years ago the foremen at an engineering client agreed on “no coffee cups on the floor” as a starting point – it took them three months to consistently achieve this standard!

Sustain: agree basic standards (Specific, Measurable, Achievable, etc) for each area. Set up regular weekly or monthly audits. Go for peer audit: Department A audits Department B; Department B audits Department C, etc. Meet reguarly to review the results, root cause problem areas and implement permanent system / process fixes.

The easiest and most effective way we’ve found to engage people:

In the workplace provide a 30-minute introduction to the basics of Lean:

• Continuous improvement:  Plan-Do-Check-Act
• The 5 Steps to Lean
• Value Added and Non-Value-Added
• The 8 Wastes

Ask people to spend a couple of hours over a week or two to come up with examples of the 8 Wastes in the workplace.  Take digital photos, take videos and post them around the place.

Gather people together in their work groups, share the examples and brainstorm some improvement actions.

Have the group prioritise the ideas using a simple “Ease and Effect” grid.

Convert this into an Action Plan, with tasks, names and dates.

Publish it, implement it, update it, revisit it, review it, do it again …