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Finding the

Hidden Factory

Prepared by Julian Kalac, P.EngLean Six Sigma Master Black Belt

HURRY UP AND WAIT—PUSH SYSTEM

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PULL SYSTEM CONTINUOUS FLOW

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BATCH & QUE PRODUCTIONPUSH

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THE PERFECT FACTORYPULLCONTINUOUS FLOW

Hidden Factory

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Shipped on time and customer happyWe Made $$$$

ProductionMaterialShip order CUSTOMER

• No Wasted Time• No Wasted Money• No Wasted Resources• No Wasted Material

? ?

99% Customer Quality

The truth

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The Hidden Factory

$50000-material scrap costs

$350,000 transportation costs

Lost orderWrong order shipped

ProductionMaterial Ship order CUSTOMER

Hidden Factory

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Hidden Factory

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Hidden Factory

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Hidden Factory

Where is the hidden factory?

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Eliminating the WastesValue Added

Typically 95% of all lead time is non-value added

1. Overproduction2. Waiting3. Transportation4. Non-Value Added Processing5. Excess Inventory/Material6. Defects7. Excess Motion8. Underutilized People

Non-Value Added

5%

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The 8th WasteNot utilizing operators to their full potential

Lack of cross-functional trainingOver relying on a select few while others are Inadequately trained

Operators are unable to rotate and help each other out to balance the work-load

High overtime, increased pressure stress

ProcessValue Added

Adds value to the output and

customer is willing to pay

for.

Optimize

Non-Value Added

Does not add value to the output, and

customer isn’t willing to pay

for.

Eliminate

Business-Value Added

Does not add value to output, customer will not pay for, but

is necessary.(Legal, Safety, Etc.)

Minimize

LEAN VALUE ADD/NON VALUE ADD

Cycle Time is dictated by the slowest (bottleneck) operation in the cell.

40 min

20 min

25 min

15 min

30 min

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•What operation controls the cycle?•How can you relieve the bottleneck?

Basic Lean Concepts

• Maintain buffer in front of bottleneck – (never starve the bottleneck !)

• Improve bottleneck operation• Cross train on bottleneck

–Creates a visual work place–Continuous Improvement–Cell Support–Balance activities / operations

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Bottleneck Management:

Managing Bottlenecks

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THANK YOU