As manufacturers, we often ask ourselves how we can be more profitable. And the answer is usually simpler than we may think. In my experience, the key to improving the bottom line is identifying waste within the operation.
Let me explain the two basic types of waste within a business. The first is actual waste—things like cardboard from incoming goods, unusable ends from cheese blocks, or paper that separates product. This kind of waste can be turned into money. It needs to be identified, separated, collected, and recycled. The second kind of waste, the one I’d like to discuss here, is inefficiency in processes, operations, and procedures.
After my years of experience as a CIM, Continuous Improvement Manager, I see any business operation through the eyes of lean manufacturing. This kind of waste can be classified into 8 types.
Defects – Manufacturing bad product
Overproduction – Making more than the customer needs
Waiting – Needing material or product from downstream operations
Non-utilized talent – Not using input from all employees
Travel – Walking, searching for tools, looking for product, etc.
Inventory – Storing more then you need (JIT)
Motion – Using an inefficient workstation layout
Excess processing – Doing things the customer is not willing to pay for
Downtime = Loss of money
Here are some examples of the 8 types of waste I have seen within cheese plants.
Defects may result from a lack of quality control or processes that are not stable. If incoming materials are not inspected, you don’t know what you received from your suppliers. In addition, incorrectly maintained equipment, like dull blades on slicers, can cause product variation. Defects can often be managed by establishing incoming product verification (spot check goods when received), performing preventative or predictive maintenance on all equipment, and implementing SPC (statistical process control) to verify processes.
If your line can run 5,000 pounds of sliced cheese per day and your customer only needs 4,500 pounds, you are storing the extra 500 pounds. This is not effective. You are running your equipment and staff harder than needed, taking life out of your machines, and paying employees more than needed. Lean uses the term Takt time. It is derived from German and means “beat time.” Your lines should run to the beat of your customer's demand. You can use tools like line balancing, VSM (value stream mapping), and cycle time measurements to ensure your lines run at the speed your customer demands product.
If your upstream operation can package 100 slices of cheese per minute, but your slicer can only cut 90, the packaging operation is waiting. Again, line balancing, cycle time, and equipment capabilities need to be measured, adjusted, and improved. If your processing line runs through product faster than your material handling staff can replenish them, VSM might be the right tool.
Too often, I see companies put their engineers or smartest people on the floor to solve problems. They may fix the issue but end up creating another. You need to involve everyone from the operator at the source of the problem to people upstream and downstream from the issue. They may have insightful information about potential root causes and can often add information about how a change could impact upstream or downstream processes. Empower and engage all your resources.
We are not talking about business travel—instead, we are referring to people walking all over a plant to obtain items needed to perform their jobs. Maybe your raw material storage is on the opposite end of your building, so your material handlers walk miles. You are paying them to keep lines stocked. Why have them travel? Look at your work cells. Have tools and other needed items within reach. If employees must take a step, production time is wasted. 5S, spaghetti diagrams, VSM, and cell layout review are key tools here. Try to remove travel from your operation. This applies to more than just production areas. Look at your office areas, maintenance department, etc.
Physically walk through your building and take inventory of all the items you are storing. How much do you really need? I often see outdated equipment saved. If it will never be used, you are giving up valuable production space. I realize customers may ask you to hold or store product for them. Make sure that is managed well. Stock what is needed and sell excess items. Floor space is overhead cost.
Often, we do things the way someone showed us years ago, but it may not be the best way. Review all your operations and look for improvements that could be made. This is where you need to get a variety of staff involved—the operator, maintenance, and office staff. Analyze any motion needed to make the product and identify waste. Remember, employee involvement will get you the biggest bang.
This includes things like rework. For example, if you made extra product and the customer changes packaging, you must rework this inventory. This can also include sorting bad product or doing things the customer did not request. Make sure you understand exactly what your customer wants and is willing to pay for.
Trust me, eliminating waste is a huge task, but it will save money. Lean is not a one and done—it’s an ongoing process. Start with one item and move through your plant and operation.