Manufacturing companies competitiveness and performance is highly dependent on their production performance. Lead-time (speed), reliability, quality, productivity determine what the current performance can be, and how competitive the company is.
The above is know since the beginning of time. Manufacturing companies are engaged in a never-ending chase to improve on these performance measures. Support these efforts is the fact that technology is endlessly advancing. Both production technology as well as information technology.
One would, therefore expect that along the years there will be a noticeable improvement in the above mentioned performance measures. However, largely if you evaluate the performance of industries with sufficient historical data you will (surprisingly) find that there is negligible improvement (if at all) with any of these performance measures (with the exception of productivity, which did grow as a result of introducing new production technologies). But, lead-time and reliability are quite the same as they were ages ago, for almost all industries. The fact that the only meaningful improvement is in productivity, through technology and that all other performance measures are not improving almost at all, should indicate that something is fundamentally not working in our approach to production performance improvement.
As much as technology enabled productivity is important, all producers in the same industry can access the same technology. Which leaves Lead-time and reliability as the key potential differentiating factors. And, as common approach to improving them is not making a visible impact, we should look at a different approach. Let’s look at only one hing you should stop doing and that can lead to a meaningful improvement in these performance measures:
- The one thing you should stop doing, is over-flooding your production floor. For almost all industries, most of the time an item spends on the production floor it is waiting in a queue and not being processed. Waiting for a production resource that is occupied with something else, waiting for a production support resource that is occupied with something else, waiting for other items in the same batch to complete their processing. However, if there is no queue, there can be no waiting. In production environments queue can be controlled, it is a result of the pace at which work is being released to the floor. If you release slower, there is less queue and thus faster flow. Reducing WIP by half, reduces lead-time by half. So, just slow down the pace of releasing work. You can do it cautiously (reduce the pace by 10-15% initially, then as you witness the effects, reduce further), or boldly (cut it by half, you will still be able to reduce it even further). In any case the effects are rapid and impressive – WIP is reduced, lead-time is reduced, reliability improves and even productivity.
This is enough for achieving performance breakthrough. It is not sufficient however to sustain it. Sustaining it, and even further improving on it, requires some additional changes in performance measures and in the priority setting and controlling procedures.
I urge you to take the first step, be cautious but not paralyzed (meaning, don’t reduce the pace by 5% and expect meaningful effects). You’ll be surprised at the magnitude of the effects and the speed at which they are realized.
