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“East and West – The Hunt for Competitiveness”
Practical, Proven Ways to Increased Profitability
Japanese Manufacturing Systems explained and demonstrated
Richard Keegan
Enterprise Ireland
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“East and West – The Hunt for Competitiveness”
Practical, Proven Ways to Increased Profitability
Index
Chapter 1 – Time and Innovation in Japan.
Chapter 2 – Ten keywords to Understand Manufacturing in Japan.
1. Focusing on production engineering (strategy).
2. Continuous Improvement (culture).
3. Zero as Optimum concept (culture).
4. Knowledge Management (culture).
5. Visual Management (culture).
6. Detail Oriented (culture).
7. Focusing on Quality (tactics).
8. Standardisation (tactics).
9. Reduction of Lead Times.
10. Equipment Independence.
Chapter 3 - Strengths and Weakness of the West and Japan.
Chapter 4 – What is WCM in Japan?
Chapter 5 – The Drawback of WCM in Japan.
Chapter 6 - Seven Steps toward WCM.
Step 1: Safety.
Step 2: Reliability.
Step 3: Yields.
Step 4: Quality.
Step 5: Rationalisation in logistics and manning.
Step 6: Synchronisation between sales and production.
Step 7: Fully automated plant.
Chapter 7 – Major activities to support WCM.
Appendixes
Appendix I : World Class Toolkit.
Appendix II : Audit Criteria for WCM
Appendix III : 5 S Self Assessment
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Tables
1. Invention Vs Development
2. 5S Implementation
3. Transition to TQM.
4. Strength Comparisons – West and Japan
5. Western and Japanese Management
6. Traditional Vs Total Quality Approach to Business
7. Process Capability Index
8. Six Sigma Vs Total Quality Management
9. JIT Vs Mass Production Characteristics
10. Operational Standard (OS) Levels
Page
Figures
1. Japanese Market Changes
2. Pyramid of Capability
3. Productivity Improvement by Industrialisation,
4. Information Technology and Creativity.
5. A New balance in products sold.
6. Changes in Human Resource allocation – 70’s to today.
7. Product Life Cycle Changes.
8. Environment Change – Management Response.
9. General trend of organisation change – Increasing sophistication.
10. Operating Principles and Standards.
11. Spiral of Production Engineering.
12. Balance of Staff Skills – Traditional Vs WCM.
13. The power of Graphics in Communication.
14. Continuous Improvement.
15. Innovation without Kaizen.
16. Performance with Kaizen.
17. Performance without and with Kaizen.
18. Statistical Process Control Chart – Philosophical Differences.
19. Kaizen – Increasingly sophisticated methods.
20. Logical Process Improvement.
21. Improvement – Daily Work balance.
22. Zero as Optimum.
23. Knowledge Management.
24. The Visual Workplace.
25. Visual Management Triangle.
26. Machine Loss Pyramid.
27. Business Fulfilment Cycle.
28. Manufacturing Lead Times.
29. East and West
30. World Class Manufacturing Management
31. House of World Class Performance
32. Normal Distribution
33. Relationship between characteristic distribution and tolerances
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34. Product and Process Capability – Working Together
35. Process Capability 86
34. Judgement on Process based on Cp Value
35. Product and Process Capability – Working Together
36. The Roles of Design Engineers and Operators
37. TPM aims
38. TQM Vs TPM – A Comparison
39. Cash to Profit – JIT Vs Mass Production
40. Delivery per Manufacturer
41. Pace Monitor Examples
42. Cost Deployment
43. Overall Equipment Effectiveness Explained
44. Seven Steps toward WCM
45. Air flow indicator
46. Dial and level making visualisation
47. Footprint visualisation
48. Automating Processes – Detail
49. Guaranteeing quality and workerless operation
50. Temple of World Class Manufacturing
51. Autonomous Maintenance Project Action Board
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Acknowledgements
This book is based on twenty five years experience working with and in companies
who have continually striven for superior performance.
It is based on the basic principles of Japanese manufacturing as taught by Professor
Hajime Yamashina, formerly of Kyoto University. Additional insights, tools and
techniques are also presented to clarify and expand on the core materials.
Both Professor Yamashina and I have worked for many years with the EU Japan
Centre for Industrial Co-Operation, an organisation co-founded by the European
Commission and the Ministry for External Trade and Industry of Japan, to promote
understanding and co-operation between Japan and Europe. The Professor and I have
worked together on the World Class Mission where European managers visit Japan to
study current manufacturing methods.
The concepts presented in this book are my, a Europeans, interpretation of the tools
and techniques used and taught by the Japanese.
I would like to also thank the innumerable company personnel both in Ireland and
overseas who have helped me to help them to understand how to use best practice
techniques to improve their operational performance. Improving operational
performance can never be the only goal of a business. Without innovation in both
process and product they will surely die, but, without being the best you can be in
how you make your products you are also risking the future. The tools and techniques
presented in this book will help you secure the present and provide a basis for a
successful future.
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Chapter 1
Time and Innovation in Japan
Time is an extremely important resource. It is very easy to lose time and difficult to
make the most of it. As we seek to understand how the leading Japanese organisations
are using World Class practices to remain competitive and to build strong futures we
will look at the recent history of Japan and it’s markets.
fig. 1. Japanese Market Changes.
The Japanese market, and consequently, it’s manufacturing output, is presented in fig. 1.
Manufacturing in Japan prior to the first World Oil Crisis, area (0) was characterised by
the widespread adoption of Quality Control techniques. These were based on the widely
understood Quality tools. At this time manufacturers were under pressure to get product
out the door. Markets, in general, could not get enough product to meet demand.
With the Oil Crises the market dynamic changed. Productive capacity outstripped market
demand and many companies felt serious pressure. In Japan the approach known as
Total Quality Control (TQC) came to prominence. The TQC approach is best known for
the use of Quality Circles but there are a number of additional elements to TQC. When
the market contracted fig 1 – area 1 many companies moved to diversify their production
in an effort to stabilise their operations and sustain their business.
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The TQC approach was chosen as a vehicle to facilitate change while delivering on the
requirements of a reducing and decreasingly more quality minded marketplace. The
TQC approach facilitated the restructuring and re-direction of corporate culture. This
refocus led in a number of cases away from a strict, by the rules systems of management
to a more open, involved, work environment where people could, often for the first time,
become involved in improving their own business worlds. The object of TQC was to
improve the Quality of products delivered to clients and consumers. This was achieved
through the systemisation of management. Processes and procedures were defined and
standardised as a first step in reducing variability of delivered product. Employees and
management were trained in the use of basic Quality Control techniques – how to
measure bad quality and how to react to address it. This learning and the subsequent
deployment of TQC was most visible in the use of Quality Circles – groups of people
charged with the maintenance of quality of output of their produce. Quality was defined
in terms of the number of defects detected. The urban myth exists to this day of the
Western buyer demanding of his Japanese supplier a defect level of 2%. The Japanese
supplier, so the story goes, could not understand why the Western buyer wanted 2%
defects but after much discussion agreed to meet the Quality demands of his customer.
The Japanese supplier duly delivered the order with 98 good products and a separate
package containing the two deliberately defective ones ordered by the customer.
In the late 80’s and early 90’s, area (2) on fig 1, the market and the producers cycled
around under and over supply. The producers worked diligently to develop and launch
new products, often looking for niche markets. Major energy was spent on being more
responsive than the competition with the objective of being able to bring new products to
the market before the competition.
In the period ’91 to ’96, area (3), many leading Japanese businesses worked incessantly
to bring profit making products to the market. This marked a shift in emphasis for the
Japanese. During this period the market remained relatively flat. This lack of market
growth meant that Japanese businesses moved away from a focus on Market Share and
towards a focus on Profitability. The market at this time was characterised by an over
supply capability – business had the resources and installed assets to produce
significantly more product than the marked required.
After 1996 the Japanese manufactures moved into what has been characterised as the
Total Quality Management period. Now manufacturers focus shifted away from
checking for defects to a more positive and active approach to avoiding faults and defects
at source, (4) on fig 1. By 1996 manufacturers had mastered the art of production.
Quality levels were achievable at single figure parts per million defects levels.
Machinery was able to be worked consistently and efficiently and logistics and supply
chain solutions had been developed to the extreme. At this time the means of
differentiation in the market place changed. Companies were no longer focusing on
“how to make” products but were, and are, more seriously focused on “what to make”.
In the early days of the new millennium companies are working very hard to align their
means of production closely with a rapidly changing market. Products and product
niches are emerging today that simply did not exist three, five, seven and ten years ago.
The most successful companies today are those that can flexibly marshal their resources,
both internal and along the supply chain, to meet the variable demands of the market
place. These demands are variable in terms of product, technology and quantity. There
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will be winners and losers in this fast moving market place. Some companies will
succeed in this alignment process, they will be able to match their creative and productive
resources to meet and exceed market needs and requirements. Other companies will find
it impossible to co-ordinate their own resources and those of their supply chain to rapidly
changing market demands – these companies will be losers in the global market place.
Changes have also taken place in the measures that management have used to drive
performance during these five periods. The emphasis has shifted away from basic
measures of productivity to more measures of corporate creativity and innovation. It is
very important to understand that the earlier productivity based measures have not been
abandoned in favour of more modern measures – they have been built upon. The leading
Japanese firms have effectively created a pyramid of capability that today peaks at the
innovation point, fig 2.
fig. 2. Pyramid of Capability
The types of measures used at a given time period related to market periods 0 to 5. As
companies, their managers, staff and suppliers gained experience and expertise at a given
level they were able to progress to the next, more demanding level. They built internal
abilities which in turn have led to sustainable businesses, in a fast moving market
environment.
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The market today is being addressed by combination of industrialisation, information
technology and creativity. In the 1890’s Lord Kelvin suggested the closure of the Patents
Office in London because everything man would need had already been invented.
Manufacturers today are at risk of making the same mistaken assumption, when we say
that we “know how to make things!” But, from a practical point of view we currently
possess a lot of knowledge on the act of manufacture. Significant progress in meeting
market and consumer needs will come from the integration of the means of production
and logistics, enabled by information technology and creativity, fig 3.
Pure manufacturing will continue to evolve and develop using advancements in
processes, new materials and operations research. Logistics, both within and between
companies and between companies and consumers will be enhanced with the use of
eCommerce and information technologies. These enablers will assist companies to
respond more quickly to market usage levels and help reduce stock levels along the
supply chain through improved visibility.
Possibly the biggest gains in productivity into the future will come from the effective use
of creativity. The application of creativity and innovation to product, process, system and
business development issues has the potential to provide sustainable differentiation into
the future.
fig 3. Productivity Improvement by Industrialisation, Information Technology and
Creativity.
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Looking at the present and into the near term future it is likely that the need for rapidly
responding, highly capable businesses will continue. Product life cycles continue to
shorten and the range of products continues to expand. However, the recent introduction
of “Simple” telephones may be an indication of a change in market direction. The way a
market is evolving can be represented by fig 4.
fig 4. A New Balance in Products Sold.
The rapid rate of introduction and short product life cycles means that New Products will
become increasingly more important for businesses. As companies chase growth to
assure their survival they will need to focus more and more of their creative energy into
this area.
“Growth is the new Battlefield!”
The winning companies in the next ten years will be those that: Secure Growth.
 Innovate their product offerings.
 Respond rapidly to changing market and consumer demands.
 Improve their productive capacity.
 Develop efficient ICT enablers to deliver cost effective logistics solutions.
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This evolution in the market and the means of production and market service will lead to
an acceleration in the trend of employment change seen since the 1970’s, fig 5. More and
more resources will be allocated to the Research, Creativity and Business Development
areas of an operation and away from the pure manufacturing area.
fig 5. Changes in Human Resource Allocation 1970’s to today.
The global market today varies rapidly due to changes in personal consumption,
disruptive technologies, new technological breakthroughs, development of emerging
markets and countries and international conflict. The old certainties are no more.
Companies are as likely today to be competing with a company located on the far side of
the world as they are to be competing with a company in the next town. This changed
and changing reality means that successful businesses need to be responsive. They need
to develop their own response to the globalisation issue and to implement a strategy to
address the challenge.
The adage:
“Think Globally and Act Locally” is both very apt and challenging. If we stand back and
look at the world it is possible to see that there are specific global locations best suited to
particular elements of the fulfilment cycle:
Thinking in a global sense, there are:
- Places where competent researchers can be hired – USA, EU.
- Places where cheap raw materials can be purchased – Africa, China.
- Places where we can get good and enough workers – China.
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Places where we can obtain software engineers – India, Ireland.
Places where we can trade freely – USA, EU.
This view of the global environment can lead to companies organising themselves to
optimise the possibilities available to them. These possibilities, though also come with
some drawbacks and these, too, need to be addressed. The drawbacks can be described
as Mass, Distance and Time, how we address each of these will define the overall
responsiveness of an operation. Human beings have overcome the Mass problem through
the development of materials handling devices, lift trucks, hydraulics and other
supportive systems. We have overcome the distance constraint through the development
of high speed trains, trucks and cars, and we have addressed the time problem through the
development of computer networks, e-mail and mobile telephones. It is now possible for
people across the world to be in contact with colleagues around the globe during an
extended working day. From Europe it is possible to catch Japan at the end of the
Japanese working day while it is possible to contact the USA at the end of the European
working day. We are living in a truly global environment.
The Winning Organisations in this global environment will be those who manage the
problems that come from having many geographically distributed facilities through the
use of effective and efficient logistics systems and suitable IT infrastructure. Local
markets will be supplied on time, in the required quantities at the necessary quality
standards with market specific customised product in an efficient and effective manner.
Today’s market is characterised by rapid innovations, driven and supported by emerging
Sales Volume
fig 6: Product Life Cycle Changes
’70s and ’80s2 year life
cycle
’00s
6 month life
cycle
technologies. We have moved from product life cycles of two years to ones of 6 to 8
months fig 6. Computers, mobile phones and personal electronics are classic examples of
rapidly changing market offerings and short life cycles. The modern market place is full
of products and services, it is not very difficult for consumers to decide not to buy a
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product. Very many products fall into the discretionary spend category. Many products
are not bought because they are not completely new, offering a new benefit to consumers.
Many are not bought because they are not completely new, offering a new benefit to
consumers. Many are not bought because they are not first to the market, they are me too
products. Many products are not bought because they are unattractive, not impressive or
not original.
At the other end of the buying spectrum customers don’t buy products because they are
not cheap or don’t sit well on the Value for Money balance.
To succeed in these turbulent markets leading organisations are working hard to be
extremely cost competitive when they face competitors. They are working to enhance
their flexibility, responsiveness and speed to produce products that the consumers really
want, and are prepared to pay for, as and when they are wanted. These challenges are
being met through increased innovation throughout the businesses, and along their supply
chains. The challenges and responses of management to this challenging environment is
presented in fig 7 Environment – Response.
The traditional approach taken by business has been to try and forecast market demand
and then match forecast demand with production capacity to deliver forecast product into
market place warehouses. Consumers are then serviced in a timely fashion from the
warehouses or storage areas. This system works well when the market demand and
environmental and technological circumstances are steady and not fluctuating. Today’s
market place is anything but steady and this, in turn, demands a different organisational
arrangement. In days gone by, inventory was seen, and managed, as an asset. Today it is
seen as a liability.
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fig 7: Environment Change – Management Response
But, what do these economic changes mean to operations management? What are the
necessary tactics to be followed to deliver on the strategic direction and insight?
At a practical level this equates to manufacturing managers focusing on
1. Cost Competitiveness
CFM
2. Speed
3. Flexibility
SCM – Supply Chain Management
This cost competitiveness, speed and flexibility in the manufacturing area needs to be
paralleled with highly innovative product development. Design and development
managers need to focus on:
1. Customer’s Viewpoint
2. Quality, Cost and Delivery in product development Knowledge Management
3. Better after service than competitors
These capabilities at the operational level need to be continually enhanced and developed
creating competent human resources, capable of continuously researching, developing,
manufacturing, launching, sustaining and recycling new and attractive products to the
increasingly demanding and fickle market place.
It is an essential pre-requisite for success that companies who develop these operational
capabilities need to be supported and challenged with world class sales teams,
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administrators and senior management. Successful business will and do challenge across
all key processes of a business and not just at the operational level.
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Chapter 2
Ten Key Phrases to Understand Manufacturing in Japan
This chapter focuses on providing an insight to the key drivers behind Japanese
manufacturing. These drivers are spread across strategy, culture and tactics. A study of
them will help explain what practical things leading Japanese companies are doing to
retain competitiveness.
1.Focusing on Production Engineering (Strategy)
Production engineering focuses on how products are manufactured. It is obvious that if
even the best designed product in the world is badly manufactured then it will be a poor
quality product. Equally it should be obvious that Products and the Processes by which
they are made are two sides of the same coin. In an efficient and effective operation the
two must work together.
As products have become more complicated, sophisticated and demanding to
manufacture so too has the Production Engineering response, see fig 8. As the level of
automation has increased so too has the necessary support infrastructure to ensure it’s
effective operation. As the support tools such as Computer Aided Design, Manufacture
and Engineering have developed, along with MRP II , Value Analysis, Robots and
Automation so too has the requirement for skilled competent staff able to bridge the gaps
between product design, product production and production process development. These
skills have been developed for the primary objective of delivering enhanced production
performance but leading firms have found ways to leverage these skills and move
themselves into emerging technological areas,
fig 8: General Trend of Organisational Change – Increasing Sophistication
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The emergence of new technologies has led to the necessary development of new
processes to bring them to the market. Major corporations who have developed
production process capabilities using advanced techniques find themselves ideally placed
to move forward with breakthrough process technologies – the Better you are – the Better
you get!
A classic example of this can be seen, table 1, if we look at some technologies and see the
difference between who created the technologies versus who commercialised them.
ITEM
TRANSITOR RADIO
VCR
TV
ROTARY ENGINE
CD
ORIGINATOR
REGENCY
AMPEX
RCA
WANKEL
PHILIPS
DEVELOPER
SONY
SONY, VICTOR
MATSUSHITA
MAZDA
SONY
Table 1: Invention Vs Development
Despite the fact that American and European companies invented the technologies it was
Japanese companies who brought them to the mass market. It was Japanese companies
who developed the production processes that enabled these, certainly at the time of
invention, complex and sophisticated technologies to be mass produced and sold at prices
the mass market could afford and was wiling to pay. The focus on developing process
capability has lead to a clear market advantage where sophisticated products can be
delivered at reasonable cost to mass markets.
What is the Japanese Understanding of Production Engineering?
The success of much of Japan’s leading manufacturing businesses is based on sound
Production Engineering principles. But what are these principles and how are they
developed?
There are three key areas of expertise fundamental to the understanding of Production
Engineering:
1. Tooling – Tools and tooling are used to create products by working on materials.
Production Engineering deals with all tools, jigs and machines within an
operation. It focuses clearly on the point of contact between the product or
material and the tool. This is known as the Processing Point, the point where raw
material is converted to a saleable product. It is in fact the point of Creation of
Customer Value.
2. Process – The process of making products and creating value is a key point of
Production Engineering. The focus starts at the point of production planning,
where asset utilisation is balanced with competing market demands. Production
Engineering strives to optimise the balance. The focus shifts to the manufacturing
and assembly sequences in an effort to boost efficiency, and concludes with the
creation, definition, refinement and continuous improvement of Standard
Operating Procedures (SOP’s). It is important to understand that the creation of a
Standard Procedure is the first step in the continuous improvement process.
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3. Layout – Physical movement through a plant, or an office, can often lead to the
accumulation of wastes and losses. Production engineering will often focus on
mapping the physical process flow with a view to reducing the distances travelled
by products, materials and operators during the manufacturing process. This
analysis often leads to the re-organisation of equipment, machines and resources
to minimise travel distances.
The Process Engineer (PE) works in an area between Operating Principles and Operating
Standards, see fig 9. To be effective the PE needs to understand the fundamental
principles underpinning the processes they use. They need to understand materials and
their properties and the principles of material transformation using tools. This basic
understanding of the key elements of process principles to ensure that any standard
operating procedures developed for production are based on sound principles. If these
principles are not understood and adhered to it will prove impossible to deliver
consistent, high quality products from any given process.
fig 9: Operating Principles and Standards
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Roles of Production Engineers.
Production engineers play a very important role, or roles, in the Japanese manufacturing
environment. A logical progression exists for the development of the capabilities of such
engineers as they progress from the position of a Production Engineer to the role of a
Total Production Engineer. This is best illustrated by looking at the example of the
capability progression of an engineer within Denso Corporation, itself part of the Toyota
group.
On joining the Production Engineering function the new recruit would be introduced to
the basic tools of quality, advancing with gained experience to the more advanced tools.
Their focus would be on learning about Quality Control as a means of understanding the
fundamentals of processes their management and the use of quality tools to facilitate and
drive process improvement.
When this fundamental grounding has been absorbed sufficiently they are introduced to
the concepts and practice of Industrial Engineering. They learn about work practices,
ergonomics, people facilitation and management and how to create and develop systems
of manufacture. On a recent study mission to Japan a group of leading European
managers were shown the training room of one of the world’s leading air conditioning
manufacturers, Daikin. This room contained much of the knowledge of industrial
engineering that the firm had captured over it’s existence to date. One aspect in
particular related to two markings on the floor. One of the group was asked to walk the
distance between the two lines as if they were an operator. He strode over the distance,
quite pleased with the short length of time it had taken him to complete this task. Then
the Japanese host complimented him on his speed but duly explained that he trains his
staff to walk at approximately 60% of the European speed because that was a speed they
could sustain all day, every day, without causing stress to the worker.
The new Production Engineering recruit has to learn, and learn quickly the accumulated
knowledge of the company in an effort to ensure continuity of the performance norms
already achieved and also to develop the capability to improve processes at sustainable
rates of performance.
Having mastered Quality Control and Industrial Engineering concepts and practice the
production engineer is focused on developing an understanding of and expertise in the
area of Preventive Maintenance. It is self evident that if a process is to produce high
quality, consistent products at a specific time then the machines, tools and systems that
go to make up that process must operate consistently without disruption due to
breakdowns, intermittent faults or low performance outputs. Consistent running of
machines and processes can only be assured by effective preventive maintenance (PM).
The tools, concepts and practices of PM are studied, practiced and deployed by
production engineers to give them a professional understanding of the techniques.
The second last step in the development process for Total Productive Engineers is to give
them responsibility for Production Control. The move from support functions to direct
line responsibility can be difficult. The pressure of meeting production deadlines within
quality, cost and delivery constraints can be high. This challenge will often help
engineers come to terms with the commercial realities of a business, but at least they have
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developed expertise and experience in the fundamental support areas before taking on the
responsibility for production output.
The last step in the process of building highly capable Total Productive Engineers is the
migration into the area of Product Development. By this time the engineer has learned
about quality, it’s maintenance and also the main reasons and causes of loss of quality.
They have learned about and gained experience of how to make products, how to create
systems of production and how to work with people to produce goods. They have also
learned about how different processes and materials affect the reliability of machines and
systems. And finally, they have experienced the responsibility of meeting market
demands. Armed with this experience they are ideally placed to move into the Product
Development role. They can bring a wealth of experience on what goes wrong when
manufacturing products and what tasks, jobs and processes lead to losses and wasted
effort in assembly and manufacture. The reduction of manufacturing effort required to
complete a task starts at the early design stages. It is very difficult to efficiently
manufacture a badly designed product – it is very easy to manufacture and remove
production costs from a well designed one.
One of the biggest issues with modern day product designers and developers is their lack
of true understanding of the details of the manufacturing process. The Denso route to
creating Total Productive Engineers addresses this issue. In many ways it mirrors the
professional development programmes once favoured in Western businesses, where
future managers were immersed in key processes of the business to give them first hand
knowledge, understanding and experience as a basis for their future managerial roles.
Practice leads to experience which leads to understanding which in turn leads to
improvement.
What Defines a Competent Production Engineer?
We have looked above at the process to develop competent production engineers but how
can the characteristics of such a being be defined? What are those key characteristics that
are required, or can be developed and fostered?
1. The first and possibly most important characteristic of a competent production
engineer is the ability to look at the current process or system, to be able to see what
they are looking at, to be able to understand a). What is being done, and b). What is
trying to be achieved? The competent production engineer then has to take this
understanding and be able to visualise clearly a better way of achieving the desired
goal and do something to deliver the new, improved process performance, fig 10.
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fig 10: Production Engineering Spiral of Improvement
Probably the biggest challenge facing the inexperienced Production Engineer is the
realisation that the process needs to be repeated, over and over again. Once the initial
state has been made operational, standardised and proven to be effective it is time to
re-examine this process to search for insights, based on facts, that can be used to
develop a better system to meet the required needs. And yes, once this new system
has been implemented, standardised and proven effective the process needs to be reexamined for further potential improvement. This process, known as continuous
improvement is possible because as knowledge, experience and capabilities develop it
becomes possible to stretch performance to ever high levels.
2. The production engineer does not deal in opinions. Their actions need to be
grounded firmly in fact and based on a professional and sound footing of well
understood operating principles, the science of materials and knowledge of
machines. The competent Production Engineer can then clearly and efficiently,
without ambiguity, establish clear operating standards. This small point is, in
fact, extremely important.
Many Western businesses operate within a range of operating conditions. These
operating conditions tend to be defined by engineering and management with
machine and system operators then adjusting equipment to their own, detailed
settings. This often results in significant variations in output and quality levels
between shifts, and between operators, for no apparent reason. The defining of
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clear operating standards, and the strict adherence to same helps remove one more
source for variability within processes and, consequently, helps reduce waste.
A further beneficial aspect to defining operating standards is felt in the
serviceability and extended life of equipment. If machines are worked too hard or
too fast their life expectancy is greatly reduced. If they are worked at an
appropriate level they can give many years of dependable, consistent service.
3. The competent Production Engineer is a good communicator. They need to be
able to absorb and understand what are quite often complex and sophisticated
processes, machines and problems. They need to be able to make sense of what
actions and control parameters are required for effective operation, and they need
to be able to communicate their conclusions simply and clearly. The Production
Engineer often has to communicate at different levels of abstraction:
a) Simply and clearly to operators.
b) Clearly and professionally to non technical management colleagues.
c) Technically to fellow engineers.
Effort spent in helping technical people improve their communication skills has
the potential to deliver significant benefits to the business.
4. Facts and figures are the mainstay of management and improvement activities.
The competent Production Engineer needs to understand how to capture data from
systems and processes and, most importantly, needs to know how to translate data
into information that can help them prioritise issues, direct actions and countermeasures and ultimately monitor ongoing performance improvement activities.
5. The key characteristics of the competent process engineer started with the ability
to look, see, understand and do things to improve performance. The final key
characteristic relates very closely to the first characteristic. The competent and
professional Production Engineering needs to have a challenging and pioneering
spirit. It is not enough to have training and exposure to the tools and techniques of
Production Engineering or Continuous Improvement. A tool is only as good as
the use that is made of it. Tools are most effectively used by people who are not
limited by the obvious. Truly effective Production Engineers are those who want
to move forward. Truly exceptional Production Engineers are those who can’t
help being pioneers. President John F. Kennedy could have been talking about
exceptional Production Engineers when he said:
“The problems of the World today cannot possibly be solved
by people who are blinded by the obvious realties. We need
people who can dream things that never were, and say why
not?” J.F.K.
The role of the exceptional Production Engineer in Japanese business is, indeed, a
very important one.
This focus on the skills of engineers and the development of their process and product
improvement capabilities and experience has led to a re-balancing in the numbers and
types of people employed in leading businesses, fig 11.
23
fig 11: Balance of Staff Skills – Traditional Vs WCM Companies
The world class company operates with less people and significantly less operators.
They have invested in brain power, focused on developing saleable products and
efficient manufacturing processes. It should also be noted that the world class
company focuses less on basic research than a traditional company. They tend to take
basic research and commercialise it rather than creating new concepts at the basic
research level; as we saw in Table 1.
One of the key characteristics of a competent production engineer is the ability to
communicate clearly and effectively with the people actively involved in delivering
results from a process. One of the most striking characteristics of Japanese factories
is the widespread use of charts, graphs, figures and graphics to:
a). share knowledge, and
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b). to manage processes.
Western managers often ask “So what is the point of all these Visual Measures?” or
“Is that all?” when they see the materials. This is a little strange to hear as we all
know the old adage: “A picture paints a thousand words”. It has been determined that
the amount of information that a single figure can relay can take up to eight minutes
to relay the message with words. It has also been determined that people can retain
messages more easily if they are delivered pictorially. The Tao, an ancient Chinese
book brought us the phrases:
I hear, I forget
I see, I believe,
I do, I understand
and it is for all these reasons that competent Production Engineers develop a skill in
visual representation and experience in delivery improvement initiatives as part of
their professional development.
The importance of the use of graphics is easily demonstrated in fig 12.
Imagine that you were trying to describe an elephant to a blind person. Your
description would probably take the form of the following:
“An elephant has a long nose, two big ears and a big body”. This apparently straight
forward description could lead to a number of different interpretations, two of which
are presented here
fig 12: The Power of Graphics in Communications
25
This little example should help demonstrate the truth of the adage “Seeing is
believing”, and also demonstrate the ease with which a simple sketch or graphic can
convey the true position. The emphasis on visualisation puts an emphasis on the
management staff to identify the key measures for a given operation and then to
develop clear means of managing to achieve performance while sharing necessary
information with all staff. Visualisation techniques are used widely for normal
process management, staff training, corporate knowledge management as well as long
term strategic objective setting and sharing.
2. Continuous Improvement (Culture)
Performance excellence and in particular manufacturing excellence are built on hard
worked and hard earned experience. A key driver behind this hard work is the
concept of Continuous Improvement. This is not a gentle approach to making
processes better over time. It is a relentless driving principle underlying all aspects of
a business. It provides a coherency to all improvement activities providing
continuity. To quote Roy Coleman, VP of Advanced Systems, Harley Davidson
Motor Corporation:
“We need to be better at 10 o’clock than we were at 9 o’clock, and better at
11 o’clock than we were at 10!”
It is this relentless drive for improvement that underpins much of leading
manufacturing worldwide.
In the natural state assets and equipment deteriorate over time, see fig 13.
Performance
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fig 13: Continuous Improvement
The use of CI techniques will ensure that, in the future, the performance level of the
system will be higher than today. Without CI the future performance level will be
lower. This mindset, this culture of Continuous Improvement is one that is embedded
in Japanese culture and is generally missing from Western culture.
Some people misunderstand the Continuous Improvement philosophy and they think
that CI operates independently of Innovation. In fact, the opposite is the truth. CI is
fundamentally based on Innovation, but at an operational level, at the day to day
level. CI also works in conjunction with high level Innovations as can be shown in
fig 14 and 15. In fig 14, we see a system where a high level innovation is made, say a
new machine is bought or a new software package introduced into the office. Over
time the machine deteriorates, or the software package ceases to be exactly right to
meet the business needs. In effect the performance level of the investment (the
innovation) reduces. The time comes to re-invent, to seek the latest, current
innovation in the field, to secure an improved level of performance. The cycle
repeats itself. Overall, an increase in performance is achieved, but quite a lot of
Y
X
fig 14: Innovation Without Kaizen
potential performance has been lost. This is represented by x and y.
27
If we look at the situation where Kaizen or Continuous Improvement techniques are
employed we see a different picture, fig 15.
B
A
fig 15: Performance with Kaizen.
The difference in performance with the Kaizen approach can be represented by A&B.
But, when compared with the non-Kaizen approach, the actual improvement in
performance is:
X + Y + A + B.
This improvement is achieved with the same level of investment in innovation or
capital investment. In turn, these improvements are achieved based on the
involvement of shop floor and production engineering staff. This improved capability
and experience is retained within the Kaizen business, and continues to deliver on
future improvements. It helps build a foundation for sustained competitiveness
through improved performance and, ultimately, lower requirements for capital
investment.
We can see this difference in performance by looking at fig 16.
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fig 16: Performance Without and With Kaizen
In the company on the left in fig 16, operating without Kaizen, the level of
performance jumps with each new innovation. We see that after the introduction of
the new innovation performance gradually deteriorates until the next new innovation
is introduced. In the company on the right Kaizen continues after the introduction of
each new innovation. After each new introduction we see a gap in performance
developing between the two companies. After two, three or four introductions the
performance gap can be quite considerable.
The Continuous Improvement or Kaizen approach is based on a specific approach to
business. Philosophical differences exist between the ways the companies in fig 16
are managed. The difference is between that of a failure driven operation and a
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prevention driven one. A number of techniques have been developed to help people
deliver Continuous Improvement.
Statistical process control techniques are often used by high volume production
companies. The technique analyses a key characteristic of the product or process and
maps the results, fig 17. On the left we see the results of a process that has been
brought under control. This is known as a capable process. Products made with this
process are deemed to be acceptable, at least most of them. In this case
approximately x hundred parts per million would be outside specification or below
the quality standard. But, the process is deemed capable and the company moves on
to address the next problem it faces, accepting the x hundred reject parts and the
quality overhead associated with checking all 1 million parts, managing customer
complaints and administering client claims and refunds due to poor quality parts
being delivered to customers. It is the best they can do and they accept this reality.
On the right we see another company, starting with the same process, with the same
level of process capability. The difference with this company is that they are not
prepared to accept a capable Process, they are committed to developing a zero Defect
process. In modern manufacturing this is known as a six sigma process. They
achieve this result over time. The next result of their effort is a process that runs at 6
sigma, equal to 3.4 parts per million defect. This in turn means that they have a lesser
need for product quality checking as their processes are under such tight control.
Their customers receive quality products and they encounter very few if any customer
complaints or refunds. Almost as an aside they have also built the experience and
capability of their people to world class standards. Their own people’s abilities
provide the basis for a strategic advantage in the market place – they have developed
the internal capability to tackle serious, complex and often technical issues and
resolve them. It is an asset that cannot be bought, it can only be learned.
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fig 17: Statistical Process Control Chart – Philosophical Differences
With the Kaizen approach to Continuous Improvement processes are made secure.
Once this has been achieved and the fundamentals of operation have been defined the
process is standardised, fig 18.
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fig 18: Kaizen – Increasingly Sophisticated Methods
But what are the reasons for adapting Continuous Improvement? Why would we take
the time and effort to develop capable and professional Production Engineers? In
very many factories large amounts of wastes and losses are the norm. It has become
an accepted fact of many manufacturing plants to have:
o Machine breakdown
o Lost time due to set-up delays
o Defective parts
o Minor stoppages
o Delays of part delivery from suppliers
o Absences of operators, and many others.
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All of these wastes and losses take away from the bottom line of a business.
Customers don’t and won’t pay for defects or breakdowns or any of the other wastes.
This means that the producer pays through a reduction in Profits. Most factories do
not clearly identify these wastes. If the wastes are identified visually and resolved
quickly then manufacturing can grow in strength, providing a strategic advantage to
the overall business. On the other hand if they are not addressed then production
becomes weaker and weaker eventually leading to harm for the business.
Best Practice in Continuous Improvement combines both rigorous attention to detail
as well as visual aids. This is illustrated in fig 19.
fig 19: Logical Process Improvement
The creation of a structured form, outlining the problem and determining targets and
objectives, analysing and addressing issues and recording solutions and possible next
steps provides a simple process for all to follow. These simple sheets also provide an
effective means of capturing corporate knowledge. The gathering together of many
of these sheets leads to the creation of an invaluable source of training material for
people within the business, and, finally the creation of structure helps people to focus
on the task in hand rather than spending time thinking “How to start” a job.
But not all companies are Continuous Improvement type organisations. There is a
wide spectrum of commitment, dedication and commitment. Five distinct levels have
been identified.
Level 1
People deny there is a problem or they don’t want to see them. They want to continue
in blissful ignorance, hoping that the problem will go away or that someone else will
fix it for them. Problems seldom fix themselves and they typically lead to and create
33
further problems. This approach of ignoring problems is not sustainable in the long
term.
Level 2
People admit that there are problems but find excuses for not being able to solve
them. People can be too busy to face realities and can often be very creative in
making excuses. At the end of the day they are only making excuses to themselves –
the problems will still be there, no matter how good the excuse.
Level 3
People accept the fact that there are problems but are unable to solve them because
they don’t know how to attack them. By the time a company has reached Level 3
awareness they are beginning to have a sense of reality. They are at least admitting to
the existence of problems. Their future is in their own hands now. They can decide
to throw their hands up in the air and say they don’t know how to fix the problems or
they can begin to learn about tools, techniques and methods that will allow them to
progress.
This is a very delicate and important time in the life of a business. If they do decide
to learn and try to move forward they have some chance of survival. But, they need
to be careful and move forward from a clear understanding of the basics. They have
to build a strong foundation by developing the skills, experience and competitiveness
of their people. They need to progress at a speed that they can absorb and be careful
not to stretch too far, too fast. There is a strong need and desire to jump forward to
Best Practice but this is only sustainable if it is based on a solid foundation of Good
Practice.
Level 4
People want to see potential problems and they try to visualise what they may be.
They use Risk Assessment on processes and products. They attack identified
problems, learning the appropriate tools. They apply proper, structured method to
their improvement activities. By Level 4 managers and workers are not just looking
at and dealing with the obvious day to day issues. They are thinking ahead,
identifying potential problems in the future and taking counter-measures to ensure the
problems don’t arise either within the plant or out in the market place.
Level 5
People know their problems and key methods to solve them. They understand how to
involve all their people to attack problems. They are ready, willing and able to tackle
any problem that may arise and are prepared to change and re-organise their operation
if this is required to address the problem. By Level 5 people have become
accustomed to identifying, tackling and resolving issues. They know how to work as
teams with the core objective of driving the operation forward. The improvement of
the business and the sustainability of the operation is paramount.
The involvement of all people in the Continuous Improvement effort is a key
characteristic of the Japanese approach to improvement. This is not to say that everyone
has the same level of time commitment to improvement activities throughout the
business.
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Managers should spend a greater proportion of their time on improvement activities than
shop floor workers, see fig 20.
fig 20: Improvement – Daily Work Balance
The higher up the organisation a person is the more of their time should be spent on
improvement type activities rather than on daily grind work. The more the focus is on
improvement the more the pressure comes to create and implement change as no
improvement can be delivered without change. The more the focus is on change and
effective change management the more the focus is on strategic alignment of
manufacturing operations with overall business objectives. Manufacturing can be a
significant strategic advantage for a company as long as key manufacturing staff are
focused on improvement within the framework of the overall business strategy.
3. Zero as Optimum Concept (Culture)
The third key driver of Japanese manufacturing is the concept of “zero as Optimum”.
This moves away from setting a target which is achieved or nearly achieved. It is an
absolute whether it refers to zero effects, zero breakdowns, zero stock holdings or zero
customer complaints.
This focus on “zero” removes the normal discussion that arises when managers spend
time and energy discussing what are optimum stock levels or what is the optimum
balance between quality controls, checks and counter measures and customer complaints
or defective products.
35
The challenge of reaching zero is often quite extreme. It is not something that can be
achieved overnight and is a goal that is achieved based on solid foundations and hard
work,
fig
21.
fig 21: Zero as Optimum
4. Knowledge Management (Culture)
The fourth key characteristic of successful manufacturing companies is Knowledge
Management. The aggregated knowledge and experience of a business is an incredibly
valuable asset and one which should be guarded, developed and nurtured. Experience in
Japan has shown that major advances in product and process can be secured by
structuring the knowledge management process. This structuring leads to standardised,
repeatable processes that can deliver new results in the future. Another benefit of
standardising the knowledge management process comes from the ability to focus on the
process itself. The application of the Continuous Improvement approach to the
Knowledge Management process leads to improved performance. Without this structure
companies are relying on the skills and abilities of individuals, and luck to resolve issues
and develop new products. It is clear that Knowledge Management processes balance
creativity with structure. The structure helps direct and guide the creativity rather than
36
stifling it or demanding of the creative person to keep too many thoughts, plans and
projects in their heads. The leading companies have developed specific approaches to
Knowledge Management and a number of sample sheets are provided in Appendix I
(pg.26-27, 28, 29, 30 – slides 52, 53, 54, 56, 57, 58, 60).
The overall process of Knowledge Management is shown in an example, fig 22. A key
feature of the Knowledge Management approach is the use of feedback loops. As
knowledge and experience are gained this is fed back to earlier stages of the process to
make even better decisions.
fig 22: Knowledge Management
Knowledge Management in the manufacturing area integrates Quality functions and
Manufacturing functions. It is essential that Quality becomes a central driver for
manufacturing efficiency and effectiveness. It is essential that Manufacturing decisions
and actions are made to enhance Quality. Information and feedback needs to be delivered
and used all along the supply chain. Visual measures greatly help this sharing of data and
information in the effort to mobilise all elements of the supply chain from ultimate
consumer to the manufacturers of the smallest components.
As knowledge is gained and recorded it becomes essential that this knowledge is shared
horizontally along the supply chain. If we think about this it is obviously silly if one part
or department of a business learns how to solve a problem and they do not then tell the
other departments how this is done. The same argument applies along the supply chain.
Knowledge is truly powerful when it is shared.
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5. Visual Management (Culture)
One of the most striking features of leading Japanese companies is the use of Visual
Management. Strong efforts are made to help managers to SEE what is happening in
their factories. Factories and production areas are arranged so that anything abnormal
can be detected easily and from a distance. If something is out of place it is immediately
recognised as being out of place.
Efforts are made to avoid having machines, materials or equipment blocking the line of
sight. If a particular area is hard to integrate in to the normal visual management
approach then some form of creative visualisation is developed.
Seven key factors to achieving Visual Management have been developed:
1. The visual tools must be seen at a glance from a distance.
2. The visual tools must be put on those items which require “Management” and
“Control”.
3. If something goes wrong, everybody should be able to notice it by the visual tool.
4. Everybody can easily use the visual tool, they must be convenient for doing jobs.
5. It should be seen how quality is built in at each process with the visual tools.
6. Everybody can observe and follow using the visual tools, and correct them if
needed.
7. The factory becomes light, bright, neat and streamlined with the visual tools.
Factories tend to be complex areas, with many different activities taking place at the
same time. This complexity makes it hard for managers to manage. Focusing energy on
developing methods that naturally highlight the exceptions will assist managers to
quickly and efficiently identify which activities and areas require their attention and
effort. The Visual Factory enables operations management to “Manage by Exception”.
Capability in Visual Management develops over time. As with the other World Class
practices, people develop capability and experience that allows them to use more
challenging and sophisticated techniques. This is represented in fig 23.
fig 23: The Visual Workplace
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The over-arching goal of Visual Management is the prevention of abnormalities. This
can be abnormalities in the product or the process. We know that abnormalities lead to
losses and problems for customers and the business. The first steps relate to cleanliness
and order. The 5S system, now the 7S with the addition of Safety and Security, is a basic
approach to getting operations into an orderly fashion. The old saying: Shipshape and
Bristol Fashion” is well known to many people. It describes a well ordered, non-cluttered
environment where people can do their jobs effectively and efficiently.
Many Western businesses have taken on board the use of computers throughout their
operations. Computers can be useful in many ways when trying to manage operations.
They are not very useful, however, when the objective requires shared understanding and
ownership of an operation. How can we expect a group of people to know what is
happening, to care about results being achieved or help improve on them if only one
person has access to the computer screen. Most of our screens are fifteen inches wide –
most of our factory and office walls are measured in many multiples of this. The use of
wall charts, graphs and other visual methods enables information to be shared with many
people at one time.
The Visual Management Triangle, fig 24, represents the underlying logic behind Visual
Management. As managers are charged with “Managing” rather than “Doing” they
obviously need means and methods to get numbers of people to See, Know and Act as a
group. Before people can commit to an action they usually need to see what is required
of them. They need to know what levels of commitment have been made, to fellow
workers, up and downstream colleagues and to customers and stakeholders. They need to
see what is expected of them in terms of Goals and Objectives. If a standard of
performance is not set, if output and quality levels are not set then it frequently happens
that standards of performance drop. They also need to know what is acceptable and
unacceptable performance, actions and interactions – they need to know the rules. They
need to See these as a Group and not as individuals, because they need to act together to
achieve the desired results.
But knowing what is required of them is not enough. They need to know also just how
well they are doing. They need to know how close they are to delivering on what is
required. They need to know what the current level of production is, what the inventory
levels are, what machines are available and also what ones are not. They need to have
ready access to this information on an ongoing basis.
These two legs of the Visual Management Triangle can be summed up by the following
quotation:
“People need to know what is required of them, and what they
have done so far”.
- Denis Keegan
The third leg of the triangle refers not to today or the current state of an operation. It is
focused on Continuous Improvement. People working in a Group need to Act in a Group
to look for ways to improve the processes and products they are working with. They
need to agree together that the techniques, methods and processes they are using are the
right ones, for the present. This is very important where plant, equipment or processes,
either in manufacturing or the office, operate for more than a single shift. Many multi
39
shift operations suffer due to differences in operation method between people on different
shifts. Adjustments and changes are made to machines, processes and procedures that
lead to changes and abnormalities. Groups need to reach consensus on what works for
the Group and move together.
The second part of Acting as a Group relates to the constant drive for improvement. This
focus is on the future. It demands that people operate the system as agreed but that they
also challenge themselves and each other to find new, more efficient ways of delivery
customer value to achieve a challenging Future State.
fig 24: Visual Management Triangle
The 5S System
Visual Management, self actualised teams, management by exception, minimum nonconformance: all these are objectives and goals for management. But how can they be
delivered? What are the practical steps required to deliver benefits to an operation? The
5S System is the fundamental key to delivering a Visual workplace. 5S focuses on
practical actions and building blocks that help managers and workers to develop their
experience and capabilities to achieve operational excellence.
Ten principles have been developed to help implement 5S in a structured way:
1. 5S is a process. Be careful to remember that the 5S system is a tool, a process
that helps deliver the goal of a well ordered, smoothly flowing operation or
production line. 5S is not the goal, it is a method.
40
2. Only keep what is necessary. Spend some time and effort distinguishing what is
necessary for the operation. Remove any unnecessary items as soon as possible.
If they are needed in the future, then store them safely. If they have become
obsolete then remove them completely from the premises.
3. Tackle Work-in-Progress. Identify all work in progress. Define the maximum
levels and stick to them. Removing work in progress will help stop processes
getting bogged down. Start thinking about how processes and machinery could
be re-designed and re-laid out to provide. U-shaped cellular arrangements.
Organisation and orderly lines will follow by removing Work in Progress and by
ensuring minimum space is allocated to the operation.
4. Put things where they are needed. Lots of time is wasted spent looking for things.
Where are tools, parts and consumables kept? Remove the necessity for workers
to have to walk to the stores area to get parts or consumables. Place tools beside
machines, beside where they are used.
5. Discipline. Management need to take a lead and show their people that they are
committed to the 5S process. Management need to take the necessary steps 1 to 4
and show commitment to the process. When workers see that management are
committed they will follow the system. If the workers see that the 5S approach is
only a management fad then they will return to the old ways.
6. Toilets are important! The state of the toilet facilities says a lot about the state of
mind of management and workers. If the toilets are dirty, damp or cold then it is
highly unlikely that the operational area will be of a high standard. Creating a
good environment in the toilet area helps create a clean and hygienic atmosphere
throughout the plant.
7. Pick it up! Everyone should be responsible for picking up litter and debris. This
should and must include top management. When workers see that management
are interested enough to care to pick up a piece of paper then they are likely to
come to understand the importance of cleanliness.
8. Cleaning provides an opportunity to do spot checks on the equipment. Workers
can often detect problems with machinery at an early stage if they clean it. Leaks
of product or lubricants can often cover a machine and lead to losses or failures of
critical components. Close co-operation between workers and maintenance staff
can lead to improved machine performance and availability as small problems can
be detected early and fixed before they become big problems. Daily cleaning and
inspection schedules should be developed and implemented.
9. No electrical wires dangling from the ceiling. Clean up the electrical, air and
water supply lines. Use trunking and cable trays where appropriate. Remember
the need for access for cleaning. Make it as easy as possible for machine
operators and maintenance staff to do their work, cleaning and inspection duties.
10. Bring the 5S methods into the offices too. Very much time is wasted in offices
looking, moving, checking and distributing paperwork. Look to see how the 5S
approach could be applied to the development of the administrative area.
The move to a 5S environment is not necessarily an overnight affair. Table 2 provides a
series of 3 stages in the process, all moving towards the goal of 5S implementation.
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Table 2: 5S Implementation
Progress towards 5S should be incremental, sustained and needs to be seen clearly as a
standard way of doing business and not just a management fad. The effective use of 5S
can lead to the energised involvement of people throughout the business. The creation of
this pooled energy is very, very helpful when it comes to addressing the Sixth Key
Characteristic of a successful World Class Operation.
Detail Oriented (Culture)
“The Devil is in the Detail”.
This is familiar saying to Westerners from our folklore. In Japan the saying is
“God is in the detail”
This seemingly small difference is very illuminating. We in the West are often
traditionally not very good at details, at carrying through to the ultimate conclusion. In
the East they traditionally have developed a focus on detail and have reaped the benefits
of this focus. Attention to detail is a key distinguishing feature of all exceptionally good
things. Whether it be in the detail of a table setting, a fine car or the organised working
of a world class factory or office, we can all see when true attention has been given to
detail.
The focus on detail does really deliver results at the business level. There is little hope of
a successful outcome if the fundamental items are not dealt with properly.
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We can visualise the effects of attention to detail by reference to the Machine Loss
Pyramid, fig 25.
fig 25: MACHINE LOSS PYRAMID
In a factory many hundreds of “Hidden Failures” can be happening at any one time. Lots
of small deteriorations in state can develop through natural wear and tear and operation of
machinery. In a number of cases, but not all, these can lead to “Minor Failures”. These
failures do not always lead to loss of function or lost output but they often lead to
variability in product quality and sometimes, in a number of cases, lead to “Minor
Stoppages” and loss of function and output. These losses are often quickly recovered
from and production continues, as in the example (fig 25) when the motor cools down.
In a small number of cases the “Hidden Failures” grow and develop to the point where a
“Breakdown” occurs. Machines and processes are stopped and output and function are
lost. These cases require a more significant input to restore function and output. Careful
analysis of the root cause of failures at this level will lead back to a single hidden failure.
In most cases hidden failures are eventually responsible for major losses, unless they are
addressed early.
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The high number of these “Hidden Failures” means that it is often difficult to address
them with a traditional maintenance approach and a traditional “We will fix it when it
breaks” business model. The 5S model focuses attention at the lower level of the
Machine Loss Pyramid and tackles the root causes of nearly all machine failures. The
development of soundly based cleaning and checking procedures will help identify early
“Hidden Failures” ensuring that they do not grow into a “Breakdown”.
Most businesses deal with breakdowns in a very focused way. When the machine stops
every effort is made to get it going again. Very few organisations tackle the causes of the
failure. Very few have systems in place to track down and remove the causes of “Hidden
Failures”. If the root causes are not eliminated then it is purely a matter of time until the
machine will fail, again.
This focus on the “Hidden Failures” helps a business to galvanise their workforce on
problems and issues that can be tackled effectively at shop floor level. Workers can be
easily trained, enabled and required to perform checks and adjustments at the base of the
Machine Loss Pyramid that will have a very positive effect on the overall efficiency and
effectiveness of the plant. By tackling the root causes of machine weaknesses equipment
failures will not occur. This is one of the true works of a World Class company.
7. Focusing on Quality (Tactics)
Quality costs nothing but is very highly prized. The Greek root of the word quality is
“arête”. This can be translated as either “Quality” or “Excellence”. In actual fact when
we are pursuing quality of product or production we are pursuing excellence. We are
working to be the best we can be.
This focus on quality has been a key driver of Japanese companies for many years. The
understanding of quality in the manufacturing arena has expanded over the years from the
early days of Inspection where the quality control department operated separately and
independently of a business. With the introduction of Process Quality control the number
of departments and functions within a business involved with quality grew.
Manufacturing, manufacturing techniques, purchasing, and the general business were
now involved with quality and took an active part in the Quality Control process.
The introduction of Total Quality Control moved quality to another level within the
business world. Effort was expended to achieve certain levels of quality and further
elements of the business became involved in delivering the new Total Quality Control
system. Marketing, R&D, Product planning, Design, production preparation and general
management became involved and helped deliver significant quality improvements
through focusing on their own areas and how they affected the quality of the product
process.
The advent of Total Quality Management closed the circle on the business. Quality
became a strategic element of a business and it’s customer interface. Quality had grown
up and out of the shop floor and was now fully integrated into the board room. Or, at
least, in those leading companies who could see the big, quality picture.
As the focus on quality has developed so too has the emphasis of management. As
strengths, capabilities and experience evolved the measure and areas of attention of
44
managers also evolved. As problems were fixed and resolved managers were able to turn
their attention to higher level issues. Managers were able to focus their attention on the
tactical and subsequently the strategic issues as operational problems were addressed and
mastered. This progression of the Quality areas over time is represented in table 3.
TABLE 3: Transition to TQM
The key driver behind this move to TQM is a very practical one based on minimising the
full costs to a business. A business that operates at Acceptable Quality Levels (AQL)
levels of 1%, that is acceptable piece part quality levels of 1% with 99 out of hundred
cars perfect, is likely to have between 30,000 to 50,000 defects in a million cars
produced. The company which operates at parts per million quality levels for piece parts
is likely to have 3 to 5 cars with defects for every million cars produced.
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The profit margins on individual cars is at such a low level that even the smallest of
defects that requires post-assembly intervention can result in the manufacturer recording
a loss on that car. Manufacturers that dissipate their profit margins fixing problems with
their products are finding it very difficult to compete with those who operate at the PPM
level. The way forward is clear and hard to travel but the benefits to be obtained are
equally clear.
8. Standardisation (Tactics)
The eighth keyword describing Japanese manufacturing is Standardisation.
Standardisation provides a basis for shared understanding of what is required of both
workers and processes. The standards provide a basis to identify when something is
working right and when something is going wrong. The definition of a standard provides
a basis for a shared understanding of how things should be. The standard removes the
possibility of individuals doing things their own way and, most importantly, it provides a
solid base from which to move forward. The setting of a standard, today, gives the
possibility for an improved standard in the future. The standard acts as a solid
foundation, a benchmark to move forward from, into the future.
What is a standard? A standard is a clear image of a desired condition. It defines what is
acceptable and what is not acceptable. A standard can be as easily applied to a person, a
process, a machine or a system.
Standards are centrally important in a WCM environment as they make abnormalities
immediately obvious. Once the abnormality is identified ACTION can be taken to
address it. If a standard has not been defined and set then how difficult is it for managers
or workers to identify the abnormality?
A good standard is a simple, clear and visual one. The easier it is to see good from bad
the easier it is to use the standard. The easier it is to use the standard the more likely it is
that it will be used and the more the standard is used the more quickly problems are
tackled and eradicated.
Standards come in many forms and types. We are probably familiar with Quality Control
standards, inspection standards, standards for responding to and dealing with customer
complaints. People within organisations also operate to standards. Means and methods
of operation, sequences of manual operations, work instruction standards, personal
behaviour standards are all examples of standards as they apply to people. Plant and
equipment standards are set in relation to maintenance and operation standards.
Standards also are evident in the support and administrative functions in terms of
production orders, item labelling, invoicing and purchasing and operations management
paperwork. Work environments are protected with health and safety standards.
Management can use standards effectively to sustain current performance and to drive
future improvements.
The real benefit of standards comes from their use in the improvement process. The
challenge facing management is to make standards an active part of the business and not
to have manuals and standards stacked on a shelf gathering dust. A work standard that is
presented, at the place of work, in the form of a printed instruction can be more effective.
If this work standard is presented in a graphical form then it’s effectiveness increases.
We can take the example of a quality standard for a paint finish as an example.
46
If the quality standard is written and kept in a manual then it’s impact is obviously going
to be low. If it is presented as a picture, posted at the place of work it is certainly going
to be more powerful than the written, filed quality standard. Probably the most powerful
standard would be actual samples of good and bad work pieces, made available at the
place of work. Each of the three standards described above are valid standards, but the
effectiveness of each means of presenting the standard, and achieving the required
objectives of top quality production is different. Each company chooses their own way to
present standards, to share with their workforce what is required of them. Equally, each
company can limit the effectiveness of the impact of standards based on these decisions.
9. Reduction of Lead Times.
The ninth keyword to understanding the Japanese manufacturing approach is “Lead
Time”. Lead Time can be taken as the time between starting a job and delivering a result.
The term is widely understood in the manufacturing arena, becoming understood in the
design arena and hardly thought about in the administrative arena.
Lead Time is extremely important for a number of reasons. We are all aware of the old
adage “Time is money”, and this is particularly true in a business environment. The
longer materials are on a premises before they are converted into saleable products and
consumed, the bigger the financial burden on a business. A second time dependent
aspect of the business – customer interface is that the longer lead-time the greater the
opportunity for the customer to change their mind. If the lead-time is long it is very
possible for the customer’s circumstances and requirements to change. This change can
result in either a desire to cancel or change the order or dissatisfaction with the delivered
product. A further aspect of long versus short lead times arises once again in the
customer interface area.
If a manufacturing company has evolved to the point where it’s production lead time is
less than the delivery lead time acceptable to the customer the manufacturer can
effectively service the market without need for expensive finished goods stocks. The
corollary is also true, unless manufacturing lead time is less than market expectations
then expensive finished goods stocks are required. A final aspect of Lead Time
Reduction relates to the pressurising of systems within a business. If people are made to
believe that action is required by a certain time then they are very likely to meet this time
constraint. If there is no time constraint then the work will usually expand to fill the time
available. Time is a very easily understood thing that can be readily used to develop a
shared belief and energy to deliver improved performance.
We will now look at lead time from both the European and the Japanese perspectives in
an effort to better understand the concepts behind Lead Time Reduction.
Looking at the business fulfilment cycle we can break the process down into three
elements, fig 26.
47
Order Processing Time
Sales Made
Production Cycle Time
Raw Materials
Delivery Time
Pick List
Administration
Production
Wrapping
Schedule
Works Order
Finished Goods Store
Delivery
Customer
fig 26: Business Fulfilment cycle
This high level analysis gives an indication of the many opportunities for delay between
the customer placing the order and the customer receiving their ordered goods. We must
remember that this is only a high level view, we will look at a more detailed process
shortly. While this is only a high level view it still only looks at lead time from the
perspective of the customer. Lead times exist too with suppliers and also with customers
when the finance department goes looking for payment. Each of these lead times account
for some element of lost time and incurred cost. A close examination of the business
processes involved in doing business can provide a major opportunity to identify priority
areas for action. Reducing Lead Times reduces the time from Cash to Cash. In fig 27 we
take a more detailed look at the system that turns raw materials into transferred cash from
customers.
fig 27: Manufacturing Lead Times
48
So far we have only considered Lead Time Reduction in terms of existing products and
services. The rate of change in the market place today is very rapid. Product life cycles
are reducing all the time. This short life cycle puts significant pressure on product
development teams. But this pressure can also lead to positive results. If mature
industries can realise that product development is a process, that can be standardised,
mapped and subsequently improved, then they can realise significant savings in the costs
of development per new product introduced. Shorter development cycle times can be
cheaper - provided the development process itself has been optimised.
10. Equipment Independence
The final keyword to the Japanese Manufacturing system is “Equipment Independence”.
This relates to companies developing the expertise and confidence to design and fabricate
production equipment in-house. This final step is a significant one. It demands that the
company has, acquires or develops the necessary technical competencies to understand
both base processing techniques as well as production process needs and wishes.
A number of benefits derive from taking this step. Machines purchased from equipment
suppliers are usually compromised. They are manufactured to meet a variety of market
needs and end user requirements. They must be designed this way if they are to have a
sufficient market. But this flexibility and compromise often means that they are suboptimised for any specific task.
If a company has taken the time and given the effort to develop it’s own in-house design
and fabrication capabilities then new equipment can often be manufactured at lower cost
and often in less time. Because the machines can be optimised for the specific task at
hand they can often be more productive than standard, compromise equipment. A further
benefit of designing and building your own equipment comes from the deep
understanding developed of process technologies and production requirements. This
knowledge helps people to be a little more adventurous in trying out new production
techniques. Creativity and innovation can be released into the equipment and can lead to
enhanced performance.
Because the machinery is being designed and built within the business it is relatively easy
to involve operators in the process. Their inputs, knowledge and experience of operating
equipment can be incorporated into the new equipment. This close involvement of all
levels of the business with the new equipment often leads to a heightened sense of
ownership, improved understanding of how and why a machine works and frequently
leads to better maintenance of “their” machine over it’s productive life.
The final key benefit of realising independence is ability to gain competitive
differentiation. If new machines are made in-house they can be cheaper, delivered and
functioning sooner, include new processes or technologies, be modified more quickly to
deliver enhanced performance and have lower full life costs due to better maintenance.
All these attributes can lead to enhanced competitiveness as they are all based around the
Captured Knowledge of a capable and dedicated team.
49
It is very difficult to compete against such a depth of excellence when buying standard,
compromise equipment.
50
Chapter 3
Strengths and Weaknesses of the West and Japan
Differences exist between the business approaches followed in the West and Japan. This
Chapter will look at some of those differences and provides a basis for examining where
businesses located in either the East or West can move forward to strengthen their
competitive positions by maximising the positive and minimising the negative aspects of
their business approach. One of the world’s most creative and effective geniuses,
Michelangelo, said:“Ancora Imporo – I am still learning”.
We will look at a manufacturing business from the early stages of research right up to
product manufacture, fig 28.
fig 28: East and West
The focus in the West is on discovery and invention. On breaking new ground, on
discovering and creating new technologies. Westerners have a serious interest in new
ideas and a relative disdain for the old. One of the problems with this is that invention
and discovery are discontinuities. There is no continual, defined process that will deliver
new discoveries. There is no predictability for genius.
The East has more of a focus on development and innovation. Concepts and technologies
are secured and continuously improved. New products and ideas are based on proven
51
forerunners. Synergies are exploited to meet customer needs and wants and to utilise
productive capacity. A well managed innovation system is both predictable and
derivative. Former investments in capital, capabilities, knowledge and technologies can
help deliver new products effectively. The time to develop new derivatives of products
can be judged with a good degree of certainty. Product life cycle planning can be
facilitated with two, three and more product generations being catered for. This security
in the product generation process can help sales and marketing, finance, purchasing,
manufacturing and logistics personnel to optimise their respective roles in the value chain
over extended periods. This formalisation of the process also leads to the opportunity to
benchmark the innovation process and to seek and secure continuous improvement in the
process. These improvements typically lead to improved product capability and or
reduced lead times for product to the market place.
These fundamental differences in approach to the Innovation process leads, in turn, to the
development of different capabilities and characteristics. These are summarised in
Table 4.
TABLE 4: Strength Comparisons – West and Japan
52
The strengths and characteristics outlined in Table 4 lead to different axes of movement
in the market place. If a company is focused on Basic Research then it has limited energy
to focus on Applied Research. Applied Research focuses on how new ideas and
technologies can be applied to create wealth. This wealth can, in turn, be used to pay for
further innovations and increased wealth generation. It creates a virtuous circle without
many of the potential pitfalls in carrying out Basic Research. Unless the basic research
leads to inventions and new ideas it is very unlikely that the investment made will be
recouped. By focusing on Applied Research companies can decide which proven
technology can work for them, without the necessary investment in basic research. There
is a balancing act in all of this and it is not completely clear which is the pre-eminent
approach. It could well be that a balance between the two approaches could lead to an
optimised response.
We have looked at the basic strengths of the West and Japan. Managers in both areas are
conditioned in how they think and act by these strengths and general characteristics. But
how does this affect how they ACT as managers? In Table 5 we look at the management
characteristics of Western and Japanese Managers.
TABLE 5: Western and Japanese Management
Managers all over the world are faced with the same problem.
“How to get their strategies and high level plans implemented successfully”.
53
Western managers achieve this with the use of Manuals. SOP – Standard Operating
Procedures, where high level strategies are fed down to the shop floor through layers of
middle managers. The key to success with this system is the skill of the middle managers
to understand the high level strategies and to be able to translate it to low level procedural
manuals.
The Japanese managers take a slightly different approach. They start from the same basis
of the shop floor but they encourage people to pass information and knowledge “up the
line”. One of the major challenges facing this approach is to ensure that individual
efforts to improve at shop floor level are aligned closely with the overall goals and
objectives of the business. Without this alignment the company risks deteriorating into
chaos. An “improvement” in one area can be detrimental in another. The Japanese avoid
this possibility in three ways:
1. Defining standards of operation. This gives a solid starting point for any potential
improvement activity.
2. Challenging people to improve the standard. Continuous improvement is seen as
being a key part of each individual’s work.
Both of these are focused on the here and now, the detail of an individual’s workload.
The definition of standards of operation could be likened to the Western SOP’s and
operations manuals.
Very few Western companies institutionalise Continuous
Improvement, though.
The third key approach followed by the Japanese is:
3. The use of Metaphor. High level goals and objectives are presented across a
business in the form of mental pictures. These mental pictures allow managers,
workers and strategists to share an understanding, to have a common goal. The
metaphors allow and facilitate the transfer of strategic objectives to all members
of a company. This is visualisation at it’s most abstract and possibly most
powerful level. It helps everyone see, understand and internalise the “big
picture”.
Define basic standards of operation, challenge people to improve on the basic standards
and create a “Big Picture” for everyone to see and aspire to. It all sounds very simple and
it is, but it also works.
54
Chapter 4
What is WCM in Japan?
The term WCM, or World Class Manufacturing is widely known. Most people feel they
know exactly what it means and what it covers. But, scratch the surface and it becomes
clear that different people have different understandings of World Class Manufacturing.
In this Chapter we will describe what WCM means in Japan.
WCM can be seen as an umbrella approach, incorporating the key techniques of Total
Quality Management, Just in Time, and others as shown in figure 29.
fig 29: World Class Manufacturing Man
Total Quality Management can be thought of as the driving brain of WCM. It provides
the methods and systems to guide the process towards improved performance. The brain
sends instructions to the body through a command system. In this case the Just In Time
system acts like the nervous system of the body, ensuring that actions are taken in a
timely and appropriate manner. The JIT system also ensures feedback to the central
system, the TQM brain. This feedback ensures that the overall system operates
55
effectively and has the opportunity to move to improve itself. Total Quality control acts
as a learning mechanism, ensuring that correct procedures are learnt and repeated. This
ensures that required results are achieved in a sustainable way. Total Productive
Maintenance (TPM) acts like the muscles, developing and sustaining the ability to act.
Total Industrial Engineering (TIE) is like a golf coach for the body, ensuring that the
actions that are taken are both appropriate and effective. Working together the tools of
World Class Manufacturing can lead to the achievement of true World Class
Performance, fig 30.
World Class
J
I
T
T
Q
M
Total Productive Maintenance
Total Industrial Engineering
Total Employee Involvement
fig 30: House of World Class Performance
All of the tools and techniques of World Class are based on and dependent on people for
their effectiveness. The tools and techniques help managers to focus and channel the
energies and creativity of their people to achieve high end business objectives. The high
end objectives need to be identified and defined by senior management. The World Class
tools and techniques facilitate managers to involve their people in positive ways to assure
the delivery of high level goals.
We will now look more closely at Total Quality in an effort to better understand the basis
for so much of the Japanese techniques.
What is Total Quality?
The primary objective of all Total Quality systems is to economically produce products
or services to meet customer needs or wants. You could as easily say that Total Quality
systems are focused on building and sustaining the long term profitability of businesses.
If customer’s needs and wants are not met by the products they buy their next purchase
56
will be from another vendor. If the qualities of the product are not or are not perceived as
being right then the next purchase will be elsewhere. And if this is not all achieved
economically then there will be no future for the business. So it should be clear that
Total Quality systems are about delivering profitability today and into the future.
Total Quality systems are based on the fundamentals of Quality Control (QC).
Management need to be sure that quality levels are controlled with the minimum of
variability if they are to confidently make commitments to customers. The Total Quality
and Quality Control concepts need to be seen as enterprise wide initiatives. It is
obviously not appropriate for quality to be confined to a single function in a business.
What is the point of having a very well made product if it is one that the customers do not
want? What is the point of having a top quality sales technique and method if the quality
and performance of manufacture is below par? What is the point of having top class
design, sales and manufacture if the quality of the administration and finance functions
cannot ensure orders and purchases are handled effectively and that the finances are
managed properly? Total Quality is just that – it is an enterprise wide and enterprise deep
approach to doing business in a proper way. The Chief Executive and the Shop Floor
Cleaner need to be equally committed to delivering quality product or service to the
customer, economically. When this Total Quality approach is followed across and
throughout an enterprise it is known as Total Quality Management (TQM).
The difference between the traditional approach to manufacturing and a Total Quality
driven one are presented in Table 6. It is an important point to note that not all Japanese
companies are following the Total Quality road. It is equally important to remember that
not all Western companies are choosing to ignore the Total Quality way. There is no
clear environmental link to the adoption or rejection of Total Quality Management.
57
TABLE 6: Traditional Vs Quality Mindsets
Traditional Way of Thinking
Quality Mindset
1. Product Out
- I am always right
- I make my own judgement even if I have
prejudice
1. Market Driven – (in)
- I think from the viewpoint of the customer
- I am humble enough to accept other
people’s opinions
2. Dependence on own Knowledge
- I depend on my intuition and experiences
2. Dependence on Fact
- I carefully evaluate based on observation
of the Facts
3. Results oriented
- Countermeasures are only taken against
phenomena
- Plan and no doing
3. Procedures are as important as results
- Relationships between cause and effects
are pursued
- PDCA cycles are run to get things done.
4. Simple thinking.
- Things are treated in an abstract way.
4. Paying attention to (variability) dispersion
and identification of causes.
- Differences are appreciated.
- Proper procedure based on dispersion is
used
- Things are treated in a concrete way.
5. Excuses for not being able to do
- Conclusions drawn without doing Trials.
- Discussions are based on assumptions.
- Fire Fighting Approach.
- Discussions Based on Feeling.
5. Devices (Systems) to solve problems
- Understanding comes from Trial.
- Discussions based on accumulated Facts.
- Recurrence Prevention Approach.
- Logical Discussions.
- Differences are ignored.
- Things are regarded as similar.
The Quality Mindset is obviously different to the traditional approach. Some managers
believe that quick action is the way to go. But, if the action taken is not based on
observed FACT it may be the wrong action and lead to a worsening of the situation. The
Quality Mindset is the application of basic scientific method in business management.
The Quality Mindset itself has developed and evolved in a number of ways. Today it can
be described as:
58
Total Statistical Quality Control and Improvement. Each of these words is used to
convey a number of underlying and enabler concepts.
The QC Mindset
T –Total
1. Strengthening the company constitution
2. Total Participative Management
3. Education and Dissemination
4. QC Audits
5. Respect for humanity
S-Statistical
6. Use QC Tools
7. Dispersion Control (Variability)
Meaning
Use QC to create a company capable of achieving lasting
prosperity.
Unite employee’s talents company wide and exercise them
to the full.
Boost human resource development by strengthening
education and training.
Top management must itself check state of QC progress
and champion QC costs.
Respect people’s dignity and have them do their best.
It’s not good trying to develop your own devices and tools.
Pay attention to dispersion (variability) and identify it’s
causes.
Q. Quality
8. Quality first
9. Customer Orientation
10. The next process is your customer
C. Control
11. PDCA Cycle
12. Management by FACT
13. Process Control
14. Standardisation
15. Source Control
16. Policy Management
17. Cross-functional management
Aim to secure profits by giving top priority to quality.
Make the goods and services that customers really want.
Never send defects or mistakes to the next process
Conscientiously follow Deming Cycle
Base decisions and actions on FACTS
Control the process of work rather than it’s results
Formulate, observe and utilise standards.
Control systems at their source, not downstream
Use policy management to evolve consistent company
activities
Create horizontal links throughout the organisation and
improve systems for managing quality, cost, delivery,
safety and morale.
I. Improvement
18. Prioritise consciousness
19. The QC 7-Step Formula
20. Recurrence Prevention and Avoidance
(prior prevention)
Pounce on priority problems and attack them mercilessly
Effect improvements by faithfully following the QC-7 Step
Formula
NEVER REPEAT THE SAME MISTAKE!
Do not neglect recurrence prevention and prior prevention
of trouble
We have just looked at the Quality Mindset. When this thinking is applied to a process
we begin to think statistically, moving away from feelings and opinions and towards hard
facts, and an understanding of deviation and process capability.
Let’s make the assumption that the process we are interested in has a quality
characteristic that we measure and find follows a Normal distribution. In this case plus or
59
minus three standard deviations (+ 3 sigma) will include 99.73% of the total population.
This is represented in figure 31.
fig 31: Normal Distribution
The Capability of the Process is defined as:
Process Capability = + 3 sigma (Plus or Minus 3 Standard Deviations) or 6 sigma, Six
Sigma.
Statistical theory tells us that the level of +1 sigma contains 68.26% of the population,
+2 sigma contains 95.46% of the population,
+3 sigma contains 99.73% of the population.
The capability of a process is, of itself, of no real interest to a practising manufacturing
manager. It is only when a TOLERANCE, or requirement for a given characteristic is
introduced that the process capability has relevance. We will use fig 32 to illustrate this
point.
In fig 32 (a) we see that the normal distribution of the measured characteristic fits neatly
within the required tolerance band. In actual fact the (x + 4 sigma) values are within the
specified tolerance range. This would be considered as efficient process capability. This
distribution would be described as having “No Bias” within the tolerance range.
60
fig 32 (a) and (b)
In fig 32(b) we see a normal distribution but this time it is not centred within the
tolerance range, it is BIASED towards the lower end of the range. However, the
(x – 4 sigma)
values are still within the tolerance range and process capability would still be considered
to be enough to meet the requirements of the application.
When we look at fig 32 (c) we see a different picture. We still have a normal distribution
but the spread is wider. Individual results deviate too much from the mean and we have
too wide a standard deviation for the process capability to meet the requirements of the
application.
fig 32 ( c ) + ( d ): Relationship between Characteristic Distribution
61
The people responsible for the process and tolerances represented in ( c ) must work to
understand why such a high degree of variability is arising and takes steps to reduce it.
Finally we come to fig 32 (d). In this case the measured characteristics are not spread too
widely, the deviation from the mean is not too high. But, we still have a problem that the
process is producing defective parts, outside the upper tolerance point. In this case the
mean value needs to be adjusted downwards to bring the process distribution inside the
tolerance levels.
A method has been developed to measure the Capability of a Process, the Capability
Process Index:
Process Capability Index
Case ( a ): Two–sided, upper and lower limits of standards.
Cp = (ut – lt)/6 sigma
Case ( b): One-sided, upper limit of standard.
Cp = (ut – x)/3 sigma
Case ( c): One-sided, lower limit of standard
Cp = (x – lt)/3 sigma
Where;
Ut = upper tolerance limit
lt = lower tolerance limit
x = the mean value of the distribution
Table 7: Process Capability Index
In the real world processes can be a little more complicated. This has led to the
development of a Capability measure know as Cpk, to be used where x deviates from the
target value.
Cpk = (1 – k)(ut – lt)/6 sigma
Where k = degree of deviation
= (ut + lt) 2 – x
(ut – lt)/2
If k>1, let Cpk = 0
If we look at fig 33, we will see examples of when Cp should be used and when Cpk is
more appropriate as a measure of Process Capability.
62
fig 33 (a) and (b)
In fig 33 (a), we see that the distribution of all points gives a 6 sigma spread where
Process Capability = Machine Capability.
In fig 33 (b) we see two sets of measured characteristics. It appears as if an adjustment
has been made to the mean. Here again the Process Capability = Machine Capability, but
the mean has changed during the measurement phase.
These measures of Process Capability are not of any great value of themselves. The real
value from the methods comes from how they are used to develop processes, how the
results are used to inform managers and operators of the appropriate responses from them
to improve their operations.
Managers and workers need to be aware of what their Capability Measures are telling
them about their processes. In this next section we will look at different levels of Process
Capability and what these might mean for managers and staff.
63
fig 34: Judgement on Process based on Cp Value
But, what does Cp mean in practical terms? What is the impact of a low Cp level on an
operation? If Cp<<1 then the process is not capable of producing products properly.
Large numbers of defective products will be produced. If Cp – 1 this means that 27 items
out of 10,000 are produced outside the tolerances allowed, or 2,700 wrong parts for every
million produced – a lot of defects! If Cp>/1.3 only 64 defective parts will be produced
per million parts made. The process can be managed effectively at this low level of
defects.
Businesses face a double challenge when working to improve capability of processes.
The first of these challenges arises from the effective design of the product itself, see
figure 35. The Product People must interface with the Process People. Experience and
insight gained from the manufacturing process needs to feed the development activities of
plant, equipment and process designers. The same experience, insight and data should
simultaneously feed the thoughts and development plans of the product development
64
staff. The careful capture, analysis and use of such process capability data and insight
can lead to the acceleration of product and process innovation. If management focus on
the development of this positive interaction between Product and Process staff they can
enhance the innovation level within the business, leading to increased capability, better
quality and shorter lead times as well as removing costs. All in all, a “Win-win”
situation.
65
It requires a team approach for a company to achieve top levels of performance from
its products in the field. Quality and the improvement of quality demands effort from
all concerned, from the basic product design conceptualisation to the end of life
management. Each member of the company team has a specific but essential part to
play, none more so than the Design Engineers and operators.
These two team members have mutually supporting roles. The Design Engineers
need to design the product carefully to ensure that it is as easy to manufacture
correctly as possible. They are also charged with designing the manufacturing
process and equipment to deliver products with high process capability, see fig 36(a).
The Design Engineers can develop processes to ensure that the process capability,
6 sigma, is well within the upper and lower levels of acceptability. By ensuring that
the process capability is well within the Upper and Lower Control levels Ul, Ll, the
operators are given a margin within which they can control the output without fear of
making inferior product. They can work to control the product variation around the
middle value, thereby helping further assure the final product’s high quality, fig 36(b).
fig 36: The Roles of Design Engineers and Operators.
We have been dealing with Quality and Quality improvement issues. In business
today there are two major philosophies in the quality improvement arena, the Six
Sigma way and the Total Quality Management way. While many of the fundamental
tactics of both philosophies are similar there are a number of differences between the
two systems, Table 8.
66
Six Sigma Way
Required process
Capability
Required Activity
on Shopfloor
Production Engineer
Operator
Result
6Sigma0.5T
Involved
?
3.4ppm
TQM Way
6Sigma0.75T
Quality Maintenance
Involved
Involved
c.64ppm
6 = Standard Deviation
66 = Process Capability
T = Tolerance Width = USL – LSL
Table 8: Six Sigma Vs TQM Way
The Six Sigma way is more a management than a shop floor tool. The main body of
the work is carried out by specialists and experts. It may or may not involve the shop
floor and operators. The results targeted by six sigma of 3.4 parts per million defect
are very high.
The Total Quality Management approach is more involving for the operators. The
targets set are not quite as demanding as for six sigma, but still are designed to deliver
on very high quality objectives of approximately 64 parts per million defect rate. The
TQM approach helps build the capability and involvement of staff on the shop floor.
The process is one of trial and error where people gain experience as they learn, as
they improve their processes. The TQM and Six Sigma approaches can be described
as two different ways of firing a rocket at a moving target. In the Six Sigma approach
detailed calculations are made before launch to determine the speed, range, angle, etc
required to hit the target. The TQM approach requires similar but not as accurate
calculations before launch. During the rockets flight adjustments to its flight path can
be made, allowing for initial errors in the calculations or variations in the flight path
of the target. On earth this analogy could be for a rifle shot versus a “smart” bomb
which adjusts itself and tracks onto the target. The TQM approach has inherently
greater flexibility built in and helps build the capability of more people in
understanding and using quality tools to achieve superior product quality and
performance.
A number of supporting tools have been developed to support the delivery of the
TQM philosophy, fig 37.
67




QC 7 Tools, SQC
New QC 7 Tools
- Relations Diagram
- KJ method – Affinity
Diagram
- Systematic diagram
- Matrix Diagram
- Process Decision Program
Chart (PDPC)
7 Tools for Product Planning
7 Tools for Establishing Strategy


Policy Management
… Policy Deployment
QFD



Process FMEA
FTA
Dr. System

Reliability Engineering
All this talk of tools, techniques, philosophies and methods must be brought to a
practical application if it is to help businesses improve. In the 1960’s and the 1970’s
Western management took on board the basic concept of management education as
the way forward. The MBA degree became almost a necessary starting point for an
aspiring manager. This new direction certainly helped managers understand more of
the different aspects of a business. It helped them to see the bigger picture in a clear
and well understood way. But, all life is delimited by time. We only have 24 hours in
a day. Managers who previously had learned about processes and practical issues on
the production floor were now learning about Matrix Analysis and strategies in the
classroom. In effect Western managers became separated from the practical area of
manufacturing. The Japanese management development system has not last sight of
the need and benefit of managers being immersed in the practical areas of
manufacturing as an essential, fundamental aspect of their development process.
Problem solving is seen, and presented as a simple and logical five step process:
Go to the Spot - GEMBA: It is possible to develop an understanding of an issue based
on reports or feedback from others. But, it is often very much more effective to go to
the actual point of activity yourself. This first step in the process suggests just that, go
to the workplace, the place where the actual event occurs. This immersion in the
environment will often provide insights and understanding that a report can never
convey. Workers will often respond in a very positive way when they see that the
manager is interested enough in the problems to come to their place of work to
understand issues and become involved in developing solutions.
Examine the Object - GEMBUTSU: Look at what is happening. Look to see. Have
an open mind and work hard to keep any preconceived ideas out of your mind. Try to
understand what your eyes and senses are telling you. Look carefully at the
“phenomenon”, absorb details of the environment and circumstances of the situation.
Avoid making quick decisions or jumping to assumptions. Take the time to absorb.
Check Facts and Figures - GENGITSU: Be detailed in your investigations. Check the
details of the equipment, materials, products, personnel and any other physical entities
involved in the incident. Be clear about what and who was involved and what and
who was not involved.
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Refer to Theory - GENRI: It is important to understand the fundamental principles
and theories that underpin the process. It is essential to understand the physical and or
chemical principles of the process; to understand how different parameters or settings
could give rise to different outcomes.
Follow Operational Standards - GENSOKU: It is important to look to see if Operating
Standards have been followed. This obviously requires that Operating Standards have
been developed previously. It is often the case where operators on different shifts will
adjust equipment to different set points, often leading to variability of output. By
having a defined Operating Standard it is possible to return to a defined “OK” level
when trying to resolve problems.
We now have a structured way of resolving issues. This can be simplified further by
describing the “secret of linear product flow”. The manager needs to “take a walk”
and “go look” for the course of any line disruption in real time – when the problem is
actually occurring and can be easily identified.
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TOTAL PRODUCTIVE MANAGEMENT (TPM)
Total Productive Management (TPM) has evolved as a key philosophy for
manufacturing companies in Japan who are focused on achieving world class
operational performance. The approach brings together people and equipment in a
coherent way. See figure 37.
FIGURE 37: TPM Aims
TPM seeks to develop and strengthen corporate culture and operational performance
through a focus on the practical aspects of effective plant and equipment running.
The approach is structured at three levels of Operator, Maintenance staff and
professional engineers. Tasks and responsibilities are identified and defined for each
level, appropriate to their experience, training and capabilities to deliver.
The Operators are required to develop their knowledge, skills and experience to allow
them to perform Autonomous Maintenance effectively. They must develop a
knowledge of their equipment and machinery as well as the processes they run. As
they build this knowledge base they can be trained in the basics of maintenance. They
can understand the impacts of certain adjustments, the affects of parameter changes.
They can, in turn, be trained to take on some of the simpler maintenance checks and
acts. As they develop experience to monitor their processes and equipment with their
five senses they can be trained further in the use of test and monitoring equipment.
The more of this low level maintenance work that can be done by the operators the
better. The operators gain familiarity and ownership of their processes and the
maintenance team are free to tackle more demanding aspects of their role.
The core Maintenance people of an operation in a TPM environment are a very
valuable resource. Working in conjunction with an effective group of operators who
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are using Autonomous Maintenance techniques they can develop their skills,
experience and understanding to ever higher levels. Analysis of the data being
captured by the operator groups can help the maintenance team to plan their
interventions in a timely manner. A manufacturing plant should have the objective of
“zero Breakdowns” and a world class plant should have this plus the tougher
challenge of “zero Speed-downs”. A professional maintenance approach can deliver
on these demanding objectives. The maintenance crew need to determine specific
strategies for their plant and equipment. Maintenance and monitoring plans need to
be developed to augment and enhance the work of the Operator team using
Autonomous Maintenance. The maintenance crew need to be trained in the effective
use of technical diagnostic and condition monitoring equipment to increase their
insights into the condition of the plant and equipment in their charge. They must have
and develop a safety focus to help ensure the on-going safety and security of their
fellow maintenance colleagues and their colleagues in the operator team.
The Production Engineers are charged with giving direction and leadership to the
Operator and Maintenance teams. They have access to data from the operators on
both output levels being achieved as well as the quantity and type of defects being
produced. As their skills develop they can begin to use ever more sophisticated tools
and techniques to better understand the underlying sources of defects and disruptions
in production. They also have access to the Autonomous Maintenance records of the
operator team and the Maintenance crew. They are ideally placed to take this data
and to create insights into how this can be used to either develop the existing
equipment and processes or to design the next generation of equipment. The
production engineers can greatly enhance the competitiveness of an operation by
designing equipment to enhance the efficiency of production.
The scope of TPM also embraces the area of improving plant equipment. Machine
design companies do not often have experience of running machines and actually
producing product. In-house engineers and operators can often use their experience
of production to enhance machines and improve their effectiveness. Machines can be
upgraded and developed to perform at levels beyond their original design
specification. Businesses that use this experience and develop this expertise can often
create a competitive advantage.
When new machines purchases are under consideration the engineering and operator
staff can contribute significantly to the design and purchase decisions. This integrated
team based approach can often result in the purchase of superior performing
equipment and a consequential minimisation of start-up times. Businesses often lose
critical time and money when commissioning new equipment. This time can be very
valuable. It is important to treat the commissioning and start-up phase of new
equipment installation as a very important project in its own right. It is not enough to
just physically install new equipment, it must be brought up to speed and quality
standards as soon as is practical. This process in itself needs to be analysed, critically
challenged and continuously improved.
TPM is based on the absolute belief that machine failures can be prevented. This
belief flies in the face of many machine and maintenance technicians and even some
engineers who believe that machines will always breakdown no matter what
maintenance is performed. This self fulfilling prophecy has ensured that many
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maintenance organisations are locked into a breakdown maintenance state. They
attend broken machines. They fix the machine, or at least the symptoms of the
breakdown, and they walk away, only to be called back to the same problem at a later
date.
TPM is focused on maintaining equipment at its optimal level and constantly
challenging and improving its productivity. It is not enough to continually fix
breakdowns. It is not enough to be a good fire fighter, to fix a machine and get it
back running. A system needs to be developed to ensure all sources of data,
information, experience and expertise are brought together to achieve optimal
equipment performance.
The Japanese experience has shown that minor machine defects are very important
indeed. They have found that minor equipment defects are now considered to be the
root cause of almost all machine failures and breakdowns. The TPM strategy is to
meticulously keep these minor failures out of factory equipment.
In Japan they say that
“God is in the detail”.
In the West we say
“The Devil is in the detail”.
This seemingly trivial difference is at the heart of an effective TPM implementation.
The lack of knowledge of a thousand seemingly insignificant details contributes in a
huge way to many equipment losses and failures. We need to develop a deep
understanding of machines, materials and processes if we are to improve
competitiveness. We need to deeply understand how machines and materials respond
to different inputs and adjustments. We need to clearly understand how our machines
and processes are operating. We need to capture data and information from all our
machines and all our processes. The scale of this work means that we must devolve
the work throughout the business. It is not sufficient for this work to be the reserve of
the engineering or maintenance staff. There is too much to do.
It is essential that operators are developed to understand the improvement process.
They need to understand and accept their role in the improvement process. They need
to become involved in machine cleaning and inspection. They need to understand
enough about the fundamentals of their machines, materials and their processes to let
them be able to make judgements based on the results of their inspections. If they are
required to be a key part of the TPM process they need to be trained and empowered
to be able to do this job effectively and efficiently. The operators will in fact begin to
do work that was originally thought to be the preserve of the maintenance staff.
As the Operators are being asked to develop their roles and capabilities so too are the
maintenance staff. They need to develop from the traditional role of fitters and
electricians to the role of maintenance technicians. This transformation is not
necessarily an easy one. Many European companies have failed to understand that
this transformation is more than a name change. Some companies have literally
changed the titles of their maintenance staff to technicians, without giving them any
training or developing their capabilities. This approach does not work. It is necessary
that technicians become involved in keeping minor defects out of equipment areas
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that are not accessible to operators. They need to develop a strong relationship with
their operator team to help them work together to maintain performance at top levels.
The technicians obviously need to be trained and experienced in the use of problem
solving and improvement techniques, beyond the level of the operators. They need to
be able to communicate with the engineering staff, to be able to understand the same
improvement language.
The Japanese experience has shown that about half of all equipment abnormalities and
failures are manmade. Most people believe that most failures are caused by machine
deterioration. If you do not really understand the root cause of failures you can waste
time and money either fixing the wrong thing or just accepting the breakdowns.
In the TPM world one of the key goals of Maintenance work is to keep every part, in
every machine “as it should be”, that is free of any and all minor defects. As we said
before very many productivity losses are due to the accumulated affects of a number
of minor defects. The TPM emphasis on keeping things as they should be is
important as it has been shown that when things are not kept as they should be it often
results in accelerated deterioration of other parts of a machine.
This Consequential Deterioration leads to increased machine downtime. The
increased downtime also leads to an increased usage of replacement parts and the
need for additional technician time. If technicians are being used to fix breakdowns
they are effectively fire fighting. This fire fighting activity can often seem to be
dramatic and successful, when problems are “fixed” and production resumes. But, if
we critically look at the use of time and resources we will realise that the best use of
the technician’s time is not as a fire fighter but as a fire preventer.
It is important to understand that breakdowns can arise from a number of sources.
They can be the result of machine deterioration such as bearings, belts or chains
wearing out. They can also arise from poor or inadequate machine design.
Sometimes machine designers will under specify load bearing elements of a machine
or design overly complex systems. And finally, some machine breakdowns can arise
from misuse of the machine. This misuse can arise from a lack of knowledge of the
operators or management in asking too much of a machine. It is important to fully
understand what is possible and acceptable to expect of a machine or process. Misuse
needs to be examined and understood by management and stopped.
The TPM philosophy has developed a number of tools and techniques to assist with
implementation. These tools are specifically focused on driving the TPM approach at
shop floor level. These tools are used by management to capture the involvement of
staff in their improvement activities:






5S System
Autonomous Maintenance
Planned Maintenance
“5 Why” Analysis
“5 G” Principles
Step by Step Approach
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
Processing Point Analysis
NOTE: We probably need to develop these points significantly!
Most people involved with improving manufacturing and business processes would be
aware of Total Quality Management (TQM). We will now look at a comparison
between TQM and Total Productive Management (TPM).
fig 38: TQM Vs TPM. A Comparison.
Definition of JIT Production
Just In Time Production defines a total production system which emphasises
producing exactly what it is needed and conveying it to where it is needed precisely
when it is required.
JIT Production is driven by the goal of finding practical ways to create the effect of an
autonomated factory which will come as close as possible to delivering on this
concept of ideal production. JIT Production seeks to gain the advantages of a highly
automated dedicated plant without the investment required to install such an
operation. It seeks to achieve these benefits through the development of systems
skills and capabilities of a highly motivated workforce using defined tools and
techniques in conjunction with multi-purpose equipment.
Just In Time Production is known in the West as Lean Production and it exhibits a
number of distinct characteristics that differentiate it from conventional Mass
Production. A comparison of the characteristics of JIT and Mass Production systems
is presented in Table 9.
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The JIT system works with the skills and abilities of its people in an effort to improve
the status quo. Mass production looks more on people as necessary elements of the
machine. They are incorporated into the process and used where it would be too
costly or difficult to use a machine. The Mass Production system typically fails to
recognise the cognitive abilities of people and generally fails to deliver any
continuous improvement activities from the shop floor.
JIT (LEAN) Production
Characteristics:
Levelled Production
One piece flow
Single Set Up
Just In Time
Kanban
Quality assurance
at process
Utilisation of manual
idle time
Multi purpose operation
Conventional Mass Production
Characteristics:
Large Lot Production
Large warehouses,
Large inventory
Production system for each product
(concentration)
Job division system
Machining division
Assembly division
Inspection division
Production Control division
TABLE 9: JIT Vs MASS PRODUCTION CHARACTERISTICS
The JIT approach makes it possible to engage with the workforce to pose problems
and to seek and promote improvements. People are involved in the process, they are
asked to be a part of developing and improving the full process capability. This
involvement leads to both better utilisation of labour and the fostering, development
and growth of the workforce as they learn new skills and develop their experience of
both running the process and ever more importantly, of successfully using problem
solving techniques. Problem solving ability is becoming a major differentiator in
today’s rapidly changing market.
The JIT workforce is engaged in much more than just production. They develop
skills in quality inspection and improvement. This can help reduce the level of
indirect support they need and can lead to a reduced overhead requirement. The same
is true of production planning and even of materials management and procurement.
In advanced JIT operations the shop floor staff deal directly with both customers and
suppliers. The JIT system seeks to get close to the Customer and the Supplier. It
seeks to reduce to a minimum, if not zero, all product along the supply chain that is
not specifically needed for a specific customer.
The Mass Production system is based on an analysis of historical demands and
forecast trends of customer demands. Mass producers try to predict the future and
prepare to meet the needs of this prediction. They move to adjust their output as they
get feedback from the markets, often in terms of revised predictions. This system
would work well if the system being predicted was a linear one. But there is at least
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one problem with this system and that is mankind. Our wants can change and this can
change our demands from suppliers, often leading to large inventories of unwanted or
obsolete goods. We have only to think of the fashion, computer and automobile
markets to see examples where Mass Production forecasting has led to large stocks of
goods being inventoried in warehouses until they can be sold at discounted prices.
The Mass Production system does not naturally lend itself to an improvement
philosophy, at best it leads to maintenance of the status quo or, more usually, a
deteriorating performance. People from outside the production system are charged
with maintenance or development.
The Mass Production system is based, to a large extent, on the work of Taylor. His
work was done at a time of huge growth in market demand for materials and products
as the USA entered a major growth period. The Taylor System was focused on
“Maximising Production Performance”. This approach was further developed by
Ford and Sloan, by Remington and the other leading producers of the late 19 th
Century and early 20th Century. The Mass Production system was also developed at a
time when capital was plentiful and money was available to purchase large stocks of
raw materials, big areas of land for building production facilities and to hold large
stocks of finished goods.
The JIT or Lean Production system is focused on “Maximising Capital Efficiency”. It
is focused on making money work hard and on returning profitability with minimum
investment. Golfers have a saying:
“Drive for show, putt for the dough ($).
In business this translates into the saying:
“Profit is a matter of opinion. Cash is a reality”.
The JIT or Lean Production system focuses on cash. It focuses on how quickly raw
materials can be turned to products to cash.
One of the most powerful metrics used by JIT or Lean Producers is that of “stock
turns”. It is a measure of how often capital cycles through a business, from purchasing
raw materials to invoicing customers and lodging cash back in the bank. In figure 39
we look at two businesses. On the left we see a “Mass Production” business. It
invests $1,000 in plant, materials and equipment, it works through the year and
returns a profit of 10%, or $100 by year end. Its stock turns for the year are 1.
On the right we see a JIT/Lean Producer. Their capital investment is $100 or 10% of
the Mass Producer. But, they turn the $100 into sales 10 times during the year
returning the same level of profitability, $100 as the Mass Producer at year end. The
JIT/Lean Producer has used $100 to earn $100. The Mass Producer has used $1,000
to earn $100.
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fig 39: Cash to Profit: Mass Vs JIT/Lean Producer
This simple example does not really reflect the marketplace. Imagine that at mid year
the market suddenly changed. The Mass Producer would be left with dedicated
investment of $1,000, though at this point it would be down to about $500, while the
JIT/Lean Producer would only have an investment of $100.
We have seen from the examples above that a JIT/Lean Producer can achieve similar
results to a Mass Producer. We have seen that high stock turn levels can play a
significant part in achieving Lean performance. The move from a Mass Production to
a Lean mindset can be difficult. It often requires people to look at optimisation of
processes at the Macro rather than the Micro level. When you are focused on
increasing stock turn levels logistics becomes very important. Effort needs to be
expended to develop and effective and efficient logistics system. We will now look at
the example of the logistics of parts being delivered to a factory. In the first example
five (5) suppliers deliver parts into the incoming warehouse. They deliver on a once
per week basis, using their own, liveried truck. The five suppliers were all located
within 150 km of each other. Now, lets look at the warehouse stock situation. We
will see that on average, the warehouse holds 2.5 days stock. This equals a stock turn
ratio in the stores of approximately 100 times per year. In many industries this would
be a very respectable result, figure 40.
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fig 40: Delivery per Manufacturer’s Item
In this example, fig 40, we have each manufacturer making a delivery once per week.
We have five trucks per week delivering to the warehouse. If we now apply the
concept of JIT/Lean Production to the supply of materials to the warehouse we can
develop a new system. The new system does not focus on improving the efficiency of
individual suppliers, it focuses on improving the efficiency and timeliness of the
overall logistics system. The new system moves away from individual suppliers, with
their own dedicated transport, with their own dedicated deliveries to one of mixed
delivery. The new system is presented in figure 41, and uses one truck to visit all five
suppliers, collecting an appropriate mix of products from suppliers A, B, C, D and E.
These products are then transported to the warehouse on a daily basis, with a major
reduction in the stock levels held in the warehouse. In the earlier example we had a
stock turn level of approximately 100. In the lean situation this is more like 500+.
The amount of capital tied up in the non-value adding warehouse facility is
approximately 20% of the former level. Savings in rent, rates and administration can
also be achieved, all from simply looking at logistics from a JIT/Lean perspective.
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fig 41: Mixed Delivery Each Day
A number of tools and techniques have been developed to help companies adapt and
use JIT/Lean principles. These are now presented:







Continuous flow production system
Multi-Process operation
Set-up time reduction
Minimisation of transfer batch sizes
Visual management
Fool proof devices
Separated jobs of operation and transportation
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The Definition of Total Industrial Engineering
Industrial Engineering in the West has suffered a bad press over the last twenty years.
Western business has largely moved away from the era of the stopwatch and clip
board. Western managers have moved a step away from the shop floor and have
consequently lost a major link with opportunities for improvement.
Total Industrial Engineering (TIE) is an approach based on an understanding of three
key words:
MURI: Difficult or unnatural operation
MURA: Irregular operation
MUDA: Non-value added operation
TIE seeks to tackle each of these losses in a systematic way using specific tools and
techniques. TIE has an objective of reducing theses three wastes to zero and
subsequently of separating labour from the machinery through the use of sensors.
TIE not only identifies the three losses but it also presents a series of countermeasures
to be deployed against them. We will now look at each of the three losses and discuss
the countermeasures used to address them.
MURI, or difficult or unnatural operation is the first of the losses. Machine, product
and process designers are often separated from the use to which their product,
machine or process is put. They are responsible for designing a machine but seldom
responsible for operating or maintaining it. They often do not realise the difficulties
they impose on people who have to operate or work with their designs. These
difficulties can in turn lead to operators or users having to make very difficult
manoeuvres to operate the machine. These difficult physical movements are known
as MURI, and Total Industrial Engineering suggests that ergonomic study be
deployed to address the issue.
An example of MURI would be the old Talbot Samba car of the mid 1980’s. The car
was fitted with a straight forward four cylinder four stroke engine. The engine service
required the valves to be checked and adjusted on a regular basis. The problem was
that to access the valves for this regular service the mechanic had to be double jointed,
with “hands the size of a child and the strength of a gorilla”, as the space around the
engine was very limited and the engine was sloped back towards the body. The
mechanics solution to this MURI was to …. Remove the engine completely from the
car to allow him easy access to the valves. This was obviously a wasteful process.
Designers, engineers and operators need to work together to avoid MURI. The
designers and engineers may have to do the job themselves to better understand the
issues. In the West we know MURI as Design for Assembly and Design for
Operation.
MURA or irregular movements can often be harder to identify in an operation.
Irregular movements mean that the same standard movements are not being repeated
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each time the operation is performed. The key word here is “standard” movements.
If a standard method has not been developed then it is almost certain that some
repetitions of the task will be performed below optimum. The creation of a standard
gives the opportunity for improvement, for the systematic removal of waste effort.
MURA leads to such lost effort. Someone has to observe the process over some time
to determine if such MURA exists.
The third key-word of Total Industrial Engineering is MUDA, or Waste. The trained
eye can readily identify MUDA. The focus of attention needs to be on identifying and
reducing. Non Value Adding Activities (NVAA). A simple way to think of what are
NVAA’s is to ask yourself if you would be prepared to put your hand in your own
pocket to pay someone to do a specific task or operation. Toyota identified 7 Wastes,
latterly an eighth waste has been added, the “Waste of People’s Abilities”.
The TIE approach relies heavily on the creation of and maintenance of Operational
Standards (OS). A simple classification system has been developed to help people
determine what level their operations correlate to, and this is presented in Table 10.
The Operational Standard is perceived and recognised not as an end in itself but as a
building block in the Continuous Improvement Process. Once an Operational
Standard has been developed it can be improved upon. Without an OS it is
impossible to say if a change is delivering an improvement or just a changed process.
Operational Standard Levels
Level 1: There is no OS. It is up to the operator how he does his operation.
Level 2: There is OS, but the OS is not good enough to assure quality.
Level 3: There is OS which assures quality, but the operator does not use it.
Level 4: There is OS which assures quality and the operator follows it.
Level 5: There is OS which assures quality and the operator follows it.
There is a system to check whether the operator has followed it.
Operational Standard is considered to be a starting point of making
continuous improvement and innovation.
NOTE: There seems to be little difference between Levels 4 and 5. Actually the
results are very different.
Table 10: Operational Standards (OS) Levels
As well as the three keywords, MURI – MURA – MUDA, Total Industrial Engineering
has developed a number of additional tools and techniques:
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o
o
o
o
o
MURI, MURA, MUDA
Video Camera Method
Standard Operation
Pace Monitor
Separation of Labour from
Machinery
o Multi-Skilled Labour
o Skill development
o Separation of labour from
Operation and from transportation
Some examples of a pace monitor are presented in figure 41.
Overtime
Tea
Target
Actual
fig 41: Pace Monitor Examples
Lunch
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5. The Drawback of WCM in Japan
The term World Class Manufacturing covers many of the key activities and initiatives
we have discussed to date. WCM encompasses Just In Time, Total Quality Control,
Total Industrial Engineering and many of the other tools and techniques being used to
improve performance and reduce waste. But there is a problem with the way WCM
and its subordinate activities have been implemented in Japan. There has been no
direct link between the activities and the actual, realised cost reduction benefits.
People have been following the WCM path in the belief that their efforts would
deliver positive benefits for the business but it is clear that a system that does not have
a satisfactory means of evaluating costs and benefits is not acceptable.
Much of the problems with evaluating cost-benefits for improvement activities stems
from the requirements of standard accounting systems. We must remember that
today’s accounting systems have their origin in the mid
19th century when the
development of the United States led to the need for more capital than individual
entrepreneur families could provide. This led to the need for external investors which
in turn led to the need to develop accounting norms and systems so that investors
could monitor the performance of their investments across a range of businesses. The
standard accounting systems and norms perform this important task well, providing
clear, standardised financial information to the markets.
But the managers in a business have additional requirements from their systems.
They need to be able to understand their systems and to understand the information
their systems are trying to tell them. They need to be able to understand their internal
operations, they need to be able to measure objectively performance improvements
being realised and they need to be able to determine Cost-Benefit analyses on projects
and initiatives they undertake if they are to be able to lead and support their people in
choosing the best way forward.
Cost Deployment has been developed as a means of addressing the gap between the
capabilities of traditional accounting systems and the needs of businesses that are
focused on achieving performance improvements. Cost Deployment is the method
that establishes a cost reduction programme in a scientific and systematic way. It
ensures the close co-operation between the financial and production departments.
This co-operation is achieved in a practical way by identifying areas of mutual
interest and organising company wide responses to tackle wastes and losses in a
coherent way. Cost Deployment is based on five key elements, presented in figure
42. These five key elements are used to direct work in a focused way, tackling
company important issues in an agreed, prioritised fashion. It is clearly not useful for
a company to dedicate scarce resources on unimportant areas.
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The key five elements of cost Deployment are:
1. Investigate the relationship between the cost factors, process generating costs
and various kinds of waste and losses,
2. Find connections among waste, loss reduction and cost reduction.
3. Clarify if the expertise on waste and loss reduction is available internally to
the company, if not, locate an external source,
4. Rank the items for waste and loss reduction according to company priority
based on a cost-benefit analysis,
5. Establish a cost reduction program for meaningful cost reduction.
Cost Deployment works in a very structured way; focusing on the three key elements
of an operation. Machines, Men and Materials. For general manufacturing specific
potential losses are identified in each of these areas with ten(10) losses identified in
the area of Machines or Equipment, five losses in the area of Men or Labour and three
potential losses in the area of Materials and Energy. When the cost Deployment
system looks at Process Industries it is possible to identify twenty seven big loss
areas. These will be addressed later.
Cost Deployment in General Manufacturing
The Cost Deployment methodology identifies big losses in eighteen areas of
operations. Theses losses are in turn broken down into
I). losses that affect Overall Equipment Effectiveness,
II). Losses in equipment loading time,
III). Production man-hour losses,
IV). Line organisation man-hour losses and
V). Defect Quality losses.
We will now move to look at the losses possible throughout a production operation.
fig 42: COST DEPLOYMENT – CLASSFICATION of LOSSES
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5I. Losses that affect Overall Equipment Effectiveness
Cost Deployment identifies seven (7) losses that affect Overall Equipment
Effectiveness levels. These losses are further categorised under three headings
a). Equipment downtime losses,
b). Equipment performance losses and
c). Defect losses.
The first of these losses relate to equipment downtime losses and are identified as:
5.I.1. EQUIPMENT DOWNTIME LOSS
5.I.1.1. Equipment failure loss.
When a machine stops or breaks down unexpectedly it is clearly a cause of loss.
When a machine is stopped it is obviously not producing any output.
5.I.1.2. Changeover loss.
A changeover loss is required when a planned change in the production plan is made.
It can also be incurred when tools or dies are required to be replaced due to wear and
tear or being damaged or broken.
5.I.1.3. Set-up and adjustment loss.
Most machine changeovers require some period of shutdown to allow internal
components to be exchanged or adjusted. The time between the end of the last good
product being produced and the production of the first good product of the following
production run is downtime, and regarded as a loss. This downtime loss often
includes substantial time spent making adjustments until the machine gives acceptable
quality output on the required product after set-up.
5.I.1.4. Cutting blade change loss.
5.I.15. Start-up loss/Shut down loss.
The start-up loss occurs for the period of time preparing the line for production. It
includes time spent running the equipment until operational conditions have
stabilised. Yield losses occur when production is not immediately stable at equipment
start-up. First off products do not meet specifications and are therefore rejected. This
is a latent loss and is often accepted as inevitable. This loss is often surprisingly large
and can often be reduced.
Other Downtime
A number of other sources have also been identified and can be included in the
categories above. These losses such as Management losses, waiting losses due to
waiting for instructions, materials, personnel and quality confirmation and release can
all be identified, quantified and tackled as part of a Cost Deployment initiative.
5.I.2. Equipment Performance Loss.
5.I.2.6. Minor stoppage and idling loss. A machine needs to run smoothly if it is to
achieve its standard output levels. When a machine is stopping and starting
frequently it will lose speed and will affect the smooth flowing of the overall
operation. The idling, stoppages and interruptions referred to are not caused by high
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level technical failures but rather by small problems such as parts or products catching
in chutes or blocking sensors. These blockages and interruptions are easily addressed
by the operator when they occur but they can have a serious affect on the overall
effectiveness of equipment. Look for operators who have made their own little
prodders or tools to help them rapidly clear obstructions. If the obstructions can be
engineered out of the process these individually minor losses can be eradicated
leading to overall major improvements in machine performance.
5.I.2.7. Speed Loss.
Machine designers design machines to run at certain speeds. Operators in factories
often run the machines at lower speeds, often for a number of reasons. Some of these
reasons can be that the machine jams at the “higher” speeds, it can be difficult to feed
the machine or to keep up with removing product from the machine when it is run at
the higher speeds. Speed loss occurs when machines are run under Reduced Speed
operation circumstances. Reduced speed operation refers to the difference between
the actual operating speed of a machine on the shop floor and the equipment’s
theoretical or design speed. In the case above we have seen that a difference exists
between what people believe is the “operating maximum” speed and the actual design
maximum speed. When targeting speed loss the aim is to eliminate the gap between
the actual operating speed and the design speed. The extent of losses from reduced
speed operation are often neglected or underestimated. The starting point for any
speed loss tackling project needs to be the identification of the actual and design
speeds of the equipment to quantify the current gap.
5.I.3. Defect Loss.
5.I.3.8. Defects and Rework Loss
A company suffers a loss if and when products do not meet quality specifications.
Some managers seem to believe that there is no loss if the product can be reworked to
correct the problem. They completely misunderstand the concept of Right first Time
(RFT) where raw materials are converted into finished goods the first time they pass
through the process. The goal should be Zero Defects to make the product Right First
Time, everytime.
(II) Losses in Equipment Loading Time
5.II.9. Shutdown Loss.
Shutdown losses refer to other scheduled downtimes, where the machines are not
planned to run because of a lack of demand from the market or a lack of suitable
materials due to purchasing, logistics or supply issues. Shutdown loss can also refer
to losses in output incurred because of a shortage of skilled or available labour.
5.II.10. Unused Time Loss
This loss is seldom tracked in the West and refers to that portion of productive
capacity where machines are not run over the weekend, Bank Holidays or planned
factory shutdown. It is a hard measure to bear as people and processes are thought to
“Need” holidays, but it is still a loss in the total productive capacity of a plant.
Overall Equipment Efficiency
It has often been said that a good manager can beat any measurement – either by
exceeding the measure or in finding ways to get around it. The adage in the West has
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been “What gets measure, improves”, and there have been numerous examples of
good managers meeting specific targets while whole businesses get closer and closer
to difficult positions. Many managers in the West believe that a business can organise
to achieve high quality levels, at the expense of output levels and machine
availability. Others believe that they can organise their operations to maximise
output, but at the expense of quality and availability. Others still believe that they can
maximise availability of equipment but at the expense of quality and output. In
reality a successful business has to optimise all three parameters. It has to deliver top
quality products at efficient levels of output when customers want them.
The Overall Equipment Effectiveness measure was developed to capture this
requirement and to provide a composite metric for companies truly dedicated to
achieving world class performance levels. OEE is explained in figure 43.
fig. 43: OEE EXPLAINED
When calculating OEE you need to determine what the individual measures were are
Availability, Performance Rate and Quality as percentages of what was possible.
OEE is then calculated by multiplying each of the individual measure together, as
presented in figure 44.
Overall Equipment Effectiveness = Availability x Performance Rate x Quality
Products Rate e.g. O.E.E. = 0.87 x 0.50 x 0.98 x 100 = 42.6%
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fig 44: Overall Equipment Effectiveness
The example used above will show that O.E.E. is a very demanding measure. It
demands top level performance from an operation across all the key areas. It is not
enough for a manager to focus their improvement activities in any one or two areas
but in all three if they are to achieve acceptable performance metrics.
Labour:- 5 Major Losses
Labour losses have been broken down into two main categories:
Production Man-hour losses, and , Line organisation man-hour losses. We will look
at Production Man-hour losses first. These losses are broken down in terms of:11). Management loss. This loss occurs when staff are unable to do value adding
work because they are waiting for instruction from their manager, supervisor or team
leader. Workers frequently have to seek permission from a higher authority before
changing to a new job or before making decisions on how to address issues that may
have arisen. Practical experience gained in a production environment has shown that
the manager can approach this matter in two ways.
The first approach is to always go to the problem and always tell the operator what
they should do next. The second approach is to initially go to the problem and ask the
operator what they think is the correct solution. If they give a correct answer the
manager can move to delegating the decision making authority to the worker. If the
answer is not correct then the manager has clearly identified an opportunity for
training the worker so that they will be able to make the correct decision in the future.
In the first example the operation will be run in a stop-start fashion. The managers
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will continue to act as fire-fighters and will feel self-important. Efficiency will be
low.
In the second case the plant will run in a much more consistent way. Workers will
develop their skills, capabilities, competencies and confidence. Efficiency will be
high. The managers will have time to manage the operation. They will have time to
dedicate to studying, analysing and improving the overall operation.
Which operation do you want to run? The choice is yours.
12) Operating Motion Loss.
Time, money and people’s efforts can be lost due to poor work design. The basics of
Industrial Engineering can be used to determine if a method or procedure is an
efficient one. The combination of modern Design for Assembly techniques with
Industrial Engineering tools can be very effective in ensuring that Operating Motion
Losses are minimised.
People who are low skilled can often find it difficult to do a job in an effective and
efficient manner. It is important to ensure that people have the correct skills to allow
them to do the job asked of them. If they are not skilled enough to do a job they will
certainly not be comfortable doing the job and they will lose self confidence. This
loss of confidence will in turn lead to low morale and consequent losses in output.
Each time a machine breaks down or stops due to jams or blockages labour efficiency
is affected. If a machine is prone to breaking down or frequently jams and stops the
operators will become tired and disillusioned with it and the process. They may move
quickly to fix a machine the first time it stops but it is very unlikely they will move as
quickly or with a much enthusiasm the 20th time it stops.
II). Line Organisation man-hour loss.
Workers will work, machines will run but it is up to managers and engineers to
organise the operation and systems that deliver output.
13). Line organisation Loss.
The workers are not responsible for the organisation of a line. This responsibility
rests squarely with managers and engineers. It is their responsibility to know about
and use the techniques, tools and technologies that will allow their workers to produce
efficiently. They must understand their processes and procedures enough to know
where, when and how to automate. They must decide how best to organise their
resources.
14). Logistics Loss.
Transportation has been recognised as a potential source of major losses within an
operation. These transportation losses should not be seen solely as those where truck
transportation is involved but rather where all movements are taking place. In simple
terms transportation needs to be examined critically, looking for where value loss can
be reduced. The use of gravity, in-house designed kitting systems, bogeys and
transfer devices can all lead to a reduction in transportation losses.
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III). Defect Quality Loss
15). Measurement and adjustment loss.
It is clear and obvious that defective products are a loss. They are a loss of material,
labour and of production opportunity. But there are other losses associated with
quality monitoring. Each time a person has to spend time checking quality of a
product they have lost an opportunity to add value to the business. If a process is not
running under control the frequency of checks and measurements is necessarily
higher, as operators work to detect when the process is exceeding its limits. The ideal
process is one where the process capability is fully contained within the limits of
product capability.
A second loss associated with quality is the loss of time, material and possibly even
machine capacity associated with making adjustments. These adjustments are often
required to assure products remain within acceptable tolerances. Sometimes
machines and processes have to be stopped to allow for the adjustments to be made.
Sometimes the adjustments can be made while the machine stays running. Possibly
the most important aspect of any adjustment is the absolute necessity for the person
making the adjustment to fully understand the impact of any adjustment made. The
operator needs to understand the effect of individual adjustments on the performance,
efficiency and effectiveness of the process. Without this knowledge the operator can
make a seemingly minor change and significantly alter the product.
Material and Energy:- 3 Major Losses
Losses in the area of materials and energy are subdivided into 3 categories:
o Material yield
o Energy
o Maintenance spare parts
We will now look at these losses in some more detail.
16). Material Yield Loss
Production starts with raw materials. As they are processed we incur a number of
losses, some of these are obvious, others are not.
The first material loss is that of defective parts. If a defective part cannot be reworked
then the full material content of the original raw material is wasted – a clear loss. The
second material yield loss is that of cutting loss. If we need a part with a finished
diameter of 20mm and we start with a material of 22m diameter we will incur a
cutting loss, for example of 2mm or 21% of the material will be lost. We can see
clearly the importance of minimising the losses due to cutting. Plan and design to
have your raw materials as close as possible to finished dimensions.
Another material yield loss can occur during start-up of a process. The normal
procedure for starting a process includes running materials through the process until
the process parameters and product characteristics have stabilised. As an example we
will look at two plastic extrusion machines. In the first machine material is extruded
through a die until the die has reached standard plastic operating temperature. The die
temperature rises from contact with the melted plastic material When the die has
reached standard temperature the required dimensional characteristics of the product
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are achieved. All material extruded between the time of starting the machine and the
die reaching operating temperature is recycled, so it is not wasted.
In the second machine the die is preheated to operating temperature before any plastic
material is extruded through it. The product is almost immediately to specification
with a very short amount of reject material to be recycled.
In the first case a lot of time was lost running the die below operating temperature. A
lot of material was extruded and had to be reground for recycling. Machine capacity
was lost due to this start-up phase along with energy, time and effort. The second
operation was a lot more effective and efficient.
Certain materials, usually food stuffs and natural materials will vary in weight during
a manufacturing process. Producers can either minimise weight loss or take active
steps to replace the lost weight towards the end of the process. Consumers have a
tendency to prefer products that have not had weight artificially added as part of the
manufacturing process.
The last major material yield loss is the loss in averages. The food industry is the
classic example of this. If we look at labels on foodstuffs we usually see it marked as
“454g e”. This means that the average weight is 454 grammes. If a producer makes 1
million pots of jam filled with 455 grammes of jam they have given away 1 tonne of
free jam. It is very important to manage processes and process average fills to drive
this “free tonnage” to zero.
17). Energy Loss.
Energy is expensive and getting ever more rare. We should be looking for ways to
reduce our energy requirements from both a business and an environmental
perspective. From the plastics example above we have seen that the energy used
during start-up of processes is a definite loss and we should work to eradicate it.
The losses incurred because motors and machines are overloaded is usually a harder
one to identify. Electric motors run most efficiently when they are matched to the
work they are required to do. If they are overloaded they will operate much less
efficiently and they will also be more prone to failing.
Heat loss is also a loss that can be reduced using best practice in manufacturing. The
first question to be asked regarding heat loss is if the process set point can be reduced.
Can the materials used be developed to work effectively at lower temperatures? The
second element of heat loss reduction is the effective use of insulation and blanketing
to minimise energy loss through radiation. The third element of heat loss reduction is
in the recovery of heat after it has been used by the main process. A pottery kiln is a
classic example of this where waste heat exhausted from the kiln can be piped to the
early drying room stage of the pottery process, saving on overall energy requirements
and improving overall process performance and quality.
18). Maintenance Spare Parts Loss.
Maintenance is often seen as a cost centre. The actual cost of physical consumption
of spare parts within a plant needs to be analysed. The type of maintenance strategy
chosen for the plant can have a major impact on the cash value of consumed parts. If
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the plant is run as a “Run to failure” plant then the maintenance team are unlikely to
worry about the cost of replacement parts if the full production facility is stopped due
to a broken or defective item. If the plant is run on opportunity maintenance basis,
where a number of replacements are made when a single failure occurs it is likely that
some parts will be replaced before their natural life cycle is completed. If the plant is
run on a time based maintenance structure then, once again, it is likely some parts will
be replaced prematurely. It is important that maintenance staff develop appropriate
strategies for their operations and even for specific sections and machinery within the
plant. It should be remembered that this loss on maintenance parts does not of itself
affect O.E.E., but if the machines fail or run poorly during required available time
then this can have a major affect on O.E.E.
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Cost Deployment for Process Industries
Business is business but it is clear that process industries do have particular
characteristics that differentiate them from standard manufacturing plants. Cost
Deployment has evolved to deal with the particular needs and characteristics of
Process Industries. Twenty seven (27) big losses have been identified for process
industries, categorised under Equipment losses, Material and Energy losses and
Labour losses.
EQUIPMENT: 12 MAJOR LOSSES
(I). Losses in equipment loading times.
Losses in loading time are broken into three categories and will now be examined.
1. Shutdown loss
Process plant is usually run for extended periods and then shut down for periodic
maintenance or servicing. Most process plants are shut down for an Annuall
Overhaul when many of the maintenance tasks and process improvements are
implemented. The time when this planned maintenance and or annual servicing is
carried out is time lost to production and is known as Shutdown Loss.
2. Production Adjustment Loss
Process plant has specific defined output levels. Sometimes production outputs are
deliberately reduced due to market requirements. This lost opportunity is often
missed and is reported against manufacturing plants at the end of the fixed year as a
negative variance.
3. Unused Time Loss
Management often plan to stop machinery for weekend, holidays or shutdown
periods. While this can be a conscious decision of management and workers it does
lead to a reduced productive capacity.
II. Major Losses Affecting Overall Plant Effectiveness
The first three losses are related to the overall structuring of the operation. They
define when the plant will run and how. We will now look at losses that can occur
when the plant is planned to be operational. We will be looking at what losses
affect the achievement of high levels of plant effectiveness.
1. Equipment downtime loss
Looking at losses in an operating plant we will start by looking at how and why
equipment stops.
4. Equipment failure loss
Process plant efficiency can be affected very much by the failure of specific
discrete elements of equipment. If a specific piece of equipment fails it can lead to
the stopping of full plant process.
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5. Process failure loss
Process plant can stop due to a breakdown in the physical or chemical properties of
the substances being processed. These are known as factors external to the
equipment itself.
2). Equipment Performance Loss
When equipment is running in a general sense it is still liable to a number of losses
than can arise. Many of these losses were explained in the earlier section.
6. Minor stoppage and idling losses.
7. Start-up loss/Shut-down loss.
8. Changeover loss.
9. Set-up loss and adjustment loss.
10. Abnormal production loss/speed loss.
3). Defect Loss
Defect losses are similar to those found in discrete manufacturing operations.
There are some differences however with process plants sometimes producing
product that are not reject quality but are also not at full “A1” quality. The
production of less than top quality product can lead to financial losses as this second
grade material is sold at a lower market price.
II). Quality Defect Loss
This loss refers to time spent making product that is of rejectable quality. The
loss takes into account the physical cost of scrap material both in terms of the
scrap itself plus also the cost of disposing of the scrap. Quality defect loss also
takes account of the financial loss attributed to selling second grade product that
was made using first grade materials on a first grade process. The importance of
top quality awareness in a process industry is essential if these process defect
losses are to be avoided.
12). Reprocessing Loss
Reprocessing losses are incurred when rejected material is returned to a previous
process stage to be worked on again. Such materials often require further work
input to prepare them for recycling and most processes have a defined limit on the
percentage of re-work material that can be incorporated back into the primary
process. If we think about this logically the best product is made when the best
raw materials are used. Reworked materials are not the best raw material and we
are expending energy and resource on materials that were already worked on.
Material and Energy: 5 Losses
13). Raw Material Losses
Raw materials do not always get processed to 100% of delivered volume or
weight. Management need to understand the physical characteristics of their raw
materials with a view to minimising losses due to evaporation or degradation or
chemical change and also with a view to maximising the process ability of raw
materials.
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14). Unit Consumption Losses
Very few products can be processed without the addition of additional resources.
In process industries it is important to track and monitor the consumption levels of
these subsidiary materials for a number of reasons.
The first reason would of course be the cost of the subsidiary material itself. We need
to manage all the inputs we make to our operations. The second reason is to monitor
the effectiveness of the process itself. If our energy requirement per tonne of product
produced rises then it may indicate deterioration in the basic structure of the
processing plant. Once steady state conditions for a process have been determined it
is possible to monitor variances in a relatively simple way. Basic metrics can be
developed as Key Performance Indicators, such as:Unit consumption of Fuel = Fuel Used
Amount of Product (kl/T)
Unit of Consumption of Electricity = Electrical Power Used
Amount of Product (kWh/T)
Unit of Consumption of Packaging = Packaging Materials Used
Amount of Product
(rolls/T)
Another reason exists for tracking the usage of subsidiary materials. In some
processes additional chemicals are added to speed up the process or to aid the
manufacturing process. These subsidiary or additional elements need to be tracked to
ensure they are being added to the process at the appropriate rates.
15). Maintenance materials loss.
16). Leakage and spillage loss.
Many processing plants operate in a fluid environment. This fluid can be liquids that
spill or leak from vessels, pumps or connections. In some circumstances fine powders
can also leak and spill from process plants. These leaks and spillages are easily
identified as losses themselves but it is often difficult for managers and workers to see
the subsequent losses incurred as people move to clear up the leaks. In a dirty or
disorganised environment it is difficult to locate the sources of these losses. In a
clean, well ordered environment it is a simple matter to identify the sources.
17). Energy Loss.
Energy efficiency and availability will be ever more important. Companies need to
carefully analyse their use of energy for commercial and environmental reasons.
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Labour: 9 Losses
I). Production man-hour loss
18). Work Losses
A plant that is running well requires less effort to run than a plant that is breaking
down all the time. Work losses included wasteful human labour than is necessitated
by a plant that is in poor operating condition. If a plant is likely to break down
management are likely to respond by having people checking and inspecting the
suspect equipment and reporting and trying to adjust and fix them. This can be very
time consuming work.
19). Cleaning Loss.
20). Inspection Loss.
21). Lubrication.
22). Testing and analysis loss.
II. Line Organisation Man-Hour Loss
23). Management Losses.
Management is ultimately responsible for the operation, maintenance and
development of a plant or operation. Managers have the responsibility to lead, guide
and challenge their people to deliver on business objectives. Management losses arise
from the use of poor management systems or from the poor operation of good
management systems. It can often be difficult for managers to self diagnose, to
determine whether or not they are using good practice management system. The use
of an external facilitator or business auditor can often help bring objectivity to the
matter. A top class manager will seek to stay current with the evolution of
management thinking and practice and will seek to find ways to improve the
effectiveness of their own operation.
24). Failure loss of not introducing new control systems.
Management need to lead the effort to find ways to increase competitiveness. It is
often necessary to look at systems critically, to look for ways to reduce head-count in
a cost effective way. Managers should be aware also of the need to balance this
challenge on head-count with the benefits to be achieved through the development of
the skills and capabilities of a core of key people.
25). Failure loss of not centralising and simplifying processes.
A good manager has to challenge the status quo. They need to look at administrative
and support processes and functions with the same critical vision that they use to look
at their manufacturing operations.
26). Logistics Loss.
III). Defect Quality Loss
27). Defect Quality Loss
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The Structure of Losses
We have looked at the major losses in manufacturing. We will now look in a little
more detail at how these losses are structured by looking at a number of definitions.
CALENDAR TIME
We all know what a calendar is. We also know how many hours are in a day. But
how many facilities operate throughout the year 24-7?
Calendar time is determined as the number of hours on the calendar:
365 days * 24 hours = 8,760 hours in a year.
30 days * 24 hours = 720 hours in a 30 day month.
WORKING TIME
Working time is the actual number of hours that a plant is expected to operate in a
year or a month. Working time is calculated by subtracting the amount of time
planned for annual shutdown maintenance, periodic servicing or for production
adjustment.
OPERATING TIME
Operating time is the time during which a plant actually operates. Operating time is
calculated by subtracting the time a plant loses due to equipment or process failures
from Working time.
NETT OPERATING TIME
Nett operating time is the time during which the plant is producing at the standard
production rate. This takes account of output lost due to running plant and equipment
below the standard speed.
AVAILABILITY
Availability is defined as the operating time expressed as a percentage of calendar
time.
Availability = Calendar time – (Shutdown loss + major stoppage loss)
Calendar time
Shutdown losses = Shutdown maintenance loss +
Production adjustment loss
Major stoppage loss = equipment failure loss = equipment failure loss +
Process failure loss
x 100%
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PERFORMANCE RATE
A plant’s performance rate expresses actual production rate as a percentage of the
standard production rate.
The standard production rate is the equivalent to a plant’s design capacity and is the
intrinsic capacity of a particular plant.
Performance rate = Average actual production rate (t/h)
Standard production rate (t/h)
x 100%
Average Actual Production Rate = Actual Production Rate
Operating time
QUALITY RATE
The quality rate expresses the amount of acceptable product (total production less
downgraded product, scarp and reprocessed product as a percentage of total
production.
Quality Rate = Production quantity – (quality defect loss + reprocessing loss)
Production Quantity
%
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Chapter 6
Seven Steps towards WCM
The previous chapters have focused on the theories underlying the tools and
techniques being used successfully by the World’s leading manufacturers to improve
their competitiveness and productivity. We have addressed the need for mutual
support and common purpose between the marketing, design, production, logistics
and support functions. We have identified an approach, Cost Deployment, which can
integrate improvement efforts with financial analysis, providing a clear means of
measuring and justifying investment in improvement activities. We will now look at
a Seven Step method for implementation which will lead to the achievement of world
class performance levels.
The achievement of world class status is not a quick process. It integrates many of
the tools and techniques such as Total Productive Maintenance, Total Quality Control
and others in a way that allows workers, managers and companies to build upon their
expertise and experience and then to take even more advanced steps to adopt even
more sophisticated approaches to waste elimination and improved performance.
Some people ask “Why not jump in at the top level tools and techniques? Would you
not become world class right away?” These questions clearly show a
misunderstanding of what a world class company is. You might as easily ask should a
ten year old student not bother with secondary school and university and not just
study for a doctorate instead? People need to know about, understand and gain
experience in using the basic and intermediate tools before they can be expected to be
able to use the sophisticated ones properly.
The seven steps to achieving World Class Manufacturing status are presented in
figure 44.
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fig 44: Seven steps to World Class Manufacturing
The first step deals with safety. If our workforce is not safe then we have no right to
ask them to work. What job is worth the loss of a life? How important is an order to
risk the loss of a limb or an eye? We must work to protect our workforce. We are
obliged to send them home in the same condition if not better than when they came to
work. A number of techniques have been developed under the general title of the 5S
programme to cover this fundamental issue. The 5S programme,can be encapsulated
by the phrase “A place for everything and everything in its place”. Managers need to
work with their people to ensure that the operation is kept as it should be. Safety
audits are used as a means of working to identify the possible hazards that can exist in
an operation. These audits are particularly effective as they are focused specifically
on identifying the possible sources of danger.
Seiri – Sorting out. Keep only those items in a work area that are necessary. If parts,
components or tools are only needed occasionally, keep them in a storage area, not in
the work area. If items are no longer needed then recycle them or dispose of them.
Seiri tackles the habit of keeping things because they might be useful, someday. By
reducing clutter it is easier to find what is required. Also, valuable floor space can be
released for additional production or new projects at minimal cost.
Seiton - Systematic arrangement. The shadow board is a classic example of Seiton,
the search for the most effective arrangement of tools and materials to have them
available in the most efficient way. Mark the floor areas or storage areas to highlight
where and how materials, finished goods and tools are to be stored and handled for
maximum efficiency.
Seiso – Spic and span. Clean the work place and keep it clean. Cleaning the work
space often leads to a safer working environment. Less clutter and clear passages
make it easier and safer to complete work. Cleaning can also be seen as providing a
basic level of inspection. If leaks, cracks, breakages or misalignments are detected
early then remedial action can take place before machine’s fail and production is lost.
It is usually easier to adjust a machine before it fails than it is to repair it after failure.
Remember the bicycle chain – it is always easier to adjust a chain before it jams than
after.
Seiketsu – Standardising. Set the new standard. Unless the new, clean and organised
standard is defined then human nature will ensure that he place reverts to the old
ways. Involve people in setting and raising the standard further.
Shitsuke – Self discipline. Perseverance. Keep with the standard, ensure that people
keep their areas at or above the defined standard. People will internalise the standard
through perseverance until it becomes the norm.
SMAT audit?
People will often work to find the easiest way possible to do a job. Unfortunately the
easiest way is not always the safest. The creation of Standard Operating Procedures
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(SOP) helps define both an effective and efficient way of doing a job as well as a safe
way.
Step 1 on the way to WCM – clean the place, remove potential hazards and clutter,
and define and maintain methods of operation that are efficient and safe.
Step 2 relates to reliability. This reliability refers to the reliability of the process and
machines that are involved in producing the goods or delivering the service. Imagine
the difficulties involved in copying a twenty page document if the copier continually
jammed. Imagine the difficulty and costs involved in trying to meet an order deadline
when your machines kept breaking down.
A process needs to be reliable if a business is to have any chance of meeting its
targets. The first step in this process is to fix any particular faults on the machines.
This does not mean reverting to “elastic band and sticky tape” engineering. It means
fixing, returning plant and equipment to a service worthy condition. When this base
level of machines that work has been achieved it is time to develop the skills,
capabilities and experience of operators under the heading of “Autonomous
Maintenance”. We need to build operators to the point where they can do many of the
basic elements of machine maintenance such as checking oil levels, emptying
air/water separator bottles and doing simple status checks on drives and bearings. As
operators develop their skills they will become more involved with their machines and
processes. It should be clear now why such an emphasis was placed on safety as the
fundamental building block for this approach to WCM. People need to be trained in
how to safely perform these basic maintenance tasks and checks. The training of
operators in these tasks effectively increases the size of the maintenance department
significantly. Highly trained maintenance staff are freed from relatively mundane
work and are available to take on more demanding work.
The more demanding work should be that of Preventative Maintenance (PM). This
involves the maintenance crew in doing work to ensure that plant and equipment do
not break down during required production periods. The maintenance crew need to
develop a deep understanding of the plant and equipment under their care. They need
to understand what can go wrong, when it might go wrong, and how it can go wrong.
They need to develop countermeasures and strategies to allow them to predict failures
and to act before they happen. This process needs to be carefully managed to balance
the cost-benefit relationship between maintenance costs and performance
improvements delivered. An effective PM system will rely heavily on diagnostic and
monitoring systems where the maintenance crew will check the status and condition
of key elements of equipment.
The use of visual techniques can once again be very useful in this task. One of the big
problems with electrical and electronic equipment centres on heat build up. Most
electrical and electronic equipment in industry and business is equipped with filters
and cooling fans. But how can you tell if the filter is clogged or the fan is still turning
without physically going to the unit? The addition of some simple ribbons to the
external screen of a filter or fan casing can immediately show if air is passing through,
figure 45.
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fig 45: Air Flow Indicator
Passing through a Japanese factory you will often see pieces of ribbon or wool tied to
filter grilles or small children’s windmills being used to visually indicate whether air
is flowing or not.
A second simple technique being used as a visual indicator is the use of Markings.
Markings are placed on dials and gauges to indicate the set points for instrument
settings. Markings and set points are important in helping assure that processes and
machines are run properly. Effort should be made to align set points on multiple
gauges so that the needle points to “12 o’clock” at the set point. This helps an
operator see when a characteristic is falling out of position.
Levels on flow meters, tanks and other areas also should be marked and made easy to
check. This can often be facilitated by the addition of a small floating ball on top of
the liquid, for contrast see figure 46:
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fig 46: Dial and Level Marking Visualisation
The third key element of visualisation in relation to the maintenance function relates
to the economic capture of machine status and condition data. It can be quite
expensive to add sufficient sensors to equipment to monitor status. The Japanese
have developed a very simple approach to address this issue. The key areas on
equipment that should be monitored are identified. The frequency of checks are
decided from hourly, daily, weekly, monthly or yearly. Different colours are
attributed to each of these time periods and labels are acquired for each colour,
usually 10mm diameter ones. These coloured labels are then attached to the relevant
parts of the equipment where data needs to be captured from. This data could be
temperature, vibration readings or gauge readings. The outline of a pair of feet are
then placed on the floor and a sketch is produced and attached at the spot telling the
maintenance person what they should be looking for and where on the machine. The
person then stands on the feet outline and can see where they need to check on the
machine. Using this method all machines can be “sensorised”, or at least the data
required for maintenance analysis can be captured in a cost effective way. The
adoption of this approach means that even older equipment can be monitored for its
condition, see figure 47.
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fig 47: Footprint Visualisation
Step 3 in the process seeks to build on the yields being achieved from processes. The
focus is on maximising yield, looking for ways to minimise waste, to use the tools of
quality and especially total Quality Control to identify wastes and remove them.
Operators are trained in the use of the quality tools and become involved in the waste
identification process. The Standard Operating Procedures developed in Step 1 are
re-analysed and developed and improved. The SOPs are challenged as are the basic
processes and methods used. The maintenance and engineering staff who have now
delivered reliable and efficient plant are required to work to develop its capabilities to
at least, if not beyond, the original design limits for the equipment, always with a
focus on reliability and quality.
Step 4 brings the full focus on to quality. The quality parameters that were originally
set for the product and the process are challenged. By this time the company and its
people understand their operations and processes in a very deep way. They may be
able to tighten up on specifications and processing parameters thereby reducing the
variability in production and arriving at a higher quality product. Achievements being
made at steps 1, 2 and 3 enable the improvements at Step 4. It would be impossible to
improve the quality of a product if it was being made on unreliable equipment that
performed badly and was run in a piecemeal way by people in an unsafe environment.
Regard steps one to four as the basic enablers for businesses to prepare for a
sustainable assault on World Class Manufacturing performance levels.
In Step 5 the emphasis moves towards the use of the tools and techniques of Total
Industrial Engineering. The focus is on rationalisation in both the areas of logistics
and manning levels. Efforts are made to reduce the logistics burden both internally
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and externally. Steps are also taken to introduce sub-automation and labour saving
devices. The skills of operators that have taken the time to learn about maintenance
and engineering are now further developed to help them manage sophisticated
manufacturing equipment.
Step 6 looks at completing synchronisation between the sales and manufacturing
areas. Efforts are made to look at the full supply chain and to identify and remove
wastes throughout the system. Companies focus their attention on the advanced use
of Just in Time techniques, using their responsiveness to meet market needs rather
than relying on large inventories of either finished goods or raw materials.
Engineering effort is put into finding ways to be even more responsive without overly
compromising on efficiency. You can imagine the high level of waste involved if a
changeover or a machine takes several hours to complete against the low level of
waste on a machine where the same changeover can be completed in a matter of
seconds or minutes.
It is important to realise that Step 6 looks at waste along the full supply chain. This
chain stretches from the raw material suppliers right through to the consumer. The
latest developments in this area even go beyond the consumer and deal with end of
life recycling and reclamation of raw materials. This whole life view is leading to
new business opportunities and the possibility of reducing the raw material burden on
the planet.
The involvement of and synchronisation with sales is a very important development in
the move to world class status. Lead companies in the automotive sector have
identified that they hold about 15 days of materials in the supply chain, about three to
five days stock in the assembly factories and up to and including one hundred days
stock of finished cars. It is clear that serious work is required in the area after
production to reduce the stocks of finished goods. It is also clear that better matching
of customer demands to factory output is needed. This requires either reduced cycle
times from order to delivery or better forecasting. One, reducing cycle times, is
within the control of industry. The other is in the lap of the Gods.
Step Seven is the point where businesses are fully aligned with market requirements,
where automated and autonomated plants and machines are producing at world class
levels in terms of both internal and delivered Quality, where product, warranty and
full life Costs are at the highest levels, where Deliveries are made as and when the
customer’s require, each and every time and where the workforce can operate in a
safe and healthy environment.
The Seven Steps to World Class status have been identified but what are the practical
things that managers can do to start implementation? Where should you start? And
what should the focus be?
Action 1 – Minimise material handling – Use the physical and process flow mapping
tools to identify material movements (ref). Look for ways to reduce material handling
to zero, if feasible.
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Action 2 – Achieve stable production – Find out what is disturbing steady production.
Use the Check Sheet and Run Chart tools (ref) to identify where problems are arising
and fix them. Identify what maintenance system is most suited to your equipment and
plant (ref).
Action 3 – Control abnormal situations – Find out how and why defects are being
produced. Use the tools of quality to help you such as check sheets, run charts, preproduction checks (ref) and tackle them. Improve the performance of machines or
processes to remove the causes of minor stoppages such as jams, catches, shortages.
Action 4 – Tackle MURI, MURA and MUDA – Look critically at the actual
operations your people are performing and work to remove difficult or unnatural
operations (MURI). Look at or introduce Standard Operating Procedures (SOPs) (ref)
to stabilise the way products are made and remove as many non-value added tasks and
actions, MUDA (ref) as possible. Use video cameras to record the actual steps
involved in a process but do not miss the opportunity to look personally at the actual
work itself.
Action 5 – Create Multi-Skilled Labour – An effective and efficient plant needs
capable people to ensure it runs well into the future. Look at your people, look at the
skills requirements of a highly effective business and plan and take active steps to
develop the skills and experience of your key core workers.
Action 6 – Separate labour from equipment – Take active steps to identify how you
can develop machines and processes to be largely independent of human input. Work
to develop machines to be able to run for one hour without human input. Push this
target to two and then three hours. The overall objective is to achieve full unmanned
operation.
Action 7: Introduce Low Cost Automation – It is possible to spend large amounts of
money fully automating processes. In certain industries this is necessary. Most
businesses cannot afford or even need such high levels of automation. But, most
operations can benefit from developing and introducing low cost automation. Work
hard at this as it can help to build the confidence of people as well as developing a
competitive edge for the business.
Sensors can be added to existing equipment, see figure 48 to assure the performance
of a task or a condition of process being met or to reject defect items in conjunction
with an ejection systems.
The use of vision systems, sensors and detectors can help reduce the need for human
monitoring of processes and will assure higher levels of accuracy. The human
operator can check quality to a level of approximately 0.2% defect rate. A sensorised
automated system can be developed to achieve defect levels of 0%.
As you move to develop automated production systems it is essential to “Build In”
quality from the outset. The knowledge of machines, process parameters, failure
modes, materials and systems is built up gradually as a business and its people move
through from Step 1 to Step 7.
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fig 48: Automating Processes Detail
Figure 48 shows us many of the practical applications of sensors and alerts that can
help remove the need for labour to check for material feeds or blockages. We can
retrofit many of these sensors and devices to older machinery, upgrading their
functionality while helping to reduce the amount of labour required to run an
operation. It cannot be regarded as a high worth job to sit watching a machine each
day to ensure that parts do not become blocked in the mechanism.
The route to effective automation is a relatively clear cut one. The first need is to
have sufficient demand from the market place to justify the effort in automating the
process. It is important to determine if it is possible to assure good quality production
through the use of available automatic sensors and detection devices. It is also
important to perform a cost-benefit analysis on the proposed investment to ensure that
the project is not a case of engineers buying lots of toys. It is essential that the project
is justifiable in overall business terms for either current or future strategic reasons.
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Provided these conditions are met it is clear that process control will be an essential
step in the process. It is crucial that the process to be automated is understood in great
details. The effects of variation in process parameters need to be understood to enable
limits to be set for the automatic sensors. A regime of calibration needs to be in place
to assure the readings from instruments used to measure or control the process.
As the process moves to being automated it should first pass through the
autonomation stage, where sensors are introduced that can stop the process if
characteristics are exceeded. This is a good first step allowing managers and workers
to gain confidence in the systems and sensors while also freeing them up to be less
linked directly with the manufacturing process.
It is necessary to check first-off products and last-off products to ensure that defects
or scratches that cannot be detected automatically do not arise. It may prove
impossible to source a technology to be able to check for all possible defects and the
use of human labour can be a very effective way of addressing this gap. In process
inspection would also be suggested, according to a regularised quality plan, to ensure
the processes are running to specification.
The final point relates to the effort to build in quality at the design stage of the
product and process. If the product is designed at the extremes of performance it is
more likely to fail than one which has a comfortable manufacturing tolerance.
Similarly, machines that are working within a sensible margin of their performance
window will tend to be more reliable than ones that are pushed to the limit. It is also
essential to ensure that the support systems such as maintenance and services are
delivered in an appropriate way to ensure the plant and machinery is operated under
optimal conditions. Figure 49 outlines a number of steps and stages in delivering an
effective, high quality and workerless operation.
fig 49: Guaranteeing Quality and Workerless Operation
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Chapter 7
Major Activities to Support WCM
This book has been structured in a way to outline the steps, stages and techniques to
help companies move towards World Class status. The specifics of approaches being
followed by leading Japanese businesses have been described. We will now look at
how these different tools and techniques can be integrated into a business wide
approach. We will use the “Temple of World Class” analogy to describe this
integrated approach, fig 50.
fig 50: Temple of World Class Manufacturing.
The objective of all the improvement activities needs to be the achievement of World
Class standards. This means that a business can compete on the world stage with the
best of the best. The pillars to support this objective are outlined from
Safety/Hygiene to environment, and the pillars represent the areas of activity required
to achieve and sustain the objective. The edifice and all improvement activities are
based upon and grounded in a number of fundamental enablers. The first of these
enablers is involvement and the last is documentation. Companies who want to
achieve World Class standards need to understand the enablers and the pillars. They
must commit to developing a clear understanding of the concepts. If we use the
building analogy, we all know it is important to have a good foundation before we
build. The same is true for a company moving towards World Class levels of
performance. We will look at the enablers and the pillars in a structured way.
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The Enablers
A number of enablers such as: Involvement
 Communication
 Measurement
 Deployment
 Implementation
 Evaluation
 Standardisation and
 Documentation
have been identified as the basic foundation elements of a successful World Class
implementation programme.
The first of these is involvement. When we talk of involvement we are talking of the
total involvement of the workforce. This workforce includes shop floor, office,
administration and sales as well as management and board members. It refers to a
common shared desire to move the operation to another level of performance. If the
board members are not aware of or do not support the management in their objective
of achieving world class levels of performance the company is doomed to fail. If the
middle management and supervisory levels do not support the effort it is equally
likely to fail. And if the shop floor workers are not aware of the high level goals and
objectives of the business they are not going to be able to support it. Involvement
means that all the people are not only aware of the goals and objectives of the
business but they are a part of achieving them. An old Irish saying refers to the
chicken and the pig and their interest in the breakfast for the Lord of the Manor. It is
said that the chicken is interested in the breakfast, as it has contributed an egg while
the pig is committed in the form of bacon. World class companies are staffed by
people who are committed and not just interested; they are involved in delivering on
the company objectives and not just along for the ride.
Before people can commit to a concept or an ideal they need to be told about it. They
need to understand the how’s and the why’s of a decision and an objective.
Communication is the term used to address this sharing of information.
Communication can take many forms, from the use of notice boards, graphs, charts,
town hall meetings, department and unit meetings, newsletters and publications, both
hard copy and electronic right to the normal “water-cooler” discussions that take place
in business. World class companies have clearly defined, coherent communication
strategies that reinforce the message to both internal and external audiences.
Effective communication can be both verbal and non-verbal and can and needs to be
used at the launch of initiatives as well as during them. It is important for people to
know how well they are performing against their objectives and also how the overall
business is progressing towards its goals.
Measurement is key when trying to determine the effectiveness of improvement
activities. It is not good enough to devise a new way of processing raw materials or
paperwork and to implement it. It is necessary to measure performance before and
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after implementation to determine if and to what extent the changes have improved
performance. Hard measures can create hard facts and it is generally better to
manage business based on facts rather than opinions.
Deployment relates to how ideas are spread throughout an operation. If an idea is
created and kept within a part of the organisation it will only deliver limited results.
Ideas need to be deployed outside the minds of people and outside the limited
confines of departments if the full benefits of new ideas and approaches are to be
realised. Ideas need to be shared if they are to grow and develop.
The best idea that is not implemented is useless. Implementation is central to success.
If ideas and new approaches remain as good ideas their results will not be achieved.
As experience is gained while implementing new ideas even further opportunities for
improvement will arise.
But not all ideas are good ones and evaluation needs to be an integral part of the
improvement process. It is useful to evaluate not only the ideas and their
implementation but also the development process itself that lead to the creation of the
ideas. The evaluation phase is a very important part of the Continuous Improvement
Cycle.
Once the evaluation cycle is completed it is time to standardise the process. It is
useful to define the standard operating procedure so that management and workers
know clearly how to do things and how things are done. This defined standard then
forms the basis for the next wave of product or process innovation.
Documentation needs to be produced in a way to support all the above elements.
Standards need to be clear and concise and easily understood. Communications need
to be coherent and well delivered. A good documentation trail captures the history of
development of both product and process and provides a rich source of insight for
those next charged with the task of driving forward plant and operational
performance. The opposite is also true. If there is little or no documentation in place
it is very easy for the next group of people to double back and make the same
mistakes made before.
The Pillars
Ten key pillars have been identified to support the overall objective of achieving
world class status:1. Safety-Hygiene and working environment
2. Customer service
3. Cost Deployment
4. Focused Improvement
5. Quality Control
6. Autonomous Maintenance
7. Professional Maintenance
8. Early Equipment Management
9. People Development
10. Environment
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Each of the pillars helps build the strength and capabilities of an organisation and its
people. For each of these ten pillars we will now present a seven step approach to
help managers and workers to progress towards world class standards. Companies
can use the ten pillars and seven steps as a guide to help them define their progress
and to measure their improvements made during their world class journey. Appendix
I presents a simple means of measuring your progress towards world class.
Safety: 7 Steps for Improvement
Step 1: Analysis of accidents followed by an analysis of the causes of accidents.
What are the sources and frequency of events? Get the FACTS!
Step 2: Identify what countermeasures can be introduced to remove the hazard and to
eradicate, if possible, the source of the hazard. Deploy the countermeasures
horizontally. Bring the understanding of the risks to other parts of the operation,
where they can be used in similar areas.
Step 3: Set tentative standards for safety by listing all the safety problems. Prioritise
problems by severity and potential consequences.
Step 4: Make safety important to everyone. Introduce a general inspection for safety.
Remove the perception that safety is the Safety Officer’s job. Train people in their
understanding of what safety means and how they can affect they safety of themselves
and their colleagues. Foster a desire among all staff to care about safety.
Step 5: Autonomous Safety Inspection. Move to the point where everyone looks at
their own environment in a critical way looking for safety issues and opportunities to
improve them. People should be actively looking for ways to improve the safety of
their working environments.
Step 6: Autonomous Safety Standards. Armed with an understanding of the theory
behind creating a safe working environment and the experience of carrying out
defined safety checks the workforce can move to defining how it wants to set its own
standards for a safe and secure working environment.
Step 7: Fully implemented safety management system with targets of zero for safety
incidents and losses.
Customer Service: 7 Steps for Improvement
Step 1: Recognition of customer requirements. The most important point when
working to improve customer service is to understand your customers. It is important
to identify customer needs and wants and to separate the two. Your product or service
must satisfy the customer need or else it will not be bought a second time. By
understanding customer wants you can be assured of continued purchases into the
future. It is also important to understand that there is no one single customer so it is
important to take actions to listen to the voice of the customers, to hear them
speaking, to meet with them and to create the environment where discussion and
listening can take place.
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Identify the customer needs in terms of Quality, Cost and Delivery. Try to identify
customer wants in terms of cachet, performance and style.
Look closely at what data you may have on customer service. Do you capture details
of on-time delivery performance, delivered quality and the number and type of
customer complaints?
In the factory we use the reject bin as a primary source of information on what goes
wrong. With customers the warranty and return files provide the same level of
information. Analyse the warranty and customer returns data for the same detailed
information on what is failing in service.
Ask questions about lost orders and try to find out why? This exercise requires an
understanding of the market and an analysis of competitor performance (ref).
Determine what is the closing rate for orders made versus quotations issued. Work
with the sales team to develop their forecasting (ref) performance and customer
management systems.
Step 2: Benchmark with competitors in terms of Quality, Cost and Delivery. To be
able to compete you need to know who you are competing against and what the level
of competition is. Carry out a competitor profile (ref) and look closely at the
competitors products initially in terms of Quality, Cost and Delivery. Also look at
features and functionality and perform a market worth analysis (ref). Look for axes of
movement, or ways in which you can move against your competitor on characteristics
of customer service. Where you have or can gain an advantage.
Identify and set Customer Service targets for your business based on the analysis from
steps 1 and 2.
Step 3: Analyse the gap between your target and actual levels of Customer Service.
You have identified the level of customer service required to compete in the market.
You have also identified your own company’s performance. It is now time to identify
the scale of the gap between the two and to decide a series of actions within a plan to
close the gap. The manufacturing side of the business can tackle the gap in terms of
Quality, Cost and Delivery while the design side can tackle any issues with features
and functionality while the marketing side tackle how to get customers interested in
your product.
The Quality activity will probably centre on the development of a Quality Assurance
Matrix, looking to find ways to enhance quality and reduce defects. The cost issue
should be tackled using Cost Deployment to objectively and logically identify wastes
and remove costs, while the Delivery target will be tackled by looking for ways to
enhance the flexibility of the operation so that customer demands can be met, on time,
every time. It is strongly suggested that the creation of large stocks of finished goods
is not seen as the answer to the delivery question. These high stock levels will add a
burden to the business, will move towards obsolescence and will deteriorate over
time. By developing the responsiveness and flexibility of manufacturing the Delivery
requirement will be met.
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Step 4: Implementation. A good plan that is not implemented is no good. Managers
need to drive their plans to implementation. They need to tackle the issues and move
their people and processes to better levels of performance. Please remember that the
plan needs to be a dynamic one. Sometimes solutions that looked certain on paper do
not work in practice. A good manager needs to help, facilitate and lead their people
around such obstacles. Together the people can look for new solutions based on
experience gained. This gaining of experience is very important. The experience is
not given, it is earned and it is very hard to duplicate this experience. But, it is only
gained through implementation, through trial and error, through making an effort and
caring about the results.
Step 5: Check the results. A good plan will contain check points. Managers will plan
for regular reviews where the results achieved to date will be compared against the
projected results. These review check points should include input from the sales,
marketing and design people. These inputs are important to ensure the full business
team are pulling in the same direction and are a key part of effective communications.
These meetings are also important to keep all team members aware of any changes
that may have occurred in the market in relation to changed customer requirements or
competitor actions.
The outputs from these reviews should be a key element of the manufacturing teams
guidance for “Next Step” actions as they plan for their future initiatives in the process
improvement area.
Step 6: Action and Standardisation. Action needs to follow the review. It can often
seem as being very difficult on people to say that what has already been achieved is
not good enough, but, the fact of the matter is that this is true. The standards of
product and customer service that were acceptable ten years ago are not acceptable
today. The standards that are acceptable today will not be acceptable in five years
time. We need to continue to define today’s standard to ensure that we have a base
from which to improve and this requires the definition and standardisation of the
Customer Service Process, from the point of earliest contact, through the sales point,
delivery, payment, warranty and even end of life. This standardisation provides a
solid benchmark for future improvement activity as well as providing a means of
capturing corporate knowledge in a clear and concise way.
Step 7: Fully satisfied customers and newly attracted customers. Let’s look back over
the six steps. We have clearly and objectively identified the customer’s needs and
wants. We have taken positive actions to identify best in class benchmarks and we
have worked to close any gaps in performance. We have challenged ourselves on
next steps in performance and we have ensured that the systems and processes that
delivered these results have been embedded into the standard way of doing business.
We have, in effect, provided our customers with products Quicker, Better and
Cheaper and it very likely indeed that they will stay Together with us. It is also
assured that the efforts of the design, sales and marketing teams will have brought
other customers to realise what has been achieved, based on focused hard work.
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Cost Deployment: 7 Steps
Cost Deployment brings together the key elements of a business working as an
integrated team. The sales and marketing people need to identify the cost reduction
targets. The financial people need to be involved in actively determining facts on the
production floor, the purchasing people need to be developing their supply chains to
tackle quality, cost and delivery issues and the manufacturing team need to lead on
production improvements working closely with design and engineering to find better,
easier ways of manufacturing.
Step 1: Cost Deployment relies heavily on the capture, analysis and use of FACTS.
o Identify total factory costs. The finance department need to define clearly and
definititively what costs are allocated to and under the control of the factory.
Costs related to design, marketing and logistics need to be clearly identified
and allocated. Examples occur frequently where materials ordered by R&D or
marketing are counted under the manufacturing budget even though they have
no control over them. This part of the Cost Deployment process is akin to
shining a torch light into the dark spaces of a business and clearly associating
costs with the managers that can affect them. It addresses the issue of
someone being held accountable for something that they are not responsible
for.
o Establish the target for cost reduction. Sales and marketing need to determine
the actual levels of cost required to compete in the market. By subtracting the
required margin from the identified market price for the product the level of
Targeted Cost for the product is arrived at. Once again a calculation is made
to determine the Required Cost Reduction by comparing the Targeted Cost
and your Actual Cost.
o Separate total costs according to processes. It is essential to allocate costs to
the individual parts of the operation. This ensures that individual people and
departments know which element of the overall cost is allocated to them.
They can then start to think about what they can do to tackle the costs over
which they have influence.
Step 2:
o Identify wastes and losses qualitatively. What are the types and sources of
losses? Which losses are most important? Which losses are easiest to tackle?
Create a set of prioritised lists to form a basis for a series of improvement
activities and action plans.
o Identify wastes and losses based on past operating data. In some cases this
data will not be available and it might be necessary to actually measure the
wastes quantitatively. This is a necessary step otherwise your actions would
be based on opinion and not fact.
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Step 3: Separate causal losses and resultant losses. Look for the root causes of losses.
Find out what are the primary sources. The objective is to tackle the source of
the losses not just the symptoms or secondary losses. This step may well
require an in-depth analysis of processes and equipment.
Step 4: Translate identified wastes and losses into costs. Put a monetary value on
losses and wastes. It can often be difficult for people to understand the value
of parts or components. If the items are not valued then they are effectively
worthless and the mindset quickly reverts to not caring about defects or losses.
A simple device is to produce a drawing of the factory, department, machine
or office and to mark down the monetary value of defects, wastes, raw
materials, invoices or paperwork at its point of creation or waiting. Visual
techniques can be used to represent the relative value of the waste. It can
sometimes help to relate the amount to things that people can relate to, be it a
weeks household shopping, a family holiday, a car or, in high value industries,
a family home. Find and use a mechanism that is relevant to your operation
and your people, but do look to communicate the monetary value of wastes so
that all can see and understand.
Step 5: Identify methods to recover wastes and losses. It is likely that the range of
losses will be quite broad and will therefore have a broad range of responses to
tackle them. Using the visual scheme outlined above it is now time to start
thinking of which method will be used where to tackle each of the key losses.
This exercise should also involve some consideration of the capabilities of
people to understand and use the methods as well as a consideration of
possible options or methods.
Step 6: Estimate the costs of implementing improvements and the amount of possible
cost reduction that could be achieved. This step effectively looks at the CostBenefit analysis of possible improvement suggestions. It is a necessary step to
challenge people to be cost effective, creative and innovative in their thinking.
People will often start by suggesting high cost solutions to issues but they will
often arrive at low cost solutions if they are challenged to do so. The old
maxim of expecting superior performance holds true. If a manager accepts the
normal, first easy solution of spending lots of money then that will be the
result. If the manager demands more creativity, innovation and thought then
they are very likely to get better, more cost effective answers.
It is clear that the lower the cost of the solution then the higher the level of
return. It is often a result that people learn more and grow more if they take
on the challenge of developing a creative solution rather than just buying a
new machine from a catalogue.
Step 7: Establish an improvement plan and implement it. The Cost Deployment
exercise will have taken the time to objectively identify the costs and wastes
throughout the operation. It will have discussed and identified a series of
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potential responses to these wastes and it is now time to lay out a prioritised
plan of action. This plan needs to take into account the physical and financial
resources of the operation and needs to be based on the agreed priorities from
the Customer Service Improvement Initiative. It is a good idea for the
manufacturing and engineering management to agree in advance with the
financial management that a percentage of savings made be re-allocated to
manufacturing and engineering to fund future improvement exercises. This
stratagem helps ensure that finance are aware of and value the improvement
activities of the team.
Focused Improvement: 7 Steps
The Focused Improvement Pillar helps management give due consideration to the
need to identify key issues for the business and to dedicate sufficient resources to
tackle these strategically important issues. The process moves managers away from
the purely operational improvement area and provides a basis for tactical and strategic
thinking. It helps create a space and opportunity to facilitate a gear shift in thinking.
The objective of Focused Improvement is to identify those areas of an operation that
can have a higher than normal impact on performance. A second objective can be of
an even more strategic nature through the identification of areas of an operation where
strategic competitive advantage can be made through the development or creation of
expertise or know-how in a particular area. This knowledge or expertise can as easily
be in a processing technology or a manufacturing system or machine development.
Step 1: Select a model area or choose a particular piece of equipment . Where does
the potential exist to make significant improvements that could be spread
throughout the operation? Look for bottleneck processes or equipment. Are
there areas that appear to be holding back the full operation? Are people often
waiting for product or service from a given area? Look to see if there is a
particular area that suffers large losses or high waste levels. Consider whether
these issues can be tackled.
Step 2: Identify the 16 major losses. Perform an exercise to objectively quantify and
classify the wastes under the major headings. This exercise will help to focus
the attention of engineers, maintenance and operators in a logical way.
Step 3: Form a Project Team. Having identified the project and the wastes and losses
it is time to create a full Project Team to address the issues identified. This
team should consist of: Line Manager, who should lead the team
 Production Engineering
 Design
 Maintenance
 Operators
 Others - such as finance, procurement, health and safety, as required.
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Step 4: Decide the Theme and Focus of the action. Will it be primarily focused on
Quality, Cost or Delivery? How will the message be transferred and
communicated to staff? How will the significance of the activity as a Model
Area be disseminated to the business as a whole.
Step 5: Action Phase. The project team need to move to action, using the correct tools
for analysis, implementation and monitoring. The tools used during the
project should be appropriate to the level and scope of the issues being
tackled.
Step 6: Cost Benefit Analysis. The engineers need to be able to demonstrate
financially the return on the investment made by the business. It is not acceptable to
just do improvement activities. It is necessary to quantify the financial contribution
derived from the work for the business. This step is also necessary to demonstrate to
the senior management team that improvement activities are positive contributors to
the bottom line of the business.
Step 7: Follow-up and horizontal expansion. The focused improvement activity will
have been shown in Step 6 to have been a financial success. But, it will have been
used in only one Model Area. Real benefits for the business will arise when the
learning’s from the Model Area are deployed across the business leading to a
multiplier on the benefits made in the Model Area.
Quality Control: 7 Steps
Step 1: Define current conditions. What are the existing levels of quality? What are
the type and level of defects? It is essential to determine the starting point, to define
the benchmark from which improvements will be gauged. Look at the processes
carefully and critically.
Step 2: Restore processes to normal conditions. Put machines and processes back to
the standards of settings and performance characteristics that are regarded as normal.
This may need some remedial work to be done on machines, it may even require the
determination of what normal settings are and should be.
Step 3: Use Cause and Effect Analysis to understand the root causes of chronic
recurring defects. These issues can often be hard to find and it may well
require the use of some sophisticated quality tools and techniques to trace the
sources of some chronic defects.
Step 4: Attack the causes of chronic defects. In Step 3 we identified the root causes of
the chronic defects, now they have to be tackled. Take countermeasures to
prevent defects arising again.
Steps 1 to 4 are repeated until the chronic issues are resolved. The importance of
addressing the seemingly insignificant chronic issues cannot be under estimated.
These small issues accumulate into bigger losses and need to be tackled.
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Step 5: Define the “Zero Scrap” condition. Having addressed the chronic issues it is
now possible to say clearly what conditions of machine, process and materials
need to be to deliver zero defects. These parameters can now be clearly
defined and written down. This is especially important when operating a
business over a multiple shift basis. One common set of settings is required to
ensure the process can be operated successfully, repeatedly.
Step 6: Check the conditions for “Zero Scrap”. Monitor the process over time. Note
the settings and verify if they are still at the set-points. Look for any
deviations and either correct back to standard or note the revised operating
condition.
Step 7: Improve the “Zero Scrap” conditions. The process is now running without
defects, consistently. The challenge is now posed to the operating team to try
to improve the yield without compromising quality. Improvements would
typically centre on the speed of the process with a view to reducing unit cycle
times.
Autonomous Maintenance: 7 Steps
One of the prime objectives of World Class manufacturing is to secure the
involvement of operators in the improvement process. Autonomous Maintenance has
proven quite useful as a means of involving people in the improvement process and
also in delivering on significant improvements in plant performance. The seven steps
to implementing autonomous maintenance are now presented along with a sample of
what a visual Autonomous Maintenance project board might look like, figure 51.
Step 1: Cleaning. Clean the area, remove any unnecessary equipment, materials,
machinery, books and tools from the area. In the West we know this as
making the area “Ship shape and Bristol fashion”, or “Clear the decks”. The
thought behind the cleaning process is that if the place is clean and clear of all
clutter it will be possible to locate any future sources of losses and leaks.
Also, a clutter free environment lends itself to an effective and safe work
place. There are less things in the way to trip over or to be moved out of the
way before a job can be tackled.
Step 2: Take countermeasures against sources. Fix leaks, stop spillages at source,
look for easier ways to check for lubricants and to perform top ups and
lubrication.
Step 3: Set Tentative Standards. Determine what are acceptable standards in terms of
breakdowns or lost time per day. Discuss with the operator, maintenance and
production management and work to agree a tentative target to be achieved by
a defined date.
Repeat Steps 1 to 3 until the autonomous maintenance team are happy they have
managed to define a standard of operation. They need some time to get the process
and their methods to work. This time will also include some training for people to
understand the tools and also how to use them.
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Step 4: General Inspection. When the team are confident that they have achieved
some results it is time for an external person to perform a general inspection.
This inspection brings a degree of objectivity to the process and will help the
team when they see how an external observer sees their operation.
Steps 1 to 4 should be repeated until the objectives set at the initial phase have been
achieved.
Step 5: Autonomous Inspection. The responsibility for the area reverts to the
operators and the team. It is important to periodically challenge the process
with an external voice seeking to quantify the benefits being achieved by the
action team as well as to re-appraise the targets and objectives of the team.
Step 6: Workplace organisation and housekeeping. As the team achieve successes in
addressing the low level issues they can progress to more demanding topics
such as the detailed organisation of the workplace and the systemisation of a
minimised but effective housekeeping regime. The catch phrase at this point
should be “Everything in its place and a place for everything”.
Step 7: Fully implemented autonomous maintenance. By this point the operators are
capable of doing many of the tasks formerly thought to be the tasks of
maintenance people. They understand how and why to do the normal daily
checks and even many of the weekly checks or their machines. They know
how to lubricate and about the different types of lubricants. They
understand the processes and the machine mechanisms well enough to
perform simple adjustments. They are trained to understand the normal
process parameters and also to be able to detect abnormal situations. They
are trained in the tools of quality and their use. They have been trained in
the basics of data capture and analysis and are integrated with the
maintenance team.
A sample Autonomous maintenance board is presented in figure 51. The board
contains areas for each of the seven steps, plus some additional space for future
projects, people development and also for the display of One Page Lessons, a system
for simply capturing and sharing the knowledge gained by an organisation through
developing responses to issues identified when working with the plant and equipment.
Visual measures are used wherever possible to facilitate the clear understanding of the
data with a minimum of analysis. Targets are set over time and results are also
tracked over time rather than waiting ‘till a due date to check if a result has been
achieved. The continuous nature of the process leads to more involvement by staff as
they observe the progress they are making towards the goal.
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fig 51: Autonomous Maintenance: 7 Steps
Professional Maintenance: 7 Steps
The development of autonomous maintenance within a plant has the potential to free
the skilled professional maintenance people to tackle more complicated and
demanding issues than they would be able to tackle if they were continually doing the
basic lubrication and checks. The use of autonomous maintenance will increase the
pressure and the expectation on the professional maintenance team.
Step 1: Elimination of forced deterioration and prevention of accelerated deterioration
of plant and machinery. Machines have defined parameters within which they
will operate successfully. If you exceed these parameters then machine
performance will be adversely affected. If machines are not lubricated
correctly or fed with air or steam or electricity of the correct standard they will
deteriorate. If obviously damaged or worn parts continue to be forced into
service they will either fail or add undue pressure to other parts of the
machine. Fix the problems. Replace the damaged parts. Lubricate the right
parts with the correct lubricant at the right intervals. Protect metals with the
appropriate coatings. Fix electrical control boxes to prevent water ingress.
Many of these tasks and many more are the basics of good engineering. It is
important for the engineer or maintenance manager to care enough about the
equipment under their charge to put things back right.
121
Step 2: Reverse deterioration. Start the process of tackling the causes of breakdowns.
Use the tools of quality, in particular check sheets (ref) run charts (ref ) and
pareto analysis (ref) to identify and prioritise the key machines and
components that fail, and fix them, and then take steps to stop them failing
again.
Step 3: Establish maintenance standards. Define what is acceptable and what is not.
It is not uncommon to see complex machinery with electricians tape holding
joints together, or cable ties replacing bolts. If this is regarded as acceptable
then it will become the norm. It is NOT good practice.
Steps 1 to 3 can be regarded as Phase I of the introduction of Professional
Maintenance and steps 1 to 3 should be repeated and reinforced until the plant is
running in a stable manner and is under control. Phase II seeks to improve the
standard equipment.
Step 4: Tackle weak points of the machine. Few manufacturers of machines have
much experience of running them in a production environment. Most
machines have a weak point or points. During Step 4 the professional
maintenance team will work to remove the weak points. This can mean the
upgrading of materials, drives, bearings, guards or software. This stage of
development in a maintenance team requires that they develop skills and
experience beyond the norm. They need to understand the basics of operation
of the equipment and the theory of materials and machine design. They need
to know how to calculate bearing life expectancies and shaft resilience and
performance of materials in specific environments.
Step 5: Build a periodic maintenance system. The space in and around steps 4 and 5
can be thought of as Phase III of the development of a professional
maintenance resource. The deep understanding and capture of plant histories
is used to develop a periodic maintenance system. Parts, components, subsystems and machines are removed and replaced at set intervals or periods to
avoid failures occurring during planned production periods. Fluids and
lubricants are replaced or topped up on a time schedule.
Phase IV deals with the final steps in the process of building a professional
maintenance capability.
Step 6: Build a predictive maintenance system. It should be clear that a time based
replacement system for parts will mean that some parts are replaced before
they reach the end of their working lives. This can be inefficient and costly.
The introduction of and development of expertise with a predictive
maintenance system can help modify the time based system enough to ensure
that the majority of the life cycle of parts is used before replacement.
The use of a predictive maintenance system requires the team to develop a
deep understanding of their plant and equipment as well as an understanding
of failure modes. They need to be able to determine which characteristics are
good indicators of deterioration and impeding failure and they then must be
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able to devise systems and methods to check and monitor trends in the chosen
key characteristics. The objective is to maximise the safe usage of parts and
components without compromising production availability.
Step 7: Maintenance Cost Management. The maintenance crew have by stage 7
developed their plant to run consistently at required output levels. They have
developed a deep understanding of their equipment and plant down to the
component level. They have devised means of analysing the state of
deterioration within the equipment and they have devised change-out,
replacement and refurbishment policies.
The professional maintenance team now need to challenge themselves on the
cost effectiveness and efficiency of their work. They need to devise a planned
maintenance system which allows sufficient resource for the necessary
maintenance of the operation as well as providing a resource for the support of
the operations improvement teams and their own development activities.
They need to develop an active budget.
Early Equipment Management: 7 Steps
The experience gained from running machines can be very useful when designing
next generation equipment. The concept of Early Equipment Management deals with
the capturing of gained knowledge and its incorporation into future machine designs
at an early stage in the process.
Step 1: Planning. Planning in business is essential. Management need to plan future
product strategies and market place tactics. The wider manufacturing teams
can support these strategies and tactics by firstly informing themselves of
them and secondly planning how their inputs and innovations can support
them.
The planning phase should look at the purpose of any investment in new
equipment or processes. It should also look at and challenge assumptions
regarding the necessity to invest in new equipment. Would it be possible to
achieve the required cost, quality and delivery performance levels with the
existing equipment? Would it be possible to do so if the equipment was
upgraded?
Analysis should also be done on profitability assumptions made. Have these
assumptions a reasonable basis in fact or experience or are they purely
aspirational?
The last part of the planning phase should look at the project plans and time
lines to determine realistic time lines for completion. The requirements of
cash, personnel and access need to be assessed and arranged to ensure a
successful project completion.
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Step 2: Basic Concept Design. The basic steps for any good design project need to be
followed. First among these is to establish the design goals. Just what is
required from the new machine? At what cost per unit? And at what running
costs? The basic requirements and goals will provide the designers with a
design envelope.
Questions also need to be answered regarding the required functions, capacity,
versatility and ease of use and maintenance of the machine.
Thought also needs to be given to how well the new machine can be
developed to enhance its use in a highly visual workplace. Careful design will
help ensure that the machine is easily observed and that it is immediately clear
when a problem occurs.
The ability to produce at the required quality level needs to be engineered into
the machine at the earliest time possible and to the required time schedule.
Step 3: Detail Design. Design concepts are developed at the sub-system level, tried,
tested and either accepted or rejected. Clearance, interferences and potential
issues are examined and addressed.
The designers need to take into account the needs of operators and
maintenance staff as well as the Quality Assurance team as they detail design
the machine.
Once again careful design and attention to detail will build in flexibility from
the outset leading to reduced downtime due to changeovers and adjustments.
Step 4: Manufacture. The machine comes to life. The detail designs are converted to
hard materials. During the manufacturing period the machine is debugged to
ensure full functionality. The actual rather than design performance of both
function, accuracy and quality of output are checked, verified and enhanced, if
necessary.
Step 5: Installation. The machine is installed and commissioned. During this phase
the new machine may perform differently than during the testing phase due to
differences in raw materials, services or even the experience of operators.
Adjustments and any further debugging are carried out as part of the
installation and commissioning phase.
Step 6: Trial Production. The machine is moving away from the designers to being a
production machine. Training of the operators is completed and the hand-over
to production is nearly done.
Step 7: Initial Flow. The new machine, now under the control of production is put
into service. Product quality is a very obvious first check from the new
machine. Operability is also a key issue. Can the operators gain safe and easy
access to all parts of the machine that they need to to run it properly? Over the
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initial period the engineering and production teams will look closely at the
maintainability, reliability, safety, function and capacity of the machine to
verify that the initial targets have been achieved. This phase can also be used
to challenge the team on what areas and opportunities they see for further
development.
People Development: 7 Steps
People are the bedrock of every improvement activity. People can be highly creative,
innovative, flexible and involved. They can also be prone to making errors. The
challenges we face when trying to develop people within a world class manufacturing
environment are:
1. Zero human errors. We need to develop people and systems to work together
to ensure that the processes work correctly, all the time.
2. Achieving good maintenance and system development by professional
maintenance people. These professionals will take lead roles in analysing
current states of equipment and developing future states.
3. Adopting autonomous maintenance by skilled operators.
4. Achieving good process control through the adoption of correct Quality
Control procedures by operators.
The seven step approach is followed again as the operation moves from Reactive to a
Preventive mindset.
Step 1: Establish principles and priorities. The starting point for all improvement and
development activities needs to be the business need. What is the
management position on worker development? What are the estimates of the
types of skills and abilities that are required for the business? What are the
types of tasks that people will be required to do? What are the base training
and understanding that people need to have to be able to do these jobs? It will
probably be possible to develop a tiered system of skills, identifying the
numbers of people that will be required at each tier to carry out the necessary
work.
Once these initial principles have been agreed it is time to prioritise the areas
that most need personnel development. This can be on the basis of new
equipment about to be delivered or because of issues arising in the area. In
any case it will be necessary to prioritise the staff development process to
ensure that resources are allocated in an effective way.
Step 2: Establish an initial training system for skills development. What are the
generic skills that people need to know and what are the machine or process
specific ones? It is advisable that everyone learns about safety, company
policy and the basics of improvement tools. It is also necessary that people
learn the core skills they need to operate their machines or processes
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effectively and efficiently. When establishing what people need to learn it is
equally important to determine how they will learn and who will teach them.
Step 3: Daily maintenance projects. Simple maintenance and machine minding
activities should be planned into the daily work of the operators. They should
be introduced to and involved with the maintenance activities from the outset.
Step 4: Establish revised training systems for skills development. Look to identify
experts and those with potential. Once the training and skills development
systems have been in operation for a time they should be analysed critically
and every effort made to find ways to improve the training process.
Look for the experts who have self-selected to learn more and take on more
responsibility. These will be people who have committed themselves to
improving the processes.
Repeat steps 1 to 4 as the level of understanding of the processes and the skills of the
workers improve. Look for ways to quantify and value the results of the training
input given. Seek to improve the methods of training where possible.
Step 5: Establish a system for developing and nurturing. This system should focus
significant attention on the developed experts. The focus should be on
exposing them to more advanced concepts and skill sets. The experts can
grow to further develop the core processes and deliver on advanced
efficiencies for the operation.
Nurture the experts and also challenge them to be more innovative and
effective.
Step 6: Access to Specific and Elective Skills. Some of your people will be able to
learn and absorb high level knowledge. Identify areas specific to the business
where an advanced level of knowledge and expertise would be useful. Direct
the experts to take on the challenge of gaining true expert status in these areas,
to provide the business with World Class Capability in business specific areas
of knowledge. Also, facilitate the experts in accessing additional knowledge
in a purely elective way. It is often from this elective study and endeavour
that true innovations will arise.
Step 7: Continuous Evaluation. Continuously evaluate the effectiveness of all the
investments being made in training. Evaluate the returns to the business from
the input to the experts, both specified and elective. Evaluate the training and
skills development of the intermediary and base level employees. Constantly
challenge the training and staff development team to improve their processes
and to quantify the results from the investments being made by the business in
training.
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Creating Good Environments: 7 Steps
The importance of sustainable development is crucial to today’s leading businesses.
World leading companies have a major responsibility to give leadership in this area to
contribute to the effort to sustain development within the global environmental
context.
Step 1: Understand local laws and regulations as they exist today and also where they
are likely to be in the future. It does not make good business sense to build a
plant that will only meet today’s environmental standards when everyone
knows that tomorrow’s standards will be even stricter.

Identify clearly the environmental issues the plant must deal with and rank or
prioritise them. Audit the processes in the operation from an environmental
impact and risk perspective. Use the output from this audit to prioritise
potential environmental risks according to potential impact as well as
according to the possibility of taking action to reduce or eliminate the risk.

Appoint a person to lead the environmental unit. Provide adequate financial,
technical and administrative supports for the role.

Establish an education system to develop employee awareness on
environmental issues and possible ways to manage the associated risks.

Select a pilot area, or areas, to initiate actions to tackle the identified
environmental risks and burdens.

Start projects and form teams to tackle significant environmental issues.

Set objectives and targets for each of the teams. These targets should be
challenging.
Step 2:
 Take action against contamination sources. Look for sources of spills and
losses.

Identify proper methods to deal with the environmental risks. Move to
implement the identified countermeasures.

Investigate the environmental risks, develop a deep understanding of what
constitutes the risk and examine the failure modes that would lead to a risk
developing into an incident.
Step 3:
 Prepare provisional environmental standards. This may start with the setting of
a reduction in the level of waste removal from the site leading to recycling
programmes and minimisation exercises.
 Spread horizontally throughout the operation the lessons learned in Step 2.
127

Establish a self auditing system where the management will audit the business.
This commitment will clearly demonstrate their support and drive for a
reduced environmental footprint.
Step 4:
 Check the environmental balance between raw materials and finished goods.
Identify where scraps, dust, noise and all the other elements of the raw
material that do not end up as products are created and look for ways to reduce
this waste of raw material and energy.

Instigate chemical substance control. Identify where and how all chemicals are
used. Define how they should be handled and disposed of after use. Look for
alternative substances with lesser or no environmental impact.

Initiate a resource saving exercise. Look for ways to minimise the use of raw
materials. Look for ways to minimise scrap and to find useful outlets for scrap
and off-cuts. Many companies are today finding that a little thought applied to
cutting lists can lead to off-cuts that are, in themselves, useful for other
products.

Energy saving. Initiate an energy awareness and saving exercise. A large
number of simple actions can make a significant reduction in overall energy
usage.
Step 5: Establish an Environmental Management System. Include environmental
accounting as an integral element quantifying the costs of poor environmental
practice. A very simple step in this process is to count the number of waste
skips used by the business each month and target a reduction. This is easily
quantified and costed.
Step 6: Establish systems for environmental load reduction, environmental risk
reduction and environmental load reduction. Look at what happens on site
and in the offices as well as along the supply chain (ref). Work to reduce your
overall environmental footprint.
Pursue green procurement. Look for suppliers that have a positive record in
reducing their environmental impact.
Step 7: Use a fully implemented Environmental Management System to work towards
the creation of a model environmental plant. The objectives of a fully green
plant are very similar to those of a truly world class facility with the desire to
do what is necessary with the least materials, people, space and energy – with
a minimised environmental footprint.
128
Educational Subjects
This book has attempted to present information and materials in a structured way.
The following topics of education are presented to help define which tools and
techniques are appropriate for study at the relevant level of development of the
business.













Cost Deployment
INTERMEDIATE
 Wastes and losses
in indirect
divisions.
BASIC
Definitions of
waste and losses.
Measurement of
waste and losses
Translation of
waste and losses to
cash value.
Development of C,
D and E matrices.
Start Projects.
BASIC
Production
Techniques
Minimal manual
handling.
Set-up time
reduction.
Assy line
techniques.
Layout
techniques.
Lead time
reduction.
Visual
management.
Standard
operating
procedures.
ADVANCED
 Deployed through
business – Sales,
Administration,
Design.
 Profit Deployment
Just in Time
INTERMEDIATE
 Material management
*Sequential feeding
* Supply by Kanban
 Internal logistics.
ADVANCED
 Production
planning & control
system.
 COP


SCM

IPS





Minimise transfer
batches.
External logistics –
mixed delivery.
Flow analysis.
Small in-line
machines.
Inventory
management.
Integrated logistics of
sales, production and
distribution.
129
BASIC
MURI, MURA, MUDA.
Video taping
Pace monitor
NUAA
Multi-process operation.
Material handling.
The way to teach.
Radar chart.
Skills development.
Career path programme.
Employee’s satisfaction.
Safety Step
- Accident analysis.
Total Industrial Engineering
INTERMEDIATE
ADVANCED
Separation of labour from IE with IT
equipment.
Separation between labour
of operation and
transportation.
LCA
130
131
Appendix 1
Audit Criteria of WCM
Ten Criteria to Check Achievement Level of WCM Process Management at Each Plant
a.
Management Commitment
1. Not 100% convinced. Only recognises problems vaguely.
2. Is convinced, but doesn’t know what to do.
3. Knows what to do and how to do it, but doesn’t delegate down into
Workgroups/Teams.
4. Delegates to Workgroups/Pillar Teams and follows up by auditing and
supporting.
5. Masters the WCM system and methods, delegates Autonomous
Workgroups/Teams and controls.
____________________________________________________________________
Prof. H. Yamashina
(2) Clearness of the Objectives
1) Factory level objectives assessed qualitatively.
2) Factory objectives clearly defined quantitatively.
3) Waste and losses are known, translated into money. Factory objectives are
consistent with Group objectives. Mechanism in place to track the effect of
individual projects on the overall KPIs.
4) Methods to attack various losses are well known, and applied. Good results are
achieved.
5) Continuous searching for waste and losses are made, and appropriate techniques
to continuously attack them are established, and applied.
Prof. H. Yamashina
(3) Route Map to WCM
1. No proper improvement programme. Ad hoc approach to improvement.
2. Based on the factory objectives, a Focused Improvement programme (what,
where, why, how and who) has been established.
3. Appropriate methods to attack losses, identified by the Focused Improvement
programme, have been created step by step and sustained results obtained. The
effect of each method has been fully evaluated.
4. Horizontal expansion of the knowledge learned has been made.
5. Based on the factory objectives, the Focused Improvement programme is
continuously improved; factory performance is consistently improving and
becoming more visual.
Prof. H. Yamashina
(4) Allocation of Highly Qualified People to Model Ares & Model Machines
132
1. No suitable people have been chosen.
2. A good team has been selected to teach specific model area or machine. Cross
functional teams established to create know-how.
3. Knowledge creation is taking place by the selected people and good results are
being obtained. Pillar owners are subcommittee for each pillar established and
active, pillar activity boards in place.
4. Good knowledge has been gained. Based on this knowledge, a programme is
made for horizontal expansion. A training programme to enable horizontal
expansion is created and implemented Autonomous Groups are present in the
major areas.
5. New knowledge and methods have been researched and implemented.
Programme supported by highly qualified engineers are allocated to areas of
highest opportunity.
Prof. H. Yamashina
(5) Commitment of the Organisation
1. People deny that there are problems, or don’t want to see them.
2. People admit that there are problems, but find excuses for not being able to solve
them.
3. People accept that there are problems, but are unable to solve them because they
don’t know how to attack them.
4. People want to see potential problems, and try to visualise them. They attack the
problems by learning the appropriate techniques.
5. People know their problems, methods to solve them, and involve all the levels of
the organisation to attack them. They are ready to attack any problem, and to
change their organisation if needed after solving the problem.
Prof. H. Yamashina
(6) Competence of Organisation Toward Improvement
1.
2.
3.
4.
No proper methods are used.
Only elementary methods have been applied.
Specific methods, to specific problems have been applied.
A continuous search for advanced methods and techniques is made, and applied
as appropriate. Good knowledge is continuously accumulated.
5. Standardisation of the created knowledge is continuously made, and horizontally
expanded to other suitable areas and machines.
Prof. H. Yamashina
(7) Time and Budget
1. No time and budget allocated to WCM.
2. An annual schedule and budget are made, but not correctly followed.
133
3. An annual schedule and budget determined, and each project is properly followed.
4. Correct delegation of authority has been made. Each group autonomously
deploys the factory objectives, into their own objectives, and systematically
improves their area.
5. WCM activities are built into annual, monthly, weekly and daily routine work,
and the factory performance is improving in a measurable and visible way.
Autonomous work groups are responsible for managing their own activities and
budgets.
Prof. H. Yamashina
(8) Level of Detail
1. Few aggregate data.
2. There is a linkage between problems, analysis, and solutions. There is
insufficient detail to identify the reasons as to allow the problems to be rectified.
3. There is a logical linkage among problems, analysis and solutions. The clues to
resolve the problems are identified.
4. “From preventive approach to proactive approach” is taking place.
5. Very detailed problem identification, detail analysis, and thoughtful and usable
proactive solutions. Any abnormality can be easily detected.
Prof. H. Yamashina
(9) Level of Expansion
1.
2.
3.
4.
5.
Few projects.
Model areas and model machines to attack major waste and losses.
Expanded to AA and A class machines.
Expanded to (A + B) class areas, and (A + B) class machines.
All the necessary areas and machines in the entire factory are covered.
Prof. H. Yamashina
(10) Motivation of Operators
1. No interest in improvement.
2. Interested in improvement, but lack discipline and unable to see problems clearly
yet.
3. Want to improve, see problems, and learn methods to resolve the problems. All
employees across the plant must be involved.
4. Want to improve, have proper knowledge, and skills to improve.
5. Eager to improve, ready to attack any problem, by learning and applying proper
method.
Prof. H. Yamashina
(1) Safety
134
1. There are reports of accidents. No substantial reduction of accidents has been
achieved yet.
2. Each time an accident takes place, an accident analysis is made and
countermeasures to avoid a repeat are taken.
3. There are safety standards, but are not strictly followed by all employees.
4. People are responsible for their own safety, and take countermeasures
autonomously against safety problems.
5. No Lost Time Accidents for the last three years. Proactive approach to safety.
Fully implemented Safety Management System. ISO 18000 achieved.
Prof. H. Yamashina
(2) Customer Service
1. There is no system to measure Customer Satisfaction. Only availability and stock
level is checked.
2. System in place to measure Customer Satisfaction in terms of Q, C and D.
Availability is not 100%. No checking of lost Customer orders due to nonavailability of stock or inability to manufacture.
3. There is a system to measure Customer Satisfaction in terms of Q,C and D.
Availability and stock level of each item is checked. There is a procedure to
check for lost Customer orders due to non-availability of stock or inability to
manufacture. Stock level is above 2 weeks.
4. There is a system to synchronise production and sales. The production lead times
are a minimum. Thus, availability is close to 100%. Stock level is less than 2
weeks.
5. Customers are fully satisfied with the products they bought in terms of Q, C and
D. Availability 100%. Lost orders are 0. Stock level of less than 1 week.
Note: Q = Quality, C = Cost, D = Delivery.
Prof. H. Yamashina
(3) Cost Deployment
1. No proper understanding, definitions and measurement of waste and losses.
2. Waste and losses have been roughly defined and identified. Based on an
approximate translation of waste and losses into cost, some projects and activity
programmes have been created. There is a lack of co-operation between Finance
and Production. The results of improvement activities have not been financially
checked.
3. All major waste and losses are identified jointly by the co-operation between
Finance and Production. Waste and losses are almost correctly translated into
cost. Based on the cost deployment, proper projects and programmes are run and
good results obtained. Must be implemented to required standards.
4. Cost deployment matrices of A, B, C, D and E are correctly used in all the major
areas and substantial cost reduction has been achieved.
135
5. Whatever improvements have been made, there is a philosophy to continuously
seek for opportunities to reduce cost and increase productivity. For this purpose,
30% of the Cost of Conversion is regarded as waste and losses, and efforts are
continuously made to try to identify such waste and losses. Each time waste or
losses are reduced, the lessons learned are horizontally expanded to other areas.
Prof. H. Yamashina
(4) Focused Approach
1. There are no projects or programmes based on Cost Deployment. All the projects
are chosen ad hoc, and no systematic approach or a proper method is used.
2. There is a system to choose subjects for Focused Improvement but no proper cost
and benefit analysis is made. There is no system to horizontally expand the
knowledge gained after each Focused Improvement.
3. Based on Cost Deployment, proper subjects for Focused Improvement have been
selected. Based on the needs of the Focused Improvement, a proper crossfunctional team is formed. Knowledge to reduce or eliminate waste and losses are
created step by step.
4. There is substantial knowledge to eliminate or reduce waste and losses.
5. There is a system to continuously increase the in-house knowledge to reduce or
eliminate all possible waste and losses. The knowledge is horizontally expanded.
Prof. H. Yamashina
(5) Quality Control
1. No proper Quality Control is practiced. Based on inspection the good and rejects
are sorted out. No measurement of Cp, Cpk.
2. Model processes for Quality Control have been chosen, and Step 1 – Step 4 have
been implemented. The results improve Quality Control giving benefits. Cp, Cpk
are measured.
3. Step 5 to the model processes. Step 1 – Step 4 to A class processes for improving
quality.
4. Step 6 for model processes. Step 4 to Step 5 for A class processes. Step 1 – Step
3 for B class machines. Increased Condition Based Maintenance for the
machines.
136
5. Step 7 for model processes. Step 6 for A class processes. Step 4 – Step 5 for B
class processes. For (A + B) class processes, proper maintenance in case of the
machine has been chosen.
Prof. H. Yamashina
(6) Autonomous Maintenance
1. Model machines for AM have been chosen and Step 1 – Step 3 have been
implemented to correct standards. A system for auditing that the steps have been
correctly followed is in place.
2. Step 4 for model machines. Step 1 – Step 3 for all AA class machines have been
completed. Cost and benefit analysis proves benefit of AM.
3. Step 5 for the model machines. Step 1 – Step 4 to all AA class machines. Step 1
– Step 3 to A class machines.
4. Step 6 for model machines. Step 5 for AA class machines. Step 1 – Step 4 to
(AA + A) class machines.
5. Step 7 for model machines. Step 6 for AA class machines. Step 1 – Step 5 for
(AA + A) class machines. Autonomy starts to take place from model machines,
gradually A class machines and then up to B class machines.
Prof. H. Yamashina
(7) Professional Maintenance
1. Mainly Breakdown Maintenance is practiced. No measurement of MTBF and
MTTR of major machines and components.
2. Model machines for Professional Maintenance have been chosen and Step 1 –
Step 3 have been implemented. Mainly Breakdown Maintenance. Steps 1 – 3
must be fully implemented and to correct standards. Each step is audited before
moving onto the next step.
3. Step 4 – Step 5 to model machines. Step 1 – Step 3 to AA class machines. From
Time Based Maintenance to Condition Based Monitoring.
4. Step 6 for model machines. Step 5 for AA class machines. Step 1 – Step 4 for A
class machines for improving quality.
5. Step 7 for model machines. Step 6 for AA class machines. Step 1 – Step 5 to A
class machines.
Prof. H. Yamashina
(8) EEM,
1. There is no system to create production and maintenance friendly equipment.
2. 1st trial of EEM by the introduction of an EEM system. Still substantial
modifications are needed. The machine has many design weaknesses.
3. Several trials of EEM continuously refining the EEM system.
Fewer
modifications are needed. The equipment is not perfect but acceptable.
4. Good experiences of EEM. Capable to guiding and coaching equipment
suppliers. Only some minor problems are left at the time of full.
5. There is a good EEM system to guarantee Quality, Cost and Delivery. Ease of
operation and maintenance. Each time any major investment is made, the EEM
system is refined.
137
Prof. H. Yamashina
(9) People Development
1. No system to evaluate required knowledge and skills of each employee, and
actual levels of their knowledge and skills.
2. There is a rough evaluation system for checking required knowledge and skills of
all employees, but no measurement system for checking their actual knowledge
and skills. Evaluation system to be applied across entire plant.
3. There is an evaluation system for checking required knowledge and skills of all
employees, and a measuring system for checking their actual knowledge and
skills. Gap analysis is made, but education and training are carried out ad hoc. No
financial evaluation of losses due to lack of knowledge and skills.
4. There is a systematic education and training system, for minimising the gap
between the required knowledge and skills of each employee, and their actual
knowledge and skills. The cost of education, training and the costs caused by lack
of knowledge and skills are continuously followed up. There is continuous effort
to make education and training as efficient and effective as possible. Employees
are willing to make improvements and are highly motivated to take on additional
skills.
5. There is a systematic education and training programme to create competent
human resources at every level such that the company can be continuously
developed into a World Class one.
Prof. H. Yamashina
(10) Environment
1. The management is not well aware of the local laws and regulations on
environments and their trends. There is no clear vision on environmental issues
and no time and budget allocated for environmental improvement.
2. There is a vision on the environmental issues the plant must deal with in long,
medium and annual terms and deploy them into action programmes with the
necessary budget. There is an appointed person responsible for the environmental
improvements and an organisation including finance. There exists an education
system to nurture employees on environmental issues and risk management.
3. All major internal and external environmental issues are clearly identified and
visualised as in a noise map, a dust map, risk maps, environmental load maps, etc.
Based on the deployments of environmental issues, proper projects and
programmes are run and good results obtained. Must be implemented to required
standards. An EMS focusing on manufacturing and internal logistics and self
auditing system are available.
4. All the major areas on environmental issues are managed under the EMS and a
substantial improvement has been achieved. Almost no pollution problems exist.
There exist supporting systems such as environmental accounting and reporting
system. External benchmarking with competitors has been made and the plant
managers far better than the competitors. Ready for applying or already got an
external certification such as ISO 14000.
138
5. There exist well established systems for environmental load reduction, operating
system, environment risk reduction and they are all actively working well. There
is a philosophy to continuously seek for opportunities for better environments.
Prof. H. Yamashina
139
Appendix 2
5S Evaluation Checklist
Table 5S Evaluation Checklist
Worksite
Section
Line
Date
Members
Check-points
1
Evaluation Level
3
2
4
5
Organisation
Orderliness
Cleanliness
Standardised
Clean-up
Discipline
Subtotals
Points
Points
Points
Points
Points
Total
Goal: Try to raise the total by 20 points within the next evaluation period
Comments
Check-points
1
Evaluation Level
3
2
4
5
Organisation
Warehouse
(inventory
Management)
The storage
area is too
cluttered to
walk around
freely.
Check-points
1
Work-in-process
Aisles
and other items
Items are placed
irrationally
2
Items are
set on the
Items have
designated
storage places,
but they’re often
ignored.
Items are
stored in
proper
locations, but
no standard
criteria
indicate when
to reorder
Evaluation Level
3
Items protrude
into the aisles.
4
Items protrude
into the aisles
Items are
managed for a
just-in-time
supply and
tracked on
inventory
boards.
5
There is no
work-in-
140
Work areas
Check-points
stand in a ropedoff area in the
aisles.
sides of the
aisles so
employees
can pass,
but carts
and dollies
cannot
pass.
Items lie scattered
around for months,
in particular order.
Items lie
around for
months, but
they don’t
get in the
way.
1
Un-needed items
have been
red- tagged and a
disposal date has
been set.
but have
warning labels.
progress,
so the aisles
are
completely
clear.
Only items to be
used within the
week are kept
around.
Only items
needed the
same day are
kept around.
Evaluation Level
3
2
Machine
parts
storage
Parts are jumbled
Broken and
together with paper unusable
craps and rags.
parts are
being stored.
Frequently used
parts are stored
separately from
those that will
not be used soon.
Work benches
and tables
Tables are covered
with un-needed
materials.
Tables hold extra
pencils and other
un-needed
stationary items.
Tables hold
materials that
are only used
once every
two weeks.
4
All parts are
stored in
standard places
with standard
labels according
to an easily
understood
system.
Items remain
on the tables
for as long as a
week.
2
Evaluation Level
3
Equipment
(mainly
sewing
machines)
Equipment is placed
in no particular
order, some of it
rusted and unusual.
Usuable and
unusable
equipment are
kept together.
Unusable and
un-needed
equipment has
been thrown out.
Equipment is
managed
according to its
frequency of use
and degree of
importance.
Line
organisation
The line is in
disarray, and planned
downtime occurs more
than 40 per cent of the
time.
Planned
downtime is
as high as 40
per cent, and
the flow of
the line is
unclear.
Planned downtime is around
20 per cent, and
there is waste
involved in
transporting
material.
Planned downtime is around
20 per cent, and
unfinished goods
are kept on the
line.
Check-points
1
4
5
Nothing is
found out of
place.
Only the
minimum
items needed
are kept on
the tables.
5
The
equipment
is set up so
anyone can
find what
they need to
use at any
time
The line is
well
organised and
flows
smoothly, with
no more than
10 per cent
planned
downtime.
141
Check-points
1
2
Evaluation Level
3
4
5
Equipment
(mainly
sewing
machines)
Equipment is placed
in no particular
order, some of it
rusted and unusual.
Usuable and
unusable
equipment are
kept together.
Unusable and
un-needed
equipment has
been thrown out.
Equipment is
managed
according to its
frequency of use
and degree of
importance.
Line
organisation
The line is in
disarray, and planned
downtime occurs more
than 40 per cent of the
time.
Planned
downtime is
as high as 40
per cent, and
the flow of
the line is
unclear.
Planned downtime is around
20 per cent, and
there is waste
involved in
transporting
material.
Planned downtime is around
20 per cent, and
unfinished goods
are kept on the
line.
Check-points
1
Evaluation Level
3
4
2
The
equipment
is set up so
anyone can
find what
they need to
use at any
time
The line is
well
organised and
flows
smoothly, with
no more than
10 per cent
planned
downtime.
5
Orderliness
Recorded level
(items arrive
when needed, in
the required
quantities)
Check-points
Waste from
searching during
set-ups.
Jig and tool
storage
Check-points
Parts are
recorded when
90 per cent
have been
used up, and
parts shortages
still occur.
Parts are reordered
when 90 per cent
have been used up,
standby occurs at
assembly
processes.
1
2
Employees wander
aimlessly searching
for parts and
materials.
Parts are reordered
when 95 per cent
have been used up.
Problems sometimes
occur during model
changes.
Evaluation Level
3
Employees
move in a
zigzag
pattern
gathering up
what they need.
Jigs and tools are
Jigs and tools are
scattered all over the stored in boxes.
place.
1
2
Parts are
reordered
when 99
per cent
have been
used up.
New
product
orders
generally
arrive in
time
4
The work
site
practices
just-in-time
manufacturing.
Reordering
only as
inventory is
used up.
5
Some effort
is wasted in
searching
for things.
Set-up carts are No time is lost
used.
in searching
for things.
Different
kinds of jigs
and tools are
stored
separately.
Jigs and tools
Jigs and tools
are stored on
are arranged by
shadow boards. frequency and
order of use.
Evaluation Level
3
4
5
142
Parts and
materials
Defective and good
parts are stored
together.
Check-points
Drawings and
charts
Defective parts
are kept on a
separate shelf.
1
Only good
parts are kept
in storage;
nicks,
humidity
damage, and
other
problems are
avoided.
Evaluation Level
3
2
Current drawings are Drawings are
jumbled together
organised and filed
with torn, outdated by category.
charts.
Check-points
Documents and
other written
materials
1
2
Documents are
scattered randomly
on tables and shelves;
old documents lie
forgotten in storage.
Drawings
that are hard
to read have
been
replaced
with new
ones.
Evaluation Level
3
Documents have
been straightened
enough so that
someone who looks
long enough will
find them eventually.
Check-points
1
Storage
shelves are
clearly labelled
and well
organised.
2
Documents
of the same
type are
stored in the
same place.
Parts are
delivered justin-time, using
kanban and
tracking
boards.
4
5
Drawings are
stored so
they’re easy
to retrieve.
The system
allows anyone
to return
drawings to their
proper places.
4
5
Documents
and written
materials are
classified
and colour
coded.
Evaluation Level
3
4
Visual storage
is fully
implemented.
Anyone can
easily retrieve
documents and
return them to
their proper
place.
5
Cleanliness
Wires and
Dusty wires and
pipes on the pipes dangle
ceiling.
haphazardly from the
ceiling.
Aisles
Wires and pipes
are laid out for
each line, but
they are hard to
clean around.
Wiring for
each line is
bundled,
making
cleaning
easier.
Aisles are littered withThere are no largeThe aisles
cigarette butts, thread, pieces of trash, are cleaned
and metal shavings. but small paper only the
scraps, debris andmorning.
Few pipes or wires are No pipes or
evident, and there’s no wires hang from
debris overhead.
the ceiling.
Surface defects
discovered during
cleaning are quickly
repaired.
Efforts are made
to keep the
aisles from
getting dirty in
143
dust are present.
Check-points
1
Machines and
equipment
Machines and
equipment are dirty
and are used in that
state.
Cleanliness of
work areas.
Pieces of thread,
scraps of cloth, and
cutting dust are
scattered around.
Visible parts of
the equipment
appear to be
cleaned
occasionally.
Check-points
Windows,
window frames
and walls.
Check-points
Tools, jigs and
moulds.
2
4
5
The panes are Both the panes
dirty, but the and frames are
frames are
kept clean.
kept clean.
Evaluation Level
3
No items are
rusted, but some
are covered with
oil or dirt.
2
5
Even the legs of the
Everything is
tables and desks are
kept clean at all
clean, and all nicks and times.
scratches have been
repaired.
Evaluation Level
3
2
Check-points
1
Work tables
and desks are
cleaned once
a day.
The panes are
dirty, but the
frames are
occasionally
cleaned.
1
Some items are
rusted.
5
Equipment is
cleaned
during setup
and changeover.
Evaluation Level
3
4
Dust and
debris have
accumulated
under the
work tables.
1
Window panes are
missing or cracked,
with haphazard
repairs.
4
Operators clean Machines and
the equipment
equipment have
once a day.
inspection
labels and are
cleaned every
morning.
There’s no large
The area has The area is
Debris and dust
debris, but smaller been cleaned. cleaned every
are caught
debris and dust
day at the end
automatically to
are present.
of the shift.
keep the area
clean.
2
Work tables Surfaces are piled so
and desks.
high with documents,
tools, and parts that
they can’t be cleaned.
Evaluation Level
3
2
Check-points
1
the first place.
Only the parts
that users
actually
touch are
clean.
Evaluation Level
3
4
Window shades
are used; kept
clean and
uncluttered, and
no extraneous
items are
attached to the
walls, giving the
area a pleasant
atmosphere.
4
5
Grinding dust
and other debris
have been
cleaned off,
making tools
and implements
pleasant to
handle.
Devices prevent
accumulation of
debris in the
first place, and
any debris is
quickly cleaned
off.
5
144
Standardised Cleanup
Restrooms
Facilities are dirty;
supplies run short;
unpleasant to use.
Fixtures are
rinsed, but
they are still
dirty and
supplies run
out sometimes.
Check-points
1
Cafeteria
and employee
lounges.
Check-points
The areas have
been cleaned
somewhat, but
they’re still
dirty.
1
Implements and
jigs (low-cost
improvements)
Items have been
patched together
with tape and like.
Overall layout.
The room is dark,
making detailed
work difficult.
2
One wouldn’t
mind sitting
there in work
clothes, but not
when dressed up.
2
Restrooms
are pleasant
and well lit,
with music
piped in.
5
Chairs have been The areas
cleaned so clothes are
don’t get dirty.
extremely
clean,
sanitary,
and a
attractively
decorated;
guests can be
taken there.
Evaluation Level
3
Signs and signal
light stands are
made of flimsy
materials such as
cardboard.
Light and
illumination have
been provided,
reducing the
possibility of on-the
job injuries.
Check-points
1
Restrooms are
clean and
hygienic, and
supply shortages
do not occur.
Evaluation Level
3
4
2
These areas are so
dirty one doesn’t
want to sit there.
Restrooms are
cleaned once a
day, but they’re
still a bit dirty.
4
5
Makeshift
implements look
weak and
fragile.
Some
equipment
is crude
looking
handmade.
The room is bright Ventilation
and safe, well lit, is sufficient,
illumination and
giving the
shades.
work area a
refreshingly
airy feel.
Evaluation Level
3
4
Well made
mechanism
use simple
automation.
The plant is
obviously a
healthy
working
environment.
5
Discipline
Workplace
attitude.
Employees avoid
eye contact and
don’t say anything,
even when they
bump into others.
People say
“Excuse me”
when they
bump into
someone but
otherwise
ignore others.
Employees make
eye contact with
and greet only
about 10 per cent
of the other people.
Employees
acknowledge
about half of the
others they
encounter.
Evaluation Level
Everyone is
polite and
pleasant and
at least smiles
and nods to
others.
145
Check-points
Smoking
Check-points
Manner of
speech
1
Employees smoke
openly, even in
front of first-time
visitors. More than
50 per cent smoke on
the job.
1
People use
unnecessary jargon.
They generally
ignore other’s ideas
and are not good
listeners.
2
3
Employees smoke
even while being
addressed by a
supervisor. Less
than 50 per cent
smoke on the job.
2
Employees light up
immediately after
meals, without
asking permission of
visitors. Less than
40 per cent smoke on
the job.
Evaluation Level
3
People have a knowit-all attitude toward
others and do not
actively pay
attention when
others are speaking.
People occasionally
speak politely and are
receptive to others’
ideas about half of the
time, paying attention
when others are
speaking.
4
Employees
don’t smoke
if their visitor
doesn’t smoke.
Less than
30 per cent
smoke on the
job.
5
Employees
don’t smoke.
Less than
30 per cent
smoke on
the job.
4
People always
speak politely,
with respect for
their leaders.
They are
receptive to
others’ ideas
about 60 per cent
of the time and
nod in actively
listening.
5
People
generally
speak
politely
and
respectfully
to everyone.
The are
receptive to
others’ ideas
about
70 per cent
of the time
and are
positively
supportive
of others
who are
speaking.