retention, and transfer—comprise the four-beat bar of music
that most factories use to add value to materials.
Just as only one four-beat bar can hardly be called music,
we need to repeat the bar a number of times to create the
“music of production.” In view of retention’s large role in
this type of production, we shall call this type “stop-and-go
production.” (See Figure 2.9).
Within the four-beat, stop-and-go pattern of this type of
production, the beats that take up the lion’s share of the
manufacturing lead-time are the two “retention” beats. In the
example shown in Figure 2.9, there are eight retention stages
from the parts warehouse to the products warehouse. Six
of these retention stages are within the factory, where they
directly relate to the manufacturing lead-time.
There are lots of retention points, and together they eat up
a lot of time. Once a pile of workpieces is set down somewhere,
it tends to stay there for half an hour, an hour, or more.
Sometimes part of the pile gets left there overnight to make
operations or changeover more convenient. Meanwhile, parts
that have been delivered to the parts warehouse can easily
wait there for a month or more. Whether the total retention
time adds up to hours, days, or weeks, it still eats up a tremendous
amount of lead-time. Retention is clearly the worst
culprit when it comes to lead-time consumption.
Materials do not do anything but wait at retention points.
Having several retention points means we must have some
means of moving materials from one retention point to the
next. That is where the “transfer” category comes in.
The nice thing about this category is that it never comes
close to eating up as much lead-time as the “retention” category
can. In most factories, each transfer takes one or two minutes.
Still, outside vendors can take several hours to transfer parts
and materials to the factory. In any case, out of retention,
transfer, and processing, transfer is the second worst culprit.
Inspection is a separate culprit altogether and should be considered
apart from the categories that make up the four-beat
pattern of production.
Finally, we have the “processing” category, which eats up
the least lead-time. A single workpiece’s total processing time
in the factory commonly adds up to a minute or two. Most
individual processes take less than a minute. Some take only
several seconds. Press processes usually range between one
and two seconds, while drilling machines average about two
or three seconds.
It should be obvious by now that bringing in the latest
production equipment to shave a few seconds off of the
total processing time is not going to help much in reducing
the overall lead-time to enable earlier product shipments to
customers. A pressing need to meet the client’s short delivery
deadlines is therefore not much of a reason for any company
president to invest in the latest production equipment.
Obviously, the best way to shorten the manufacturing leadtime
is to get rid of the worst culprit: retention. Once we
do that, our stop-and-go production system can be turned
into a “process-and-go” production system in which the fourbeat
pattern of retention, process, retention, and transfer are
replaced by the four-beat pattern of process, transfer, process,
and transfer.
Today, shorter lead-times are in big demand by consumers
and are also a major factor enabling the expansion of client
orders. Old and worn as the expression is, it still rings quite
true in the world of manufacturing: “Time Is Money.”
Lesson 5. When the Flow of Goods Stops,
the “Lead-Time” Clock Keeps Ticking
Approach to Efficiency: Estimated Efficiency
and True Efficiency
Factories are full of talk about efficiency. Factory people are
always trying to improve the equipment operators’ efficiency,
the equipment’s own efficiency, the efficiency of the operations,
and various other types of efficiency. The prevalent
attitude is, “Let’s try to turn out products even just a little bit
better than we do now.”
Different people, however, have very different understandings
of this “efficiency” concept. Most people view such things
as efficiency and productivity as a ratio of “output”-to-“input.”
In other words, people think of productivity as the value of
production output divided by the cost of production input.
This definition is expressed as an equation below.
PRODUCTIVITY =PRODUCTION OUTPUT
PRODUCTION INPUT
Assuming that this equation is correct, one could propose
three measures for boosting productivity
Measure 1: Increase the production output.
PRODUCTIVITY = PRODUCTION OUTPUT
PRODUCTION INPUT
In this equation, I have used arrows to indicate constant
levels (→), increases (↑) and decreases (↓).
Measure 2: Decrease production input.
PRODUCTIVITY =PRODUCTION OUTPUT
PRODUCTION INPUT
Here, we have kept the production output constant (→)
but have lowered (↓) the production input, which raises
(↑) productivity.
Measure 3: Increase production output and decrease production
input.
PRODUCTIVITY = PRODUCTION OUTPUT
PRODUCTION INPUT
This is a combination of Measures 1 and 2, in which we
raise (↑) productivity by lowering (↓) production input and
raising (↑) production output. Obviously, there are also other
ways to boost productivity, and there are various ways of
applying the three measures just described.
When we think of “raising” productivity or efficiency, the
notion of “raising” tends to lead us first to Measure 1, in which
we aim simply to raise production output.
For instance, let us consider the example shown in
Figure 2.10. Here, we have a factory that is trying to boost
productivity by increasing the number of product units manufactured
daily by ten people from 200 units to 250 units.
According to the productivity equations illustrated, the
“estimated efficiency” plan in Figure 2.10 should have worked