This article is an excerpt from Alan Greenspan’s latest book, “The Map and the Territory: Risk, Human Nature, and the Future of Forecasting”. As Lean Six Sigma professionals, we also...
Sometimes you feel honored to be reading an article that delivers substantial content. This article is the apex of such statement. I cannot refer to a better article the applications of Lean and problem solving. Robert Simonis clearly describes the problems of applied overhead accounting when the metrics do not match the drivers of the customer demand. As described in the article, the metric used by the plant manager was operational cost. This has nothing to do with production and throughput of the customer demand, yet that is the metric for the plant. It skews the decision making by treating less optimal decisions as a priority as described in the article. Lean provided for the best operational efficiency for the organization by improving cash flow and lowering inventory. This is described as value stream accounting.
Robert describes the tools needed to improve the assembly area and how to properly apply them for a teaching moment. I especially enjoyed the application of single-second-exchange-of workstation (SSEWS ) for level flow of mixed production.
Applying error-proofing and standard work also allowed for the process to become in control, effective and efficient. The decision regarding headcount versus machine was properly communicated on how they would save more without the machine than with it. This also provided another teaching moment on metrics regarding the square footage of plant space used.
This article is a good reference tool when reviewing your organizational metrics. Ask yourself of any of your internal metrics can skew your decision making like in this article. If so, you need to change them quickly to avoid refusing to perform profitable work.
Article Link: http://www.sme.org/MEMagazine/Article.aspx?id=84499
Gary Kapanowski – Lean Six Sigma Master Black Belt – Excelsior
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