Assessing Your Current Operation

When faced with the task of continuously improving our manufacturing operations, we must first understand how we are currently performing. I have found some basic questions to be helpful in this regard. Consider these questions as part of an operations assessment for a product, product line or product family.

  1.  What is your manufacturing leadtime? Consider leadtime as the time from the start of the first step in the process to the completion of the last step. Effective operations measure this time in days or hours (some even measure it in minutes).

If you measure your leadtime in weeks, this is a symptom of production delays that need to be addressed. Compare your manufacturing leadtime to the direct labor required to manufacture the product. For example, if the product requires 1 hour of direct labor but has a manufacturing leadtime of 10 days, the difference presents an opportunity for improvement. You may not be able to reduce the manufacturing leadtime to match the direct labor, but you should strive to bring them as close as possible (and practical).

  2.  How much work-in-process (WIP) inventory is in the manufacturing pipeline? Work-in-process inventory consists of parts that have been started but have not yet been completed. Put another way, it is expense (labor and material) that has yet to generate revenue. In multi-step manufacturing operations, WIP can build up at any step in the process.

Count the amount of WIP you have (total units) and compare this to the level of demand for the product. For example, if the part has an average daily demand of three pieces, and 60 parts are “in process,” then the WIP is expressed as 20 days (60 divided by 3) of demand. Although there is no magic formula to determine how many days of WIP you should have, less is better, because WIP is really a result of waste in the process. So in the above example, 20 days of demand presents a significant opportunity for improvement.

  3.  How far does the product travel throughout the manufacturing process? Physically measuring travel distance can be very revealing. When looking at an assembled product, measure the distance traveled for all components. The more a product travels, the longer it is in the manufacturing pipeline, and the greater its ultimate cost. Product travel measured in hundreds of feet is an opportunity for improvement.

  4.  How much space does the manufacturing process consume? Measure the square footage that is used by all equipment required to make the product. At the same time, look at the amount of storage space used to store raw material, WIP and finished product inventories. Although we want to minimize all space consumed by the manufacturing operation, we want to put special emphasis on the space dedicated to storing inventory. Often, simply reducing the space available for storing inventory will do much to reduce it.

  5.  How often is key equipment unavailable when needed? Monitor a piece of key equipment for a period of time and collect data about downtime(the time when the equipment is needed, but not available). Compare the downtime to the total time the equipment should have been available and express this as a percentage. Although downtime is never good, it should be of special concern if it exceeds 5 to 10 percent of needed time.

  6.  How long do equipment change-overs or setups take? Select a piece of equipment that is critical to the overall manufacturing process and that requires periodic change-over from one job to the next. Record the time the change-overs take, using as the measure the time from the last good piece of one job to the first good piece of the next job.

Although we may not be able to change over all machines in 1 minute (the concept behind Single Minute Exchange of Die, or SMED), if these change-overs currently require hours, there is real opportunity for improvement. In fact, any change-over requiring more than 15 minutes is a candidate for quick change-over techniques.

  7.  Is basic housekeeping lacking? Look over the entire manufacturing operation. Are tools in there proper locations? Are jobs immediately removed from the workcenters when completed? Can equipment be easily located? Do people have to walk over or around things to do their jobs? Are employees spending a considerable amount of time searching for things? If the answer to any of these questions is yes, a concerted effort must be made to organize the operation.

Take this assessment to see how you are doing and what opportunities for improvement you can uncover.