FLOW EVERYWHERE and Make Tons of Money – Part 2

In my last blog, I explored how FLOW is the key to making money in Lean companies, and that flowing everywhere (and I really mean EVERYWHERE!) is something Lean CFO’s and other Lean leaders should always strive to do.

I proposed that truly Lean companies have to incorporate ALL necessary and important activities into value streams so they do not inhibit Flow – even when these activities do not directly add value to the product the customer buys. Moreover, I asserted that there are two ways to do this: move the people doing this work into the value stream or move the work itself into the value stream.

This gives you a lot to think about, especially if you are in the early recovery stages from standard costing methods. But take heart! I’ve done this myself, and have seen other Lean companies go successfully down this road.

This time, I’ll take a look at how to remove impediments to FLOW with two important manufacturing support functions: Quality, and Maintenance. Next week I’ll tackle Procurement and Planning & Scheduling.

Quality

Traditionally, inspectors within a “quality department” do the quality work. From a Lean perspective, this inhibits value stream flow because it creates waiting time until a quality inspector is available to perform the quality work. I see this showing up on current state value stream maps where there’s an Inventory triangle and a long wait time, usually after a supplier shipment, or between processes.

Here’s a snippet from a value stream map that shows this. (from Practical Lean Accounting: A Proven System for Measuring and Managing the Lean Enterprise, by Brian Maskell, Bruce Baggaley, and Larry Grasso, 2nd Edition, 2012)

This is exactly why “Quality at the Source” is so important. Lean companies build quality inspection directly into the production process. The people doing the production work also do the inspection, rather than relying on dedicated quality inspectors. Doing so eliminates wait time; Lean companies design this into the standard work of value stream operators.

Of course, there may be circumstances where strict “Quality at the Source” isn’t possible. There may be specific quality requirements that necessitate testing to be done on specialized equipment and/or by technically certified inspectors. If this is the case, the best solution is to assign quality people or machines directly into value streams so the quality work can be performed as a defined, standardized step in the production FLOW.

If this is not possible because of limited resources, machines or floor space, then the quality work has to be pulled into the value stream when required. Doing this Pull System will not eliminate all the wait time, but will significantly reduce it. The point being: FLOW will improve.

Work you do to improve the FLOW will necessarily help you pinpoint exactly where you can focus more improvement efforts. Ideally, the long-term solution is to not have a bottleneck that is caused by the limit of quality resources inhibiting FLOW at all.

Maintenance

This is an area where the contrast between traditional ways of thinking and Lean methods is quite stark.

Traditionally, when you need maintenance work, you submit a maintenance work order. The work order then gets assigned to maintenance workers; they are usually then responsible for determining the priority of all the maintenance work orders they have.

From a Lean point of view, this type of work order process is a Push System. Of course, we know the “squeakiest wheel” gets the grease. The maintenance workers will always have to fight fires and do work that is critical. They are often directed to do so by circumstances outside their department’s control. They sometimes have to drop everything to get the production line working again. When work is “pushed” onto the maintenance workers they are forced to deal with variable priorities of the work itself and how much time and effort it takes to complete it. Often the result of such a Push System is excess machine downtime, no time for preventative maintenance, a backlog of maintenance work orders and interruption of value stream FLOW.

Lean companies approach maintenance much differently. They know it requires a combination of a preventative maintenance (PM) program and creating a FLOW of the maintenance work itself.

PM involves having planned downtime to minimize unplanned downtime. Because a PM program is scheduled, the value streams can incorporate PM downtime into their own schedules so customer orders are not delivered late.

Much like how Lean companies approach quality, the ideal solution for improving maintenance work for the value stream is to assign maintenance people full-time to value streams. Many times this is not possible due to the variability of demand for maintenance work between value streams. In this case, the maintenance work has to FLOW to the value streams when it is needed.

Obviously, managing the variability of maintenance work is key to making maintenance FLOW. There are two basic types of variability that you have to manage: 1) the priority of demand and 2) the cycle time to complete the work. The Lean solution to managing this variability is to have someone take on the role of maintenance Flow Manager. Then, as requests for maintenance work arrive, it is the responsibility of the Flow Manager to prioritize the urgency of the work and to determine the amount of time it will take to complete.

Also, Lean companies know they must apply authentic Lean methods to improving maintenance FLOW, namely level scheduling and single piece flow of work. These require thinking of work in terms of “units,” just as it is done in manufacturing production. For maintenance, a unit can be defined as some standard work time, such as 1 hour of work. The responsibility of the Flow Manager then becomes clear: to convert maintenance work requests (including PM) into units of work so it can be level scheduled and create FLOW.

A level schedule balances the work among resources and allows for buffer capacity to cover unplanned variability. In the case of maintenance, unplanned variability will be emergency work that has to be completed immediately and the variability of the actual time it takes to complete the work. In some cases (for example when emergency parts or outside services are required) maintenance workers may not know exactly how long it will take until they actually begin the work.

For example: a level schedule for maintenance could be 6 hours of work per day. Workers (now part of the Maintenance Team) would be assigned enough units of work for 6 hours. In the case of smaller, simple jobs this may mean one worker has 6 jobs to complete, while another worker may be assigned 1 complex job that is 6 units. The 2 unscheduled hours are available for unplanned demand and the actual cycle time to complete unplanned work.

Maintenance Team members will pull more work as they complete their schedule on time. If a worker completes his schedule quicker than estimated, the Flow Manager will assign the next highest priority of work to him. If a worker encounters problems and the work takes longer than expected, that is OK. This worker would notify the Flow Manager of the situation and the Flow Manager will reassign work not started from another maintenance worker what has capacity.

The Maintenance Team will meet daily at their scheduling board to review the previous day’s schedule attainment. Schedule attainment is a team-based performance measure. If the previous day’s schedule was not attained, quick root cause analysis will be done during the daily meeting. They can apply the usual who what where when why approach: “Were we missing a critical part?” “Was the time allotted not sufficient? “ “Do we need more cross training so additional people are able to help?” And so on. Improvement activities can then be done to eliminate root causes.

FLOW in maintenance is created and sustained with a combination of these Lean practices that eliminates almost all variability from maintenance activities except perhaps the cycle time to complete an unusual or difficult job.

Next time, I’ll be discussing Procurement and Planning & Scheduling.