"YOUR OPERATION LAYOUT COULD BE COSTING YOU MONEY"

by Jim Tarr

It is little appreciated how much the physical layout of an operation influences the way the process works. This is true whether the process is manufacturing, distribution or paperwork. Consider the following factors:

• Time and cost spent moving things adds no value to the product or service.
• If distances are great and movement is frequent, batch sizes will tend to be large. Nobody wants to move things frequently and over long distances one at a time.
• Large batches will lead to increased Work in Process, tie up critical resources for long periods of time and lead to a reduced ability to meet customer requirements.

A manufacturing company trying to improve their process analyzed how individual parts flowed through their process. Here are some of the things they found on a typical part, one of several hundred that went into their product:

• The product went through 127 individual steps, of which only 27 added any value.
• The product traveled over four miles inside their facility from start to completion.
• The process took over 1300 elapsed hours to complete.
• At one point the product was "formally shipped" complete with shipping documents and "formally received" complete with receiving documents ACROSS AN EIGHT FOOT AISLE!!
• The product batch was counted 16 times. Often it was the last operation in one department and the first operation in the next.
• An actual sequence of operations was as follows:
• Automatic paint prime.
• Manual paint prime.
• Automatic paint.
• Manual paint.
• Touch up (on every part).
• This is if the process went right. There was, in addition, substantial rework when parts were manufactured correctly. And because of the rework, there was a great deal of "Just-in-Case" inventory sitting around in case parts didn’t get done on time, in the right quantity or the right quality.

Clearly this was a process where the primary activity was waste and this is not unusual in many processes. And before you paper pushers gloat, manufacturing processes are, in general, better controlled that paperwork. Its not unusual to find that the paperwork to plan to manufacture a product takes more time than the manufacture of the product itself.

Here are some simple things you can do to test the effectiveness of your client’s process:

• List the steps in a process, paper or manufacturing. Take a workplace layout and identify the physical location of each step. Measure the distance the paper or part travels in the course of the process (you will be surprises). Look for duplication, backtracking, delays, double checks, reviews and sign offs -- all non value added activities.
• Ask how long it normally takes to complete a process or part. Then ask how long it would take in an emergency if it were "walked through". The difference in time is all waste.
• Look for the step in the process that has the largest backlog of work. Measure the throughput of that operation (pieces/hour, for example). The step with the largest backlog will usually be the bottleneck in the process and will determine the capacity of the whole system.

By beginning to look at your client’s business in these simple ways you will begin to get an appreciation of what causes the numbers to be what they are. In addition, you will be in a position to advise your client how he can influence those numbers to obtain a more positive result. As business advisors to our clients we must do more than just add the numbers correctly. We must be a partner is his success.

As usual, if you have any specific client situations you wish to discuss with me, I am always available.