Every manufacturer understands how important it is to eliminate lost time. Isolating the causes of lost time allows manufacturers to reduce cycle times, improve manufacturing productivity rates and increase production throughput. To this extent, a number of companies use various approaches to identifying idle time. One of these includes using Pareto charts to isolate the causes of idle time and identifying the most egregious offenders. Therefore, I’ve decided to include a sample Pareto excel chart sheet for lost time analysis. The chart allows companies to identify causes of lost time and document their impact.
The Pareto principle was put together by Italian economist Vilfredo Pareto and is used by a number of companies to identify the effectiveness of certain business operations. Its basic rule implies that 80% of outcomes are derived from 20% of causes. Pareto used the rule to account for variances in wealth and land ownership in Italy when he found that 80% of the land was owned by 20% of the population.
For businesses, the rule often implies that 80% of a company’s revenue is derived from 20% of its customer base. Leveling out this ratio allows companies to mitigate risks by alleviating the concerns of losing any customer who might fall under this 20%. So, how can Pareto charts help manufacturers identify lost time?
Using Pareto Charts to Isolate Causes of Lost Time:
In my recent post Manufacturing Cycle Times: Use Pareto Charts to Graph Lost Time, I showed how a company can isolate the causes of lost time by using a Pareto Chart. In the following graph, you are able to input variables for the “BLUE” shaded areas under “Causes of Lost Time” & “Incidences of Lost Time”. You can use this in a particular production work cell or across your entire production floor. The idea is to segregate the causes of lost time, track amount of lost time driven by these causes, and then graph these causes on the Pareto chart.
The two “YELLOW” shaded areas are not to be touched. These cells calculate the individual and total percentages of the lost time. The red line, on the graph, depicts the percentages of each cause until they total 100% on the "Z" axis. The only line you have to play with is the green line – which merely shows the 80% Pareto threshold. In this graph, the first three causes (work instructions, bill of materials, work orders) of lost time account for 80% of the incidences.
This sample Pareto excel chart sheet for lost time analysis won’t show you how to eliminate idle time, but it will depict the impact of the causes of down time. As such, the best way to eliminate idle time is to see production in person. In fact, the Pareto chart’s entire approach is predicated on seeing production happen in real time.
Don’t rely solely upon your MRP system to show you why your production is encountering high cycle times. Your system can point to variances in cycle times, but it can’t show you how to reduce those times. For that to happen requires you see production happen in real time. Here is the sample Pareto excel chart for lost time analysis: Download Manufacturing-Pareto-Chart-Capturing-Lost-Time
If you want and excel sheet that allows you to track variances in cycle times (like the table above), then please refer to: Cycle Time Tracking & Variance Analysis in Excel for Small Manufacturers
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