A number of my customers are somewhat overwhelmed when it comes to discussing the steps needed to increase their manufacturing productivity rates. In fact, most are unaware of the simple approaches to determine those rates and how eliminating idle time helps to lower cycle times and increase production throughput. To alleviate these concerns, I always advise my clients use the Stage-Gate process to simplify their approaches. This allows them to systematically identify waste in all its forms and put plans in motion to reduce their impact. So, how does one use the Stage-Gate process to increase throughput?
First, it’s important to note that a large number of my customers rely solely upon what their ERP, MRP or other manufacturing software platform tells them what their cycle times are. These systems can only tell you what the times are and the variances between these times. They can’t come up with intuitive strategies to reduce cycle times. For this to happen requires that you witness cycle times occur in person. Go directly to the workstation and see work as it happens. Nail down a cycle time and then track those times and their variances with your ERP afterwards.
This Stage-Gate process is predicated on using manual approaches to increasing your company’s manufacturing productivity rates and production throughput. Each step has additional information that includes either a video or an outline of the principles explained in this article. Here is a summary of what the Stage-Gate process would look like.
1. Determining Manufacturing Productivity Rate
The first portion of the Stage-Gate process is to determine your current manufacturing productivity rate. Now, this exercise can be done across your entire production floor (across multiple sections of your production), but in keeping with the emphasis of seeing cycle times occur in person, let’s analyze the cycle times in individual work stations & production work cells. This means you’ll have to deduct lost time during actual work time. So, how is this done?
First, understand that while your company pays someone for 8 hours, you’re not getting 8 hours of work. Take away lunch (1 hour) and break time (2 x 15 minutes) and you’re left with 6.5 hours. This is the amount of time available to work, but nobody is 100% efficient and therefore, nobody can work a full 6.5 hours. To determine the productivity rate, you must find out how much work actually occurs from this 6.5 hours and how much time is wasted due to lost time.
- Determine potential hours of work: (6 & ½ hours = 390 minutes)
- Determine total lost time: 135 minutes (this time is captured throughout the day)
- Determine Actual work time: 390 – 135 = 255 minutes
- Determine Productivity rate%: 255 minutes divided by 390 minutes is 65%
2. Isolate Causes of Lost & Idle Time
Reducing cycle times is all about eliminating lost & idle time. What caused the lost time during your initial analysis in step 1? Was it related to equipment failure? Was it due to improper work instructions, unclear bill of materials, poor assembly outlines or long transit times from one production cell to the next? Was it due to material & part shortages caused by an inventory stock out? Or, was lost time caused by issues pertaining to production bullies or lack of tools? There are a myriad of causes of lost time.
Some issues are obvious and some not so obvious. In my experience, a number of companies rationalize the causes of lost time. After all, what’s a “couple of seconds” here and there? Don’t rationalize lost time. Those few seconds add up to minutes over days, hours over weeks and finally, days over years. Itemize the causes of lost time and use ECN's (engineering change notices) to eliminate them as causes.
To read more about capturing lost time, please see: Manufacturing Capacity Planning: The Perfect Manufacturing Work Station
3. Set Up Ideal Work Stations: Use Workstation Prototyping
After you’ve determine the root causes of lost time, your next step is to set up the ideal work station by using workstation prototyping. The first step was to determine the cycle times and manufacturing productivity rates with all its flaws. In essence, you welcomed the lost time because it exposed problems and inefficiencies. It provided you with the opportunity to identify waste and itemize that waste in step 2. Now you’ll set up a new work station without any of the issues that caused the lost time. In essence, your production employees with operate like surgeons. They’ll have all the tools they need within reach and will be able to operate with minimal downtime.
U-Cell Design:
T-Cell Design:
S-Shaped or Z-Shaped Cell Design:
The above design layouts and video are from the post: Manufacturing Work Cell Optimization: Design, Layout and Analysis
4. Track Cycle Time & Production Throughput Variances
Now you can use your ERP or MRP system to track cycle time & production throughput variances. You’ve now lowered your cycle times and can track any variations from this point forward. However, when you track your variances in cycle times, don’t rationalize lost time. Don’t assume that a couple of seconds here or there don’t amount to much. Most importantly, track lost time and determine its impact to your company in terms of lost profit. This requires you apply a dollar value the impact of lost time. It's the only way to determine the net effect of down time and the costs to the company.
The tables and video above are from the post: Cycle Time Tracking & Variance Analysis in Excel for Small Manufacturers
Using the Stage-Gate process to improve manufacturing productivity & throughput should help to simplify the process of reducing cycle times. However, don’t rationalize lost time. Don’t ignore the causes of downtime and never take the information provided by your ERP & MRP systems at face value.
Only you can provide the necessary approaches to reducing cycle times. MRP systems aren’t intuitive. They don't have the capacity to define the ideal cycle times. Instead, you must determine your manufacturing productivity rates. Next, itemize the causes of lost time and systematically eliminate their causes. Afterwards, set up new manufacturing production work cells. Finally, establish new cycle times and use your MRP software to track the variances of those times.
To read about the multiple causes of lost & idle time, please read: Manufacturing Best Practices: Do You Know What Causes Lost Time in Your Production?
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