One may ask what does ‘non-value added production have to do with supply chain. Let’s see.
Changing customer requirements are shifting many manufacturing companies from mass production of standard products to small-lot production of customized products, with even greater focus on quality. Many companies continue to produce large lots based on a forecast, with batches pushed from department to department and with people trained in limited, repetitive tasks. But it's becoming clear that this approach causes excessive inventory, too much movement and waiting and wasted resources in people, plant and equipment, all of which result in highly inflated costs. In the age of transparency, visibility, faster on-time delivery and reverse logistics are these negative results what we strive to avoid in out supply chains?
This particular article on LEAN in a manufacturing environment will concentrate on non-value-added or inappropriate processing’. This simply means: doing more than is necessary. Basically, subjecting work to additional and usually unnecessary steps in the process. This goes against the grain in Lean methodology – is it happening in the right place, at the right time.
I must think of inappropriate processing as the continuation of old business rules, practices and systems while still in use have outlived their importance.
Redundant rules and processes exist in almost every firm; creating opportunities to reduce waste. Consider your current systems and processes, how long they have been in production. It is most likely that you are working with systems and or processes that have been added to more often than being streamlined or junked to make way for new modern processes.
Today, most manufacturers’ whether they realize it or not are encountering inappropriate processing.
Inappropriate processing is primarily due to poor planning of layouts and machinery. People have been trained to think that more is better. Not necessarily true but they strive for high output with high tech machinery. Most tend to forget that many times layouts are built in situations for inappropriate processing.
To identify either situation the following questions must be posed:
- Why are we doing this?
- What happens if we no longer do this?
- What happens if we do less?
- What is the good business reason for this?
- Are we doing this just because we have always done it this way?
- When did we start doing this?
- What was the rational at the time?
- Can anyone remember?
- How are we doing this, the resources and the processes being spent?
- Is this the only way to execute the process?
- Can it be done for less cost?
- Do we have an alternative or replacement approach for performing these tasks we could reuse?
These seem like simple questions but the answers may be very revealing. Challenge yourself and your business colleagues to continue to push onward if the process, the business rule, the activity is truly necessary. In most cases you’ll see the business reason for the rule is no longer relevant but the rule remains unchallenged. These rules represent inappropriate processing and thus waste.
Inappropriate processing is not just confined to production but can find it in two other places – tooling/equipment and IT.
Inappropriate tooling is merely using improper tools for the job. Every job requires a set of tools and has a set process to be followed. Many manufacturers use state of the art technologies in their facilities. However, the truth be told most only use a small fraction of the functionality. Large sums of monies are tied up in procurement and maintenance of these tools. This relates to cost while the tools’ output is minimal. Why do companies maintain such equipment or tools?
It departments need to look at their own operational processes and procedures. Can be executing operational processes that were valid five or ten years ago such as – processes to reduce online/batch contention – which due to modern technology is no longer a valid process. This is just one example of old IT operational rules leading to inappropriate processing.
Inappropriate processing is tied to overproduction and can lead to some of the same techniques. To review business rules and processes that seem to ensure the product will be cheap to produce seems like nit-picking. After all, what is the real cost of making a product? The answer can be plenty if you are still doing things no longer need to do.