Productivity

Nov 17 2018

Manufacturing Today, By The Numbers

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What does manufacturing as a whole look like as a worldwide economic activity? When a company starts up or shuts down a plant, or relocates production from one country to another, it is a data point. It may be a compelling story but it doesn’t tell you the aggregate effect of all manufacturing on a country or the world.

Beyond anecdotes about particular companies or locations, the global data collected by the World Bank and the International Labor Organization confirm that (1) the size of the manufacturing sector is positively correlated with that of the rest of the economy, and (2) the share of manufacturing in advanced economies is holding its own in terms of value added but declining in terms of share of the labor force.

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By • News • 1 • Tags: , , , ,

Epidaurus12Steps

Feb 4 2018

Methods Yes, Methodologies No

Michael Ballé opens his 1/29/2018 Gemba Coach column with “all methodologies are about making a better use of our minds.” Are they? Tom DeMarco and Tim Lister disagree. In Peopleware, they describe methodologies as follows:

“A Methodology is a general systems theory of how a whole class of thought-intensive work ought to be conducted. It comes in the form of a fat book that specifies in detail exactly what steps to take at any time, regardless of who is doing the work, regardless of where or when. The people who write the Methodology are smart. The people who carry is out can be dumb. They never have to turn their brains to the ON position. All they do is start on page one and follow the Yellow Brick Road, like happy little Munchkins, all the way from the start of the job to its successful completion. The Methodology makes all the decisions, the people make none.”

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By • Management • 6 • Tags: , , , , ,

Nov 3 2015

Cars Per Employee And Productivity At Volkswagen Versus Toyota

Seen this morning in a Lean consultant’s blog:

“Two decades later, VW has topped Toyota as the world’s number one automaker, but Toyota generally is considered to be […] far more productive. In 2015, VW employs 600,000 people to produce 10 million cars while Toyota employs 340,000 to produce just under 9 million cars…”

Is it really that simple? VW produces 10 million/600,000 = 16.67 cars/employee/year, and Toyota 9 million/340,000 = 26.47 cars/employee/year. Ergo, Toyota is 60% more productive than VW — that is, if you accept cars/employee/year as an appropriate metric of productivity.  Unfortunately, it is a bad metric that can easily be gamed by outsourcing.

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By • Metrics • 2 • Tags: , , ,

Jan 7 2014

Using videos to improve operations | Part 7 – Detailed review of process segments

Asenta 2011-03 Roberto Cortés
Roberto Cortés
Asenta Juan Ortega head shot
Juan Ortega

This post was co-written with Asenta’s Roberto Cortés and Juan Ortega, based on a joint project in Spain in October, 2013. A detailed analysis of the video recordings on two operations was key to generating improvement ideas that the plant has implemented since. The company had shot some videos of operations before, but not used them this way before, and it was a learn-by-doing experience for the participants. 

The demand for the company’s products is growing, and it is struggling to keep up. Its core technology is a fabrication process, and engineering has focused its attention on it to increase capacity. After fabrication, however, the product needs several assembly operations. From direct observation, it was clear that the operators were working at a pace that could not be sustained for a whole shift. The manager confirmed that the pace slackened and the quality dropped towards the end of the shift.

The challenge was therefore to change the assembly process so that the operator could complete the tasks within the takt time of about 60 seconds, at a steady, sustainable pace, without running ragged or getting exhausted. While on site, we focused on two operations, shot videos as recommended in earlier posts — from an elevated position and focusing on the operator’s hands — and coached the plant team on reviewing the videos, with the goal of enabling them to do it on their own for the other operations.

Preparation

The detailed review breaks the operation down into its smallest identifiable steps  to discover improvement opportunities for each. If you are going to do this on a regular basis, you should probably invest in software to collect timestamps from videos, categorize the steps, and record improvement ideas, like Timer Pro or Dartfish.  Timer Pro was developed specifically for Manufacturing; Dartfish, for sports, but it has also been used in Manufacturing.

For the first time, it is best to do it on short operations, and you can make do with an Excel spreadsheet on which you manually record the timestamps. It needs the following columns:

  • Step number
  • End time
  • Step duration, calculated from the timestamps.
  • Cumulative time, aggregated from step durations.
  • Operation Description
  • Operation Category
  • Improvement Ideas

Sufficient time has to be allowed for the detailed review. It is customary to allow between 3 and 5 times the length of the recording and even more if the recording is very short. It is recommended to have a sample of the product and components at hand where the review is being held.

Asenta----Product-sample-in-conference-room
Product sample in conference room

Review

The video is analysed and the spreadsheet completed step by step. For short steps, you can play the video in slow motion  to give time to observe details. Because you are going to be adding times, you need record the timestamps at a higher precision than you are really interested in. For example, to analyze time in second, you need to record the timestamps to one tenth of a second. The video and the form are shown on the screen at the same time.

Asenta----Video-and-analysis-form-on-same-screen
Video and analysis form on the same screen

While conducting the analysis, do the following:

  • Describe each step with an action verb and a single object. If you find you can’t, break it down further until you can.
  • Do not criticize ideas. Write them down for later evaluation.
  • Aim to eliminate unnecessary steps (muda), reduce the variability in how the steps are carried out (mura) and their inconvenience (muri).
  • Assign a category to each step so that you can aggregate times by category.

You can generate your own categories as you go along and standardize them as you reach conclusions. There must not be too many (5 better than 10) and they are usually of the following type:

  • Pick up/put down
  • Walk
  • Assemble
  • Inspect or test
  • Wait
  • Adjust
  • Rework
  • ….

If there are large differences in how different operators perform the operation, several videos can be screened at the same time, with the same task carried out by different operators. It is essential to carry out this detailed review with the operators in the videos. They know things that nobody else knows, and have ideas that you want to use.

Asenta -- Operators participating in analysis
Operators participating in the analysis of their own work

Conclusions

When you analyze operations for the first time, it is common to discover that about 40% of the time is spent on activities other than assembly or test. This is due to a combination of wrong sequencing, redundant steps, multiple handling, inadequate fixtures, inconveniently located tools or parts, etc.

Of course, not all of these can be eliminated easily. Some can be, by redesigning or retrofitting the work station; others can be taken out of the assembly flow and performed in parallel so that, for example, the operator does not have to prepare a part while the product waits. The net productivity increase that can usually be accomplished is on the order of 30%, without overburdening the operator. In our client’s case, this means making the assembly jobs sustainable while absorbing a higher demand.

Once the summary of times by category has shown the “gold in the mine” — that is, the improvement potential, the team fleshes out the ideas generated during the review of the video, tries them out as much as possible immediately, and turns them into proposals. The following pictures shows the flip chart with sketches of the proposals generated in our sessions, and a snapshot of try-storming.

The team then turns the  improvement proposals into a detailed action plan for the short, medium-, and long term.

Once the improvements are implemented, the team shoots another video of the operation, for the following purposes:

  • Validating the improvements.
  • Standardizing the sequence of operations
  • Training other operators

By • Technology • 2 • Tags: , , , , , ,

Jan 31 2013

David Meier on Productivity Metrics | The Lean Edge

See on Scoop.it – lean manufacturing

davidmeier.thumbnail

“The first point I want to make is that any measure has flaws and will not completely reflect reality. They should be considered indicators and in some way all refer to some sort of “standard” or desired condition. This is the basis for problem identification, which is the main purpose.

Any measure is a ‘snapshot’ of conditions during a specific time period and reflects many variables that are occurring. Some measures such as productivity are based on assumptions such as standard hours. The notion of standard hours is flawed in many ways that I won’t get into, but this measure can be used effectively (if used carefully). The mistake that is often made is to evaluate performance based on the measure and to drive inappropriate behaviors like overproduction.”

 

Michel Baudin‘s insight:

Insights on productivity metrics used at Toyota.

See on theleanedge.org

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Dec 8 2012

Comparative advantage, free trade, and productivity

In a recent post in Evolving Excellence, Bill Waddell pointed out that the economic theory of comparative advantage was wrongfully used to justify outsourcing to low wage countries. The way Bill puts it: “…the theory is based on productivity – not hourly wages.  It is driven by the idea that goods should be made wherever the collective combination of hours results in the overall minimum consumption of human effort…” (http://bit.ly/Uy8yfg)

In an earlier post, Bill cited the economic report of the president in 2010 as defining comparative advantage as the idea, “that nations specialize in producing the goods that they can produce cheaply relative to other goods.” (http://bit.ly/UsT0aA)

David Ricardo
Adam Smith

The comments by readers of  Bill’s post seem to confuse Ricardo’s comparative advantage with the  Adam Smith’s division of labor.

They also tend to confuse low labor costs with low wages, when increasing productivity achieves both low labor costs and high wages. In the 1910s, when Ford started paying workers $5/day, twice the going rate in Detroit, it still had lower labor costs than competitors because its workers on assembly lines were four times more productive.

Ricardo’s own words are easy to check, because the Kindle edition of his Principles of Political Economy and Taxation costs $0.00 and the discussion of comparative advantage starts on p. 92. It is more a case study than a theory, in which two countries benefit from free trade in two products, even though one is more productive at making both than the other.

British cloth

Ricardo’s case is cloth and wine made either in Portugal or England. Both needed less labor to make in Portugal but wine required much less while cloth only slightly less. In this case England was said to have a comparative advantage  on cloth even though Portugal has an absolute advantage on both wine and cloth. The practical consequence is that more wine and cloth are produced overall if England focuses on cloth and Portugal on wine.

Port wine from Portugal

It sounds like a hypothetical example, contrived for the purpose of illustration, and that is what I first assumed it was. It sounded particularly far-fetched, writing in 1817, that the production of cloth should take more labor in industrial England than in Portugal. But it is not a made-up case. It is a real one that unfolded in the century before Ricardo wrote, before the industrial revolution. If we believe the following excerpt from the Wikipedia article about the history of Portugal, it happened as follows:

“The 1703 Methuen Treaty between England and Portugal had both direct and indirect effects on the Portuguese wine industry. The treaty not only stipulated that the amount of duties on Portuguese wines was to never be more than two-thirds that of which was levied on French wines, it also allowed English woolen cloth to be admitted into Portugal free of duty. This second stipulation ended up having a devastating effect on the Portuguese textile industry, leading to huge numbers of shepherds and weavers becoming unemployed. In and around the Douro region, this segment of labor turned to the wine industry and encouraged a boom in vineyard planting.”

Three centuries later, while British textiles are not what they used to be, port wine from Portugal can still be found in liquor stores worldwide. It owes its unique taste to its fortification for sea travel to England, and it is sold under English brand names like Croft or Sandeman, from the British trading houses that used to ship it.

It is a great story, but hardly enough to prove that free trade always benefits all participating countries. It is not easily generalized from two countries trading two products to many countries trading many products, and it is not obvious that it can be used to justify outsourcing. On the other hand, I have applied it in production to the allocation of work among machines with overlapping capabilities.

Ricardo talks about “the labor of 100 Englishmen” as the main measure of the resources consumed in making a product. In the 1700s, labor was the main resource used in production, but, in 2012, labor is only one of many, the others including equipment, tooling, energy, and data, and a discussion focused exclusively on labor would not be appropriate.

So, what metric would you use to represent the total amount of resources used to make a product? The metrics used for this purpose are usually called “cost.” Their calculations involve debatable allocations that are not consistently made even within one country, and equally debatable exchange rates to make international comparisons. You would also use different metrics depending on whether you are deciding where to locate a new plant or how to allocate work among existing plants.

In using comparative advantage to allocate work among machines, the metric was the amount of machine time used per unit of product, which was relevant because we were trying to maximize production for a given mix of products. To minimize WIP instead, you would use a different metric, so as to penalize a machine for processing WIP-generating batches instead of single pieces.

When I first heard of comparative advantage, it was described to me as one of the few economic theories that is neither trivial nor false. And indeed it is, and I believe it makes Ricardo a precursor to today’s Operations Research and Game Theory, but we should be wary of jumping to overly broad conclusions about 21st-century globalization based on the trade of wine and cloth between England and Portugal 300 years ago.

By • Management • 0 • Tags: , , ,

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