By most measures, the domestic economy is struggling. With a struggling economy come revenue reductions for many surface finishers. With reductions in revenue come reductions in net income and cash flow, and with reductions in these areas comes the need to reduce cost.
Finishers looking to reduce cost should look no further than “The Seven Deadly Wastes.” A half century ago, seven types of waste were identified by Toyota’s Taiichi Ohno, whose Toyota Production System became the precursor to what is now commonly known as Lean Manufacturing.
The finisher who finds herself in need of cutting costs will do well to spend a half day on the shop floor identifying the following:
Waiting—Observe what keeps your people or equipment waiting. Examples include employees at a production line waiting for a chromate or color changeover to be completed before running parts, waiting for an order of parts to be delivered to the line by a material mover, waiting for the proper tooling to be placed on the production line, waiting for the maintenance department to repair a line breakdown. Find creative ways to reduce waiting and you will reduce cost.
Overproduction—In one sense, overproduction is difficult for a surface finisher to achieve. For sure, a part cannot be processed through a coating line until it arrives at the line and is ready to be processed.
However, early production is also an example of overproduction in that it adds value to a part prior to that value being realized by the surface finisher in the form of a completed order. Thus, the surface finisher can attack overproduction by running an order (and thus incurring cost) as close to the scheduled ship date as possible.
Transportation—Waste results from the movement of orders or parts throughout the operation. Can you charge your customer more the further an order has to travel through your shop? Of course not. An example of transportation waste is storing customer product far away from your production line, so that it must be moved a significant distance in order to initiate the coating process.
Another is locating the work cell that packages coated product a long distance from the end of the production line. Just for fun, track a single order through your shop and draw a diagram of the route that order travels. Find a way to reduce the distance, and you will eliminate waste.
Overprocessing—doing more than your customer requires. An obvious example is tin plating an electrical contact to a thickness of 600 μ-in. when your customer only requires 300. Another is providing a level of aesthetic quality (and incurring the associated costs) that is beyond what your customer specifies or is willing to pay for. Take care to add only those costs that translate themselves into something of value to your customer.
Motion—Movement of people or machines that is not required to add value to your product. I can’t tell you how many times I have stood in a finisher’s facility and watched employees walk virtually half way across the facility to retrieve the proper racking to run a part or to retrieve a tool required to complete a task. Another example of motion waste is the positioning of load/unload containers at a distance from the end of the line such that employees must carry raw and coated parts to and from containers.
Inventory—Beyond the cost of chemistry, powder and other materials, a finisher might feel that inventory is not a waste that concerns him. He doesn’t own the parts and has no cost invested in them, thus they result in no inventory waste, right? Not really.
While many finishers do not own the parts they are coating, these parts can still result in inventory waste. Think of the time it takes an employee to locate an order when the shop is full of orders. The risk of losing an order also increases with the amount of customer inventory in the facility. The cost of space required to store product is yet another example. By keeping backlog low, a finisher can reduce this kind of waste.
Defective Product—It should come as no surprise to most finishers that “bad parts” are a form of waste. The labor and materials invested in running the part the first time, and the machine capacity consumed for no corresponding
revenue are painfully obvious examples.
Whether or not your operation is feeling the squeeze of a slower economy, eliminating the seven deadly wastes will have an immediate impact on bottom line performance. The time invested in identifying and eliminating them is time well spent.