VALUE ADDED
Recently I was invited to take a tour of a small
manufacturing plant south of
One of the most dramatic operations we saw was confined to a space about 20 feet by 30 feet. As it was explained, this wasn’t the case not too long ago. Previously the separate steps of the operation were spread throughout the entire shop. Employees would make batches of parts and then wheel them to the next station where an additional operation would take place. And so it would go until the assembly was complete.
By thinking of ways to reduce waste, the employees with the help of a consultant, realized the travel time between stations was a problem. They also began to understand that by making large batches they tied up a lot of money in work in progress, and they made a lot of bad parts before they knew it, if machines got out of calibration. They were also getting tight on building space and were even considering the need to add to their building.
So over a period of time they evolved to where all the machines required to do the entire job were placed side by side in a U configuration in the 600 SF space. Now as few as one person can make the parts or several employees can work side by side in periods of high demand. And they are down to working in batches of eight.
Our tour guide said they have increased efficiency well over 100 percent, and they aren’t done yet.
Upon seeing this example of improvement, we asked about methodology. How did they begin to understand what to do, where to work, etc.? The tour guide pointed out a simple chart on the wall. It looked something like this. The Xs represent brief descriptions of steps in the process of making this assembly. VA stands for value added and NVA stands for non-value added steps in the process.
VA NVA
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX
XXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXX
XXXXXXXXXXXX
So by flowcharting all the steps in the process and then categorizing them as to whether they added any value to the product to the customer - they were able to see which steps to try to eliminate or improve.
Using this simple technique allowed the employees to systematically identify the steps in the process and to come to the realization that they could be using their time on more important work. It was a dramatic representation of how much of what we do isn’t really necessary or valued by the customer.
As a footnote to this story, so often when we see examples
of such dramatic improvement there is the issue of people losing their jobs
because of the dramatic improvements. I am happy to say in this case this
company has a very stable workforce with little turnover, and they are all
continuing to prosper because of their continuous improvement.