The answer: the wrong process is optimized.
When you want to improve processes, it sometimes seems like there is a bottleneck somewhere, but in fact that process is just being disrupted. Adding more capacity will only be counterproductive and lower profits.
Optimizing an unstable process often results in the process becoming more unstable. To make a process stable, identify special causes of variations and set them aside first.
Examples of disruptions:
- Late deliveries from suppliers or subcontractors
- General quality problems
- Unplanned process interruptions
- Employees who are absent too often
We call these first-tier problems: the absolute low-hanging fruit.
But there is also a deeper, psychological layer of the organization. These specific causes are not easy to identify, and they are usually the cause of most organizational instability. But do make the biggest impact in terms of disruptions.
Examples of organizational disruptions:
- Doing easy work first, at the expense of more difficult work.
- Cramming rush orders into the system without regard to the rest of the orders in the system.
- Working in batches places to be “efficient.”
- Pulling forward assignments and clustering to “save” setups,
- Increase order size to “just-in-case.”
- Constantly new daily production lists and forcing employees to switch and work on the latest “rush job.”
- Worse: the director who manages the employees in the hall and overrules the planning.
- Jumping from one task to another before the first task is completed: poor multitasking.
These disruptions are often the biggest roadblocks to getting a self-organizing factory in which you as owner or manager have a relaxed business, with overview, peace and, above all, stable profit growth.
If you want to achieve stability and properly identify the system’s bottleneck, your first step should be:
Eliminate the special causes in the first list that affect system output. STOP doing the things in the second list.
Easy, right? Not so easy. If it were easy, you would have already done that and identified the bottlenecks. But no worries, I will give further explanation of the possible manners how best to deal with this.
But tell first: Which ones are most common in your business? Click “ANSWER” and let me know!
– Luke
P.S. As of early September, I have capacity again in my part-time CTO program. This is often fully booked most of the year. It helps metalworking companies keep an overview of their digitization without having to hire a full-time IT project manager. If interested please feel free to send a no obligation reply to this email.
