If a business wants to meet demand it must find ways to improve flexibility!
I often get emails from people asking me for information about the best methods to improve their business processes to meet their customer demand. It is not always easy to determine the root causes of demand based problems without observing the actual process. Many companies suffer from the same problem, which really boils down to too much demand and not enough capacity. I start by suggesting to take the first step by implementing a 5S system and training their employees to improve their own workplace.Â What should they do next?
There is one area that seems to be overlooked by most companies. It is the process of product changeover! It occurs in all manufacturing and non-manufacturing business systems. I know, many of you with some lean knowledge are saying, â€œHang on a minute, this is only supposed to be focused on machinery, equipment, etc.Â right? Well that is what it was originally developed for, however, since Lean principles are being successfully applied to non-manufacturing processes, they can use Single Minute Exchange of Dies (SMED)principles to improve their changeover events. How can a non-manufacturing based business implement a system that was developed for manufacturing? Where do changeover events occur in a non-manufacturing business?
Every business process, no matter what the industry, has an element of changeover. It can be something as simple as walking to a filing cabinet to pick up a folder for the next customer, or changing the toner in the printer or fax machine. If you understand business processes, then you understand there are changeover events occurring everywhere on a daily basis. Purchasing, Accounting, Administration, Human Resources all these and many other functional systems are experiencing changeover events. How do changeover events affect a business?
The answer to this question is relatively simple in theory, yet not so simple to identify in practice. Changeover events bring a process activity to a stoppage point, which requires the person performing the task to reorganize and reactivate their workspace. It causes them to stop what they are doing and start to focus on doing something else. I can use a clerical activity to demonstrate what I mean. A person enters information into a database, they are entering the information for one client then moving onto the next client. They are performing the same task for each client, which is to enter their information into the database. When they move from client to client there is a small pause were they adjust their focus because the information is different for every client, e.g. name, address, state, etc. The more complex the changeover procedure, the longer it takes to move onto the next product or service.
The actual time for a recognizable changeover event can range from seconds to days, weeks, etc. depending on the type of product or service. In the manufacturing industry it is not uncommon to see changeover events that require several hours to complete. Management teams must realize that for every hour allocated to a changeover event, there is a loss of one hour of production time. If a changeover event takes 3 hours, then a process cannot produce anything during this time. These 3 hours are lost production time and they cannot be recovered, they must be made up by running the process longer, which delays the start of the next customer order. It is necessary to have changeover events in business processes but it is also important to reduce them whenever possible. Many companies accept changeover events as a necessary evil and they never challenge themselves to try to reduce them. This is very shortsighted because there are several cost benefits and improvements in process flexibility when the total time for a changeover event is reduced. Why do companies avoid dealing with this problem?
Most companies believe it will take too long to deal with the problem and this will interfere with their production scheduling. A belief such as this affects the thinking of a management team and generates resistance. They will be reluctant to remove employees from the production floor for training and let them deal with the changeover problem. However, eventually the problem will have an effect on overall performance. When this happens they will need to find ways to reduce the amount of machine or process downtime and increase their machine availability. Both of these can help a company to work towards developing the capability to deliver products or services to their customers, as they need them and on time, every time.