- July 24, 2019
- Posted by: David Marshall
- Category: Measurement, Productivity
Unemployment is low enough in this country right now that businesses (especially manufacturers) can’t find enough people to fill open slots. While you can always train your existing people to fill the new slots, you can come at the problem from another direction to increase productivity.
This means you can produce more with fewer people which reduces the need to hire more people in the first place.
A great way to increase productivity is to measure everything and everybody and eliminate waste — wasted effort, wasted paperwork, wasted processes, etc. Measure people, measure their output, measure the machines and how often they break down, and so on.
How Measurement Can Increase Productivity
Years ago, when I started at Robroy, we had an issue with damaged raw stock that we were constantly trying to fix, but we never knew how successful we actually were.
In the conduit business, the raw stock we worked with is conduit shell — that’s the industry term for “pipe.” If the
pipe conduit shell was bent even just a little and had a bow in it, it wouldn’t go through our other machines properly, so we would have to reject it.
The problem started because we were using 20-foot lengths of conduit, and they would get bent before they ever got to the first machines. We had the idea that we would straighten any pipes that had a bend so we could recover them and make them usable.
That meant adding a process to the manufacturing, and it meant we had two full-time workers whose sole job it was to straighten out bent conduit, but we never knew what our actual success rate was. Once we started measuring everything, including the recovery process, we made a startling discovery:
The yield from trying to straighten bent pipe was less than 10%.
That meant that over 90% of what we were trying to straighten was still being scrapped.
In other words, not only were we losing a number of conduits to mishandling, we were spending a lot of time and money to add another step before we were throwing them away. Imagine cleaning off and fully restoring your paper plates before you threw them away.
We quickly realized it was pointless to add a process that required extra machinery, extra people, and extra energy costs when the yield factor was less than 10%.
If the part you were trying to reclaim was worth $1000 and it cost $10 to recover, that would be worth it. But if the part is worth $10 and you spend $10, it’s a total wash, even if you recovered 50% of the damaged pieces. The conduit was a commodity product, so it was very low value, between $2 – $15 per foot; we were spending that much or more just to try to reclaim the bent pieces.
Make Sure You Improve the RIGHT Productivity
When trying to solve this problem, a lot of people would have looked for a way to improve our recovery process. Better machines, better people, a more stringent evaluation method, a loosening of the subsequent procedures to let the recovered pipe through, and so on.
But we looked for a way to eliminate the damage in the first place. We figured we wouldn’t have any (or many) losses if we could find out the problem. What we discovered was that the biggest reason for the bends and dings were as a result of forklift operators driving their forks into the bundles; they were the ones who created the problem in the first place.
So we devised a new way of strapping and stacking the conduit to avoid the problem, and that eliminated the recovery process because we had almost no imperfect pieces. By reducing the potential for a reject, we were able to eliminate the reason to have a recovery process.
Basically, we improved our productivity:
- We moved the two recovery specialists into different jobs that were otherwise open. That meant we didn’t have to hire anyone.
- We stopped spending money and machine power to recover unrecoverable conduit.
- We removed a series of steps from our overall process, which streamlined our operation even more. Those recovered-but-rejected pieces that we kept trying to fix? Those didn’t jam up and slow down our manufacturing process.
- We reduced the amount of scrap, which not only reduced our raw material costs, we saved waste pickup costs.
- We could get rid of or repurpose the machines needed for the recovery process.
That also meant we could do more projects in less time, which meant we didn’t need overtime, extra shifts, or extra personnel to make it all happen. And that’s one way we reduced our need for hiring new personnel.
I’ve been a manufacturing executive, as well as a sales and marketing professional, for a few decades. Now I help companies turn around their own business. If you would like more information, please visit my website and connect with me on Twitter, Facebook, or LinkedIn.
Photo credit: Pashminu (Pixabay.com, Creative Commons 0)