An Alternative to Big Enterprise Spending

While companies continue to invest in operational performance, what prevents some from embracing Lean Six Sigma? During my 30+ years of manufacturing experience I have been involved in many different types of manufacturing companies however, I can testify that there are some practices that most share:

There seems to be a common and genuine intent to do their best effort to become the top of the line in their arena, sometimes without having a clear idea of what is the appropriate roadmap to achieve such important task. They quickly and widely invest money and resources to do what it takes for their companies to deliver their customers what they expect. A large number of companies still believe that larger is better. They invest in state of the art, fast, high volume production technology beyond what is strictly needed to fulfill their existing customer needs with the certainty that they are prepared for increasing sales in the future.

Another flawed pattern these companies follow is creating large infrastructures to subsidize known but frequently ignored traditional processes inefficiencies e.g.:

• Highly effective expediting crews to make sure raw material and components arrive on time to keep manufacturing lines running, when the right thing to do is to have effective planning systems and reliable suppliers that assure parts and material will be just in time at point of use.
• Very skilled and efficient incoming inspection teams and facilities (sometimes at a cost of several thousands of dollars) to inspect every piece and every lot arriving manufacturing docks to "prevent" poor quality from arriving to the manufacturing lines. A much more effective approach is to partner with parts and raw material suppliers to robust their processes to reliably produce Quality needed during their manufacturing.
• Large stores to keep in house inventory to "protect" manufacturing continuity just in case something wrong happens to parts and raw materials supplies. Instead, they should invest in developing reliable suppliers that are capable to deliver just in time material.
• Large direct labor people training costs to subsidize inefficient manufacturing process hoping that operation personnel attention is assured 100% of the time people is at their post. This inefficiency is worsening by people turnover which is a fact of manufacturing world. Instead of having highly human attention dependant processes, Manufacturing Engineering crews should be challenged to create the most robust process possible that have low person full concentration dependency.
• Highly developed Quality Control teams dedicated to inspect manufactured product to filter every defects and try to prevent poor quality impacting final customer.
• Costly defective product rework areas and facilities to repair what should have been properly manufactured the first time.
• Large corrective maintenance costs instead of budgeting and properly planning autonomous, preventive and predictive maintenance strategies that increase equipment availability significantly.
• Budget for costly prime shipping carriers to assure customer will receive their products on time instead of taking every step to assure just in time production with enough time left to deliver products to customer using standard transportation mechanisms.
  

Each of these examples consumes the finite resources and finances available to any company.  It is no surprise then that for as long as priority is given to these types of investments, powerful methodologies like Six Sigma and Lean are left out of the strategy.   The failing in all of this lies in the fact that these less expensive and more targeted remedies are viable options to tackle the variability and waste.  They are simply overlooked while companies distract themselves and delay the valuable impact particularly that Lean and Six Sigma are delivering.

If better solutions are within reach, what is preventing management teams from seeing through these distractions?  My personal belief is that once manufacturing lines are running and production is underway it seems that there is no time to stop to analyze how things are being done, challenging existing solutions and processes to question if they are adding expected value or not. Once problems that were never planned appear, it becomes evident there is almost a blind desire to do whatever it takes to solve the problems and it is very easy to justify additional inefficiencies in the name of reaching Customer Satisfaction. From there it seems that there is only one way to keep enterprises running; adding more resources to where the problems appear and inspect the way the teams are quickly "solving" them. Unfortunately, most of the time, all the teams have time to do is mask the underlying problem while they tackle more visible symptoms.

It is crucial that Management stops this deadly race and free resources fighting problems to start improving Critical To Customer processes to actually prevent more problems. Lean Six Sigma is the perfect response to reverse this vicious circle.

We’ll talk more on the how in my next article.

Sam