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Join Date: Mar 2005
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Process Consistency Key to Profits

10/18/2006 8:56 AM

Managing a large manufacturing or industrial processing facility requires more than just monitoring the day-to-day operations. Profit management is a skill that every industrial engineering executive must have to ensure that the business - as well as the facility – is productive. Foundry Management and Technology explores how to build management teams focused on profit-related concepts such as labor costs and process consistency rather than relying solely on accounting metrics that reveal problems after the fact. Can streamlining your processes help provide the real-time data necessary to improve your plant's operations?

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Associate

Join Date: Sep 2006
Location: Culver City, CA
Posts: 52
#1

Re: Process Consistency Key to Profits

10/18/2006 10:42 AM

Hi, the issue here is often called "hidden plant". A great deal of productive time is lost on activities that don't generate profit. Such things as MRB, searching for lost parts, and rework. The percentage of the plant that is not being used productively is as high as 20% in some plants I've seen in my experience. A good place to start is using a "waste walk" thru the plant. This is a 5S concept and it is often most interesting to walk the plant with these ideas in mind. In both my current and previous jobs, we walked the shop floor and found some really strange things going on. We asked ourselves "why in the world are we doing this"? Hearing the answers is sometimes really amusing. Usually these time wasters are generated by managment as a "corrective action" to some problem. Good luck with your program.

paul horgan

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Anonymous Poster
#2

Re: Process Consistency Key to Profits

10/19/2006 1:11 AM

Process consistency AKA process repeatability is the key to quality as well.

Most production facilities start up a line and then fine tune the process to achieve this consistency/repeatability.

Many facilities begin streamlining before there is a high enough level of consistency - this is usually messy and definately not profitable.

Andy

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Power-User

Join Date: Jun 2005
Location: Lenox, Massachusetts, United States of America
Posts: 223
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#3

Re: Process Consistency Key to Profits

10/19/2006 9:12 AM

Great topic, Moose! Thank you for sharing.

It seems to me that it was the application of this approach (via Deming) to process improvement and elimination of waste that is the bedrock from which Toyota has climbed to its place of leadership in the automotive arena. So, this discussion is far more than a nice academic exercise; it's the real thing for ALL of us.

The concise article that you reference is a wonderful reminder that we are all part of the solution and that we all benefit from constant vigilance in making the business run more efficiently and productively. From what I've read and seen, the folks at WalMart ascribe to this approach and have been able to reduce the theory to practice at all levels of their organization; hence, it is the bedrock of their success and their ability to provide 'low, low prices' (no, it's not about squeezing labor; they push the boundaries on everything).

There are a LOT of consultants who make a LOT of money preaching a Profit Management sermon and setting up programs for companies. So, I know industry management (and engineering) has heard the message and likes what is being said in principle. Darned if I know why it has not been more successfully embraced as a basic premise of everyone's daily responsibility. Any thoughts on that?

Also, there are many libraries filled with good books on this and related subjects. A favorite of mine (woven into an amusing/enlightening story of plant manager Alex Rogo's personal and professional woes) is: The Goal.

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Anonymous Poster
#4
In reply to #3

Re: Process Consistency Key to Profits

10/19/2006 9:36 AM

Isn't the answer to your question of 'why hasn't it happened more often' .. empowerment? Who best knows how to improve the efficiency? It is most often the people doing the work - no one wants to work in an inefficient manner, but their suggestions are often not heard, considered, or implemented by management! What I've seen that I consider very unproductive in my experiences is that the 'power' (to change, improve, etc) has moved constantly upwards (thru the management chain) over the past 30 years; this is opposite of what needs to happen! We (society, upper management, etc) are 'hogging power' these days.... in more ways than one!

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Power-User

Join Date: Jun 2005
Location: Lenox, Massachusetts, United States of America
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#5
In reply to #4

Re: Process Consistency Key to Profits

10/19/2006 10:17 AM

REALLY???????????

I am absolutely unaware of any quantitative assessment that such a major shift (good or bad!) has occurred in business management over the past 30 years. For every negative anecdote that you or anyone else can write about, I, and others, can come up with a postive anecdote. It offers little value to blame others for these matters when there is so much that is within our engineering perview needing attention. At the very least, make your subordinates and peers cognizant of the opportunities for improvement and the notion that they are 'empowered'.

"Authority is 20% granted and 80% taken." That is one of the handful of quotes that has guided me through my career. (It is a statement made by Peter Ueberroth when asked why he, with a background in the travel industry, had been so successful in organizing and managing the 1984 Olympics in Los Angeles.) Yes, I've been called on the carpet at times and have found there is truth in the statement that it is (usually) easier to ask for forgiveness than for permission. But, if your intentions are good and the rewards far out-weigh the risks, then are you not doing what you are called to do as an engineer?

Is it possible that YOU have not assumed the responsibility that comes with empowerment, Guest? Is it possible that in some of your failures (yes, we all have them) you would rather project your mistake on management rather than owe up to it and get on with the next opportunity that comes your way because you do not want to fail again?

I am the first one to champion teamwork and that it is everyone's responsibility to pull the oars together. BUT, success (and survival) are rooted in competition. If you cannot get your team to understand that there is another team in YOUR business competing to serve YOUR customers better and more cost-effectively than you, then you will eventually succumb as you cling to the negative view you have developed over the past 30 years.

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Associate

Join Date: Sep 2006
Location: Culver City, CA
Posts: 52
#6
In reply to #5

Re: Process Consistency Key to Profits

10/19/2006 11:02 AM

I find it amazing that, 40 years after I first heard of "Statistical Process Control", that it is still not in use at most companies. Toyota et. al. have moved far beyond basic SPC techniques yet in the US we are still debating the benefits. My first use of these techniques was in Milwaukee in the early '70's. We produced over a million parts for IMB utilizing SPC charts without a single defect. I have recently become a Six Sigma Black Belt and have seen the benefits of this technology as well. Generally a SSBB project has an annual ROI of at least $200,000 before a company will commit resources. Keep in mind that Six Sigma is a process to initiate breakthrough. It is assumed that the process in in control and stable before the define phase begins. Regarding asking forgiveness, I have done this many times in my career, but most often in order to achieve real improvement to a process, or product line, it is necessary to commit major dollars. This requires financial analysis and management buy-in. Seldom is it possible for a lower level engineer or manager to commit the dollars necessary to acheive breakthrough and a real improvement. This is why both Deming and Juran said clearly that improvement begins at the top of the organization. In my experience most companies who talk of empowerment simply mean that they are going to flow down responsibility but are not willing to provide the authority that is required.

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