The feature of value is at the heart of ‘lean,’ being defined as an item or feature for which a customer is willing to pay. Anything else is regarded as waste. As pointed out in the BUT Coaching Book 5, Operations (1) ‘production… Is where your business adds the value that turns your inputs into your final products / services. ‘ As expanded upon in the book Lean Thinking (2), lean involves actually defining what is of value, prior to identifying the stream of actions required to ensure the customer receives this.
The aim is to create a flow of value-creating steps, then develop a ‘pull system’ for order processing in response to customer demand. The pursuit of perfection throughout this process then allows for continuous improvement. AS QUALITY SYSTEM One highly effective lean process for creating, maintaining and improving value flow is the AS quality system. This consists of five steps as follows: 1) SORT – Identify what items are required and which are not. 2) SET IN ORDER – Items should be easily accessible. 3) SHINE – Work area is kept free from dirt and anything else not required. STANDARDIZE – Continual improvement on the previous steps. 5) SUSTAIN – The maintenance of systematic organization, visual placement and cleanliness. These five steps represent tangible actions and can be directly applied to Ascot’s goods assembly / dispatch process, with immediate effectiveness in helping to meet the business challenge. To demonstrate this, the intention is to examine each step in turn. SORT Once a job order is passed to Ascot’s production department for processing, the team proceed to procure goods from a variety of suppliers.
Some goods arrive Lully finished, but most items require in-house assembly or modification, prior to packaging and dispatch to site. This represents the ‘value stream’ of actions required to ensure customers receive quality, finished signage products. Goods are often bulky, and there are sometimes issues as a result of insufficient storage space. However, it is evident that a substantial amount of valuable space could be reclaimed by eliminating unnecessary items from the warehouse. These include pallet-loads of leftover goods and materials which are unlikely to ever be used.
By sorting and removing all redundant items, the company can quickly and simply free up more space to effectively store new incoming goods. SET IN ORDER The production department uses a large variety of tools and fixings for goods assembly / finishing. At present there is a lack of order and consistency in the way these items are stored. Tools often seem to go missing and fixings appear to be in short supply. Upon examination, it is evident that workshop tools are being taken to site by fitters, who should have their own equipment. Fixings are simply difficult to locate.
These problems are incurring expenses ND inefficiencies as a result of unnecessary procurement and time-wasting. To address these issues, all tools and fixings should be set in order. All tools should be numbered so that they can be tracked. Workshop tools should be stored in clearly designated locations and replaced immediately after use. The most commonly used fixings can be stocked and systematically stored in well-labeled containers. All items must be clearly visible and easily accessible to the assembly area. These actions will not only help to prevent unnecessary expenses, they will also help to improve output.
This is because tools and fixings will be more quickly and easily obtained, thereby speeding up the assembly process. This reasoning is justified by the following statement by Scott Hoyden of Cataracts (3): ‘If Cataracts can reduce the time each employee spends making a drink, the company could make more drinks with the same number of workers, or have fewer workers. ‘ The application of lean principles helped Cataracts to reduce costs by $175 million in the first quarter of 2008. SHINE The company has occasional problems with cleanliness in the goods assembly / warehouse area.
To address this, the factory manager should establish a programmer to ensure the entire area is kept free from debris, dirt and any other waste items not required. In order to achieve consistent cleanliness, ‘shine’ should be a routine procedure to which all production staff are committed. One challenge in applying this principle is that simple cleaning procedures are often overlooked when the production department is busy and operating at maximum capacity. This can be resolved by developing a daily ‘shine’ checklist, and by allocating a regular time-slot for these activities, which must be adhered to at all mimes.
STANDARDIZE Occasionally there is disorder in the goods assembly / dispatch process, due to inefficient flow and storage of goods. There is poor designation of the key production areas, resulting in finished goods being packaged and stored alongside incoming raw materials. The process could be standardized by improving the designation of the following key areas: Goods IN Goods Assembly Goods OUT These areas should be clearly marked out using standardized signage and by color coding the floor area / storage racking (see Appendix A, Warehouse Plan).
The aim is to achieve an even and highly streamlined flow of goods from one area to the next, from the moment they arrive until final dispatch. This will enable Ascot to develop an effective ‘pull system,’ with maximum order processing efficiency in response to customer demand. As outlined in The Goal (4), a steady, organized flow will also enable the production department to minimize the amount of work in progress, helping to reduce costs. SUSTAIN It is essential that all production staff become committed to implementing the AS strategy.
Staff should be helped to see that this is a process of continuous improvement and encouraged to participate in the pursuit of perfection. To assist in managing the production flow and sustaining AS, Ascot could create an ‘information wall. ‘ This would consist of a clearly designated wall area containing all production-related paperwork, including job order forms, artwork schedules, production programmer and installation checklists. As detailed in The Machine That Changed the World (5), a similar solution is used by Toyota, in the form of an electronic screen (Anton board) displaying important production information.