Lean Productivity

Improving productivity is a cornerstone of lean improvement. This task is not difficult to comprehend, but is extremely difficult to execute. Productivity, by my definition, is the unit of time expended to complete work divided by the units produced.

Time can be measured in days, hours, minutes or seconds. Interestingly, while most of the world measures productivity in days or hours per unit, world class companies typically measure output in seconds per unit. This small unit of time puts work under the microscope and enables waste in the lowest form to be identified and eliminated.

Units can be products, or services, or parts of products/services. The goal with productivity is to provide more output with the same headcount, or the same output with less headcount. The reason we need to go after productivity improvement is two-fold. First from a cost perspective, it is estimated that nearly 80% of an organizations costs are directly tied to the number of people working there. People require wages, benefits, parking spaces, phones, computers, lunch and break-room space, training, etc. Having fewer people reduces all of these expenses simultaneously.

Now, we are not on a witch hunt for heads through productivity improvement. Our real objective is to service current and future customer demand with the same headcount. To accomplish this over the long haul, we must continuously improve productivity.

Secondly, we cannot sustain a continuous improvement mindset without growing resources needed to support change. As improvement reaches out to more and more parts of the organization, you will need additional resources to train teams, facilitate improvement, see and eliminate waste, etc. Where do we get these resources from? They need to come form the labor we have freed up from productivity improvements.

The tool we use to find productivity gains is the cycle time / takt time chart also known as the operator loading diagram. This chart shows the relationship between the manual cycle time to complete a task and the takt time of the process. Operators loaded above or below the takt time calculation, or operators with large amounts of non-value added activity are immediate opportunities for productivity improvement. Standard work and visual management are the wedges that hold productivity improvement.

I'll show you the loading diagram in next week's blog. For now, just remember, always harvest productivity gains! They keep your costs low and allow your improvement system to self fund.

Lean Blessings;

Ron

Ron Bercaw
www.breakthroughhorizons.com