Wednesday, 14 December 2022

Improve productivity by understanding Internal & External Operations

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Productivity is a fickle thing, it can drive you to make some interesting and costly decisions in the name of getting more out of your process. Organisations the world over get sucked into the belief that to improve productivity, you have to open the wallet and spend the profits (or the overdraft) to become more productive.

How much are you being bombarded with messages that tell you if you want to improve your productivity then it's all about IOT (Internet of Things) or Industry 4.0, big data and high-end systems. Of course these things can help and drive massive improvements, but you can do a great deal just be understanding the basics and thinking differently about what needs to be done, who should do it and when. That's a key part of the thinking you need to adopt when you start in on your lean journey. Lean is all about doing more with less, less effort, less expense and of course less waste.

Internal vs External

When we start talking to people about internal versus external operations, it's not uncommon for them to think we mean work that happens inside the company and work that happens outside the company, we don't. We mean work that happens at your processes in your organisation:

Internal Operation

Anything that can happen while your process continues to operate

External Operation
Anything that happens while your process is stopped and waiting on you to complete your operation

The more things you can make an internal operation, the more productive you are going to be.

An Example

I grew up being a process engineer in a contract electronics factory, we built a lot of stuff for a lot of people from mobile phones to network servers, engine management systems and aircraft parts. The thing about contract manufacturing is that your margins are small, the customer never wants to pay too much and the suppliers always want to charge you lots, so you need to get good at being smart.

For ease of explaining let's consider a machine in an assembly line while that machine is operating it's effectively making money for you so stopping it is expensive and non-productive (assuming you have orders for the stuff you are building).

Our machines for placing part son boards looked a little like this one and could put around 35000 parts every hour or between just over 9 parts a second. That's a lot of parts! If your machine stops for just one minute, you lose around 580 parts being placed. When your line costs $2 million to buy, every minute it doesn't run is around $5.80 in cost. If a part change takes 2 minutes, that cost goes up quickly. Stopping isn't something you want to do.

To avoid this, we looked at the process and said Ok what things can be done while the machines are running (internal) and what things can only be done when they are stopped (external).

Easy internal operations were things like clearing away the carrier tapes from the back of the machine, inspecting boards when they came from the machine and so on.

Originally you could only change a part on the machine when it was stopped (all external), that meant we wanted to minimise the time the machine was stopped. So we broke that process down further and said which parts of the feed change process can we make internal to the operation of the machine, what can we do when it's still running.

The machine would signal to us when it was getting low on parts, but equally we could monitor the machine and see what was going to come due just by checking the read-outs as we walked past. We didn't have to stand and watch the machine; we could do a whole range of things while it ran.

Instead of waiting for the machine to stop and then get everything ready, losing at least two minutes, sometimes longer, as soon as we knew a part was going to need changed, we could take that part from the rack of spare stock, carry out all the double check processes we had in place to make sure we were putting on the right part in the right place and have it sitting waiting to place onto the machine in a spare feeder unit.

This means we could take about a minute (so about our 580 parts) worth of time to get ready while the machine was still running. When the part finally ran out, we were ready to drop the next one in, taking a 2-minute job and machine stop to about 10 seconds at most.

The result was, we'd lose only about 120 parts output instead of 1167. In terms of costs, we used to charge out at an average of $0.01 per component placed. That means a 2-minute feed change would cost us $11.59, a 10-second one would only cost $0.97!

That's a massive saving if you are doing 10 of those an hour over 10 lines and over 3 shifts (300 a day) it's almost $3190 saving per shift. Over a year, it's almost $800K in savings.

Plus, we gained additional line time – about 9hrs a day in each assembly hall, or just under 2300hrs, free. Remember we could put down between 35000 components per hour so that's the ability to place around another 8021000 extra parts we could place. At $0.01 per part that's an almost an additional $8million we could sell for no additional cost.

Brain over Wallet

By taking the time to stop and apply a bit of lean think about all the things you can do while your process is still operating (internal operations) and only have the absolute minimum happen when it's stopped (external operations) the process get more done. Your team work less, and they don't have to rush, they can prepare and be ready. All of which means less stress to the operators.

Breaking all your tasks down to the component parts and saying Ok what can we do with the process running is also a great way of involving your team in some really sound lean thinking. You engage their brain, their enthusiasm and build engagement.

What did it cost you, a bit of time with the team physically at the process, while it's running! Which means you develop this internally to the process as well, technically it's free!

The next time you want to improve the productivity of your team, step back and thing what things are stopping the process, how do we eliminate them and engage the team and their brains before you engage your wallet.