Lean and the Million Dollar Printer
When Taiichi Ohno started the journey that was to revolutionise not just Toyota but the manufacturing world, which has now spread across all organisations including services and even healthcare and construction. Ohno started with good old-fashioned Industrial Engineering, that was his job. Today universally it's referred to as lean, but at its core, it's industrial engineering and its thinking doesn't really change. The core tenant is always the same do wasteful things, is the end customer won't pay for it, if it adds no value eliminate it, if you can't eliminate it then minimise it as much as possible. If you did nothing more than that then you could have a really impressive organisation. What is even better than eliminating wastes in your organisation is to not design them in at the start.
The Designed In Waste
When you are designing your new process, factory or building there area whole host of things you need to think about and it takes time, there are trade offs to be made and sacrifices that are well, sacrificed as each of the interested parties get their say. IT and toilets are two of my favourite examples, IT being the easiest example and coincidentally a great example came up the other day for me a conversation that helps explain this and it all revolves around a humble printer.
So a little back ground, the conversation was around designing a new building and we were looking at an existing office space that had been created a couple of years ago as a example of what could be delivered and it is a lovely office, lots of light, spacious, a pretty cool place I have to say. The office is about 19 meters wide by 30 meters in length so it's a good size, the 'facilities hub' for it which was where all the printers and coffee machines are was at the top of the office, which seems fine right? All the printing & coffee in one place, easy to maintain, each and low cost to install so the implementation costs were kept under control.So, we have design in the way people are going to work, where they have to collect their prints and coffees etc. Doesn't seem like an issue, right? Here's a hint, the average person walks at a speed of 1.4 meters per second…
The Real Cost of a Printer
Ok so here's some more numbers to work with, there are around 45 people in this office, all going to that single print station (for simplicity we won't count the coffee stops). They will walk anywhere between 35 meters and 10 meters to the print station each time they need to pick up a print. Each walk then talks between 14 and 49 seconds. Let's say the average is 17 meters (it's probably more but let's go with that), 17 meters then, takes the average person 23.8 seconds to walk. Not one second of that walk is value add, it's all waste. Then of course they need to walk back, so another 23.8 seconds so that's 47.6 seconds every trip. How many times do you print each hour? Let's keep it low, let's say it's averages out as 3. Now you have 3x 47.6 seconds each hour, which is 142.8 seconds or 2 minutes 22 seconds every hour assuming you don't stop for a chat on the way which is about 4% of non-productive time every hour. Still not a big deal, right? Ok remember that you work around 2080 hours per year which is 48 working weeks, give or take that means over those 48 weeks you spend 82.5hrs walking back & forth to the printer, that's over 2 weeks!
Remember we said there was 45 people in the office and the 17 meters is an average distance for everyone, so we have to multiply the 82.5hrs per person by the 45 people which is 3712.8 hrs of walking back and forth to the printer. Remember we said the average person works 2080 hrs per year so that's equivalent to almost 1.8 people being paid to do absolutely nothing all the time. The question is how much are you paying these people to do nothing, well is we assume that average rate in this particular office is around $85,000 (I think it's higher!) then works out to $151720.00.
To be clear that's $151,720.00 to add 100% zero value to anything the customer would want every year, not just once but every single year this set up is in place. That's $758,625 over 5 years and $1,517,250 over 10 years which is typically the time frame you would remodel the office in.
We could obviously just move the printer to the middle of the room and there by halving the impact and cutting the waste in half so an instant $75K a year in our pocket. The question is, how much would a second printer really cost?... well I checked, I could get a really cool full multifunction A3 colour printer copier with stacker output and print on demand for under $1000.00 per month. That means we could spend $12K plus the cost of installing some cables (or a better WIFI systems) and have a 2nd printer in the office which would mean that no one would ever walk more than 6 meters to a printer which brings the losses down to a third of what they were, only $53K which is still a lot.
The question is what is the break even point here, at which point have you reduced the waste enough to offset the cost of the printing.
Of course, remember that the coffee machine is also at the back of the room where the printers are, how much could you save by moving them as well?
Off set that of course by the benefits of the walking around for a health point of view and from a people interaction point of view and I'll grant you it's not as simple as I've painted here in terms of the thinking, but understanding the costs, that's simple.
We haven't for example talked about what other value adding stuff these people could be doing if they weren't walking around for a year and a half and what that would add to the bottom line or how they would feel, the effect on their morale.
Think About the Whole Picture
When you are looking at coming up with your new layout for your assembly line, factory, office, nurses station or whatever it is stop and think about it from a user's point of view. The short-term savings you make at the implementation may well lock in some high long-term costs that add zero value to your customer and quickly become accepted practices that steal time and money.
Stopping and thinking about whole picture, how will it really be used, what is the impact on people because of the design we are putting in, what is the total cost of what you are doing and applying even the basic level of industrial engineering thinking, which is where Ohno started, yields massive improvements and huge waste reductions. When you have your design done, stop and revisit the lean wastes and ask, what wastes am I going to build in here, what wastes am I going to encourage with the design, and what can I eliminate but studying what people do, their routines and behaviours and asking them what would be best. How much could you save by breaking out the short-term silo thinking about individual budgets and implementation costs and looking at the whole picture over a sustained period of time? In this case, you would save at least $1M over 10 years, probably more, that's in 1 office space, just think of what you could do if you looked at everything the same way.
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