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I don't know how many times I have the conversation or overhear the conversation about wanting to improve throughput in a operation by doing things quicker. Typically it's something like "Lets find that 1 or 2% additional speed and it'll be fine", I cringe every time and here's why, speeding up your operations will not give you the big bang change you need to increase your throughput. That's right, the speed of your actual operations or value adding elements is probably not what is killing your throughput.
Lets look at a standard process flow shown here. It's not unusual, stock comes into the plant and waits a few days before getting pulled into he production operation and transformed into a product that can be sold.
Along the way it needs to go through a number of operations, some inspection, some rework (hopefully not a lot!) and of course spends some time waiting on the operations.
When we look at the total cycle time, the time for the material to come into the system and then exit of the system, it's 89.75hrs, almost 4 days.
So the word comes down, "We are not hitting our delivery dates! Speed up the machines!"
So the team go out and tries as hard as they can to speed up the machines. The result is often a tail of two outcomes, some minor increases in throughput time and a increase in rework numbers.
Not exactly an ideal result is it, so why not look at it another way.
Just so we are all on the same page, lets define what Value Add actually is, it is the amount by which the value of an item is increased at each stage of its production, exclusive of initial costs.
In other words each time you carry out an operation that transforms an item closer to what you sell (excluding rework) is generally value adding.
If we redo the flow chart as a Value Adding Flow, identifying value adding (Green boxes) Vs Non-Value Adding (Red Boxes) and then placing them into streams the picture starts to take shape. We will include Pack as value add since if you don't pack it you don't ship it and get the sale, some may argue but that's the assumption we'll work on.
Now lets add up the respective times
Just so we are clear, all Non-Value Add time is Waste!, you don't want it, any of it.
I don't know about you but I'm thinking there is a whole lot more scope to remove time from the 86.25hrs than the 3.5hrs and it'll be cheaper to do as well!
So now it's clear that if you want to improve your throughput you need to look at the Non-Value Add elements, especially if find out that 96% of your time is Non-Value Added time don't you think you should look there?
A measure of which products or processes to start with and on how you are improving your process is to create a ratio of the Cycle time to the value adding time.
In this case the ratio would be 89.75hrs / 3.5hrs which is 25.64. By comparing these ratio's to other processes you can focus on the largest number 1st to give the biggest bang for the buck. By trending the ratio over time you can track the real improvement in your process. The target of course is to get as close to 1 as possible by reducing the cycle time, in which case the Total Cycle Time would equal the Total Value Added Time, meaning the would be zero waste in the system, Nirvana!
If however you focus on reducing the Value Added Time (i.e. speeding up the machine) look what happens, say we gain 30 minutes, what happens the the ratio. The formula is now 89.75hrs / 3hrs which is 29.92, it gets worse! you have increased the amount of waste in the system relative to the value adding time.
So again, if you want to improve your throughput, go look for the real waste, find your non value adding elements using your value stream mapping and start ripping out every minute that doesn't add value.
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