Tag Archives: control

Three keys to unlocking production capacity…

…little-known “secrets”… hidden in plain sight!

Like other complex systems, factories don’t always behave in the way that we might expect them to. It’s not that factories are capricious, or that the people who work in them are bloody-minded. It’s just that “common sense” approaches to increasing throughput often overlook the complexity. The keys to unlocking capacity are actually very simple, but simple solutions do not come from glossing over the complexity… they come from understanding it.

Let’s look at what’s going on here:

1. Constraints to capacity are real…

Understanding this provides the first key to maximising throughput. Why? Common sense tells us that asking for just a little bit more than we want out of the system will create the incentive to do more. But because capacity constraints are real, this simply overloads parts of the process or areas of the factory, creating bottlenecks. The effect of bottlenecks is delay – almost always disproportionate delay.

So, the first key to unlocking production capacity is this:

The factory will produce most if it is loaded just below its demonstrated maximum capacity – which will typically be between 80% and 90% of its theoretical maximum.

2. Resources are valuable – so use them well…

Which means maximising utilisation, right? Larger batch sizes, to keep those machines and operators busy… think of those utilisation “KPIs”! Well… maybe not! What if the batches are too big? What if batch sizes are bigger than the numbers actually needed? Tying up machines and operators on work that is not yet needed creates a bottleneck of a different sort. Everyone is busy, but they’re not producing what’s wanted right now. So choose batch sizes that fit with what is actually required.

Which means that the second key to unlocking production capacity is this:

Choose the right batch sizes. Even if machine and operator utilisation is lowered, smaller batches sometimes increase throughput.

3. Lead times are also real…

But do the lead times that you use for planning match the lead times that you actually experience? When supply or throughput of a particular area is not keeping up with demand, the reaction is often to increase the planned lead time for the related item or process, to give more time to the activity. But this creates an immediate increase in planned demand, burdening procurement or the workload in the related area. The problem is not about time, it is about capacity and no amount of extra time will make up for lack of capacity. Worse still, if the original delay was caused by a planned lead time that was already longer than necessary, then the existing problem has just been made even worse!

Leading to the third key to unlocking production capacity, which is this:

Planned lead times need to be long enough to get the job done and ensure people don’t keep running out of work – but not longer!

The common link between these three keys is that they are subtle and counter-intuitive. You may be imagining the potential responses: “What? You’re saying we should plan to make less!” or “This component is always takes ages and you want to shorten the lead time” or “How can we possibly make more, if we lower utilisation?”… and those are just the polite versions!

Taking counter-intuitive action requires trust and confidence, especially when others are sceptical. Evidence, sound theory and examples of successful practice will all help with this, as will effective personal and communication skills. MML emphasises the importance of all these areas in its Production Planning and Control Course – next date 16-18 September – click the link to find out more. Alternatively, if you would just like to know more about these ideas, or share your own with us, please contact us through our website, give us a call on 0870 438 1201 or post a reply to this blog. We hope to hear from you soon!

What Do You Mean By “Control”?

What Do You Mean By “Control”?

We talk a lot about “being in control” in business but what do we really mean by this?

Is more control always a good thing or can we have too much?

How much control do we really need?

What is control?

“To control” means different things to different people.  It even means different things to the same people in different contexts.  Here are some dictionary definitions:

  1. To exercise authoritative or dominating influence over; direct.
  2. To adjust to a requirement; regulate
  3. To hold in restraint; check or limit
  4. To reduce or prevent the spread of, e.g. a disease
  5. To verify or regulate (a scientific experiment) by conducting a parallel experiment or by comparing with another standard.
  6. To verify (an account, for example) by using a duplicate register for comparison.

When we try to improve how businesses operate, for example by introducing new processes and systems, we often aim for “better control”.  How often are we clear about which one, or several, of these meanings we are using?

Too often, someone selling an idea intends one set of these meanings when the decision makers assume different ones.  The result is frequently confusion and a disappointing outcome.

In our experience, being clear about what we mean is the first step to making real improvements that actually work and last.

What do we mean by “in control”

To some people, “in control” means plans set in concrete and everything happening in accordance with the plan.  It is a static condition where change is suppressed.  A common example is the idea that success can be measured by conformance to an annual budget.  Is that really what we want?

We may lock down the way the business operates but the world will go on changing around us.  Successful businesses respond positively to the changes around them.  For them, “in control” doesn’t mean slavishly following a detailed plan.  It means adapting to change so as to achieve overall goals.

Being in control means not being easily knocked off course by change but it also means being able to correct our course or change direction quickly and precisely when we choose to.

Is more control always good?

We’ve all heard people complaining about control freaks and micro-management and we’ve heard much recently about the damage done by a “tick-box culture”, inappropriate targets and excessive bureaucracy.  Clearly, it is possible to have too much control.

One way to identify too much control is the Lean concept of The Seven Wastes (“Muda”).

Transportation

Are we moving goods or data around unnecessarily in order to exercise control?

Inventory

Data, including paper records, is inventory.  Any that is not absolutely essential to adding value is waste.

Over control may also require physical inventories that we wouldn’t otherwise need

Motion

This is unnecessary activity of people and equipment; both the lost productive capacity and the resulting wear and tear.  How much time do people spend recording information that never leads to action?  How much time do our computers spend calculating results that nobody uses?

Waiting

How often do tasks wait for some verification, approval or check?  How often is control the real bottleneck in a business process or a factory, causing all the other resources to wait?

Over-processing

This means doing more work than the customer requires.  For example, how often do we see over-complicated reports, printed in full colour, that contain far more detail that is really needed?

Over-production

Just think of the overuse of cc on emails!

Defects

It isn’t unusual to find errors in the data used for control.  There may also be errors in the logic or calculations.  A long time ago, a famous study audited a sample of spreadsheets used by large companies to make “business critical” decisions.  A third of them contained significant errors.

In addition to the famous Seven Wastes (“Muda”), we should not overlook the other two “enemies of production”: variability, unevenness or irregularity (“Mura”) and overloading, unreasonableness or absurdity (“Muri”).

Inappropriate controls can disrupt a smooth flow of work by causing delays.  Worse, a badly tuned closed-loop control system can cause oscillation.  Worst of all, some control configurations can create chaotic variation where there is no predictable pattern at all.

Similarly, excessive controls can overburden people with work.  This not only prevents them from doing productive tasks but causes stress, leading to errors and further loss of productivity.  In too many cases, we see the absurd situation of controls that conflict with each other or actually prevent people from doing what is necessary for the benefit of the business.

By using this framework, we can identify the costs and the damage to customer satisfaction caused by excessive control.  This gives us a sound basis for judging when the urge to control everything in the finest possible detail has gone too far.

How much control do we really want?

“Everything should be as simple as it can be, but not simpler.”
                                                                                attributed to Albert Einstein

We can also use the framework of Muda, Mura and Muri to look at the consequences of insufficient control.  To take a few examples:

  • lack of control may cause late delivery and unhappy customers;
  • delays may require expensive emergency actions such as air transport or buying small quantities from a premium-priced, same-day supplier;
  • unclear priorities result in tasks being repeatedly interrupted, wasting time and causing errors;
  • we may waste effort and materials doing things that no customer will pay for.

We can take each of the wastes, identify how they can result from under-control and look at their costs and impact on our customers.

To begin with, we can balance the costs of over-control and under-control to arrive at a compromise, where we are in control without excessive rigidity or unnecessary costs.

However, this kind of trade-off is what is known in the TRIZ methodology as a “contradiction”.  In the longer term, our aim should be to resolve the contradiction through new ideas that eliminate negative effects of both over- and under-control.  Our goal should be a business that is in control in a way that is both efficient and agile.

If you would like to know more about these ideas, please contact us through our website or give us a call on 0870 438 1201.