In any system, in all processes – from production and assembly to the hotel business, health, transportation and social services – there are hidden losses.
Identifying and addressing these losses saves millions of dollars annually. organisations that regularly evaluate their activities according to lean standards Production.
Hidden Losses fall into seven categories:
- Overproduction
- Defects and alteration
- Movement
- Displacement Materials
- Reserves
- Excessive processing
- Waiting
These Hidden losses increase production costs without adding customer value, really necessary for the customer. They also increase the payback period investments and lead to a decrease in the motivation of workers. For anyone who aspires to streamlining processes in industry, these seven hidden losses are the worst Enemies.
It is necessary identify and then eliminate these losses. So, in what processes are they hiding?
LOSS OF OVERPRODUCTION
Loss overproduction occurs when we produce, assemble or release more than necessary. We do something “just in case” instead of to do “just in time“. Shortcomings of planning, large reserves, long readjustment time, insufficient close contact with customers (that interferes with the understanding of their ever-changing requirements) lead to an increase in duration of production cycles. We worry about our customers may need more, and as a result, we suffer from the cost of production of goods and services that cannot be sold.
Find processes, during of which more is produced than the customer “pulls”, and therefore the surplus products require additional measures to organize their storage between Operations.
Reduce loss by reducing the amount of time for adjustment, readjustment and balancing production lines.
LOSSES DUE TO DEFECTS AND THE NEED FOR ALTERATION
Loss due to defects or the need for alteration occur when there is no reliable a preventive system that includes the methods of poka-yoke and built-in error protection. Each time, making a mistake when working with the product and transferring it to the next the operation of the process or, even worse, the buyer, we put up with the rework as an integral part of the process.
We lose money twice whenever something is produced, assembled or repaired while the customer pays us for a product or service only once.
Identify defective or unfinished products or services, as well as finished products that redone or have to be thrown away.
Reduce loss by improvements in the visual inspection system and the development of more complete standard operating procedures. Implement built-in error protection where the source of the errors is hidden.
LOSS OF MOVEMENT
Loss when moving, these are unnecessary movements of personnel, products, materials and equipment that does not add value to the process. Often workers commit unnecessary movements from your site to the shop warehouse and back, and walk around equipment they don’t need. Such movements can be eliminated and this will speed up the process.
This is one of the most unpleasant losses and for ordinary personnel, and for management, as wasted time and downtime deprive most production processes of efficiency, making labor heavier Work. Despite the fact that most production processes are initially designed to minimize unnecessary movements, basically this is one of the the largest sources of losses that occur imperceptibly and lead to failures.
Install when personnel makes unnecessary movements or movements and draw up a comprehensive diagram (spaghetti diagram) of the actual process flows.
Reduce loss by developing and studying a value stream map and/or a physical map flows for each process, followed by a reduction in operator movements, equipment, materials.
TRANSPORTATION LOSSES
Transport losses occur when personnel, equipment, products or information move more often or over longer distances than is really necessary. In multi-step processes, materials and personnel move from process to a process that is separated by space and/or time.
Instead of arrange processes sequentially or side by side, they are often located far away from each other, which requires the use of forklifts, conveyors or others transport devices for moving materials to the next operation. All these movements do not add to the consumer value of the products produced.
Find Move personnel, materials or information that do not contribute to the creation process Values.
Reduce loss by minimization of the physical distance of material transport and movement vehicles, highlighting zones and applying redevelopment.
LOSSES FROM SURPLUS STOCKS
Loss hiding in excess stocks, fraught with many unpleasant problems quality, such as alterations and defects, problems in workforce planning and/or production, inflated lead time, problems with Suppliers. Maintain excessive reserves, capital-freezing and demanding bank interest payments are too expensive. Excess stocks reduce returns investments in labor and raw materials.
Identify Unwanted production capacity, excess stocks of raw materials, work in progress or finished products with a turnover of less than 10 times a year.
Reduce losses by applying just-in-time techniques and Kanban.
LOSSES FROM EXCESSIVE PROCESSING
Loss from excessive processing arise in the production of products or services with more than high consumer qualities. Than it is in demand by the buyer and for which he agrees to pay. Add functionality that doesn’t have values in the eyes of the consumer, does not improve the product or process. Lack information about how consumers use products or services. Often contributes to the addition of unnecessary functionality to them. In which, according to the manufacturer, customers need or desire them (however, this is definitely unknown).
Find groceries returned by buyers as broken or defective in those places where there were no signs of wear before the breakdown. Clarify the situation through a survey consumers and research the operation of the product in real conditions.
Reduce loss by determining what functionality the consumer really needs and for which he is willing to pay. To do this, you need to understand well and clearly understand, how exactly and in what conditions customers use your product.
LOSS OF WAITING TIME
Loss time to wait occur when people, operations. Or partially finished products are forced to wait for further actions, information or materials. Bad planning, supplier optionality, communication issues and imperfect inventory management leads to downtime that costs us time and money.
Find people or hardware that is waiting for the previous one to finish. Or the next one to start transactions, receipt of materials or information.
Reduce loss by equalising the load of production lines using a bar chart cycle time/cycle time to synchronise processes.