The fallacy of bottom-up Lean initiatives – Part 1

the-fallacy-of-bottom-up-lean-initiatives

Yes, Lean initiatives can be started bottom-up, but I doubt they’ll get very far and last for long. Here is why.

Bottom-up Lean initiatives, e.i. improvements, are opportunities for improvement found by shopfloor people, line leaders or shop management. “Improvement” is most often understood in a broad meaning and bring up suggestions ranging from make worker routine job easier, fix small problems, make the workplace more enjoyable, achieve their work more efficiently and maybe add some value for end customers.

In order to awaken the staff to finding such opportunities, an initial training about Lean principles, the seven wastes (the infamous muda!) is often necessary, with “kaizen events” organized to hunt wastes and frame the initiatives.

Most often the improvement suggestions and bottom-up Lean initiatives remain in this format: a moderated, paced, focused and framed series of periodic workshops. The events are planned and not problem-driven, done when the workload allows it, which means when people have time and management agreement to distract some resources and time from regular operations.

Here lays a triple pitfall:

  1. People do not develop an autonomous Lean Thinking culture, but keep playing the assistants of some appointed Lean “genius”(1). If the latter is not available, the event cannot happen (so common when “black belts” are mandatory) and chances are that the knowledge gathered during these events will not remain with the team, but go away with the facilitator instead
  2. Problems are not tackled when they appear, failing to use the opportunity for learning from a real, actual and acute case. The muda hunters are set loose to “find something to improve” when the kaizen event is scheduled
  3. As the kaizen events are scheduled and too often subordinate to low workload, the “continuous improvement” is erratic in frequency, inconsistent with learning, problem solving and likely to be stopped for good at some point because “We have no time”.

The format and drawbacks of those events is not the sole reason for making me doubt about bottom-up Lean initiatives being viable. Those bottom-up ideas and initiatives assume that the suggestions will lead to real improvements.

Yet how many of them are nothing else than improving the workplace comfort, changing something to workers’ preferences or taste while assuming this will ultimately lead to (noticeable) performance improvement?

I’ve seen many such “improvements” agreed because management wanted to show willingness to back up bottom-up suggestions, foster workers’ commitment and not discourage them from the beginning. Other suggestions were agreed on the belief they would indeed improve “something”.

Yet most often the evidence of the improvement is not delivered, and no kind of measurement is set up to demonstrate the gain. I am not even expecting for an indisputable demonstration of the cause-and-effect relationship linking the “improvement” to a positive increase of performance, a trustworthy correlation would suffice.

Worse, the good idea in say manufacturing is to have parts unpacked and presented ready to assemble for assembly line workers. The unpacking and display of parts is pushed upstreams to the logistic team feeding the lines. As production lines productivity is measured and closely watched, their efficiency may well go up when the parts preparation is get rid of.

For the logistics team it’s another story, it must absorb additional workload without compensation and as usually its productivity is not measured, nobody sees the waste simply moved to it, perhaps at the expense of other useful activities.

Even worser: Value Stream Mapping is one of the most popular Lean tool and used as a waste revelator. So Value Stream Maps flourish and again muda hunters are set loose to eliminate waste. What the mappers overlook in the first place is the value of the stream they are mapping. And sometimes the process under scrutiny is a pure waste that is noticeable when seen from broader perspective, or higher altitude if you will. But this vantage point isn’t familiar to shopfloor staff.

Isn’t it ironic they put means and time to optimise possible waste? A Lean-deadly sin…

What happens so often next with bottom-up initiatives is top management asking where the beef is. After all, time and resources have been used to “improve”, so where is the return on this investment? And getting no convincing answer, the whole is finally put on hold and frustrated stakeholders conclude that Lean doesn’t work. (2)

Summing up

  • Scheduled and framed workshops are not the best way to develop a Lean culture, especially if it’s the only “continuous improvement” mode
  • Teams remain helpers to the appointed Lean / Six Sigma champion, barely develop a Lean culture
  • Bottom-up initiatives are too often based on unchallenged assumptions regarding the outcome, started on wishful thinking
  • Middle management often lacks the courage to discard suggestions that will obviously not lead to meaningful improvement
  • Improvements are too often local optimizations at the expense of the greater good
  • Shopfloor staff don’t know the bigger picture, hence improve what they see and know, reinforcing the previous point
  • Proof of the reality of the improvement is not systematically delivered
    At some point top management will put an end

Footnotes

(1) “Genius with a Thousand Helpers”, in Jim Collins’ “Good to Great”.
(2) I do not approve the way some companies require a calculation of a ROI prior to any change, because the way many costs are defined are questionable. Sometimes improvement are hard or even impossible to express in numbers: reduction of Lead Time, neatness, morale…That’s why I mentioned “correlations”.

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From Obeya to wallpaper show room

When visual management turns into useless wallpaper

Having an Obeya is the latest – fashionable – sign an organization takes Lean seriously. The name itself sounds performing as is it is so strongly related to Lean.

Obeya may sound both exotic and performing, but is nothing more than a “big room”.

(I assume the perplexed Japanese are too polite to ask why so many westerners get jumpy when getting a big room.)

The bigger the room the longer the walls that call for something to display. And in order to make the obeya impressive, especially to visitors, lots of graphs, figures, tables, drawings, photos and maps must be displayed. So shall it be.

As a matter of fact, many companies display impressive walls clad of the previously mentioned printed material, plus sticky notes and hand colored symbols.

Well, many and most of the obeyas I’ve seen fail to turn to the war room where smart decisions are made to win the never ending battle against the empire of waste and its dreaded sneaky saboteurs named muda, mura and muri.

Getting closer to the display, it takes the outsider a while to find out the meaning of what is shown. I didn’t expect the pride about achievements to be that discreet, but it turns out, once the code for reading the charts has been broken, that the pride and achievement are still to come. Anytime soon suggests the presenter.

Not seldom are the prints totally outdated, and latest manual inputs (a place is left for them) missing. Key performance indicators graphs are plotted without any mention of unit nor indication of the target. Some data tables or audit sheets show the period between two events, confirming the lack of cadence.

Actions plans are anything but that. Fluffy wording is used to describe problems and even more fuzzy ones to describe the actions to take. The department in charge are mentioned together with a date (never know if it is the date the information is pushed to this department or the expected date of problem resolution), but nothing to track the actor’s acknowledgment, results nor to check off the action as successful.

The latest obeya with long walls full of complicated looking graphs and lots of other information turned out to be a kind of wall of shame, bluntly displaying and confirming what was happening on the nearby shopfloor. With time lag though.

Nevertheless, those obeyas just as the successful ones, set the scene for ritual meetings where the poor performances are “discussed” without many convincing decisions taken. My colleague describes those rooms as places where people shout at each other, standing.

Now, when I am invited to visit the Obeya, I expect to see visual management turned into useless wallpaper and the dedicated war room turned into a pathetic wallpaper showroom.

To end this post with a more optimistic tone, I assume I am only called to places in trouble and those working well simply do not need me.


Share your experience via comments!


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We are all Lean now. What’s next?

Every once in a while, for nearly 30 years, the question arises: “what’s the next big thing after Lean?”, suggesting that the askers are done with Lean. We write July of 2016 and it seems that everybody is Lean now.

Many people have been repeatedly exposed to Lean methods and tools, have been involved in Lean workshops, kaizen events, sketched Value Stream Maps and identified wastes, sorted out, cleaned up and rearranged stuff 5S style.

They have seen improvements, celebrated the workshop’s success and were dismissed with a feeling of mission accomplished. Others didn’t see a clear outcome, noticeable improvement or a sustainable result and resumed their regular work.

Both may have a legit feeling of being done with Lean, the first because their objectives were met, the latter because Lean doesn’t work.

Almost everybody has heard about Lean, in good or bad, in manufacturing or administration, in hospitals or software development. Lean is a word that found its way into the business lingo, and hearing it often makes it familiar.

There is also the growing impatience as everything speeds up and the instant satisfaction sought by everyone becomes commonplace. Few people are able to commit to a very long and tedious journey towards excellence in the Lean way, most would prefer periodical quantum leaps. Just as they replace their smartphone from one model/generation to the next, keeping up with fashion or state-of-the-art technology.

Of course we are far from done with Lean and very very few companies I’ve visited can claim being Lean. Nevertheless I can understand the fading interest in Lean and the need to reinvigorate it with something new and effective.

Something new means something new to people they didn’t know about until now, not necessarily new per se. Effective means bringing positive results system-wide, not a local optimisation.

My advice would be to consider Throughput Accounting, Critical Chain Project Management and the Logical Thinking Process.

This is not about the next big thing AFTER Lean but the next big thing WITH Lean!

Throughput Accounting (TA) is not really accounting but rather a Throughput-based decision-making approach. In a nutshell, TA shifts focus from cost reduction to Throughput increase and optimization. Follow this link to know more.

Critical Chain Project Management (CCPM) revisits Critical Path Method, the prevalent project management method that failed so far to get developers and project teams to finish on time. CCPM makes sure that projects finish on time and that, thanks to continuous improvement Lean and CCPM style, project durations can be shortened in future.

Logical Thinking Process (LTP) copes with system-wide complex problems. It provides logical tools and methods to surface and neutralize false assumptions, beliefs, conflicting objectives and the like that hinders the organization achieving its goal.

Giving a try with any or all TA, CCPM and LTP, will reveal new potentials and focusing points for Lean to exploit them. Lean isn’t gone soon.


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Respect for people starts with saying hello

Lean respect for people principle is somewhat difficult to grasp in first place. While some gurus say it is not (only) about saying hello, I do think respect for people definitely starts with the basics of politeness, especially saying hello.

Respect or signs of reverence have long been unidirectional, from the lower ranking to the higher ranking, from subordinates to higher authority.

The mighty demanded respect to show how mighty they were and the lower ranking paid respect to the unquestioned power, especially when they were on the pointy side of the sword.

Everyone having been on the modern form of the pointy side of the sword (whatever it now is) understands that not been greeted or not been returned a hello is a deliberate sign showing some (real or pretended) distance.

Still in our days many higher ranking believe it is not necessary to say hello, return a greeting or simply be polite with “lower rankings”.

Respect for people is therefore, at least for me, recognizing the other as a peer, regardless of conventional or social ranking. Being polite is recognizing the other as a peer and showing him or her respect and saying hello is the very first polite sign to give.

When it comes to Lean Thinking and working to improve a process, the gathered talents can come in many forms and are all welcome. Original Lean did not come with grades and belts to show some kinds of ranks but put very different talents together to solve problems. And it usually works fine, especially when participants don’t have to care about (artificial) ranks or social differences.


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Is Lean about eliminating waste or not?

Some thought leaders and Lean promoters stress the fact that Lean is about eliminating waste while others seem to get away from this idea.

Could some have been wrong? Is there a shift in Lean Thinking? What is Lean finally about? Is Lean about waste elimination or not?

Well, yes and no.

Defining waste

Waste is an outcome of problems, the result of processes not delivering what is expected but Undesirable Effects instead. In order to avoid the same consequences occurring again in future, something has to be corrected and/or improved.

So when someone mentions eliminating waste, in a Lean Thinking context, it means (should mean) solving problems.

Lean for everyone

As Lean is a philosophy for everyone, not for experts only, it is necessary for people on the shopfloor, manning machines or doing routine administration tasks to develop and hone their Lean awareness and culture by eliminating waste and solving problems.

In order to do that, they have to be trained and coached to identify problems and learn how to solve them. They will do so in their familiar environment first and yes it can turn out as a kind of systematic waste hunting.

On the other end, senior management need to setup the “True North” a far away and visible reference, a Goal to achieve for the organization. It is then necessary to solve the various problems hindering the organization to achieve its Goal and improve the processes accordingly.

This again can be called waste hunting, yet it is (should be) focused onto most important problems (and wastes) standing in the way of the organization’s attempt to achieve its Goal.

Once the True North is defined, everyone is expected to align his/her contribution to the achievement of the organization’s Goal. This means pick and work on the problems necessary to be solved.

So Lean is about waste!?

A Lean transformation is not an all-out elimination of waste, but focusing limited resources on the most important leverage points to let value flow faster to the customer.

For instance, if a machine critical to timely deliver goods to the customer has very few spare capacity and often this capacity is wasted by some problems (e.g. late raw material supply or quality issues), then solving the problems in order to reduce the waste of capacity is meaningful.

If a machine in the same process has a lot of spare, unused capacity, it may be seen as a waste of capacity too, but it would only be counterproductive to reduce this waste by running the machine more than necessary. It would end up with overproduction of unecessary parts, excess inventory and transforming raw material that can no longer be used for producing anything else.

Lean is not about waste when it means optimizing every process step by eliminating waste, simply because the sum of the local optima cannot lead to the system optimum.

Wrapping up

When some Lean promoters state Lean is not about waste, they probably mean Lean is not solely about eliminating waste, as waste elimination is a means, not a goal.

Striving to eliminate all waste will not likely end up with a Lean organization.

Yet solving problems that hinder the organization to achieve its Goal is mandatory and as waste is the result of problems, Lean is about waste.

I hope this helps.

Readers are welcome to share their thoughts.


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What is Kaikaku?

Kaikaku is one of these Japanese words which found their way into the Lean lingo. Kaikaku is usually translated into “radical change” or breakthrough.

my tiny Japanese dictionary proposes “reform”, “renovation” and “reorganization”.

“Doing” kaikaku means introducing a major change in a process in order to drastically improve it (quantum leap). Kaikaku is therefore “opposed” to Kaizen, which is incremental, small steps, improvement.

Kaizen is often praised for being a safe and low-cost improvement way. By changing only one thing at a time and trying allows to observe the effect of the change and to learn from this experience.

Kaikaku will discard much if not all from the existing solution and introduce big change(s). The usual set of parameters and previous accumulated learning may not be useful anymore. The new process is likely to be unstable until all new influencing parameters are fully understood and under control. Therefore Kaikaku is feared as risky.

Yet Kaikaku is not all bad. Once Kaizen has given all that can be reasonably achieved (timely and in terms of Return Of Investment), a radical change may be the only option to improve further.

Kaikaku is often understood as innovation, bringing in some high-tech or top-notch technology.

Indeed, if a manufacturer changes his production way from cutting away material to additive manufacturing (3D printing to make it simple), it is a disruption and potentially a quantum leap in productivity, efficiency, lead time, customizing, etc.

Kaikaku can be more mundane than that, like reorganising the way of operating for instance.

I remember working for Yamaha music, assembling home cinema receivers and CD players, when we heard the headquarter was planning a switch from long linear conveyor belt assembly lines into small autonomous cells, it was kaikaku because it was disrupting decades of streamlined production.

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Chris Hohmann in Yamaha’s headquarter, Hamamatsu city

Many Kaizen events (also called kaizen blitz) are in fact small kaikakus where drastic changes are made in short time. Those events are not the best way for try-and-learn, it’s more often one expert moderating a workgroup and leading it to a disruptive solution, hence kaikaku.

If you’d like to share your thoughts or experience, use the comments below.


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TOC, Lean and aviation MRO

In a previous post, “CCPM helps shorten aircrafts MRO”, I explained the benefits of Critical Chain Project Management (CCPM) for reducing the aircraft downtime during their mandatory and scheduled MRO.

If CCPM is great and helps a lot meeting the challenge, it will not squeeze out every potential improvement, thus time reduction, on its own.

As I explained in my post Critical Chain and Lean Engineering, a promising pair, “What CCPM per se does not is discriminate added-value tasks and non added value, the wasteful tasks listed in a project in a Lean thinking way.

Conversely, if wasteful tasks remain in the project network, chance are they will be scheduled and add their load (and duration) to the project.

That’s why in aviation MRO (as well as in other businesses), Critical Chain Project Management will not be used as a stand alone but in conjunction with other approaches, like Lean and Six Sigma.

Lean mainly will help to discriminate value-added from non value-added tasks, especially those on the Critical Chain, making them high priorities to optimize, reduce or eliminate.

We did not differently when we started with our client Embraer and while in their service center, I placed Philip Marris in front of the camcorders to present, in situ, two books related to TOC, Critical Chain and Lean in aviation MRO (aircraft Maintenance, Repair and Overhaul).


Note: Critical Chain Project Management is part of the Theory of Constraints Body of Knowledge, hence the title of this post where “TOC” is referring to CCPM.


Chris Hohmann

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How Lean can help startups – Do not repeat mistakes of established companies 2/2

Entrepreneurs, at the beginning of a new venture, have limited means and therefore should be waste-aware in order not to spoil their so limited resources.

>Have you read part one?

Waste is a central Lean concept widely known and documented. Here is the minimum to know about waste:

Waste is consuming resources without value creation.

Taichi Ohno, father of the Toyota Production System, has codified the various types of waste. Himself and his team spend significant time on factory shopfloor to observe and understand how and where waste happens.

Waste comes in 3 major families: Mura, Muri and Muda. These, although originally observed in manufacturing, are generic and transferable to any industry or business.

Variability (Mura) produces unpredictable results, uncertainty and variation in quality and delivery. Variability may lead to redo or correct what has already be done, thus “costing the double”, especially when the first widget has to be scrapped or a file discarded, etc. The impact of variability are dissatisfaction and corrective actions inducing additional costs.

The unreasonable (Muri) is the use of inadequate and / or poorly dimensioned resources, which carry risks on quality, safety or health; having people lifting heavy loads, overloading a transportation cart… Other Muri are more impacting costs, like renting a large office when a small one is enough, using a sledgehammer to crack a nut…

“Operational” waste (Muda) were classified into 7 original types to which an eighth was added later:

  • Waste from overproduction
  • Waste from waiting times
  • Waste caused by transport
  • Wastage due to unnecessary inventories
  • Waste in processes (overprocessing)
  • Unnecessary human movements
  • Wastage due to defects / poor quality

and the eighth: waste of human talent

The bigger an organization, the more opportunities to create waste exist: people and processes work with poor coordination, which means waiting, piling up of Work In Progress (another word for inventory), working on wrong versions…

The bigger the organization the more transportation of physical goods between departments (parts, paperwork, material, documents…) and human motion (walking, handling..), handovers, etc.

The list of examples can go on endlessly. It was all experienced in established companies.

For more details about the Lean obsession about waste, I invite you to refer to the related post.

How can this help startups?

Being waste-aware will help prevent waste. Remember: especially at the beginning resources are scarce and should be used wisely.

It is a question of sound management as well as a showing respect to the prime investors trusting the wannabe company.

It is far easier to prevent waste than to fight to reduce it afterwards, another learning from established companies.

So for instance when planning a layout, it should be done in a way to minimize unnecessary motions, handling, transportation and so on.

To avoid overprocessing and overproduction, think about Minimum Viable Product: the demo widget does not have to be perfect nor to come in huge numbers.

When defining a product or service features, remember that “best is enemy of good”; the customers may not want to pay for all the fancy bells and whistles.

Create a culture of “right first time” to minimize quality issues and the burden of rework or redo.

Wraping up

Waste is burning resources without creating value. Some of these wastes are inevitable and should be minimized, others are avoidable and should be eradicated.

Wastes, their effects and ways to prevent them are widely known and documented, therefore entrepreneurs have interest in using the accumulated and shared experience in order to avoid repeating bad practices.


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How Lean can help startups – Do not repeat mistakes of established companies 1/2

If there is one way Lean can help startups, it is to provide guidance or “Lean inspiration” from the very beginning and prevent them reproducing the same mistakes of long-established companies.

>Lisez cet article en français

Most established businesses are built on an outdated model in most cases: the mass production of low variety products, regardless of the actual reality of their business.

This model is characterized among other things by:

  • an organization built on functional silos
  • hypertrophy of overhead functions called “support”
  • a pyramidal hierarchical structure
  • an obsession about lowest unit cost
  • seeking economies of scale

This set of characteristics influenced the structure, management procedures and the rules of the organization.

Yet most startups are preparing to face a demanding market awaiting highly customized products in small volumes, possibly with specific additional services. They may go for pure services e.g. mobile apps, something relatively new compared to established businesses settled before the Internet or mobile phones even existed.

Consumption patterns have greatly changed. Owning something in full property is no longer the single or even principal modality in some cases, think about pay per view, download on demand, rental, subscription and freemium for example.

Thus, a business in creation must adopt a structure fit for the different upcoming challenges:

  • customer satisfaction, which notably includes timely access to services they request; pre-sale consulting, delivery, after-sales service, installation assistance and / or operation, maintenance, etc.
  • the satisfaction of stakeholders, the partners, suppliers, investors, employees, possibly residents, local authorities, etc.
  • the satisfaction of regulatory and legal requirements, including tax, accounting, social, etc.

and all this in a sustainable way.

This structure will evolve over time, because the requirements are not the same depending on the size of the company, its markets and business volumes.

The difficulties that established companies face when looking to return to leaner structures, should encourage entrepreneurs to remain vigilant and embed Lean into the Vision from the start.

It starts with thinking in terms of value-creation flows rather than operational subdivisions. It is often related to as “value chains” or “value streams” that are built specifically to quickly deliver the value expected by customers, without being disturbed nor burdened by artificial , expensive “additions”, without significant contribution to value creation.

The examples which we can think of are:

  • tending over complicated dashboards and lengthy reports
  • installing quality controls to filter and retain defective products
  • granting statutory functions, well paid but non-contributory
  • multiplying hierarchical levels

Experience shows that once such structures are in place, holders, beneficiaries and “supporters” will find ways and means to justify their continuation and even strengthening them, this is Parkinson’s Law.

It is therefore easier to be vigilant and to control the development of such (often called supporting) functions:

  • put in place only what it is a strictly necessary condition for the satisfaction of non-negotiable demands or requirements, by customers, markets or regulation
  • keep them “minimum” from the start rather than fighting desperately to restrict them later
  • do not hesitate to dismantle or convert them if the original requirement disappears or can be satisfied by a more flexible, more efficient or cheaper alternative

>Move on to part two


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Why SMED is quick win in pharma – Episode I

Improving changeovers in pharma industry is a relatively quick and easy way to quick wins, faster and easier than usually assumed. This series tells you why.

Episode I: The Background

There are roughly two cases to consider when addressing operational performance in pharma industry :

  1. the traditional (big) ones
  2. the tollers and generic makers.

Traditional pharma makers used* to be protected by their patents, granting them several years (about 20) of monopoly in order to payoff the huge initial investments in R&D.

*Many blockbusters drugs have lost patent protection, allowing generic makers to produce and sell them much cheaper. The dramatic drop in revenue for the original makers brought up the term “patent cliff”, a metaphor for the sudden fall of incomes. For manufacturers without other blockbusters to compensate, it is a sudden exposure to leaner and meaner competitors.

Tollers (or subcontractors) and generic makers are not investing in hazardous R&D and will not have patent protection in return. They manufacture for others or “copy” drugs after they fell into public domain and sell at much lower price.

On the operational side, during the blockbusters years – when huge incomes were secured – the (big) pharmas did not care much about capacity exploitation and efficiency. When more capacity was required, new equipment, lines or even whole factories were bought/built.

The payoff was such that it was faster to setup a new facility and run it at relatively low productivity level than to try to improve already installed capacities.

Falling off the cliff

The consequences years after, once most of the blockbusters fell off the patent cliff into public domain and related revenues plummeted, are:

  • huge overcapacities, often whole plants,
  • low productivity* compared to other industries,
  • lower maturity regarding industrial best practices (e.g. Lean Manufacturing, Lean Management),
  • no real sense of urgency** to improve in operations,
  • lack of agility,
  • a “sudden” and unprepared facing of leaner and meaner competitors, meaning ordinary competition,

*OEE (Overall Equipment Effectiveness), is often in the range 15-35% when in other industries it is rather in the 50-65% range.

**this lax posture of well paid pharma workers, even when “the platform is finally burning”, make them the “spoiled children” from the perspective of others, struggling in harsher competition with lesser compensation.

Tollers and generic makers must be lean and efficient at once because of their business model. They don’t have secured incomes nor a patent shielded-off competition. They compete with makers in low wage countries, with lower sales prices, hence lower profit per unit.

They nevertheless have to invest and carry costs related to regulatory compliance.

Given the circumstances these makers understood much sooner the importance to close the gap with Best Practices in more mature industries. This does not mean that generic makers are all best in class, but they had powerful and early drivers to push them up the performance ladder.

Now that the scene is set, what is the link to quick changeovers?

For traditional pharma experiencing normal competition, investments are no more that easy they once were. Given the many remaining overcapacities, when delivery is poor, the solution is no more installing additional capacity but make better use of the one installed.

When looking closer how the installed capacity is wasted, changeover duration most often pops up as a major cause. And as changeovers tend to multiply with the shortening of runs and smaller, more frequent batches, they become good candidates for capacity / performance improvement.


In the next Episode, we’ll see how much can be gained and why.


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