True kaizen generates no waste and reduces costs.
Eliminating waste increases efficiency and reduces costs. But is it wise to increase efficiency in every instance?
Many people define production efficiency as the process of searching out and eliminating waste, then deploying newly available resources to a more productive task. This process is called kaizen.
Effort or motion that doesn’t contribute to the progression of the production process should, with wisdom, be converted into useful work. The key to true efficiency lies in ensuring the maximum labour expended goes directly to adding value.
But increasing the level of efficiency is very different from strengthening labour, which is increasing the workload without improving the job. Eliminating wasted effort and making better use of the existing work force increases output from the same labour.
Labour efficiency is work divided by motion (or effort), and the objective is 100%. Don’t be deceived by apparent efficiency from improved work methods.
Take a manufacturing line producing 100 parts per day with 10 team members. By eliminating waste, team members now produce 120 parts per day. But the extra 20 parts per day is more than what’s required and that’s waste.
Any kaizen must lead to reduced costs. Let’s say improved efficiency enables just eight team members to produce the required 100 parts per day. That’s genuine efficiency.
Machinery and equipment can also deceive with apparent efficiency.
It’s easy to assume costly equipment should work 24 hours a day, producing large numbers of items while reducing unit cost. However, production that exceeds planned volume only increases costs.
To illustrate this, imagine someone who buys a new automobile, and drives it all day, every day, with no particular place to go. Quite apart from the gas and oil used, the vehicle runs a greater risk of accident or wear. The same is true of production equipment.
The Japanese call the rate of operation “ka do ritsu,” which can also mean “operational availability.” This is the percentage of operating time machinery and equipment is used without breaking down, or more precisely, the equipment must be capable of operating when and for as long as you want it to.
Imagine a rowboat with oarsmen rowing in unison and at a constant rate, except onefellow. This guy has extra energy and insists on rowing faster than everyone else. All he actually achieves is a disruption to the established rhythm, which slows the boat.
The same applies to work. Increasing your own efficiency without an equal improvement in the shop will not result in a cost reduction from your extra output. In fact, your actions may increase costs.
A good way to focus on efficiency is to be critical about inventory. When there’s excess inventory, more containers are required that need extra space. And more inventory means more control and maintenance. Decide exactly how much stock is essential for the job. Make sure this amount is provided, and no more. Excessive inventory is a waste, but it also generates other forms of waste.
Distinguishing between apparent and genuine efficiency is key to your continuous improvement efforts. Genuine efficiency directs attention to what advances the production process and ensures the expended labour adds value.
Richard Kunst is president and CEO of Cambridge, Ont.-based Kunst Solutions Corp., which helps companies become more agile, develop evolutionary management and implement lean solutions. Visit www.kunstsolutions.com.