Published in WICMA's Industry Insight 2013
When I was doing my doctorate, I came across
many accomplished people linked to the power sector in various capacities. They
all were kind enough to spare time and share their insight with me, answer my
questions and educate me far beyond the knowledge that I was seeking. They all shared
a common view about the transmission and distribution loss (~30%). It was pointed
that if we simply reduce the losses, we will have lot more extra power to
bridge the demand and supply gap instead of trying to continuously add
generation capacity to cover the deficit. Can you imagine the colossal amount
of waste of precious resources like coal and gas?
There are many combined cycle power plants
today which generate power using gas as well as steam. The steam turbines are
run by converting the heat generated while running the gas turbines using a
heat recovery steam generator which otherwise would go waste.
However,
this article is not about power generation plants; it is about waste in corrugation
business, how it gets created, what its effects are and how can we minimize it.
Corrugation
business is a highly resource intensive trade where the margins are dwindling
as days go by. On one hand creditors have to be paid on time preferably within
30 days (in case of small manufacturers a
60 days credit period would incur higher rates) while debtors are more
relaxed towards their outstanding bills. Though packaging holds a pivotal
position in today’s supply chain and logistics scenario, packaging suppliers do
not figure on top of the payables’ list in majority of the companies with raw
material suppliers finding preference and priority.
We will try
to understand the 3Ms – Mura, Muri and Muda as identified by the Toyota
Production System (TPS) that has propagated Lean Manufacturing and try to understand
them in the context of corrugation plants.
Unevenness and Strain
The
first sign of problem is irregularity or unevenness in any process. This is Mura. If the production system is not
leveled properly then certain parts will have more work than others.
UNEVEN
DISTRIBUTION OF LOAD
There will
be inevitable build up of inventory at that stage and throughput will be less.
The waiting of parts to get processed is also a waste of resources.
Suppose the stitching section of the carton
manufacturing process has only two machines with limited manpower to operate
them at the same time, there is bound to be inventory build-up at the beginning
of this process. It will be immaterial if the corrugation, pasting, slotting
and scoring sections are giving uniform and steady output. The productivity of
the entire plant will get reduced as the stitching function is unable to give
the same even output.
STRAIN ON
ONE VEHICLE AND LESS LOAD ON ANOTHER
With unevenness,
comes overburden or strain. This is known as Muri under TPS.
Look at your own body. If you are reading for
a very long time, your eyes start watering or paining. The rest of the body is
fine. But due to strain on your eyes you are unable to do anything else till
you rest for a while.
Similarly,
in factories there is strain on machines and manpower. This diminishes the
efficiency of that particular process. There can be issues of quality and
chances of defects in the output. In our day to day business, we try to strike
a fine balance of quality, productivity, on-time delivery while maintaining
safety of the premises and staff.
Imagine a case of uneven production where
workers have to keep changing the reels and moving them back and forth the
storage area and corrugation machine. How much time and resources are being
wasted because of the same? Is your customer paying for these costs? No!
Mura + Muri = Muda (Waste)
Waste is nothing but consumption/ utilization of resources which provides no apparent value to the customer and something that they are not ready to pay for.
WASTE OF
RESOURCES BY USING TWO VEHICLES
A customer needs a corrugated carton that can
be made using a 50 inch decal reel. Suppose you have a reel that is 51.50
inches which you have in stock and decide to use. You will be wasting the width
of 1.50 inches as your customer will not be keen to pay for the extra paper.
Liberally
viewing, most support functions seem non-value adding for a customer. However,
we cannot do away with administrative or IT support activities in a company.
The objective should be to rationalize such processes and restrict waste
generation.
How do we spot waste?
It is
imperative that there is waste in everything that we do. What is lacking is a
critical appraisal. Question is how we spot waste in our manufacturing process.
The Japanese management systems have very simple solutions for manufacturing
business. They talk of two Japanese terms
– Gemba and Genchi Genbutsu. You do not need to remember these terms.
The idea is “go to the real workplace and see.”
When I had first started looking into our
business, I was given a ballpark figure of scrap that’s generated. This was
continuing for quite a while. On a detailed scrutiny we found it was much more
than what was being registered and reported (or assumed). What a waste of
resources!!!
Take a walk in your factory, look around and
observe what is happening. Make notes and take pictures. Ask the people manning
each of the positions about what they are doing, how they are doing it, how
much time are they taking and what kind of problems are they facing. Do not
comment, just listen and note. Many would contend that it is our factory and we
have set it up. We know what is happening and do not need any walking and
seeing etc. Believe me; you will be in for lot of surprises. Have faith and take
the walk. It will be totally worth your time.
Try and
analyze the layout of your factory. The positioning of machines might be such
that they require semi-processed items to be moved back and forth till the end
product is ready. Waste of motion?
With waste
of motion, often there is another associated waste – transportation. If the required
machine setting tools are not kept near the machine in the 5S way, workers
might move back and forth with wrenches and other tools or go about looking for
them all over the factory.
Problem of
transportation waste can also occur if you order the wrong decal from the paper
mill or the paper mill sends you the wrong one. You unload the wrong item from
the truck and again reload it after arguing with your paper mill or agent. You
have waste of time. You have loss of production in case you are trying for a
JIT – like scenario. (Just in time)
Another
pointer is to look for places where there is no standardization. Often people
buy three different types of the same machine over time. It means they have to
keep three types of spares at all times. Your cash is tied up. Waste of
inventory?
DIAGRAM OF 7
TYPES OF WASTE
People are
also biased towards technology. Over automation can lead to processing that
might not be needed to generate value for a customer. The production process
might not be able to achieve the economies of scale. Waste of over-processing?
You might
come across people on the scoring or slotting machine idling away. The previous
process is yet to give the output while the slotting process has completed its
output. It is a common bottleneck. Waste of waiting?
How good are
your job cards and bill of material? Are they being scientifically managed? If
not, you might end up manufacturing 27 cartons instead of the required 25. Your
customer is not going to absorb these additional cartons. Waste of
overproduction?
The worst
kind of waste is defect. Take the example
of a defective carton. It is delivered to the customer. The customer rejects
it. Either you take it back or leave it there. You have to now make a
replacement carton and send it to the customer. There is man, machine, material
cost and transportation cost notwithstanding the demand of time. And you do not
even get paid extra.
Manufacturing
processes should be well – documented and standardized wherever possible. Use
of 5S will be greatly helpful in reducing waste. Implementing visual controls
can cut down on miscommunication. System audits should be conducted
periodically.
Starting Point
5S and 3M
are the base of Lean Manufacturing. They help in setting the stage for an organization-wide
Lean Culture. This concept is extremely relevant for corrugators amongst all
other businesses. There is still quite a
bit of primitiveness in the corrugation business. It is time for paper mills
and corrugators to form a stronger synergy to grow mutually. Synchronizing
production processes, raw material procurement and consumption will be pivotal
in maintaining low inventory, timely conversion of raw material to finished
goods and rotation of funds at each level. Everyone wins.
It is established
that waste gets generated from the point of unevenness in the system. This
leads to overburden and strain on certain parts of the process while others are
idling away.
Here
we need to understand the throughput level of each system as discussed by
Goldratt and try to create a balance (Heijunka)
between each process and sub-process.
BALANCE
AMONG VEHICLES
The aim of
each manufacturing process should be in-process checks to ensure quality. This
will reduce the time and cost of production and improve efficiency. Delivering
the right quality and quantity of items to the customer in the given time frame
is the fundamental key result area for any business. It clearly means greater
customer value. Profit will happen as a simple byproduct.
Remember that waste identification and elimination
is a continuous process.
