Spot Waste and Eliminate!

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.