Measuring Production In Job Shops #1
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Like most make to order factories, we had problems: with measurement, on time shipments, and meeting schedule. The facility was the size of a football field. Over four hundred skilled and semi-skilled employees scampered between eleven assembly lines, packed side by side under one roof, barely keeping pace with demand.
They carried much of the process inside of their heads. Products varied by line from small enough to fit in your hand, to as large as your car. Complexity and cost varied from hundreds to tens of thousands of dollars per item. Leverage points within the process were invisible to us. It was difficult to get help. A handful of engineers both designed the products and oversaw production. It was disorienting.
We had insomnia. We had frustration. The problems loomed so large, they felt impassible.
Because production was measured by a combination of units produced and dollars shipped, supervisors were incentivized to ship high dollar, easy to make, or high profile customer orders first. Difficult to assemble and small orders languished until customers complained and were then expedited. My manager at a later position quoted Eli Goldratt, the author of “The Goal”: “Show me how you measure me and I’ll show you how I behave.” It applied perfectly to us, as we created some of our own problems.
But we already had a better method, hidden away on a single assembly line; with a solitary, enthusiastic promoter. Unlike many of us, John (not his real name) was an Alabama native, born and raised. He’d overseen the production of a three factory company and brought that same incisive mind with him. He wore his colors proudly, wild curly red hair held in a Crimson Tide visor. “Roll tide,” was a constant refrain as he posted his numbers at the start of the shift.
He had a solution to our problem. His largest assembly line fed products to a major HVAC company. This customer measured production using Cost Standard Hours (CSH). CSH, defined by engineering time studies, indicated how long it should take to build each version of an item. Think of industrial engineers walking around a factory with stop watches and you get the idea.
John asked, “Why don’t we apply this to all the assembly lines and not just mine?” Measured this way, we could establish the average sum of CSH per day, by assembly line. We did what any grown adult would do in order to implement it: we created a CSH competition. The most consistently accurate daily CSH forecasts for 30 days running would be the winner.
We created pocket sized cheat sheets with the CSH for each assembly line. At our morning meeting, each supervisor estimated what CSH he would produce, based on his Work in Process (WIP) and upcoming orders listed in the system. We posted the estimates at the production board. We totaled the CSHs versus the number of man hours in the plant and came up with a number for daily efficiency – creating at a single production efficiency number for the plant as a whole.
With the estimate, we had a solid idea of what our efficiency was, our performance to schedule, and how our labor matched to volume. Difficult jobs became attractive because the cost standard hours were higher. Supervisors tracked production on an hourly basis. If something changed during the shift, and estimates were in trouble, they created a reaction plan to get them back on track. Savvy managers began to horse trade key employees in blocks of two and four hour increments—all they needed in order to recover.
After a few weeks, we consistently predicted what each line would produce. What had been chaotic turned into relative stability. The competition was over, but the habit remained. Overall plant performance improved. The focus created consistency. Supervisors got smarter and figured out how to prework orders to raise the typical Cost Standard Hours produced by their assembly lines. If they knew they were still going to be short, they asked other supervisors if their lines could make up the volume, so the plant as a whole would still make its numbers.
We kept going. We gained confidence.
If you don’t have an engineering department, you still have a watch. A rough cut of the cycle time usually is enough. If you can figure out changeover times, you can figure out cycle times. If you can figure out cycle times, you can create estimates. If you can create estimates then you can predict. Then the process takes on a sense of orderliness, and you stop just reacting.
It’s worth it to think through how you measure production. Because many of the assembly lines were in parallel, shared constraints were less obvious. Because of variation, level loading the schedule was difficult. But the estimates that engineering used to quote the work proved to be accurate. We implemented many other changes, but measurement was the turning point. It was under our noses the whole time.
You may be closer to the finish line than you think. Good luck.
Let me know how it goes.
Torrence