The Value-Adding Bang

William A. Levinson

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Why should you attend?

Inventory, one of the Toyota production system's Seven Wastes, is directly proportional to cycle time, or the amount of time the work spends in the product realization process. Most of this time, and the amount can be 99 percent, is non-value-adding except in the leanest industries such as continuous flow chemical process industries and moving assembly lines. This means that, not only do the processes carry far more inventory than they need, they may need to produce to forecast rather than to order. This increases the risk of being stuck with unsalable obsolete inventory, which is why (for example) savvy consumers wait until the end of a clothing season to buy apparel at discounts of 40 percent or even more. This is also why it helps to wait until the end of a car's model year to buy a new vehicle; the dealer needs to get its unsold inventory off the lot to make room for the new models.

When manufacturers recognize that the value-adding "Bang!" as depicted by Masaaki Imai's Gemba Kaizen, and value may in fact be added in a fraction of a second when a press or forging machine makes contact with the work, depicts the only cycle time that adds value, they will be positioned to identify and remove unnecessary cycle time.

The good news is that there are proven off-the-shelf techniques with which to eliminate unnecessary cycle time to focus on the value-adding "Bang!" These include single-unit flow, single minute exchange of die, pull production systems, and attention to variation in processing and material transfer times.

Areas Covered in the Session:

1.       Little's Law says that inventory is proportional to cycle time, and Henry Ford's 1/3 reduction in cycle time freed $20 million of idle cash in the money of the early 20th century. Well over 90% of cycle time can be non-value-adding in many industries.

2.       Short cycle times enable make-to-order rather than make-to-forecast which ensures that each item has a buyer.

3.       Wasted cycle time is asymptomatic, as described by Henry Ford: "…wasted time does not litter the floor like wasted material."

4.       Cycle time accounting quantifies the time spent on value-adding and non-value-adding activities. This forces wasted cycle time into the open.

5.       Single-minute exchange of die (SMED) and external setup reduce handling and setup time.

6.       There is nothing good about batch-and-queue processes. Single-unit flow, or continuous flow in chemical process industries, are superior.

7.       Pull production systems such as kanban and Goldratt's drum-buffer-rope eliminate unnecessary inventory from the process. The DBR method keeps an inventory buffer only at the capacity-constraining resource.

8.       Variation in task and material transfer times results in more inventory and longer cycle times, and requires the carriage of protective inventory. Henry Ford wrote almost 100 years ago that, if there was no variation, there would be no need to carry inventory, and he designed his processes accordingly.

Attendees will receive a handout of the slides and accompanying notes

Who will benefit:

Manufacturing and quality professionals and practitioners; people with responsibility for continual improvement and lean manufacturing

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Recorded video session

Speaker: William A. Levinson,

William A. Levinson, P.E., is the principal of Levinson Productivity Systems, P.C. He is an ASQ Fellow, Certified Quality Engineer, Quality Auditor, Quality Manager, Reliability Engineer, and Six Sigma Black Belt. He is also the author of numerous books on quality, productivity, and management.

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