The Best opportunities?

continuous improvement

Continuing with our previous post’s theme of identifying waste (or the best opportunities for improvement), the process of doing so is one that is often misunderstood.

Case in Point
For example, we were invited to visit a large packaging company which had been “in Continuous Improvement (CI)” mode for many years. They wanted help because their efforts were not having any impact on their profitability.

Their sector of the industry suffers from substantial over-capacity, which has created major challenges for all the major players. We began with an assessment, during which we met a broad cross-section of people so we could gain an understanding of what they had been working on, how they had gone about it and what results they have achieved.

What we found was very interesting…

Conventional wisdom in this industry dictated that the only way to make money is to keep the presses running. Consequently, anything that slows down the presses needed to be “fixed.”

With that principle in mind, the company launched a number of projects aimed at improving uptime; project teams consisting of the crews and technical people were put in place and they developed good ways of measuring performance, getting to root causes and taking corrective action. Several of these projects delivered substantial improvements in up-time.

However, in this industry, cost of raw materials is by far the largest proportion of total cost. It therefore made sense to re-focus the improvement efforts on ways of improving yield, which was defined as the percentage of inputs that end up as saleable product made correctly the first time.

This new focus revealed all kinds of problems leading to yield loss, including:

  • Lack of training
  • Inconsistent procedures
  • Errors in getting correct customer requirements
  • Inconsistent internal information
  • Standard loss factors which may lead to complacency
  • Inconsistent raw materials coming from a sister plant

This is an example of a well-intentioned company with well-intentioned people who did not ask what impact their projects would have on the bottom line. If that question had been asked, a much different direction would likely have been taken.

As Bill Conway often said, at least 50% of Continuous Improvement involves working on the right thing.