World-Class, Lean Performance in the SMEs - Small and Medium Enterprises - by Carlo Scodanibbio, Industrial & Business Consultant - Lean Management Consultant

Carlo Scodanibbio
Industrial & Business Consultant
Lean Management Consultant

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Value Adding Management
Systematic Elimination of Waste

In industry, often waste is very difficult to discover.
While certain items of waste are easily noticed (for instance wasted materials), many others go un-detected, un-noticed, un-identified.
This is because waste is often so "innocent", so "genuine", and it hides so cleverly, that even expert eyes have difficulty in unveiling it.

Still, the rule is so simple:

Whatever adds to cost and/or makes time elapse without adding to (output) value is just waste.

Waste is generally originated by three well identifiable causes:

  • By the human tendency to do things "...for the time being...." and "haphazardly".
  • By Smith's Division of Labour principle.
  • By (inadequate or wrong) processing methods.

When we do things "for the time being" or "haphazardly" we just avoid a problem.
By adopting a "stop-gap" solution to the problem, we settle with it.
Until that solution seems to be acceptable. Up to the stage we believe there is no better solution.
That "haphazardly" solution adopted so long ago becomes a rule, an unspoken "credo". And we live with that forever.
Waste has been originated, has settled, and has become part of the "scenery" by "furniture effect". People gets used to it. People don't query it any longer.
So, in a factory some "off-cuts" are produced. The worker asks the foreman where he should put those off-cuts. The foreman is very busy. So, he says, "....for the time being just put them there.....". Next day, the worker doesn't even ask his foreman what he must do with off-cuts. He just puts them there. And next day. And next day. Until, one day, there is full of off-cuts. Because everybody, for an unspoken rule, just throws off-cuts there. Which has been very convenient. After all, those off-cuts may be useful, one day....
Eventually, there are so many off-cuts in there that we need to do something about it. So we organise there with good criteria: sorting out the various off-cuts per colour, per size, and per type... and providing bins or shelves to accommodate them.... and fencing the area so that it will be well identifiable... and perhaps even posting up a nice signboard "Off-cuts Area".... and perhaps putting somebody in charge of the area, to administer it, to keep records of off-cuts stock, and to issue them in those sporadic occasions in which they are needed....

Sounds familiar? Well, that's waste. That's how it originates, grows and proliferates. Until it starts generating more waste. Waste always generates more waste. It grows "virally".....
A major cause of waste. Because fragmented activities, assigned to specialised workers or machines, need somehow to be "glued together".
The glue comes in the form of planning and supervision.
But that's not all.
Fragmented activities may happen at a physical distance the one from the other. This introduces the need for "transporting", "moving", "conveying".
During transport/conveying items may go lost. They must be searched for. Unless there is a fool-proof bureaucratic method (impossible)....
More. Fragmented, specialised activities are "repetitive" and "separate" the one from the other.
This introduces routine, boredom, loss of attention and focus. Consequently, errors are possible.
Errors may not be discovered immediately. Because the next activity may be executed at another time. Hence the need for quality control and administration of errors/defects.
Consequently, more specialised activities are created.
Waste always generates more waste......
This cause is strictly associated with the previous one.
Because activities are specialised and fragmented, the best method is to make them as repetitive as possible.
This introduces (especially in manufacturing - but not only there) the principle of the "batch" and of the "economic lot". Production is "per lots".
But lots need to be administered, transported, stored or parked, and transported again, and checked, inspected, controlled, and counted, and verified....
The efficiency achieved through "batch processing" goes lost "around" the batch, because of the many non-value adding activities necessary to make the batch method exist.....
Moreover, when a "special" (product or service) is requested by a customer, the batch processing style needs some set-ups here ad there.
In conclusion, while individual activity's efficiency may be extremely high in batch processing, the overall process' efficiency may be extremely poor, due to the un-accounted waste surrounding those activities....

The new-world enterprise needs to set up a system in which waste is known - queried - identified - isolated - killed, or reduced to minimal levels.

For the world-class enterprise, Value Adding Management and Systematic Elimination of Waste are not only a philosophy and a guideline, but also operational disciplines.
When applied to processing operations, they originate disciplines like Lean Manufacturing and Flow Production (more »), Lean Project Management (more ») and Process Engineering (more »).
The approach is always the same: firstly eliminate all wasteful, non-value adding activities in a process - then streamline/rationalise the remaining value-adding activities to create a Flow Process.

In a nutshell. These are the concepts that gave logical origin to resulting philosophy: Lean Thinking (more »)

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