Quick Flow Benchmarking
Want to do a quick assessment of your work-in-process ("WIP"), capacity utilization, and response time? Quick Flow Benchmarking is a vital tool for any manager trying to understand and improve their process.
It's vital because creating a Quick Flow Benchmark ("QFB") is easy, is usually done in a couple of hours and, most importantly, the information can lead to very rapid identification of improvement opportunities. The QFB analysis (see below) led to a 30% increase in throughput at a European plant where Lean continuous improvement efforts had been ongoing for 15 years! The analysis was conducted one afternoon, a pilot was run that night that successfully confirmed the findings and a month later the operations had been reconfigured to achieve the 30% increase in throughput on a daily basis.
A QFB only requires four pieces of data:
1) Bottleneck rate of the process
2) Raw process time of the process—this is real world "value-added time" as it includes setup time and downtime in addition to processing time
3) Current Throughput
4) Current WIP
This simplicity in data acquisition makes the quick flow benchmark highly practical. As described above for the European plant, the QFB analysis led immediately to drastic improvements. Sometimes a more detailed analysis is needed that takes into account all the complexity of shared resources and product or task mix. For those situations there's the Flow Optimizer. Click here for more info on the Flow Optimizer. For those who like technical explanations, the difference between the QFB and the Flow Optimizer is as follows:
- The Quick Flow Benchmark assumes a fixed level of variability in processing times to derive the marginal case curve (See Factory Physics, 3rd Edition, p. 244-248). In Factory Physics, the Marginal Case is called the Practical Worst Case.
- The Flow Optimizer curves are drawn from a full CSUITE operations analytics model with all the complexity of routings, different process centers and product variation. For services or projects the WIP is not usually a physical product but no matter. The same analysis can be applied, for example, when WIP is "tasks-in-process" for project management or electronic drawings for product development management.
In the example shown, the reader will note that throughput increased 30% but cycle time increased even more. A typical reaction is that this is a poor solution because increased cycle time is always bad. That is the wrong reaction. The challenge for this client was to increase throughput as much as possible because they had high demand. WIP was very inexpensive. Adjusting the WIP levels did indeed increase cycle time but the average cycle time went from about 18 minutes to 1.5 hours and they only shipped once a day. If the WIP had been highly valuable, for instance gold, and the cycle time scale had been in months, there might have been a different decision made. That's the power of operations science, you create a solution that works best for your unique business conditions.
If you want to make improvements now, give us a call at (415) 510-2681. We can train your people in practical operations science and analytics to ensure improvements last. We have worked with leading companies the world over to create and implement breakthrough operations strategies. We accelerate results using your existing efforts, such as Lean or Six Sigma, and your existing information technology. Call us if you want better results quickly or send an email to firstname.lastname@example.org