Hidden Factory / Hidden Process

A hidden factory is the set of undocumented and unstaffed processes that are done in an organization.

When you dive into a process, you will often find two methods of doing it. The first is the documented method, or the one described by the operator as what he or she does. This is often the method that is used for timing, and ultimately for planning the staffing and capacity of an operation.

Then there is the second process. It is the one that is done without realizing it, or in response to specific problems. This second process flies under the radar, so seldom has any attention, and almost never has appropriate resources.

The big problem with hidden factories is that they are hard to see, hence the name. This means that they seldom get any continuous improvement focus on them.

The first step to removing hidden factories is to bring them into the light. You can’t fix what you don’t acknowledge. Start off by looking at processes where the documented times don’t match up with actual recorded times. Processes rich in hidden factories will often have much higher cycle times than their standard work would indicate. Teams frequently working unexplained overtime also often indicates hidden factories.

Even with clues about where to start looking, though, finding hidden factories can be a challenge. In many cases, the process is so routine that nobody recognizes it as a problem. Or work may be done by a third party. An issue may occur with a customer, and a supervisor may handle the follow-up communications, making it transparent to the team’s output. A lead or supervisor may walk up and down the assembly line prepping materials for production.

The key to uncovering hidden factories is to have a separate set of eyes watch and document multiple cycles of a process. The repetition exposes intermittent problems, and the written list of steps provides something to compare existing work documents to. That helps open up operators’ eyes to all that they do without realizing it.

Hidden Factories in the Office

The term hidden factory would imply that this is not an office problem. Hidden processes in the office, though, are more prevalent than those on the shop floor. There are more branches to a process, so for each piece of work, there are more possible steps to complete it. This means that to do a 10-minute process on the shop floor, an operator needs to know about 10 minute’s worth of steps. But in the office, because of the number of permutations, he or she might need to know twice the work content, or more.

Think of answering a customer call. It might take 2 minutes of actual work, but if you added up all of the possible steps, the operator might need to know how to do ten times that amount of work. Consequently, the potential for hidden factories can be ten times as great as well.

A hidden factory in the office can be subtle. They include things like calling customers back to get correct addresses or smoothing over missed shipments.

Never let an operator document a process from memory. Always have another operator observe, preferably more than once. This will prevent missing hidden factories, whether those that an operator does subconsciously, or the ones that are done intermittently.

Hidden factories are a thorn in your capacity planning side, because you probably don’t know about them, as the term “hidden” implies. This means that if you haven’t scrubbed your processes for the hidden steps, you are, most likely, short staffed in your operation.

If you decide to go after the hidden factories and bring them into the light, be prepared for a cost to it. It will not actually change anything—after all, the work was being done before. But it will force you to follow your Lean principles. For the intermittent problems, you’ll have to address how to handle them. If you choose to use andon lights, you’ll have to have resources available. If you add the steps to the process documentation, the official cycle time will climb. Both will likely require action. Try using continuous improvement to bring down the work content before adding headcount, though. You will often find that hidden factories stem from quality problems at upstream processes.