Capital expenses are the costs for fixed assets—the things that are typically carried on the books (reported on financial statements), last longer than a year, and provide recurring value. Buildings, vehicles, and equipment are typically capital expenses. Capital expenses hit the income statement in the form of depreciation. Your company doesn’t have to report the whole cost of a building all at once when they buy it. They slice off a little piece of the Read more…
Capacity is the amount a given group, team, or individual can produce. It is determined by factors such as productivity, staffing, hours of operations, equipment limitations, defects/scrap, setup time requirements, number of shifts, equipment maintenance requirements, and a host of other factors. When does capacity become most important? As any traveler knows, it becomes most critical when you are running out of it. If you are going on a short overnight trip, your suitcase is Read more…
Buffer time, in project management, is the extra time added into a time estimate to keep a project on track. The purpose of this leeway in planning is risk management. It allows project managers to be able to account for unforeseen situations without having to change the coordination of a project in a major way. This time may be officially designated as a buffer, or it may be built into tasks. There are two general Read more…
The term “bottleneck” (capacity constraint) comes from the area at the top of the bottle that limits the flow coming out. It doesn’t matter how big the rest of the bottle is—liquid will only flow out as fast as the size of the neck will allow. That is stating the obvious, but the concept holds true in any production environment, whether in the office, or on the manufacturing floor. There is one process, station, step, Read more…
Batches are groups of products that go through a process together. Batches work against the Lean principle of flow, because the first parts that are produced have to wait until the rest of the parts are completed before they can all move to the downstream process. Batches tend to drive up inventory. It is rare that the batches meet the exact needs of the downstream process, so the completed work sits until it is used. Read more…
Bar charts are generally used to differentiate between the values of a parameter for buckets of data. The length of the bar shows the relative value of that data point. That just means that the bars represent a group, such as types of fruit in these examples, and the longer the bar, the higher the number. The parameter can be anything—number sold, acres planted, or people choosing it as their favorite fruit. The key is Read more…
One of the fundamental tools in any Lean toolkit is 5S. In a nutshell, it entails creating an organized, effective workspace that supports the processes being performed in the area. You Probably Already Use 5S at Home The original 5S terms come from Japanese words: Seiri (Sort): This step entails getting rid of clutter and unused items. Seiton (Straighten): This step entails arranging the work in a manner that makes jobs easier to do. “A Read more…
Once again, I found myself re-learning Lean lessons. This time it was a valuable one about inventory. Whenever I go to the big warehouse style megastore, they always have great deals. The last ‘great deal’ was on a couple pounds of grape tomatoes. This morning, as I was throwing out the shriveled remains of the last 20 or so little tomato corpses, I wondered how much I really saved per pound, if I amortized the Read more…
Assumptions are pieces of information that are presumed to be true, often without any evidence to support them. In Lean, people often resist changes by presenting assumptions as fact. “Our customers will never go for that.” “We need all these parts, or the line will shut down.” “We can’t get those two machines closer.” Time and time again in Lean, assumptions act as an artificial obstacle, holding up progress. Even something like the assumption that Read more…
If People Are So Important to Lean, Why Is It So Hard To Find A Lean Book That Focuses on People? You’d be hard pressed to find anyone well versed in Lean who doesn’t recognize the critical role people play in the success of a Lean company, yet you wouldn’t be able to tell that by looking at their bookshelves. Most Lean books focus on a Lean tool and mention the importance of people in Read more…
What’s the biggest difference between how shop floor (gemba) work and office processes flow? It’s not what you might think. A task is a task, whether you are grinding out burrs, installing an electric motor, or entering data. Sure, the motions are different, but in truth, the mechanics are similar. Your brain decides what to do. It tells your muscles how to do it. It doesn’t matter if your brain tells your finger muscles which keys to Read more…