Don't forget about OEE when balancing your line! Two big mistakes...

When working with manufacturing teams doing line balancing, I constantly encounter the same mistake. They typically forget to consider OEE (Overall Equipment Effectiveness) when doing their takt time calculations. This mistake could easily lead to missed deliveries and unplanned overtime.

Planned cycle time (PCT) or Target Takt Time (TTT) are commonly used numbers to use as buffer numbers when performing takt time calculations. Some popular lean books provide rough guidelines like 85-90%. So in those scenarios the calculation would look like this: 

Demand = 400 pieces per day
Available time per shift = 420 minutes
2 shifts per day available
Takt Time = Available time / Demand = (2 x 420) / 400 = 2.1 minutes per piece
Planned Cycle Time = 85% x 2.1 minutes = 1.79 minutes

Ok, so we target 1.79 minutes for our line balance right? Well not quite. The 85% Planned Cycle Time rule of thumb fudge factor is only designed to protect you against basic productivity losses. But there are many other things to consider in the calculation like quality losses, machine breakdowns and changeovers. Well, the metric that we already have that many manufacturing sites already measure is OEE. OEE is the product of three factors - quality losses, productivity losses and availability losses. So alternatively, using the same demand and availability profile as before lets consider this example:

OEE = 75.4%
Planned Cycle Time (using OEE) = OEE % x Takt Time
Planned Cycle Time (using OEE) = 75.4% x 2.1 minutes = 1.58 minutes. 

Clearly there is a big difference between balancing a line at 2.1 minutes vs 1.79 minutes vs 1.58 minutes! 

I did allude to "two big mistakes" in the title of this post. The first one was ignoring OEE - the second one is not working to improve it. Some teams just "accept" that their OEE is what it is instead of actively working to understand and improve the results. Let's look at an example

What if the total cycle time for our example cell is 5.7 minutes meaning from start to finish the total work content to make one piece is 5.7 minutes. 

Using the standard manpower formula:

Manpower = Total work content / Planned Cycle Time = 5.7/1.58 minutes = 3.6 people

Ok, so clearly we can't do the work with 3 people and we need to staff 4 heads RIGHT? Well wait a minute. We should focus our efforts on improving OEE to drive the optimal line balancing. The first step would be to identify the targets for OEE.

What OEE would we require for a staffing of 3 people? Lets assume that 8% is an acceptable overtime level. 

3 people with 8% overtime = 3.24 people (equivalent)

3.24 people = 5.7 minutes / (2.1 minutes * X) 

Solving for X = 83.77%

What does this mean? It means we need to improve our OEE from 75.4% to 83.77% in order to achieve a staffing of 3 people with no planned overtime. Seems like a daunting task but lets breakdown our OEE to see exactly what we are dealing with here. So we take a deeper look into our OEE number and find this:

OEE = Availability % x Quality % x Productivity % 
Availability = 98%
Quality = 81%
Productivity = 95%
OEE = 75.4%

Well the number that stands out here is clearly quality so what if we focus only on quality? How much would we have to improve quality to reach our OEE target of 83.77% assuming Availability and Productivity stay the same? Using some basic math:

83.77% = 98% * X * 95%
Solving for X = 90%

This means in order to achieve an OEE of 83.7% (which would allow us to staff with 3 people at 8% overtime) we need to improve our quality from 81% to 90%. What we have to do now becomes much clearer because of our calculations. In the meantime, while we are making those improvements, the management team needs to consider a containment action. 3.6 people (from the original manpower calculation) is 3 people with 20% overtime. This is challenging but definitely possible - and we have to understand its only a temporary measure. Alternatively the team can use 4 people temporarily - the downside of this is that the operators get use to a standard work with 4 operators as opposed to 3 and it becomes difficult to adjust the work content later. Also, the 4 person standard work carries 0.4 heads worth of waste unless you are able to flex that operator to another line.

To summarize, Productivity and Quality targets are often picked out of thin air but we should be applying a common sense data driven approach. Lean shouldn't be a science project but we do need to use the metrics at our disposal. We need to ask ourselves what future state are we trying to achieve and what improvements do we need to make to achieve that vision. 

5 Steps of a Lean Manager - Video

One of my colleagues shared with me a terrific video about lean management. Its a great illustration of how value stream managers and team leaders should think. Its very often difficult to get away from the daily firefights but more managers need to think about the long term. The weekly numbers are important but more important is having a vision for the future state of the value stream.  

1. Control your territory - as a leader its important to have a clear understanding of your boundaries. In what areas am I seen as the leader (not only the areas you manage sometimes!)? Who are my customers?

2. Give meaning to your actions - link actions with results. Visual management is very important here so that your employees understand whether you are winning or losing on a daily basis.

3. Motivating and driving your team - are you coaching and recognizing your team members properly?

4. Delegating simple problem solving - a leader should be focusing on planning, creating a vision and continuously improving. The team itself should be trained and empowered to solve the small day-to-day problems on the shopfloor instead of the leader constantly firefighting. Small problems become big problems!

5. Managing the progress plan - Each value stream should have a CI Plan clearly linked to the site's Policy deployment.

How to pass the ASQ Six Sigma Black Belt exam

Well, ok, the article title is a bit misleading. This post is moreso about how I passed the ASQ Certified Six Sigma Black Belt Exam (on the first try!) - but it may give you some tips that will help you. So first off, let me give you some background about my experience so it'll give you an idea of what I started with. I took a Six Sigma Black Belt course in college but that was ten years ago. I still managed to keep some of the notes from the class which helped a little bit. After college, I got green belt certification at my first company and did a couple projects. Since then, I've been doing black belt level projects sporadically with my current company. Lean has been a greater focus in my role and six sigma is more like a nice-to-have skill. I thought it would be important to round out my skill set as a problem solver and get ASQ certified.

I first submitted a few projects I did to ASQ in order to sit for the exam - my projects were approved and I had about 3 1/2 months to study. The first thing I did was a quick search online through some blogs and forums to get some exam advice. The most useful article I found was from Nicole at a blog called Quality and Innovation (article can be found here). Based on advice from her blog, I bought two books - the CSSBB Primer from the Quality Council of Indiana and The Certified Six Sigma Black Belt Handbook (Second Edition) by Kubiak & Benbow. I bought a used copy of the Handbook off of Amazon that included the CD. The handbook arrived first around 2 months from the exam date. I started reading it from page 1 and to be honest found the content structure to be a bit confusing. I understand what they were trying to do with tying to the Body of Knowledge but for me it just seemed cumbersome. The CD contained one file and it was a 70 question practice exam (one that I later found online for free also). The handbook did end up helping me on exam day though as I was able to find a couple of key definitional points in there that weren't in the Primer.

When the primer (along with the Solutions handbook and test CD) came, I started going through each section one at a time. After each section, there is a set of blue pages that has practice questions related to that material. I found those questions to be very useful in testing knowledge of the content. The structure of the questions were also very similar to the ones found on the actual exam. I took about three weeks and two hours each day to walk through the entire primer and every blue page test question. The solution handbook explanations of the questions were very detailed and well-written. In the last 8-10 days before the exam, I started working through the test CD. The test CD has a ton more questions and you can do them either as simulated exams or topic by topic. I chose to do a bit of both. The questions and answers on the CD are actually explained very well also and they reference back to the primer with exact pages.

The test, as you probably know already, is open book and open notes. You can't bring in the blue page question sections so you have to rip those out of the primer. So what exactly did I bring with me on exam day?
  1. My notes - As I went through the blue page test questions and the CD questions, I jotted down notes on all the questions I got wrong - those notes helped me a lot in the exam.
  2. The CSSBB Primer - I ripped the appendices out of the back and laid them on the table to make them easier to reference during the exam. I probably went to the primer about fifteen times during the exam.
  3. The Kubiak and Benbow handbook - again, I think I referenced this twice during the test.
  4. Calculator - my TI-83 wasn't allowed so I brought an old Casio.
  5. Two bottles of water (long test!)
  6. Four #2 pencils (I only used one)
So on exam day, my strategy was to circle all my answers in the exam book and then to transfer them to the Scantron at the very end. This strategy nearly backfired on me because I was literally filling in my bubbles in the final minute of the exam. I probably cut it a bit closer than I should have! In comparison to the practice questions, I found the exam to be equal in difficulty on the non-statistics questions but a little easier on the ones where I actually had to bust out a calculator. I left the room feeling relatively confident that I passed the test although theres always that little voice in the back of your head that questions that confidence! The ASQ site says you typically get results in about 7-10 days - I took my test on a Saturday and got my results the following Friday so about 6 days. They send you an email first and then a packet comes in the mail with your shiny certificate. Anyways, I hope the story of my journey has helped you a bit - let me know if you have any questions!

Little's Law - Application in Lean

John Little
John Little - MIT Professor
I was recently teaching some value stream mapping concepts to some lean leaders and we were talking about the relationship between WIP and Lead Time. I shared with them the important concept of Little’s Law in relation to lean manufacturing. Little’s Law is most commonly used by service organizations to explore wait and response times. To paraphrase the Little’s Law Wikipedia page a bit, Little’s Law is that “Average # of customers in a stable system L is equal to average arrival rate λ multiplied by the average time a customer spends in the system W”. Relating this to a mathematical formula yields L = λW.

Well how does this relate to manufacturing and value streams? If we break down the statements in the definition and relate them to lean terms, then this relationship can be easily understood.

“Average # of customers in a stable system L”: In a service organization, Average # of customers in a stable system is essentially system WIP. In a value stream map that would be the parts in the system. A stable system in service would describe any time there isn’t a built in ramp up and ramp down like opening time and closing time perhaps. A stable system in value stream mapping would be similar – any time you are in normal production and not new production introduction. In our new formula we’ll define L = WIP

“Average arrival rate λ”: How often a customer walks into a service process is your arrival rate – well what would that be in lean? How often should parts arrive into a value stream – theoretically at the customer demand rate. The customer demand rate we will call throughput which will be a measure of units over time (e.g 2 parts per day, 1 part per week, etc). For our new formula, λ = T (throughput).

“Average time a customer spends in the system W”: For a service organization this is exactly what it sounds like – basically how long he/she waits for a response. If its McDonalds it’s the time from when the customer walks in to when they order food and leave the queue. Relating this back to manufacturing, if our customers are our WIP, then we can think about how long the WIP is in our system. This is of course leadtime! So for our new formula W = LT (leadtime)

So after breaking down Little’s Law we now have a modified formula for manufacturing and value streams: WIP = T x LT. So the inventory in your value stream is a function of throughput times the leadtime. This is a very powerful relationship to understand and can prove useful in many situations. My boss recently told me that my inventory needed to be no more than $1.2m on a critical value stream. By knowing the average value of a part in the value stream, I could tell that this represented approximately 30 pieces of WIP. I knew based on required customer demand that throughput was 2 per day. So:
Target WIP = 30 pieces
Throughput = 2 per day
Lead Time = ?
30 = 2 * LT
LT = 15 days
So based on this, I know my target leadtime is now 15 days. I know based on system actuals that my current leadtime is 18.5 days. Based on this knowledge I know how much of a leadtime improvement I need to make in order to achieve my bosse's targets. Little's Law is also useful in doing sanity checks while doing value stream mapping.
Any thoughts about Little's Law and experience applying it to manufacturing situations?

Healthcare Kamishibai - Kaiser

I was recently shown this neat little Kamishibai system in a Kaiser hospital. It shows all the things a new mother has to do after giving birth before going home. One side shows the necessary task and the other side shows a check mark indicating completion. This is a great example of lean applied in the healthcare sector.

The 5S's - Squid Salami Stopwatch, Sasquatch, Salmonella?

Love this video from Mark Graban's ( Youtube channel (link if the embedded doesn't work:

It really does hold true though. How many times have you walked through the office area of a factory and seen someone with their desk taped off and labels everywhere. I'm not saying office organization isn't important, but you can defnitely go too far. Lean in the office is about streamlining processes using tools like four-field mapping not about putting tape around pencils!

Have you ever seen office 5S gone wrong?