‘You can’t change what you don’t acknowledge’

If you have already implemented Lean Six Sigma within your organisation either recently or some years back, then it’s best to understand how well you are doing.

We have developed an online questionnaire to help you determine which of the areas you have excelled in and which areas need more attention. Once complete the results will be emailed to you. What you will receive is a simple visual radar map that shows where your organisation should focus on so as to improve. For instance, the example below shows areas of improvement to be:

  1. Implementation of 5S.
  2. Implementation of a Continuous Improvement mindset.
  3. More visual controls required instead of written instructions.
  4. Lack of continuous flow therefore batching during production.

The online questionnaire is available here. Please feel free to use it and give us feedback by sending an email to info@deltablade.co.uk

Reality of Stock Outs in Business

This article briefly discusses the impact of stock outs in your business and how you can start to manage them based on the service level you want to offer your customers.

For any sales and marketing department within an organisation, stock outs are seen as a disaster. And there is good cause for that. Not only in terms of revenue loss but stock outs give loyal customers a chance to experience a competitor product. This may eventually cause them to switch away from their earlier choice.

However, moving back down the value chain, the supply chain department has to set it’s inventory levels to balance held up working capital, production output and storage space. And to do this, they must look to reduce costs and make the product price competitive. This almost always ends up in a heated discussion between production and sales blaming the other for stock outs.

To resolve this, you need to define the correct service level for which you will supply the product. A 99% service level means that there is a 1% chance of stock out. But this comes at a cost. Inventory costs will rise as you strive to meet that service level.  However, depending on market conditions, most companies strive for a 97% service level i.e. 3% chance of stock out.

Once the service level is defined, we can work backwards looking at the variation of both delivery lead time and the customer demand. This allows production to set the following quantities:

  1. Maximum Stock Level
  2. Re-order Level/Point
  3. Safety Stock Level
  4. Minimum Stock Level

The benefits of this analysis include:

  1. Optimising your inventory levels.
  2. Confidence that your re-order point is correctly set.
  3. Ensure a good understanding between the trade-offs i.e.  inventory costs vs. revenue loss
  4. Reduced friction between sales and production.

Are you interested in understanding more about this topic and how we can help you set the right inventory levels?

Drop us an email: info@deltablade.co.uk

Facility Layout using Lean

This articles discusses the benefits of warehouse design using simple lean tools and techniques. It is important before you have built your facility to have thought through the process and potential areas of cost increase.

The example below is taken from a facility in Holland. It shows several cross-over points and a disconnect between the different spaces. This leads to confusion, an increase in costs, inability to deliver the product on time and poor expansion planning.

https://www.business-improvement.eu/lean/Oce_layout_voor.jpg

Applying lean tools and techniques during the design process can help get the most out of the space available. In recent weeks, we have been doing just that for a facility in Nairobi. By breaking down the manufacturing processes, we were able to identify process requirements, storage requirements, uncover organisational constraints and reduce non-value adding activities (waste).

Here are some of the benefits of doing this:

  1. Good understanding of dependencies in production process
  2. Most efficient use of space.
  3. Better planning to allow for expansion
  4. Cost effective layout of the facility by reduction of operating costs.
  5. Easy access and protection of materials and equipment.
  6. Improved production floor safety.
  7. Improved Ergonomics of the workplace.

The typical forms of waste to look out for include:

Transport

Transportation of raw materials, work in progress and finished goods costs money. Cost of the forklift, the driver’s salary and maintenance costs are just some of the savings when transportation is reduced. Furthermore, reducing excessive transportation reduces safety risks which could have led to a higher costs. 

Inventory Build-Up

Inventory of materials is another waste generating form commonly seen in factories. Many factories because of poor layouts have to ensure that large piles of raw materials or work-in-progress are placed close to the machines to account for forklift breakdowns or shared resources. Subsequently, this leads to large piles of finished goods at the machine output. Therefore, when planning a facility look to reduce material build up given the constraints like night shift, security issues etc.

Motion

Excessive motion of your staff or machines is another form of waste. This could be excessive walking, bending or stretching. It also creates room for error during handling of either work in progress or finished goods. In some cases, this may have a direct impact in the defect rate at  your facility. Limiting motion in the factory will also influence how you resource your production and manage the communication between operators.

Waiting

Long waiting times for work-in-progress or finished goods has a direct impact on the ability for your facility to meet customer delivery times. For example, having only one lift to serve different floors creates waiting as it take time to load, lift and off-load. By introducing a continuous flow system in the facility, this will drastically reduce waiting time.

These are just a few of the examples of how you can improve layouts.

If you are looking to save costs, plan for expansion and get it right before you have set everything in stone? Drop us an email at info@deltablade.co.uk

Creating Capacity for Growth

When challenged with growth, some organisations tend to find themselves in a situation where they don’t really have the capacity to deliver. This articles discusses some of the few things an organisation can start to think about to create the space to grow.

Reducing the Product Options

This may sound strange but to a certain extent it may be applicable to your organisation. Many products these days are packed with features and options that manufacturers believe really differentiate their product. These features are additional to the core features of the product. Understanding what your customer really wants and removing some additional features creates space in the organisation.

Take a look at this world famous example, where World Foods was selling peeled oranges in plastic containers. Neglecting the fact that oranges already come with a natural container that keeps them fresh and juicy.

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Secondly, you may want to reduce producing things that don’t deliver a business outcome or don’t align to your business strategy. These could be products or services that may have created you profit in the past but are just not applicable to current day demand.

Improve the Way You Do Things

From a lean perspective, this is really about focusing on value adding activities and reducing non-value adding processes. We have seen organisations that have several processes that are duplicated in different ways but still create the same result. You must spend time to identify these and immediately put a stop to them.

We have also seen organisations that have several different ways of doing the same processes in a business. This is where standardisation and operating procedures must be used.

Secondly, think about reducing the number of unnecessary sign-offs and controls in your business. There are many managers that throw unnecessary checks on a process to ensure accountability.

For example: an invoice check in an organisation we reviewed had to undergo six different checks before payout. When we interviewed the people checking the invoice, 4 out of 6 had no data to verify the goods and the amounts. They relied purely on the last person to have done his/her work properly.

Improve Efficiency in the Business

Work levelling is an important to creating capacity in your business. In lean production, Heijunka, removal of fluctuations in the production can be directly applied to your business process. To ensure this, everybody must maintain a good tempo of work within the business. Having people too busy while others are not, is a clear sign that you must address this. Sometimes this may be down to skills gap but smaller tasks can still be undertaken by junior staff.

Secondly,  you want to limit very high peaks of work during some period and not having anything to do during the next. This is a big waste in the organisation. Resourcing correctly for the peak period also reduces stress on your staff. Thereafter maintaining other avenues of work during the low periods allows full utilisation of your resources.

Having a structured approach to these three key points is vital to you being able to create capacity for growth within your business. By mapping your processes in the organisation, assigning process owners and setting KPIs for each process allows you to have insight in where the capacity lies and  when you can take advantage of it.

If you would like to hear more or continue this conversation, please send an email to  info@deltablade.co.uk

Going Beyond to GOAL-3P

Lean dates back some 100 years starting from production of the Ford Model T. During the production, Henry Ford introduced the conveyor belt which significantly reduced waste to create each unit in just 93 mins. Some years later, Motorola’s roll out of the Six Sigma approach in the 80’s reached for 3.4 defects per million.

Today,  some companies have already invested huge sums of money in lean and have only just seen a fraction of the benefits come through. Why?

Over the last few months, we have been spending time discussing with our clients about lean and  specifically their needs. We have interacted with more than 50 different companies and we are now in a stronger position to better serve them. 

Lean Projects despite the investment and roll out are still failing. There a number of reasons for this like: no leadership, no data, focusing on tools not mindset, resolving symptoms not root causes etc.

Today, we are introducing a new offering to the Kenyan market that we are calling:

Goal -3P is a part of our consulting offering that goes beyond the standard quality, cost and lead time related issues. It focuses more on Process, People and Performance.

Why is it important to focus on these three elements?

Process: Understanding your company’s processes allows you to identify the vulnerabilities in the business. Where are your bottlenecks and where can you start to remove inefficiencies? Good processes are also important to ensure continuity of the organisation especially if you are aiming to be around in the next 100 years.

People: Linked to the processes, many growing organisations still don’t know who is doing what and when. And when issues arise they all get escalated right to the top. There have been many situations where there is a lack of accountability for the process and  the decisions made. For growing companies, it is therefore important to define reporting lines and the responsibilities for each employee.

Performance: How do you know you are doing well in your business? Very few companies in Kenya actually set KPIs to help make decisions and drive the business in the strategic direction. Planning is also important in maximising your profits. We have seen many companies run on short term planning unable to capitalise from long term deals.

Delta Blade Consultants has now specialists from each field, allowing us to come in and provide companies with a one-stop solution.

Why choose to work with us? We provide cost effective solutions and expertise catered to your business.

Is this of interest to you? Get in contact with us to understand more of what we can do for your organisation.  Send us an email: info@deltablade.co.uk