In order to Lower Cost while Increasing Production you must understand that there are two key things that should be reevaluated throughout the manufacturing process. These two things can be the difference between having a successful manufacturing experience or losing money and potentially driving you out of business. It is important to know that no one single thing can completely change the efficiency of a manufacturing company but it is the combination of all the little things that can make the biggest difference so one can see the biggest return on their investment.
Lower one while raising the other
Value
This means anything that the customer is willing to pay. An example of this would be a basketball at a basketball manufacturing plant. People are willing to pay for a basketball and this give the basketball value.
Waste
This is anything that doesn’t give value to the product. This could be an excess material from the basketball that people aren’t willing to pay for.
There are 3 Main Types of Waste
The first is anything that does not add value to the product. This could be over production or things that are unnecessary. The second is lack of consistency. Many time machinery will have small adjustments occur over time which changes the final product. It is important to maintain a consistent workflow and continually monitor product lines to keep consistency. The third is unreasonable demand from resources and an example of this could be paying more for something when you could be getting it cheaper somewhere else.
Toyota found 7 which spelt out TIMWOOD
Transportation– Unnecessary moving of parts and people.
Inventory-Unnecessary storage of products.
Motion– Unnecessary moving within a process.
Waiting– People waiting for a process to be completed.
Over processing – Over processing from poor design.
Over production– Producing more than what is needed.
Defectives – Defaults in the product.
By understanding these different obstacles, one can further understand how to drive down the cost and increase production. Many companies lose money each day because they aren’t addressing these key problems and it is costing them more money than many would think.
