Are we Efficient and Effective?

Are we really efficient and effective?

Yes, you got it right, you can be efficient but not effective, what I mean is that you can do the things right, which means being efficient, but are those the right things to do?! Which means being effective.

Got you little messed up?! .

Lets take a look on a current example, Nokia is a great mobile phones manufacturer, one of the pioneers in this field, but the sales are declining and actually it was acquired by Microsoft lately, oppositely we got companies like, Apple, LG, HTC, Samsung which never considered as pioneers in this industry or market leaders but today they are fast growing in the market and consumers eager for their products, why?!

The answer is simple Nokias products are great, but the customers want apps. And in this field Nokia considered to be very moderate.

Each time that we are advancing toward an activity (even at our home) we must to ask ourselves three basic questions:

• Is it really important for our customer?

We can prepare a great Sushi but our child wants a scrambled egg.

• Are we physically changing the product or service?

We have to go wait until the pan warms up

• Did we managed to produce it right from our first effort?

If we burnt the eggs, we will be in serious trouble

If the answer for this 3 questions is positive than we have a winner, and this is the right thing we are doing.

But if the question for one of this answers is negative than the situation is different and it means we are actually producing waste, what an awful word, and in Japanese it even sounds worse than that, it is called

Muda - 無駄.

Lets take a closer look on set-ups:

• Is it really important for our customer? Essential, important for the process but much less for our customer, so do we as customers of food, transportation, etc., we are not willing to pay for set-ups.

• Are we changing the product during the set-up? I wouldn’t agree on that either.

• Do we have right from our first effort? Sometimes yes and sometimes no, from the customers point of view there is no sometimes, So for us as customers, we are not willing to pay for scrap, error or deviation, the company has to absorb this cost.

So actually the set-up process is waste, maybe an essential one, but it has to be reduced, improved or eliminated (if possible).

So what is really the basis of this subject? What is the noise is all about?

Set-up time has a strong influence on a term called Availability.

Availability is the actual time from the total potential time that we can operate our equipment (in a known and defined time frame).

That is, if we will manage to reduce the set-up time or reduce down time our availability will go higher, and that will lead to improved throughput, reduced customer waiting time or in other words shorter lead times, we will be able to produce smaller batches, the long term result would be lower or zero inventory handling costs, we will also be much more flexible which will allow us faster response time to orders.

There are two kinds of activities in a set up process,

Internal Activities – Those are activities done when the machine is not operating or not producing any good parts, which means time consuming activity that not contributes to the actual purpose.

On the other hand we got

External Activities – Those activities are done in parallel to the machine operation as preparation to manufacturing of the next item, those operations do not interfere in the machine process time, so must aim toward converting as many as possible internal activities to external activities.

For example on the shop floor we must prepare in advanced (and in parallel to the current machine operation) all the required tools and equipment in reach and in the rational way for the next machine set-up, by doing so we will save valuable time.

In one of the companies where we conducted a set-up reduction project we managed to reduce the set-up time by more than 50% (as seen in table and chart below) , we managed to do it by reducing movement, transportation and converting internal to external activities and of course reducing those activities either.

So strive towards effectiveness but of course without losing the efficiency.