It looked like some sort of gigantic computerized claw, sitting on the side of the shop. Big and slightly menacing, it was the biggest and most expensive piece of gear there. The Speedking 3427 could take a customer order and turn it into a finished product in one shot, with no human intervention at all.
Weighing in at 6 tons and priced like a condo in California, it was the shop owner Jake’s pride and joy. It had also recently become his biggest problem.
Jake and I had been working on his sales. We had identified his ideal customer, and then we had taken steps to find more of them. We also looked at the market and adjusted his pricing to make him more competitive. It worked, and business was booming. Well not exactly.
In the past, this part of the shop ran like clockwork. Jake was thankful for the Speedking 3427 and how it had made things so easy. Now all of a sudden they were missing delivery dates, having quality problems and scrap rates had gone through the roof.
In the past, Jake’s company’s choke point, the limiting factor on his growth, was sales. He had eliminated that choke point but stumbled upon a valuable lesson. The choke point never goes away. It just moves. It had settled heavily in his shop, specifically on the Speedking 3427.
While the machine could do many production steps, it also had the longest cycle time of any process in the shop. That meant that the shop only ran as fast as it did. Nearly every order shipped had a product (or many products) produced by this machine.
We went out to take a look. It was chaos. Raw material and finished product was stacked around the 3427. The dispatcher was in a heated conversation with the operator about a missing line item on an order. Most importantly, the Speedking 3427 was sitting idle. Jake looked at me in frustration. “How do I get out of this?” he cried.
Jake needed to move his choke point again to increase his output and take advantage of his newfound sales. Step 1 of moving a choke point in production is making sure that the choke point is being utilized as much as possible. In order to get some Visibility into the issue I had Jonah, the operator pull a report from the machine showing its utilization. It was 24%. Out of a 10 hour day, it was operating for less than 2-1/2 hours.
“First things first,” I said, “We need to get that beast operating and producing product”. We watched the machine sit idle while Jonah packaged and labeled the product for shipping.
When the shop was not at capacity Jake had set things up to minimize the labor used on the machine. The operator was not only producing parts but also staging material and packaging finished product. It did wonders for his costs. Not so much for his throughput.
We pulled someone from another area of the shop and began training her on how to properly pack and label the product so it could be shipped. This freed up Jonah to produce more parts. This solution is an example of Step 2 of the process, which is to sacrifice other areas of the process to get more out of the choke point. Jake took resources from a non-chokepoint department and put them on the chokepoint. Sure enough, the utilization went up the very next day… to 45%. Progress, but not exactly crushing it. We had used our Visibility to improve our Process, but we still had a long way to go.
A visit to the shop floor showed the Speedking was sitting idle again. Only now there was another person standing around waiting to pack material as well. There was raw material stacked around the machine, waiting to be processed, and Jonah was staring at the computer.
“I am trying to figure out what to do next,” Jonah explained. “I know we need these 3 orders today, but I need to figure out where all the pieces are.” He pointed at a jumble of carts and pallets. Sometimes I don't even have what I need to complete the job and I have to go track it down” he complained.
“Let us clear this up for you,” I said. “Find a job you need to do today and get started.” I brought over the dispatcher and told her to find some paper and attach signs to all the raw material she needed to be processed today and to place a 1, 2, or 3 on the jobs in order of priority. “What about the rest of this stuff?” she asked. ‘We will worry about that tomorrow” I replied.
Having Jonah plan his work not only kept the Speedking idle, but it was also not a good use of his time. This highly skilled machinist was now a production planner, and not a very good one. In our tweaking of the Process, we of course found an Organization issue. The dispatcher had a good understanding of what was needed each day and could prioritize and label the work for Jonah, who could concentrate on running the Speedking.
Having the dispatcher plan the work was a band-aid solution, but the Speedking was now being used 80% of the time. This translated to a 3X improvement in output, and it was enough to get the shop back on schedule.
Getting the right skills in place to manage the planning took a bit longer and it of course exposed more Visibility, Process, and Organization issues. It was a big focus for Jake because of course now the chokepoint had moved again… to production planning. Jake had realized by now this would always be the case. Performance improvement means optimizing his chokepoint… until it moves.
There are 4 steps to optimizing a choke point, but they are not always needed, we will talk about the others in another post. The important thing is to chase the chokepoint as it is more important this just optimizing for optimization's sake.
“So I just have to keep chasing my chokepoint forever?” asked Jake. “Only if you want to improve,” I said.
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