Overview of the hidden factory that every plant manager, CEO does not want anyone to see . But realist is the hidden factory exists everywhere

1. Prepared by Julian Kalac, P.Eng
Lean Six Sigma Master Black Belt
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Shipped on time and customer happy
We Made $$$$
ProductionMaterial
Ship order
CUSTOMER
• No Wasted Time
• No Wasted Money
• No Wasted Resources
• No Wasted Material
? ?
99%
Customer Quality

7. The truth
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The Hidden Factory
$50000-material
scrap costs
$350,000 transportation costs
Lost order
Wrong order shipped
ProductionMaterial
Ship order CUSTOMER
Hidden Factory

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Hidden Factory

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Hidden Factory

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Hidden Factory

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17. Value Added
Typically 95% of all lead time is non-value added
1. Overproduction
2. Waiting
3. Transportation
4. Non-Value Added Processing
5. Excess Inventory/Material
6. Defects
7. Excess Motion
8. Underutilized People
Non-Value Added
5%

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Lack of cross-functional training
Over relying on a select few while others
are Inadequately trained
 Operators are unable to rotate and help
each other out to balance the work-
load
High overtime, increased pressure stress

19. Process
Value Added
Adds value to
the output and
customer is
willing to pay
for.
Optimize
Non-Value Added
Does not add
value to the
output, and
customer isn’t
willing to pay
for.
Eliminate
Business-Value Added
Does not add value
to output, customer
will not pay for, but
is necessary.
(Legal, Safety, Etc.)
Minimize

20.  Cycle Time is dictated by the slowest (bottleneck)
operation in the cell.
40
min
20
min
25
min
15
min
30
min
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•What operation controls the cycle?
•How can you relieve the bottleneck?

21. •Maintain buffer in front of bottleneck
– (never starve the bottleneck !)
•Improve bottleneck operation
•Cross train on bottleneck
–Creates a visual work place
–Continuous Improvement
–Cell Support
–Balance activities / operations
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