The Two Main Sources of Loss in
Since the beginning of their existence, Industrial
Engineers have always focused on two basic aspects of losses that not only reduce profits but can eventually
create the failure of enterprises.
processes:Caused mainly by the lack of objectivity, innovation, and associates’
empowerment. These account for the, sometimes ignored, waste of: Power, Labor, Materials, Plant Capacity,
Product, and a few other unnoticed losses.
Time:Caused by: tardiness, accidents, long setups, lack of training, poor
maintenance-reliability of equipment, and in most cases the lack of a true Best Practices culture. Down time increases the cost of
§ The good news:
These factors can all be measured, controlled, and
Even some of the most successful enterprises can
find opportunities to improve their processes and utilization of time.
Time awareness is usually not present in the minds
of everyone, as it should! Management should be a Role Model of Time Awareness!
In the past, it would suffice with having some
owner, executive individual, or group taking care of all the details… even when they would not really solve
all these adverse situations.
That bad trend has made, (and still makes), some
American Manufacturers, poor competitors. If we truly want to make American Manufacturing Great Again, it is
time to scrutinize every aspect of the operation. This is not possible for a person or small group. The total
performance of an enterprise requires the total participation of every associate, in whatever role of
responsibility they may be. When I talk about “Best Practices culture,” I am referring to bringing everyone
in an organization to optimal true levels of: knowledge, empowerment, responsibility, accountability, and
participation. No longer should companies look for the cheapest, but for the most capable people to run the
different aspects of their business. When that status is reached, each individual will be able to truly
contribute to the success of the purpose of their position and all others.
The required successful team will be made of
100% of people who have a thorough knowledge of the principle of operation, flow of the product, needs
and expectations of each other, and who are empowered to intervene and cooperate to the whole
operation. Operational Excellence gives each one the real time information and knowledge to detect
threats to the flow, and the authority to help prevent any delay, disruption, or
For some organizations this thought is still very
far from the reality that has governed their old style of management. The history is full of examples of
powerful companies that grew oblivious to the need of looking and searching outside of the box, and then
The future of America will require a switch of
gears here. Management styles must change to belong into the new meaning of true leadership.
Every associate (formerly called employee), will have to be thoroughly
capacitated to participate in the “new enterprise” with more skills and better attitudes all the
This can only be accomplished through continuous
education and training.
It is the only way to create the right Culture to Survive!
Continuous Process Improvement:
Everyone must have the processes constantly in
mind, and learn about the lean strategies and evolving technologies that can contribute to improve them all
the time. There is no room for “status quo” in the new management environment. Whatever has worked somewhat
efficiently for the organization until today, will need to be scrutinized and challenged tomorrow, or the
competitors will do it.
Right nowyou may have in front of you several opportunities
to improve the productivity of your plant. Do not miss this moment: Go visit one area of the plant or a
particular work station, and Challenge “the way it has always been done.” Those are the bad kind of
“traditions” that can bring companies to the grave. Ask everyone in the area: What could we do in this
operation to make it easier, or safer, or more productive?
You will be surprised at all the talent that might have been overlooked in the past.
About the “Time” factor:
Time is the most valuable resource that there is.
Everyone in the Team must become aware of this. It is the only resource that is never recoverable. Once it is
gone, it is gone for good!
The current common use of cellular phones and
atomic watches has brought to us the advantage of being updated up to the second and synchronized with the
rest of the World. Today there is no excuse to be late.
Even the most efficient individuals are useless, unless they are absolutely punctual. People who arrive late, even if for a minute, steal from the people who count on
them, the opportunity to perform well.
One General Manager at a petrochemical
plant learned this in one lesson. We had agreed on a time to meet with all the important people in the
factory in order to plan a strategy that could bring the company to a World Class competition level. When we
were about to start, some 20 people were present, but not the general manager. Some expressed surprise and
even fear when I decided to start the meeting on time. The general manager showed up about four minutes later
and had to discretely sneak into the room. Many other meetings took place the weeks after that, but he did
never come late again. We all need to learn lessons the first time. Not always is there a second
Focus on the process improvement and do it
dynamically, every week or even every day. Listen to opinions from everyone inside or even outside the work
station. Do not forget to assure people that you value their opinions and they are being taken into account
to improve the processes.
As for the Time factor, make sure people are
recognized in front of the others for their punctuality and their on-time deliveries. Punctuality will be a
profitable new attitude of the organization.
Your team will understand the culture by your
modeling. No need to teach a lesson, just act the lesson.