Page 322 - The Handbook for Quality Management a Complete Guide to Operational Excellence

308 C o n t i n u o u s I m p r o v e m e n t A n a l y z e S t a g e 309

to order items that have been partially processed, but are not yet ready for
handoff to the customer.) The rationale is simple: new orders from customers
cannot be started until work (or items) in process is completed. Thus, the
activity on new items is stalled. An example from a service process is a
doctor’s waiting room. The patients are work in progress. New patients
aren’t serviced by the doctor until those that arrived earlier are completed.
When a process step receives items from a single step preceding it,
Little’s law is used to calculate the process lead time by multiplying the
number of items in process (in queue) by the time to complete each item.
For example, if it takes 2 hours on average to complete each purchase
order, and there are 10 purchase orders waiting in queue, then we need
10 times 2 equals 20 hours lead time for the process. In other words, we
can’t process any new orders until the 20-hour lead time has allowed the
existing work in process to be completed.
When the time to complete is excessive, potential sources of delay
include:

• Unnecessary process steps
• Errors requiring rework
• Non-optimal process settings
• Excessive movement of material or personnel
• Excessive wait and/or setup times
Reducing or eliminating non–value added cycle times often provides
the clearest and most direct methods to reduce cycle time and lead times
for better velocity. It’s not uncommon for more than 50 percent of a pro-
cess cycle time to consist of non–value added activities.
One of the first steps for any cycle time reduction project should be to
identify and eliminate the type 2 waste; the process steps that are simply
not necessary. These may include activities such as routine authorizations
or approvals, or information and data collection that is not necessary.
We can force a cycle time reduction through a reduction of errors
requiring rework. Practices for accomplishing this include standardiza-
tion of procedures, mistake-proofing, and improvement of process capa-
bility. Each of these is covered in Chap. 16. As errors requiring rework are
eliminated, the business value added inspections and approvals currently
necessary may also be reduced or eliminated.
Rather than simply reducing errors, the optimization tools allow the
process to operate at an improved level with respect to customer require-
ments. For example, the cycle time may be reduced to a point that goes
beyond the elimination of complaints to the level of customer delight. These
tools, discussed in Chap. 16, include designed experiments, response surface
analysis, and process simulations. For example, in a service process, we might
use these tools to optimize the number of trained personnel at each station
within the process, based on the mix of customers arriving at a given time.

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