Page 325 - The Handbook for Quality Management a Complete Guide to Operational Excellence

312 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 313

product, for which customers are waiting, must wait for the remainder of
the batch to be processed.
The attempts to improve the departmental efficiency can create addi-
tional waste in the product value stream if the departmental efficiency
produces outcomes that do not serve the customer’s needs, or requires
inputs that increase costs for suppliers without adding value. While stan-
dardization of product components makes the individual processes more
efficient, this efficiency can come at the cost of customer value. Think
about the usual new car purchase experience. You buy “the package,”
which includes things you are paying for but do not need, because it is
more efficient for the production and delivery processes.
This batch-imposed waste is compounded if changes occur in design
or customer needs, as the work in progress (WIP) or final good invento-
ries require rework or become scrap. Note that these concepts are not
limited to manufacturing; businesses in the service sector can also gener-
ate waste. Think of the hamburgers cooked in advance, waiting for an
order, or checking account statements that come at the end of the month,
long after you could possibly prevent an overdraw.
Three common reasons we are “forced” to consider batches are:

1. When the cost of movement of material is significant
2. When the setup time dominates the per item cycle time
3. When the process is designed for multiple items

An example of the first case is shipping a batch of items, when the
customer really only wants one or a few items. The customer has to accept
inventory that they do not want, or may wait until they need several items
before placing an order. In lean, we try to reduce the space between sup-
plier and customer to reduce costs of movement. Offshore production
efficiencies may be less than perceived if true costs of consumer ship-
ments, consumers holding unused inventory, and consumers waiting for
delayed shipments are considered.
When processes are designed to produce multiple items, they may be
inefficient for small batches. Most modern kitchen ovens are designed
with large capacity to cook the turkey, the stuffing, and the potatoes at
the same time on Thanksgiving. But what if we want to bake cookies?
The boxes of prepared mixes are meant for dozens of cookies, as are the
ovens, even though we would often prefer to eat only a few freshly baked
cookies tonight, then a few freshly baked cookies tomorrow, and so on.
In manufacturing operations, the term monument refers to purchased
equipment that was designed for large capacity, and restricts our ability
to make lean small batches.
When setup time dominates, it’s natural to process as many items as
feasible to spread the setup costs across the batch. This was common in the

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