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Standardization and Pull System: basic methods for the improvement of labour productivity and the developmen...t
Letsky Vladimir Pavlovich, Director for production development, Rimera Group E-mail: vladimir.letskiy@rimera.com
Standardization and Pull System: basic methods for the improvement of labour productivity and the development of production system
Abstract: The principal criteria for the availability of operational system is repeatedness of operations, i. e. standards or standardized work. The article considers company’s transition from a manageable chaos to a pull-out system with the stages of its implementation.
Keywords: standardized work, pull-out system, production system, kaidzen.
Introduction
With an increasing competition and a permanent increase in client demand machine-building companies are forced to constantly improve organization of work Production system development puts this process in place and, in end aims to meet consumer satisfaction and enhance efficiency and results business processes. Standardized work creates a background for production system development that motivates the process of constant improvement. Currently we see the scarcity of both theoretical basis and practices in standardization of machine-building enterprises. Another crucial issue to be discussed is the implementation of pull-out system. A number of isolated experiential works are hardly built up in a completed rigorous concept. In this connection it is essential to look on standardized work and pull-out system as constituent elements that provides efficiency of production system.
Standardized work
To achieve goals it is crucial for a company to be able to solve problems as they incentivize improvements. The most difficult issue to be solved is the lack of an algorithm of actions that will be shared by both company’s leaders and operators. In case of a leader we can hear an argument for non-standardized handling. Eventually it implies that typical problems are approached with non-standardized solutions, however it prevents company’s management from a comprehensive standard search ofsolutions. Above all, interim partial decisions regularly pull the problems out to another developmental level. In contrast, effective problem-solving will help to break down this “vicious circle" and find root causes and standardized decision to the problem.
With an operator work, standard sequence of tasks should be observed in each cycle. That’s the standard sequence of operations which shows up whether lean production is put I place in a company. Standardization implies precise sequence of operations made by a worker in a single timeline so as to produce quality goods in an efficient way.
Based on a suggested approach the most efficient solution to a problem is withheld in a standard fashion. Disappointedly few publications on standardization of handling problems can be found [1; 2], whereas standardized operations lay a basis for permanent improvements.
As a result of our survey we suggest the sequence of operations that can be implemented into companies practices and allow effective problem-solving and goal-achieving.
Stage I. Target group training
Objective: to present the information of production
types and standardized operations. As a result the group is aware of the role and content of standardized operations in production.
Stage II. Set a task for the group
Content: to appoint each group member to a particular operation, arrangements (handing out stopwatches, training), and filling out “Time estimation check-list" Timing of a single operation is most important and required condition for standardization, for we have to be client-oriented to meet their requirements.
Stage III. Set up a basis for standardization
Fieldwork (in a workshop), timing of each allocated between group members operations, time check of conveyor (trucker, front-end pickup-) cycle, filling out “Observation” sheet (form) and “Standardized worksheet"
Importantly, this stage is characterized by timing without identifying elements (cycle rotations, cycle time fluctuations etc.). This allows to identify larger problems at workplaces, focus on them and find solutions.
On top of this we measure elements in such sequence as an operator do and compare the sequence with that in approved technologic list. Since the sequence of operator’s action cannot always match the technologic list, it is seen as a problem to be solved.
Stage IV. Error analysis. Supplies timing. Supermarkets
The fourth stage is for error analysis based on the revision of forms filled out at the previous stage. Then, operators are to fill out “Observation" form and “Standardized work" list. Fieldwork, timing of operations, timing of supplies, supermarket locations.
Stage V. Fill out “Micromanagement (handling) observation" sheet
In contrast to the third stage, this stage deals with identifying losses at workplace, in particular, double-tapped parts; rotations in a cycle; time losses, connected with workplace organization; cycle idle time (stand-by time), a division between cyclic and periodic work of an operator.
To identify losses it is necessary to define types of work that an operator fulfills daily: value-added work or losses. Value-added work takes insignificant time, ideally, an operator should make only significant work.
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Yet it is important to organize workplace so as prevent arms from over pressure by measuring it and to allocate the load proportionally for both left and right hands. Alongside with building up and monitoring the sequence and it is advisable to undertake a set of steps to arrange parallel performance to substantially improve labour productivity.
Stage VI. Measuring a number of operators and supportive staff size
Fill out “Supervision of regular work” form. “Integrated card of standardized work”, “Balanced work scorecard”, measuring staff size (operators, foremen, supply handlers, truckers).
Stage VII. Kaidzen offer
Fill out “Improvements checklist” and “Kaidzen offer”, generation and implementation of kaidzen-offers.
Stage VIII. Re- timing
Re-timing and refilling out in the forms from the previous stages.
Stage IX. Designing standard
This stage is made up of standardizing operations and standards for a trucker in regard with safety, quality, tools etc. This stage results in a completed, officially approved and administered standards, workplace visualization.
Stage X. Summarizing and finalizing Final presentation has a strong focus on achievements. Positive results disseminations, and informing those
concerned. That helps to provide company’s synergy effect. This stage presents standards at workplace, sample ground, potential for other divisions, kaidzen, efficiency and productivity improvements.
Push system
The initial state in most production companies is manageable chaos. Why chaos? Because it is unclear what is happening as there is not enough information and this creates difficulty in management decision-making and in coordinating activities. Why do we call this as “manageable chaos? It is because that plan is magically fulfilled by the end of the month. Manageable has several characteristics:
1. There is not enough space to store parts.
2. Parts, materials and containers are located chaotically.
3. Materials are not marked, it is difficult to identify parts.
4. Inter-operational control.
5. Time losses; parts are under waiting control.
6. Lack of space at workplaces to temporarily store uncompleted production.
7. Problems with containers. It is not clear what kind of containers are required and how spacious they are.
If we can observe these a company should transfer to more efficient management system.
Push system which is traditional for mass production, implies task production, no matter whether a product is required or not (fig. 1).
Fig 1. Push system
Push system has the following specifics:
1. The product is pushed out further and stored as uncompleted to the next operation.
2. Complex, multi-leveled system of planning dispatching, and transporting.
3. The storage of uncompleted production is increasing.
4. Current assets are “frozen”
5. Money is unlikely to be reimbursed in case of client’ refusal.
6. The information, whether product is processed at the next stage is ignored. Or what purpose the workplace is used for, whether it is ready for processing the product or to fulfill another task.
Pull system implies production in the quantities, required by internal or external clients. In this case it makes sense to decrease supplies so as to identify and solve problems. To solve the problem through over exceeding supplies is increasingly destructive for a company and its administration. Pull system allows minimizing supplies level and provides production with really required tools (fig. 2).
Pull system has the following features:
1. The work is made only in case of receiving orders with the follow-up operation.
2. Works is discontinued if there are no orders.
3. Supplies from uncompleted production are restricted.
Consider different types of pull out system illustrated on
Figure 3.
In “A” type goods from supplier workplace are transferred to buyer workplace through supermarkets of a supplier and a buyer. In “B” type production is transferred from a supplier to a buyer through supplier’s supermarket. In “C” type production is transferred from supplier directly to buyer’s workplace (fig. 4). Work practice shows that “D” type is most usable as it represents combination of all three types in pull out system. It embraces “A”, “B”, “C” types according to a production rate and level of pull out implementation.
“A”, “B” and “C” pull systems can be combined and applied to create mixed system. The use of mixed system makes a point in the case of 60/30/10 rule, Tthat is — a small amount of components (approximately 10 %) makes the
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Standardization and Pull System: basic methods for the improvement of labour productivity and the developmen...t
biggest part (approximately 60 % and 30) %) of production output per day. The analysis is occasionally carried out so as to group components according to their amounts: “A” type (high volume),”B” (medium volume), “C” (low volume and few orders). Such combination allows to selectively apply
both A, B and C types. Above all an enterprise will take the advantages of each system, even though the demand is fluctuating.
Material supplies are fulfilled within fixed time and fixed amounts.
Fig. 2. Pull system
Fig. 3. Types of pull system. Supplier workplace (WP (S)), Supplier supermarket (SM (S)), Buyer workplace (WP (B)), Buyer supermarket (SM (B))
Fig. 4. Pull types. Type “C”
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Implementation stages of pull out system:
1. Stabilize the process (equipment, quality, well-trained staff, and assembled parts).
2. Select materials that would work within pull out system and what principle is applicable (fixed amount or fixed time).
3. Estimate trucker cycle time (fixed amount of supplies) or fixed cycle of supplies — schedule of trucker runs (fixed time of supplies).
4. Estimate material supplies according to estimation standards.
5. Design the model of material supplies based on fixed amount and fixed time principles.
6. Design and make containers, slides, kanbans, storage stands and devices based on FIFO system.
7. Train the staff into pull out system.
8. Start working in-line with materials supplies.
How to overcome resistance to change?
Any change in enterprise may cause a resistance from personnel, managers of different levels, e. g. a transition from chaos to pull out system. This is a natural response since the processes of production system change requires a lot of personal efforts and self-development. In this connection each stage of the suggested methodology engages explaining and clarifying, training and constant communications with personnel so that no one is left behind with their work problems. The philosophy of transformation that we develop in a company lay a ground for this change. As to operator’s work our task is to persuade a person that we can work more productive with less exhaustion. This objective is approached through by changing a stereotype of “traditional and conventional is more convenient”, we should illustrate that conventional way of operation performance may not always be most comfortable and beneficial whereas we may find most efficient way of operations performance that later will have to be standardized. Thus we take an operator to a
new way of doing things that may be unusual but comfortable that eventually bring a person to constant improvement of his/her performance. Gradually an operator starts to be aware of an advantage of the approach and is actively engaged in transformation process.
Results of the suggested approach
In compliance with the suggested methodology “Rimera” corporation implemented a number of projects aiming to company’s developmental goals. See the example of Izhneft-emash” plc (table 1) as a ground for the projects implemented by “Rimera” “Sukhar” project aimed to enhance technological efficiency and minimize costs. In one of the workshops work cell was designed to decrease labour intensity and improve productivity twice as much. As a result of the project implementation storage was decreased in approximately four times as much; a number of staff was reduced three times as much, (Bit should be noted that the staff were not made redundant but retrained for another job).
Another project was implemented in a reducer gears assembly section. It resulted in improvement in labour conditions; out of 7 assembly stocks there were two left providing more space for set supplies. Another advantage was that there was a space for parts visualization; productivity was increased as two and half times much.
One more project was realized in the section of clutch production. The outcomes of the project were seen in production cell development it allowed cost decrease and productivity increase in approximately three times.
Some outcomes of the projects realized in “Izhneftemash” plc are that the company managed to enhance production processes and increase labour productivity by 37.7 % for one year.
Thus standardized work enhance management effectiveness in machine-building enterprises and, consequently, growth of labour productivity. In addition, pull out system is one of the constituent elements to providing efficient development of production system.
Table 1. - Project efficiency indicators
indicators was now
“Sukhar” project
Supplies, items. 1080 285
Distance 175 m. 3 m.
Number 3 persons 1 person
Timing 15.7 hours 4.1 hours
Reducer assembly
Number of assembly stocks 7 2
Number of operators 4 3
Uncompleted production (reducers), items 7 2
Timing, min 180 90
Operators workload, % 50 90
Clutch production
Capacity, items 450 960
Average monthly issues, items. 24.5 50.6
Direct costs, rubles 204.4 194.2
Average monthly salary of workers, rubles 30 154 37 678
Number, persons 24 18
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Industrial dominance: analysis of influence on small companies in Russia
References:
1. Luister Т. Lean production: from words to actions Series: Lean production, Standards and quality, - 2009.
2. Standardized work. Series: Production without losses. Institute of complex strategic work, - 2007.
Pyatkov Maxim Viktorovich, Omsk State University, postgraduate student, Department of International Business E-mail: pmv0990@gmail.com
Industrial dominance: analysis of influence on small companies in Russia
Abstract: Russian economy is characterized by the presence of a number of single-industry towns, where one or several companies influence the development of other firms. The results of author’s research on measuring the influence of industrial dominance are presented. It is found that while dominance has an impact on labour and services availability in the region but not on the availability of capital.
Keywords: single-industry town, industrial dominance, agglomeration effects.
One of modern economy’s characteristics of Russia (and the CIS countries as a whole) has become the existence of a large number of single-industry towns — settlements, in which the driver of economic activity appears to be only one (major) company. Some Russian scientists note that one-industry town — is specific to the formation of post-Soviet countries [1], but the analysis of foreign (outside CIS) research shows that conceptually similar questions have also been studied — in particular, through the study of the dominant firm’ impact on the industry and the region’s economy.
The founder of the “dominance" analysis in the economy can be considered B. Chinitz — US scientist engaged in research of US cities in the 1960s. The analysis of Pittsburgh allowed Chinitz to characterize the influence of the industrial dominance — companies whose presence in the region influences the development of other firms [3]. Based on studies of Pittsburgh, he gave a description of the main characteristics of the regional economy with a dominant company:
1. Tendencies to entrepreneurship activity are low, due to the lack of positive examples of creating your own business, compared to availability to achieve career growth within the existing (large) companies.
2. Access to capital for new companies is also limited: on the one hand, investors tend to invest in the industry already presented in the region; on the other hand — the dominant companies’ investments usually directed to the maintenance and development of its own integrated production chains.
3. Labour resources have little motivation to mobility, because a large company is able to keep a relatively higher level of pay. Furthermore, many businesses exhibit significant restriction of working conditions, which eliminates part of the population of economic processes (e. g., metalworking industry and related businesses usually hire men and vice versa).
4. Infrastructure attractiveness of the region is also low, due to the vertical integration of dominant companies. In addition, a great impact on the region’s attractiveness may have its environmental conditions (eg, air or water pollution).
The above leads to the goal made by the author of research: the need to understand how the presence of a dominant enterprise in the region’s industry impacts the economic potential of small businesses operating in similar conditions.
Measuring the impact of industrial dominance to the agglomeration effects in the industry
Firstly, the analysis of scientific literature devoted to the study of the impact of industrial dominance in the individual effects of agglomeration was performed. The results of the analysis can be divided into three categories, corresponding to the three A. Marshall agglomeration effects:
The first of the three ways in which industrial dominance may have an impact on economic activity is a reduction of risk-behaving activity. B. Chinitz suggested that the desire to open new business, taking the risk is reduced in the presence of large, profitable companies that offer stable attractive working conditions [3].
Subsequent researchers have extended this hypothesis. People working in large corporations have skills that are suitable for a particular type of activity and are less likely to acquire skills related to entrepreneurial activity [11]. Large firms are more stable, offer greater compensation package and additional bonuses, reducing the desire for a change of career path [8].
Industrial dominance also has an impact on the occurrence of agglomeration effects due to access to specialized assets and services. Region dominated by one or several companies is usually limited to the ability to produce a wide range of goods and services; also, large firms are usually vertically
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