The hunger for profit can cause a lot of mistakes, since a lot of companies fail to consider the effects of a surplus, yet this is a vital part of a business process. In conclusion, companies have a huge advantage if they manage to stay efficient by simplifying their processes and being organized.
How the Japanese have focused on the muda
For many years, top Japanese companies have focused their cost administration efforts on the muda, which means clearing the surplus. It was a Japanese miracle that took over the world in the 1970s. They have practically introduced the JIT (Just In Time) concept in the business world. Plenty of western companies have tried to imitate them in order to be successful too. All in all, the general idea of analysing processes is to take business activities as a chain of events. The chain must be split into small parts, which are quite discreet and easy to identify.
Harley-Davidson is a great example. The company has encountered a series of difficulties during the 1970s. This is when the management has decided to pay a visit to a local Honda factory. The directors noticed a lot of differences in the presentation, production line, efficiency and inventory administration, They quickly decided to implement a new idea referred to as MAN (Materials As Needed). The production operations were restricted by reducing the amounts of resources for material administration. In other words, the American manufacturer has managed to reduce the amounts of materials received too early, as well as the early inventories. It may not be related to this story, but this is why I love Honda.
Caterpillar has been through a similar process. In the 1980s, the manufacturer was way in front of its competition – the Japanese producer Komatsu. However, Caterpillar has realized that Komatsu had a more efficient technological process. The factory has been immediately rearranged with a PWAF (Plant With A Factory) technique. In some situations, the entire production cycle time has been reduced with up to 80%.
How to improve your production by focusing on the muda
A few tips will work a very long way when trying to reduce the surplus.
- Analyse your own production process and look for the causes of inefficiency and losses. Ask the people leading these processes how they can be improved. They know better than you because they are in there. Discuss these aspects with your providers as well.
- Come up with a clear and easy to apply plan. You need to reduce the inefficient fields and replace them with better solutions by simplifying them.
- Find out what you want your success to look like. How do you plan to measure it? When can you evaluate the progress?
- Pay attention when introducing a new plan. Changes can have unexpected consequences. Random adjustments might be highly needed.