Home
 
Information
Sources

 
Training &
Seminars

 
About
Btt

 


 

 

Production Process Variability

 

 

This diagnosis was carried out for a major, process-based manufacturing company. At the time, it was concerned about the frustration of its customers with the company's poor delivery-date reliability. Not only were customers very unhappy, but for the company itself, the situation had led to high levels of unwanted inventory and very high costs as well as the damage to its customer service reputation.

The diagram below represents what appeared on the surface to be a plethora of disparate and unrelated problems across the organisation. Our analysis showed that all the apparently unrelated operational problems across many of the functions within the company could be traced back to a single cause. As you might expect, the overall situation was of course more complicated.

 


Business Reengineering Project
A significant-scale business reengineering project had been commissioned to design a new production facility for an important new product introduction.

It was essential that the new product could be delivered, when promised, to customer orders. Unfortunately, the root-cause analysis showed that delivery reliability was likely to share the same problems as existing production processes because they all shared the same fundamental problem.

IT Projects
Another dimension to the situation was the large number of IT projects that had been initiated with the intent of improving the company's delivery performance.

Reviewing the business cases for those projects, indicated that each was intended as a point-solution to a particular manifestation of the symptoms across different company departments - as illustrated in the diagram.

 

  Click on diagram for enlarged image

 


However, those sponsoring the projects and the business cases justifying them, had had not recognised the existence of a root, core problem. Their proposed solutions therefore had little chance of materially improving the situation. The projects would consume funds, resources and time, but unless they managed to suppress the symptoms of the underlying problem, would fail to meet their objectives or satisfy their business cases. Which was exactly the experience.

Under the Surface
By drilling down into the situation, it became evident that a single root cause was manifesting itself in many different  and apparently separate, problem areas. At the core of the situation was the variable success and unpredictability of a particular step in the manufacturing process.

The effects of the variability in this one step were leading to problems across the organisation in for example, Customer Services, in IT Systems, in Production Scheduling, in Materials Management, in Purchasing and ultimately in costs control.

In the diagram, the organisation's stated business goal areas are listed in the box in the bottom right hand corner. The colour codes show the links to those goal areas in the cause-and-effect diagram and show how the achievement of those goals is impeded by the influence of a core, root problem. The root problem is shown as 'Production Process Variability'. That is in this case, the uncertainty that any given production batch would result in usable product and further, unplanned production runs would be needed to achieve good product.

The Conflicts
The diagram shows how the effects of that core variability would lead to (for example) Poor Customer Delivery Date Reliability, which in turn led to angry calls by customers to the Customer Services department wanting to know where their goods were? Morale in Customer Services was desperately low because delivery date reliability was outside the control of the department yet maintaining good customer relationships was their responsibility.

The reputation of the IT organisation and their systems suffered because the perception was that the information in the production planning systems was not dependable. The accuracy of production plans and schedules information in the systems frequently did not agree with the way things had turned out in production. With the lack of confidence in the in information, system users realised there was little value in trying to maintain the information... and those running Production chose to work around the systems in order to do their jobs. A classic 'informal' system developed in parallel to the prescribed formal system; the informal system was the real means by which work got done.

Shared Root Causes
This organisation wanted to address a range of operational issues.  The diagram illustrates that many of the operational issues actually stemmed from a shared root cause. The diagram also suggest that simply focusing on the root cause would have been the most productive strategy and could have alleviated a range of critical problems across the organisation.

Carried out some years ago, the analysis unfortunately never reached a sufficiently senior level in the company for its message to be translated into appropriate action -  history has confirmed the analysis accuracy.

     
  Back to: Business Performance Improvement  
     

 

Copyright © Biness Transition Technologies Ltd 2004.  A

ll Rights Copyright © Business Transition Technologies Ltd 2006.  All Rights Reserved.