Understanding the Whole Picture: Monitoring Business Processes
This past week I noticed a post in one of the groups I follow on LinkedIn, which is about tracking jobs on the shop floor. This is a highly controversial topic, with pros and cons regarding a number of aspects of the issue. Of course every manufacturer wants to monitor the status of production, manage inventory, and collect cost data. However there is a price tag for everything, and many approaches actually run counter to the primary objective, which should be maximizing productivity.
Comments on this post highlight some of the contradictions. They talked about how difficult it is to get workers to correctly record their hours and other production metrics. That is itself is a reflection of a conflict that managers must take into account. On the one hand, workers understand that their main goal is production, so when they are asked to stop their work to record something, that in itself contradicts that main goal.
Several posts also mentioned the importance of continuous process improvement. Most facilities are always changing machinery, flow, and other aspects of the production process. Also in many make-to-order factories, the products and lot sizes are almost never the same. Therefore, detailed historical data is often out of synch with current production, so what is the point of trying to collect every detail? Simpler and lower cost tracking schemes monitor work center throughput and material usage, which is far less intrusive and results in more meaningful metrics.
Management is often too focused on direct labor in the first place, when in fact the overall throughput is the result of many other factors. For example, to keep work flowing smoothly requires perfect synchronization of materials, input from prior processes, available machine time, tooling, output space, and many other variables all timed to an accurate schedule. Any of these factors can delay the process, and most have nothing to do with the direct worker. Often the best place to start improving production throughput is in the front office, where the planning and support activities begin. If that work is not done well, then measuring direct labor is of little value.