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Why Would a Company Do Time Studies That Record Only "Value Added Time?"

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Viewing 16 posts - 1 through 16 (of 16 total)
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  • #53975

    Martin K. Hutchison
    Participant

    The facility that I work for ships about $50M of sheet metal finished goods per year, and is one of a number of facilities that are part of a multi-billion dollar company. When they do time studies here, if it takes 45 minutes to do a setup, 30 seconds to load a part, 30 seconds to weld a part, 30 seconds to unload the part, they put a 30 second time in the MRP system. So then costing and scheduling in the MRP system all say 30 seconds. When the ME’s look to do cost reduction efforts, they have to impact the 30 seconds that are on the books, not the other 46 minutes. If someone added 10 minutes to the setup, there is no penalty, although “real” cost savings are generally considered to be in terms of manpower reduction-so if you get rid of a material handler which may cause the setup time to increase to an hour because the machine operator has to load his own coil, it is seen in the MRP system and by the execs as a win. Where is the upside, and how does this happen?

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    #192401

    Stan Mikel
    Member

    It sounds to me like your company is run by stupid people. How else to explain?

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    #192406

    MBBinWI
    Participant

    Clearly being run by stupid people. Somebody was told that only VA time was important, and so they disregard all the waste, not realizing that it is real.

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    #192408

    Straydog
    Guest

    In general managers aren’t stupid. They just have insufficient data. MRP and other accounting systems are not configured for all the details. Doing so is just too much work. You need to show management the details they’re missing. I’ve found this to work: Do a TVM (Time Value Map) of the process. This clearly illustrates how much of the start-to-finish time is value added and how much is waste. Calculate the VATR (Value Added Time Ratio) — Value-added time divided by start-to-finish time. Show how a change in process affects this. Say that by doing this you discovered something that was hidden in the official numbers.

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    #192413

    MBBinWI
    Participant

    @Straydog – Sorry, Dog. I’ve seen too many in mgmt that truly are stupid.

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    #192415

    Gary Cone
    Participant

    @Straydog I have to agree with my friend MBBinWI. It’s like the thing they tell you in all sorts of training – “there are no stupid questions”.

    There are, you are just not supposed to judge them in an environment of openness and trust.

    A top down, authoritarian, no real knowledge of the job type situation being described here? There are really, really uninformed questions and demands. Some people would refer to that as stupid..

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    #192419

    Mike Carnell
    Participant

    @martinkh Are you sure about them quoting only on VA? If that were true then they would be underbidding everything and losing money on all their jobs. In a a $50MM company that shows up pretty quickly. Do they have all the NVA rolled into some type of formula?

    I do detailed bids on new parts into my factory but I also have a regression equation that I use. I plot it into a fitted line plot and if it is outside the 95% Prediction limits we go back and see why it doesn’t fit. It would be easy enough to have someone assume we are bidding from a graph.

    @garyacone The classroom is open and trust but we seriously owe people the coaching that lets them know that they have the proclivity to ask stupid questions. Eventually it can be a career limiting skill.

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    #192426

    MBBinWI
    Participant

    @Mike-Carnell – there’s a difference between a naive question and a stupid question. A naive question is one like: “How are we going to utilize our freed-up capacity?” A stupid question is one such as: “How long do we need to wait to fire the excess people that we have, now that we’ve fixed our problems?”

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    #192429

    Gary Cone
    Participant

    @Mike-Carnell I agree with the coaching, I just refrain from giving a dunce cap and sitting them in the corner for the duration of the meeting.

    It was certainly more fun before.

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    #192431

    Martin K. Hutchison
    Participant

    We have the OK to start changing it, but apparently some other divisions have products that have almost no setup time and continuous runs, so they just used the same model and no accounting clue. My manager keeps focusing on “don’t worry about it, just find solutions that don’t involve spending money”, since he knows I am trying to find costing data for justification purposes.

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    #192442

    Roger Ellis
    Participant

    In the classroom I do this exercise – I pull two dollar bills out of my pocket and hold one in each hand. I characterize the one in my right hand as saved by improving value added time, and the one in my left hand as saved by improving non-value added time. I then ask students which dollar they want. Often someone will speak up and say they want to save the non-value added dollar. The more astute will say that they want to save both of the dollars. Money is money – it doesn’t matter how it was saved. Time is time – it does not tick off on the clock as value added or non-value added. The important issue to focus on is not how much time is value added (or non-value added). The important thing to focus on is saving money by either increasing throughput (in your case how many sheet metal pieces are produced), decreasing operating expense (by shortening up the changeover time), or decreasing inventory and investment (which will happen if the setup time is shorter). Mark Twain said that there is nothing so common as the lack of common sense, and the folks in your organization are proving this once again. Roger Ellis, Master Black Belt

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    #192443

    Stan Mikel
    Member

    @mellophone I do a similar exercise with my students. I use real data from stogy old companies like GM. The data is of VA time, NVA time that is currently necessary, and all other NVA time. The all other NVA time is always >10x the other two combined. I ask my students which they would work on. If you want to do it with dollars, the VA and currently needed bucket is a one and the all other NVA is a 20.

    Cute exercise but meaningless. We teach people leverage.

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    #192454

    Mike Carnell
    Participant

    @mellophone interesting story but what you are doing in class is cute but has nothing to do with the question.

    @martinkh why would you care what the other divisions are doing.

    @MBBinWI and @Garyacone In virtually every class I have ever taught there is always a person who asks stupid questions. You know it, I know it and we know that the class knows it because you can see them roll their eyes when that person asks a question. You are doing them a favor when you inform them they have a proclivity to ask stupid questions. There is an instructor out there who you both know who has an interesting comeback I love – He gets a question on a topic previously covered and says “That is a roundabout” Typical response “what is a roundabout” his response “we covered that round about and hour ago.” Great way to deliver a message.

    Somewhere we got off track and decided we need to treat people like Faberge Eggs so that empowers them to bring their most autistic behaviors to class. We generally give a class a “smiles test” for the instructor to make sure they did their job. The smiles test has nothing to do with them doing their job in fact I would be willing to bet that instructors who scored well on the smiles test were probably better entertainers than instructors. Someone who doesn’t score well probably did the job. If you really want to know if the instructor did the job test the class before and after. So much for that soapbox.

    Just my opinion

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    #192458

    MBBinWI
    Participant

    @Mike-Carnell – When I was an officer basic course instructor in the army we did pre and post tests. I once brought that up in a company for which I was training and got a look from the mgr like I was speaking Martian or something. In the army we also did situational exams where the student was presented information about a scenario and they had to use their knowledge to address the situation. The real part of the exam was in how they defended their answer, not in the specific answer itself. This is very analagous to LSS where there may be different approaches to solving a problem. Alas, when I suggested this approach this to was derided. Oh, by the way, this was a mgr that turned the tng dpt into a diploma mill.
    There are stupid questions, and there are stupid managers. ’nuff said.

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    #192487

    Mike Carnell
    Participant

    @MBBinWI Doesn’t it strike you as odd that at the very least if you are teaching data driven decision making or continuous improvement where it is a basic concept to baseline some thing and then measure the improvement that we don’t apply that rigor to training. It seems that the easiest way to evaluate instructors is to see which one move the class the furthest.

    Another advantage to the baseline is you can evaluate the people who are sent to training. If you do something as simple as a times series on the initial results you can see if you are getting more slugs in the later waves of training. If you plot the amount of change between first and second test across time you can see if it is consistent or if it drops off.

    Let’s assume you have built up a data base on first tests, you could maybe try something like a hypothesis test to see if your current class is significantly different. You do a final test and test against the data base on previous tests and see if you are producing belts that are consistent in classroom knowledge.

    There is a ton of analysis you could do with that data. I saw a methodology once that people were taught these tools. Imagine using SS to improve the quality of SS training and/or class selection? There’s a concept. Maybe not because – WE ARE DIFFERENT!

    I wasn’t going to answer because you said ’nuff said but then I thought I would answer anyhow. Age, you know. It makes you a little prickly about people telling you not to say certain things.

    Just my opinion

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    #192496

    MBBinWI
    Participant

    @Mike-Carnell – Of course there’s always more to say. For instance, the “evaluation” that was done by one formerly “prestigious” consulting firm was nothing more than a beauty pageant form. And then to top it off, the forms were filled out by the students in pencil (bubble forms) and handed in to the instructors. Curiously, after I started to collect the forms and plot the data myself before sending directly to the home office of the consulting firm, there was a dramatic drop in the scores. hmmm, a process organization that doesn’t have a tamper proof process for their own feedback system. Makes you wonder.

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