Don't Miss : Non Finance for the Finance

Yes...you read it correctly. There is no spelling mistake in the Heading. It is not Finance for Non Finance. It is the reverse.

Forward this article to your Finance & HR teams. Help them to understand and appreciate what you do.

It is easy to understand and apply. The methodologies are so simplified that it is very easy to apply to our daily lives - ourselves, our family , our home and our children.

This will help persons in finance to understand and contribute effectively to the manufacturing department. This improves the edge and capability of a finance person in the company and help them to grow faster due to the broader understanding of their domain expertise along with this Non Financial Knowledge.

This also needs to be read through by technocrats who head companies, department, divisions, groups - but still are oblivious to these simple philosophies that have helped Japanese to retain the No 1 title.

Japanese Productivity Improvement Techniques:

Productivity improvement techniques can be applied effectively in enterprises of any size, from one-person companies to corporations with thousands of staff. Japan developed number of productivity improvement techniques after World War II . The TPS comprises the following productivity improvements components. Toyota, a giant Japanese automobile company was pioneer in development and application of various productivity improvement techniques under Toyota Production System (TPS). Taiichi Ohno developed the Toyota Production System (TPS) after World War II. Some of the selected Japanese Productivity Improvement techniques are presented in this section as below5:

A) JIDOKA:

Jidoka is a Toyota concept aimed at describing the man-machine interface such that people remain free to exercise judgment while machines serve their purpose. The jidoka system shows faith in the worker as a thinker and allows all workers the right to stop the line on which they are working. Jidoka is often referred to as automation with a human mind?. The jidoka way of working consists of following three principles-

(i)               Do not make defects

(ii)              Do not pass on defects

(iii)             Do not accept defects.

B) HEIJUNKA

Heijunka focuses on achieving consistent levels of production. It is defined as “distributing the production of different [body types] evenly over the course of a day? It incorporates the principles of line balancing by attempting to equate workloads, leveling demand out by creating an inventory buffer and replenishing that buffer.

It believes in providing even work load for all employees. Heijunka has the capability of reducing lead times by minimizing time losses due to frequent process changeovers.

C) KAIZEN Techniques:

Kaizen (Continuous improvement) is a management supported employee driven process where, employees make a great number of continuous improvement efforts.

i) Five Ss of Housekeeping:

A structured approach to achieve clean and orderly work place by fixing place

for everything. Five Ss is an abbreviation for the Japanese words :

Seiri, Seiton, Seiso, Seiketsu and Shitsuke.

It means:

Seiri               - Getting rid of unnecessary items

Seiton            - Arranging items (materials, tools, gauges) systematically for easy retrievability.

Seiso             - Keeping work place scrupulously clean.

Seiketsu       - Scheduling regular cleaning and clearing out operations.

Shitsuke       - Making all the above task meet agreed standards at agreed intervals.

(ii) Muda elimination:

Muda means ?Waste?. Here muda elimination implies an ?on going? and

systematic reduction or elimination of waste. There are seven kinds of major waste :

(i)   Overproduction Muda

(ii)  Stock Muda

(iii) Transport Muda

(iv) Defects Muda

(v)  Delay Muda,

(vi) Motion Muda

(vii) Over processing Muda.

 It helps to :

(i)  Eliminate redundant processes or parts of processes

(ii)  Delete non-value added activitie

(iii) Simplify motions

(iv) Minimize fatigue

(v) Reduce wait time

(iii) Poka-Yoke:

It is powerful and comprehensive method of ?error proofing?. A work process to eliminate inadvertent errors to ensure quality products and services. It helps in defect prevention and defect detection.

(iv) SMED:

Single Minute Exchange of Die (SMED) is a technique of performing a set up operation in lesser amount of time .It affects a machinery setup for change over from job to another in less than 10 minutes expressed as a single digit. It helps in reduced Work-in-progress, better average daily production, increased capacity and faster delivery to customers.

(v) Total Productive maintenance (TPM):

TPM is keeping machines in good working condition through systematic maintenance of equipment so that they fail less frequently and production process continues without interruption.

(vi) Just-In-Time:

JIT is a management philosophy aimed at eliminating waste from every aspect

of manufacturing and its related activities. The term JIT refers to producing only what is needed, when it is needed and in needed quantity. The aim of JIT in a factory is to :

(i)    Reduce lead times

(ii)    Minimise inventory

(iii)   Reduce the defect rate to zero

(iv)    Accomplish all of the above at minimum cost.

There are three essential ingredients to effective manufacturing excellence through JIT :

(i)                JIT manufacturing techniques that aims to promote a rapid response to customer demand while minimising inventory

(ii)              A total quality culture to pursue excellence in both the product and every area of the business, including customer service, purchasing, order taking, accounting, maintenance, design, etc.; and

(iii)             People or employee involvement in the development of the organisation through its culture and its manufacturing and other business processes.

(vii) Kanban:

Kanban is a manual production scheduling technique controlled by a process or machine operator. Kanban means card in Japanese, ia attached to given number of parts or products in the production line instructing the delivery of given quantity. The kanban card after all parts/products have been used up is returned by the operator to its origin. Production is controlled through demand originating from external customer.

(viii) Process Oriented Management (POM):

Traditional management focuses mainly on results and individuals on their ultimate achievement. Kaizen management emphasis on process of achieving the results. Managers in POM are judged by people centered skills as time management, education and training, inter-team participation, communication and morale boosting.

(ix) Visual management:

Visual management is the method of providing, in a clearly visible manner, to both workers and management, information on the current status including target of the various operations performed as well as various work pieces found at the work place.

(x) Work Standards:

Work standards represent the best way of doing a job and it consists of set of documented policies, rules, directives and procedures established by the management for all major operations to enable employees to perform their jobs without errors and to enable management to minimize variations in output, quality, work-in-progress and cost. Three elements of standardized work are takt time, work sequence and standard work-in-progress. The key steps in implementing work standards are

(i)  Identify the key issues in the current process

(ii)  Map the process

(iii) Improve the process

(iv)  Implement the process

(v)   Sustain the process.

(xi) The PDCA/SDCA Cycle:

The PDCA (Plan-Do-Check-Act) cycle is an endless improvement cycle

which demands that each team

(i)      Plans (establish a target for improvement (through action plan)

(ii)     Does (implement the plan)

(iii)    Checks (monitor and evaluate effects)

(iv)    Acts (Standardises new procedures or set goals for further improvement).

Since every process is initially unstable, it must be stabilize using SDCA (Standardise-do-check-act) cycle. Thus, a SDCA cycle must precede every PDCA cycle to consolidate gains into current process before raising the standard threshold.

(xii) Statistical Process Control (SPC):

Statistical Process Control is the application of statistical techniques to control a process and eliminate process variations due to assignable causes. Statistical process control requires operators to do periodically sampling of the quality of their own output, enter data into control charts, analyze the trend, and decide for themselves when to shut down the process and when to make adjustments / corrections to the process to prevent defects.

xiii) Suggestion Systems:

Suggestion Systems- the fundamental to the Kaizen philosophy is the process owned by employees through designed to benefit the company, inviting employees to suggest / implement any idea, large or small, novel or mundane concerning any aspect of the company life.