Lesson Learned #27
When we do studies in an area, the primary purpose at the highest level is to separate the value-added time from the non-value-added time. We define non-value-added as time that a supplier spends doing something that a customer wouldn’t want to pay for if he or she knew about it, such as reworking a product because it was made incorrectly the first time; or fixing errors made somewhere upstream in the process; or simply idle time when there isn’t enough work to keep everybody busy. We use colors to illustrate the separation: green for the value-added time (which is “good” time); and red for the non-value-added time (“bad” time). It’s a simple device that is extremely effective for making the point – except for one occasion, when a client failed to see the distinction. After a somewhat confusing debate. we learned he was color-blind.
The green time is processing time. The red time is down time or “waste” in lean vernacular. Both green time and red time can be improved, but we’ve learned that it’s harder to fix the green time. Fixing the green time means taking an existing process and reconfiguring it so that it is more productive. This is what “re-engingeering” was all about, and why it struggled to be more than just a fad that bridged TQM and Six Sigma. Re-engineering advocated starting with a blank sheet and re-thinking how a process should work. The trouble with this approach is that it often leads to changes in equipment or technology, which can be expensive and is often a slow-decision process for many companies. Attacking the red time is a better place to start for a number of reasons. Attacking the red time is more immediate and means fixing some of the existing operating problems that people cope with or have to work around. Or it means tightening the scheduling of an area to better match volumes to resources, and so incur less idle or down time. The one major obstacle for fixing red time, and the chief reason much of it exists in the first place, is that many operating problems have their roots somewhere in an upstream process, which may be outside the control of the functional department with the actual problem.
But if you can get different functions working together, fixing red time is typically much more immediate, and easier to implement because it fixes problems for people.
