Understand Analysis and Determine Operational Leverages

While the second step determines the improvement targets, the third step concentrates on understanding how successful we can be in meeting these targets under current conditions and how they can be sustained in the future by

  • • Determining the basis of measurement and analysis
  • • Prioritizing the improvement areas and focusing on sources
  • • Determining the best operational improvement leverages

Therefore, a comprehensive assessment is necessary to figure out where you may have the most leverage and where you may have gaps. For such an assessment, information on improvement needs and potential in the following dimensions of each process is necessary.

  • People and organization: Roles, responsibilities, job definitions, training, incentives, performance measures
  • Policies and procedures: Business rules and assumptions, controls
  • Physicalfacilities and technologies: Capacities and capabilities

For this purpose, collect data on the end items, intermediate components, subassemblies, and parts for each final product to be made, including structure and configuration of major components and assembly sequence, preferably in an operation process or flow process chart in a value stream map. Understand customer ordering and consumption patterns and their variability, including the impact of a model mix. Identify the current triggers and information flows that drive production and movement between processes.

Therefore, to be more concrete, determining the best operational improvement leverages requires reviewing and analyzing problems (if any) in

  • • Cycle or processing times
  • • Changeover times
  • • Uptimes
  • • Scrap rates and yields
  • • Staffing
  • • Buffer size
  • • Process flows
  • • Information flows
  • • Management performance
  • • Employee satisfaction
  • • Employee turnover rates
  • • Working hours, break times, and variations in workload and peaks
  • • Facility plans and materials handling
  • • Facility, machine, and labor capacity utilization
  • • Machine and labor productivity
  • • Delays
  • • Suppliers’ performance
  • • Customer ordering and consumption patterns
  • • Customer complaints
  • • Production volumes
  • • Products and their quality
  • • Research and development, technology, and innovation capabilities
  • • Production planning and control systems
  • • Operations control procedures
  • • Raw materials, work-in-process, and finished goods inventory policies and performances
  • • Relevance of operations

Afterwards, analyze findings and identify potential operational improvements. In this step, by using the results of measurements, various dimensions of critical losses affecting improvement targets of the business that we have set in the previous step are determined.

Therefore, problems (i.e., losses) should be defined clearly and in detail. The more clearly they are identified, the better and faster the solution process will be.

Why you do it

It is essential to gather all the necessary information about the situation you are trying to improve. Once you get the information, carefully document your findings in an organized way to figure out the key problems.


• Rated and identified causes for improvement issues

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