One year right after the end of the first semester we received the visit of the CEO of our plant. He came to discuss with the plant management how we were doing against budget. A huge part of the discussion was around the fact that our daily throughput was less than expected and for that reason the cost per case was higher than our goal. The whole cost system was built around total number of cases produced regardless we need them or not.
The warehouse was full, there was no space for more finished goods. Sales were slow so the total number of daily shipments to our customer was under average; but we were working overtime to produce enough cases to meet the cost per case target. Instead of working to produce what our customers need or move ahead with new products or try to conquest new markets, we continue producing as per forecast because that is what “we need” to do to keep our cost per case in budget.
Being a lean manufacturing student who work on a company where the concept lean manufacturing only have meaning at plant level is not easy. During that meeting, my heart was beating so fast that I thought that everybody could listen it. My boss was looking at me, he knew that I was about to say something. I take every chance I have to talk about lean with the hope that at least one person will learn something and he knows it.
Our production schedule is not even, we work overtime for months just to have a one week shutdown and then after a couple of weeks of regular production, we go back to overtime. Unevenness in production that is not related to the customers needs is Mura. Mura is another type of waste, just as Muri and Muda (the most common type – remember the seven wastes?). Together they are known as the Three M’s.
Mura is the waste of unevenness or inconsistency and most of the time is the cause of many of the seven muda wastes. When we are inconsistent in our schedule with a lot of peaks (overtime) and some valleys (shutdowns), we create so many problems using materials and creating goods that we don’t need that defeats the whole purpose of lean, attack muda.
The third type of waste, Muri is the waste of overburden. Overburden means to give unnecessary stress to employees and processes. When we decide to work overtime for months and months while the warehouse remains full we are causing stress to our employees who can see the warehouse full and can’t understand why we continue producing more. We also stress the process, people and machines work too many hours; people get tired and machines don’t get the appropriate maintenance. Both things leads to downtime and errors that create rejects and poor quality products and increase absenteeism rates.
While I was talking about this, the CEO was looking at me with genuine interest, he asked some questions and promised that we will talk more about this in the future. To be honest, talking is not necessarily what I was looking for, but at least he listened and we all start to talk about using different types of indicators to measure the plant performance.
That day, we all realize that Mura and Muri are our real enemies, they are the cause of muda. That day, we also accept the idea that traditional financial KPI maybe is not the best way to measure the plant performance.