Tag Archives: Waste

The Hidden and not-so-hidden costs of Inventory

Gold Bullion Missing
1/3rd to 2/3rd gone every year!

Inventory is one of the seven types of waste. There is usually quite a significant cost associated with having inventory, usually much more than what traditional bookkeeping accounts for. Between 30% and 65% of the value of your inventory is spent every year as inventory-related costs! This post looks into more detail at the cost of this inventory. Continue reading The Hidden and not-so-hidden costs of Inventory

A Lean Obituary for Maybach – A Cautionary Tale About Cost of Complexity

$439,000 gift with every car purchased
$439,000 gift with every car purchased

With the end of last year, Daimler stopped selling its flagship vehicle, Maybach. I would like to use this opportunity to talk about the danger and harm to your company by increasing the number of product types sold. As an illustrative (and expensive) example, I would like to split the total cost of the Maybach in its individual parts (as far as I can estimate them).  My hope is that this motivates you to reduce, or at least no longer increase, the number of variants in your product portfolio. Continue reading A Lean Obituary for Maybach – A Cautionary Tale About Cost of Complexity

Lean Shop Floor Checklist – Top 4 KPI to Watch in the Factory

Lean Shop Floor Visit Checklist
Check my List!

Due to popular demand related to my two posts on “Make Your Plant Tour a Success!” and “How to Misguide Your Visitor – or What Not to Pay Attention to During a Plant Visit!,” I have created a  checklist for a lean visit to a manufacturing shop floor for you to download. Take this checklist with easy-to-use metrics during your shop floor visit to make yourself independent of potentially misleading data given to you by the shop floor staff. Metrics include worker utilization, machine utilization, inventory reach and turnaround, and order & cleanliness. Continue reading Lean Shop Floor Checklist – Top 4 KPI to Watch in the Factory

What the OEE is Good for … and What it’s Not

What is an OEE good for anyway?
What is an OEE good for anyway?

Measuring the Overall Equipment Effectiveness (OEE) is one thing, but before you measure the OEE you should know when and where you actually need the OEE to improve your industry. This post describes what the OEE is good for and what it’s not. Continue reading What the OEE is Good for … and What it’s Not

Top Three Methods on how to Fudge Your OEE

How to fudge your OEE!
How to fudge your OEE!

The Overall Equipment Effectiveness (OEE) is by far and wide the most lied-about and fudged measurement on the shop floor, both intentionally or by accident. This post tells you the top three different ways how an OEE is fudged, so you know which OEE to trust and which one not. Continue reading Top Three Methods on how to Fudge Your OEE

What is OEE? – Definition of OEE

What is an OEE?
What is an OEE?

OEE, the abbreviation for Overall Equipment Effectiveness (or sometimes Overall Equipment Efficiency), is a measure of the utilization of a machine. It is frequently used on the shop floor, often determines part of the performance-based compensation of the managers, and is by far and wide the most lied-about and fudged measurement on the shop floor. Continue reading What is OEE? – Definition of OEE