The Fish Always Begins To Stink From The Head

The Italians say: “The fish always begins to stink from the head.”

As a lean practitioner, the phrase "…in a value stream map, the most important of the three flows is the information flow…” is sure to be familiar.  I ask myself, are we married to this idea when trying to improve a value stream?

We often spent a lot of time in collecting operational information on cycle times, number of machines, number of operators, OEE, efficiency of any kind, and setup times. However, we rarely investigate business process problems concerning how we pass along information on the shop floor, how we collect that data, and how we use them.  The information flow drives the effectiveness of doing the “right” work, in addition to efficiency, doing work with as little waste as possible.

A business process can be mapped in order to understand the information flow and the effect that the Key Performance Indicators’ selection have on material and process flows. Analysis and improvement can be obtained with well established lean tools, the same tools already used to remove wastes from operational processes. Examples of over processing, over production, waiting, or excess motion and transportation can be found in activities such as scheduling, planning, or material replenishment management.

In a bearing corporation in Illinois, for example, multiple component value streams merge into one stream to be assembled. Regardless of the high level of efficiency in any single department, component mismatch and uncontrolled inventory grew due to lack of synchronization. By applying lean methods to the information flow in the scheduling processes of the merging value streams, mismatches and inventory were reduced by 30%. 

In an Italian sheet metal company, for example, dynamic nesting was chosen over static nesting in the laser sheet cutting operations to maximize the sheet utilization indicator. By reducing the amount of steel scrap in the fabrication process, this decision produced savings. However, it increased the overall cost structure because it required the introduction of a new down-stream kitting operation, increased  stock, and increased manpower. The information used in the decision did not cover the whole business process.

From these examples, the operational side may be very efficient and lean, but without having a brilliant mind in planning, scheduling, or everything that can be related to a business process, results and benefits will be reduced or mitigated by extra cost due to a poor understanding of the process inputs. Make sure that the fish head does not stink because if something is wrong there, the rest of the fish will soon go bad.

- By Gabriele Tagliavia, PhD, Senior Consultant