Assessing a plant

How much can we learn from a walkthrough?

Have you ever had the opportunity to visit a manufacturing plant and wondered whether you got the most out of it? Having toured a huge number of facilities with a wide range of people, we’ve seen a vast difference in what people learn and take away from those visits.

Having a structured approach can enable you to absorb more than you might expect. If you get it right, you’ll come away with a good understanding of how the plant runs, where it could improve and what you can learn and take back to your own plant.

Priorities

I once toured a large operation where we were told from the outset that safety was the number one priority.  As the General Manager gave this speech, I could see a large, heavy pallet of goods precariously dangling from the racking, over a heavily congested area below. When asked what would be done about it, the GM was very dismissive. Words, actions, and attitudes were not aligned. 

Businesses having clear priorities, which are commonly known, communicated and tracked, typically make quicker progress and towards their goals. Ask your tour guide, what the priorities are. Do you see that reflected in the information and measures around the plant? Do behaviours and actions align with what has been described?

Do the priorities centre around things which will bring business benefit: Customer service, Cost, Capacity, Capital or Culture? 

Flow

Observe how material and information flows through the facility. Is there a logical flow from incoming goods to despatch? Where does flow slow, stop or deviate? Most tours will follow the flow from start to finish. Imagine yourself as a product passing through the process. 

• How far will you travel?
• How long will it take you?
• Will you get lost or confused on the way?
• How will you know when it’s your turn at each process?
• How does information flow through the process?

If the answers don’t come easily, you’re probably looking at a turbulent flow. Turbulent flows are unpredictable and can be chaotic.

Ask what the rate of customer demand is and check if processes are running at the correct rate to meet that demand

Inventory

The amount of inventory held in work in progress on the shop floor is a good indicator of how lean the plant is. You can ask or observe the output of a process to see its rate of production. For example, if a machine produces 100 units per hour and there are 1,000 units ahead of it, there are 10 hours of inventory on the floor. The average waiting time to be processed is 10 hours, but this may vary widely if the product has to wait for changeovers or batches. It may be worse still if orders are cherry-picked by the operator. 

Take a look at raw material and finished goods. Can you estimate how many hours/days/weeks of inventory there are? Observe, reflect and think about what might be possible.

Visual management

What is being displayed on the shop floor? In the best plants, you’ll know within two seconds if they are having a good or bad day. 

Check if the data is up to date and whether it reflect the priorities mentioned earlier. Look for evidence about what is happening to address the priority problems. You can find out a great deal by speaking with the operators asking operators how they know if they are having a good day. Often they will explain what’s going well, or not so well and why. Check to see if that matches the visual management systems. 

Imagine yourself as a supervisor on the shop floor. Could you pass the area at a normal walking speed and know whether you need to stop and help?

Complexity

Many plant managers will explain how their process is special and more complicated than any other you may have seen. The reality is that many plants have complexity and that simplifying it is more effective than trying to manage complexity.

Review the different items passing through the plant and think about what the product tree looks like. In a car assembly plant, the process involves many parts coming together to make one, large final assembly.  In a paper plant, there may be one raw material which ends up in a huge number of finished variants.  Look at where the complexity is and think about how you would simplify it if it was your plant.

Equipment 

Capital intensive operations will have a different focus than labour intensive ones. When looking at the machinery, don’t be taken in by the age or sophistication of the equipment. We have seen excellent plants operating with 50+ year old equipment. A new piece of equipment that is unloved may well be outperformed by an old piece of equipment which is run and maintained effectively. 

When speaking with an operator of an old rolling mill, she showed me her manual monitoring of overall equipment effectiveness. The sheets were handwritten. The operator owned the process, knew it’s performance and took immediate steps to rectify any problems. 

In contrast, I visited a company with the latest CNC machines with sophisticated monitoring systems. The data was held in a remote server, belonging to the engineering department which nobody ever looked at. The operator had no idea what the effectiveness of the machine was, and nobody felt responsible for improving it.

I’ll leave you to guess which process was more effective.

Culture

One of the most subjective things you can assess is culture – it’s also one of the most important. Look at the interactions between the teams.  Look to see if there is open communication, regular feedback and a genuine interest in performance. Companies with a great culture exude passion. 

Is everybody respected for the role they play in the company and given a chance to succeed? When you come away, do you feel that everybody cares about the success of the business and the capability and success of the people involved in it?

Next steps

It takes a great deal of experience and knowledge, combined with a structured approach to read a plant. The above tips will help you start on the journey. If you need to really understand your own plant, benchmark against other operations, or know more about a plant you are considering acquiring, we are here to help. 

www.virrata.co.uk

info@virrata.co.uk

+44 151 374 2802

You’ll be amazed what we can tell you from a walk through.

Plant assessments

Operational due diligence

Operational insight