1. Pricing your Products to be Profitable
Friday 11th March 2016

2. Workplace Organisation

5. Numbers game
On the following sheet are the numbers between 1 and 99, can you tell me which ones are missing?

7. Numbers game
If I told you that there are two missing numbers and they are between 1 and 49 – removing all the unnecessary numbers above 50 might make things easier.

9. Numbers game
If I now told you that there was some order to the numbers on the sheet – would you then be able to tell me which numbers are missing?

11. Numbers game
Arranging the numbers in order makes things very clear

13. Information People and process Material
A business typically has three flows which deliver a product or service to a customer
Information
Customer requests for goods and services
Supplier
Business
Customer
Step 1
Step 2
Step 3
Step 4
People and process
Raw materials, Installation Equipment, etc.
Material

14. 5 Business Principles
Specify Value - What does the customer want/need ?
Perfection - Pursue zero waste and CI
Identify Value Streams - Sequence of processes from raw material to final product
Pull - Make only what the customer wants
Make Value Flow - Avoid batch and queue

15. Value & Waste WASTE VALUE
Only an activity that physically changes the shape or character of a product and/or that the customer is prepared to pay for can add
VALUE
Therefore
Any activity that does not change the product or that the customer will not pay for is
WASTE

16. Value and Waste Waste Value Non-Value Adding Activities 5% 95%
Waiting & Delays
Movement
Excess Production
Set-Ups
Breakdowns
Searching & Storing
Scrap & Rework
95%
Value
What the Customer is prepared to pay for 5%

17. The 7 Wastes (+1) : Overproduction Waiting & Delays Inventory Movement
(stocks + work-in-progress)
Movement
of People
Talent
Inappropriate
Processing
(procedures & paperwork)
Transport of Materials
Defects
&
Rework

18. Overproduction Root Causes Too much – more than is needed long set ups
batch sizes
design of process & layout
using up material
Too early – earlier than is needed
lack of machine capacity
subcontracted operations
long in-process delays and leadtimes
Building more than the customer wants? (just in case)
How many shortages were created?
Where is the addition stock/parts stored?
How much did this cost?

19. Waiting & Delays Root Causes How often does it occur?
Why does it happen?
How much does it cost?
Waiting For:
Paperwork
Instruction
Supervision
Products
Machines
No material
scrap
breakdown
poor schedule
poor purchasing procedures
poor supplier
lack of preparation or instructions
materials stored incorrectly / missing
No machine
set-ups
large batch
no tool, jig, fixture, gauge
No man
skill shortage
absenteeism
watching another machine

20. Inventory (stock + work-in-progress)
Root Causes
Unbalanced Material Flow
synchronisation between stages
level quantities in and between stages
Cushion Storage
breakdowns
rejects
poor suppliers or buying
Safety Storage
increase feeling of security
Lot Delays
transfer batches greater than one layout
How much does this cost?
Why does it happen?
How much space is taken up by stock?

21. Transport of Materials
Movement of People
How much excess movement do you do each day?
How long does this take & what’s the cost?
What else could you have done with the time?
Root Causes
Layout
Workplace Organisation
Functional Organisation
Work-in-progress and/or stock levels
Transport of Materials
How many times are materials handled?
What do racks do to the process?
How much time is spent handling materials?

22. Inappropriate Processing (procedures & paperwork)
Root Causes
Wrong tool, jig or machine specification
Poor procedures or process
Lack of operator skill or knowledge
Roughing cuts due to oversized material
Deburring due to poor tool maintenance or product design
Could things be done more simply?
Buy expensive machines and what can happen?
What happens to set-up times on big machines?
Are operating procedures, testing procedures and paperwork fit for purpose?

23. Defects & Rework Root Causes Wrong tool, jig or machine specification
Poor procedures or process
Lack of quality prevention and inspection
Lack of operator skill or knowledge
How much does a defect cost?
How much does rework cost?
Can you add value twice?
What do defects do to production?

24. Talent What extra skills do people have? How could these be used?
What will be the benefit?