Management And Accounting Web

Goodson, R. E. 2002. Read a plant - fast. Harvard Business Review (May): 105-113.

Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

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The purpose of this article is to describe a lean assessment technique referred to as the rapid plant assessment (RPA) process. According to Goodson, using the RPA process during a plant tour can indicate if a factory is truly lean in as little as 30 minutes. The process includes two assessment tools, the RPA rating sheet, and the RPA questionnaire. The information provided by these tools can be used to influence decisions related to benchmarking, continuous improvement, competitor analysis, and acquisitions.

The RPA rating sheet includes 11 categories for assessing leanness, and the RPA questionnaire includes 20 yes or no questions that are used to determine if the plant uses best practices in the 11 categories. It is recommended that: 1) the process be performed by a tour team of four or five people, 2) that each team member is assigned to a few categories, 3) that team members not take notes during the tour to detract from observing visual cues, 4) that the team should meet immediately after the tour to share impressions and fill out the work sheets, and 5) everyone on the team answer the last question "Would you buy the products this operation produces?"

The 11 Categories: What should we find in a lean plant?

1. Customer satisfaction: Workers in lean environments know who their customers are, both internal and external, and place emphasis on customer satisfaction. Workers' attitudes toward customers are usually apparent at the beginning and during a plant tour from greetings and information provided about the plant layout and products.

2. Safety, environment, cleanliness, and order: Lean plants are clean, safe, and orderly with everything in its place.

3. Visual management system: Signage guides workers to appropriate locations, tools, and tasks, as well as records related to productivity, quality, and maintenance.

4. Scheduling system: Lean plants have a single pacing process for each line and supply chain based on a pull system, i.e., the end of the line controls the speed and output of all upstream activities.

5. Use of space, movement of materials, and product line flow: Lean plants use space economically and materials are moved only once in efficient containers, usually by hand rather than by forklifts.

6. Levels of inventory and work in process: Lean means low inventory, no more than a few minutes worth of inventory by each work center.

7. Teamwork and motivation: In a lean environment there is usually visible evidence of teamwork, problem solving, and employee empowerment.

8. Condition and maintenance of equipment and tools: Lean also means that equipment is clean and well maintained and operators are involved in the decisions to purchase tools and equipment.

9. Management of complexity and variability: The best lean companies (e.g., Toyota and Dell) build complexity handling into the production process with systems that use common parts and fail-safe devices that guide workers to choose the appropriate part and perform the appropriate action.

10. Supply chain integration: Lean factories work closely with a small number of dedicated suppliers that are part of the process and are paid based on completed, shippable product. Few names on container labels and a lack of paperwork on the receiving dock are indicators of a lean operation.

11. Commitment to quality: Lean plants also place considerable emphasis on quality and call attention to excess and waste such as scrap and rework.

Adaptations of the RPA rating sheet and RPA questionnaire appear below.

Rapid Plant Assessment Rating Sheet
Categories Related
Questions
Poor
1
Below
Average 3
Average 5 Above
Average 7
Excellent 9 Best in Class 11 Category Score
1. Customer satisfaction 1, 2, 20
2. Safety, environment, cleanliness,
and order
3-5, 20
3. Visual management system 2, 4,
6-10, 20
4. Scheduling system 11, 20
5. Use of space, movement of materials, and product line flow 7, 12,
13, 20
6. Levels of inventory and work in process 7,11, 20
7. Teamwork and motivation 6, 9, 14, 15, 20
8. Condition and maintenance of equipment and tools 16, 20
9. Management of complexity and variability 8, 17, 19,20
10. Supply chain integration 18, 20
11. Commitment to quality 15, 17, 19, 20
Total score for 11 categories (Range 11-121)

Rapid Plant Assessment Questionnaire - 20 Yes or No Questions

1. Are visitors welcomed and given information about the plant layout, workforce, customers, and products?

2. Are ratings for customer satisfaction and product quality displayed?

3. Is the facility safe, clean, orderly, and well lit? Is the air quality good, and are noise levels low?

4. Does a visual labeling system identify and locate inventory, tools, processes, and flow?

5. Does everything have its own place, and is everything stored in its place?

6. Are up-to-date operational goals and performance measures for those goals prominently posted?

7. Are production materials brought to and stored at line side rather than in separate inventory storage areas?

8. Are work instructions and product quality specifications visible at all work areas?

9. Are updated charts on productivity, quality, safety, and problem solving visible for all teams?

10. Can the current state of the operation be viewed from a central control room, on a status board, or on a computer display?

11. Are production lines scheduled off a single pacing process, with appropriate inventory levels at each stage?

12. Is material moved only once and as short a distance as possible? Is material moved efficiently in appropriate containers?

13. Is the plant laid out in continuous product line flows rather than in "shops"?

14. Are work teams trained, empowered, and involved in problem solving and ongoing improvements?

15. Do employees appear committed to continuous improvement?

16. Is a timetable posted for equipment preventive maintenance and ongoing improvement of tools and processes?

17. Is there an effective project-management process, with cost and timing goals, for new product start-ups?

18. Is a supplier certification process - with measures for quality, delivery, and cost performance - displayed?

19. Have key product characteristics been identified, and are fail-safe methods used to forestall propagation of defects?

20. Would you buy the products this operation produces?

Total number of yeses

The RPA tools described above are fairly easy to learn and provide consistent ratings from various teams. According to Goodson, the tools have been used hundreds of times by students in more than 400 tours of 150 different manufacturing and service industries. The RPA process has proven to be a very powerful application for education as well as decisions related to benchmarking, continuous improvement, competitor analysis, and acquisitions.

______________________________________________

Note: In addition to the fairly simple tools described above, the RPA process includes a template for determining a plant's cost of sales, and some additional measurements that are fairly complicated. For more on those measurements see Goodson's web site at http://webuser.bus.umich.edu/Organizations/rpa/.

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