More Valuable Than Gold

    

The Problem.    Some time ago, I came across a project by a team of five operators and supervisors of a factory that manufactures florescence tubes for commercial buildings. The process of manufacturing these tubes were a heavy investment, and so the production volume must be high enough to recoup the investment cost.

 

One of the expensive ingredients used in the manufacturing process is a powder mix used to coat the interior walls of the florescence tubes. These are sprayed like a shower as the tube envelopes the nuzzles. Immediately after that, the tube is vacuumed and then sealed. All these are done with high precision and high speed mechanical robots in clean room conditions. The tubes produced were of superb quality and last a very long time.

 

One day, while studying the material purchasing order slip, the engineers noted that the coating powder was very expensive, in fact more expensive than gold, if compared ounce-for-ounce. If only they can just reduce a fraction of a gram for each tube, the savings will be tremendous, given the high volume. The team of five set to work with this in mind.

The Alternatives.

Alternative 1.  Use less powder.  Obviously, having a thinner coat of powder will reduce material cost and that will save money.  Unfortunately, there is a threshold.  Anything less, will result in in-complete coverage, and lead to rejects at the end of the inspection station, and this is very costly if rework had to be done. 

Alternative 2.  Use substitutes.  The brightness and durability are the product advantage, and the powder (phosphor++) has ben designed through lengthy research and studies.  Another product is in the pipe-line, and all these is outside the purview of the Production Department.  Production is in no position to recommend change of material unless they can suggest a substitute and clearly Production Department has no alternative substitute material.

Alternative 3.  The Chinney Brush!  The team focus on how to reduce the overall usuage of the expensive powder, and the idea of re-cycling came to their team discussion session.  They studies the production to find out where there was splurges etc.  They found that, some of the rejected tubes had ‘extra volume of powder’ especially around the electrodes.  These interfere somewhat and eventually gives abnormal readings when tested on the current flow measuring device and had to be rejected. 

Maybe, excessive powder should be removed before sealing the electrode!  One member thought of his baby’s milk bottle cleaner, and another the chinney brush.

  

After a few versions of modification and trails, in less than 4 months, the new automated brush was ready to be installed in all the stations.  A simple three brush strokes, remove excess ‘phosphor powder’, and these were recollectd at the end of the production shift and treated before recycling.  The projected savings for that year came up to a neat S$100,000!! Not too bad for the team of five.

Learning Point.

Sometimes, the ‘gold dust’ is flying out the window right under our noses.  Just look around, think a bit, measure a bit, and there are many things we can improve.

 

The Road Tax Difference

            

    

A common task faced by logistic planners in fleet management is that of having to pay road tax when it is due.  Road tax are normally paid up to the day.  This means that to be certain that one does not run foul of the law, payment is made to the tax office a few days before it expires.   This is all well and good if we have one or two or perhaps three vehicles at home. 

However, when your business grows, the fleet grows too.  One after another, your fleet increases, first you add on the multi-pickup truck, next the heavy duty pick-up, then a van, then a minbus, then a rover, etc.  

The Problem.     One morning, one of the delivery trucks of the company was stopped for a simple traffic offense – turning on red, but the charges were compounded when the officer found that the road tax had also expired a week ago. Double whammy. 

The team of five came together one morning to think through this problem.  They felt that the penalty could have been avoided.  The obvious reason was that, the team, overwhelmed by other tasks and duties have missed out on the deadline to make payments.  It was definitely not intentional to skip – you will be caught sooner or later.  The team went through a review of the process of payment, iron out the responsibilities of each other, and of course they concluded that it was indeed a case of un-intentional negligience.  Next a serious brainstorming session was held to see if a better way to do things could be found – one that can set off an alarm.  They tried looking at others companies.  Indeed when you talk about reminder systems, there were many different ways to do it. 

One team member suddenly raised a curious remark which triggered lots of thinking.  He said that, “Reminders are lousy ways to do things!” He illustrated with his experience with alarm clocks.   He said that he always switch off the alarm when he hears it in the morning, and then turn over and carrying on sleeping!  Waking up on time is a chore for him, but having the alarm clock is hardly motivating, and something that he hates.   He suggested looking at other solutions.  

The Alternatives.

Alternative 1.   Reminders!   Set up a reminder on the calendar on the notice board, in the computer, tie a ribbon round the last finger, etc.  Any sort of reminder – as long as the people are prompted well before the time. 

Alternative 2.   Pay in advanced every month.  I am sure that the tax collectors will be happy to hold onto our money, better still, send them post-dated cheques so that they do not earn extra interest.  This really means that the ‘alarm-clock’ is now with them! Not surprisingly, they were not interested to carry our alarm-clock!

The Discussions.     Anyway, the team discussed and members feel that even with the reminder system they will still need to visit the Tax Collector’s office many many times.  And even if they managed to convince them with post-dated  cheques, it also require one to draw out cheques every now and then (this was the time when GIRO was not so common).  Therefore they will still need to have a tracking system to ensure that the dispatch rider go over to collect the tax disc regularly, in fact almost every week.  All these steps were still extremenely cumbersome when the number of vehicles has reached about 200.

Alternative 3.   “Consolidation”.   Throwing out the reminder system was the best thing the team did.  It forced them out of the ‘alarm-box’ literally.  A new trend of thoughts ensued. Consolidation was their final solution.  Someone in the team made a breakthrough.  He suggested that, if they can convince the tax collectors to consolidate all payment to four quarterly payment dates, then work will be reduced greatly for all parties. 

First the team must convinced the tax authorities that setting fixed dates, four times a year, for batch payment of all the vehicles in their fleet. Of course the company will have to first pay off all remnant fees, then set a common cut-off date. It was quite easy actually. The tax autority first computes the full-year tax payment, due a year from that date.  Of course there will also be the age of the vehicle that has to be tracked since there is the COE (Certificate of Entitlement) scheme must be adjusted. Everyone is aware of the 10 or 12 years scrap date, and the last date (prior to scrap) for road tax needs another simple adjustment. 

The tax collectors were happy, because it also means batch processing for them.  The tax collectors can even set a date when they are less busy – which co-incidentally is also a less busy date for the company (usually the second Tuesday of the different quarter.) 

This is a new and neat idea, consolidated processing, batched work, translates into less trips to the tax collector’s office.  It was indeed a win-win situation for all parties.  The company reaped 50 man-hours savings, and when converted into monetary savings, even rewarded the team with a one-off monetary reward, while the company continue to enjoy more meaningful work!  

 

Learning Point:

Do not jump at the first solution that comes to your mind.  Ask yourself and also team members if there can be some changes to work procedures, perhaps bend some rules to make work more efficient.  It may not be easy to break out of the box.  We are all creatures of habit, but when you do, like this case, the benefits from the changes are really very worthwhile. 

Honk! Honk!

The Cup That Saved $40,000 per annum

Today I would like to share with you a case where a team of three working in a local company saved US$40,000 through a simple change in operation procedures.  This is how it happened.

Several months ago, a supervisor was on his rounds checking through the operators working on the line.  This is a highly skilled supervisor.  He has been with the company for more than 10 years.  Although seniority is probably an advantage, I am sure that it is not the only thing that matter in problem solving.  I salute this chap for he has a knack for spotting problems and converting it into good money saving for the company.  I must also put on record that the management has provided the environment that liberated the fire of problem solving spirit in their corporate culture. 

The Problem.    While he was on his rounds, he noticed that some of the operators were emptying cups of lubricants-solvents into the waste bins which were later sent for disposals.  Some of the operators highlighted that the mechanical shringes were not working so well, and there were air bubbles trapped in the tubings therefore they need to flushed the air bubbles out.  Therefore the lubricating-solvent were flushed off.  Clearly a lot of good liquid had gone straight from the reservoir into the waste chute.  Even as he asked the operator – he seems to get the message, that all the flushing was for a ’good cause’ (but he thinks that it is really ‘bad cost!) and it is a standard procedure.

Together with two other colleagues, he managed to change the way work is being done to ‘save’ the liquid by a simple ‘recycling good liquid’.  All the operator needs to do is to use a clean cup to collect the liquid when flushing out the bubbles, and pour it into a container for recycling.  Checking with their Chief Engineer, it was understood that within the week or so of exposure to ordinary air, there was no deterioration of quality of the recycled liquid. The success of the experiment was submitted to management for adoption and since then, the new standard operating procedures was put in place.

When management made a projection based on current usage, using the cup save them a tidy US$40,000 per annum!!  So much for a 4 months study and experimentation, which the three members invested during low production hours.

The ALternatives

1.  To ordinary operators, the air bubbles in the tubing is a problem and flushing the bubbles out is the solution.  Therefore flushing is the solution.

2.  To the supervisor, in addition to getting bubbles caught in the tubings, excessive ‘flushing’ is also the other problem.  This flushing is simply a wastage of valuable liquid.  Of course, he is aware of the cost of the liquid, which the operators may not.  So depending on our perception, we see problems where others do not.   While it is still important to solve the bubble-problem – a very difficult problem which need to be addressed at the molecular surface tension level, his interim ‘recycling cup’ is simple and gives great value for the company. I am sure eventually even better solutions will be thought off.

Learning Point.

Be practical.  The full solutions may be hard to come by, but when we just give a bit iof thought to the problem, you can find alternatives first.  The Chinese saying, ‘ride the cow to look for the horse.’  Tackle the problem stage by stage.