I am often surprised at the lack of “Standard Work” in many, if not most, of the companies I visit and consult with. There seems to be a general lack of awareness of how Standard Work affects the bottom line of the company, the attitude and motivation of the workforce, and the work product or service the company delivers. The lack of Standard Work is apparent everywhere; on the shop floor, the back office, within customer service functions, sales, finance, and the within the executive leadership. It encompasses not only the “hard skills” of manufacturing, but the soft skills found in other areas of the company.
A common definition of Standard Work is “the most efficient and effective tasks, combined with manpower, materials and machinery.” Standard work is the method, and one of the four M’s of manufacturing (manpower, material, machinery, methods). Standard Work is only “the most effective” until the standard is improved. It has also been said that, “Standard Work is the foundation of effective continuous improvement.”
A quick search on Google with the term “Standard Work” produces dozens of websites with different definitions and different focus. I’d like to discuss my opinion as to what Standard Work should be, and why it is important.
First, “Work methods that are standardized, documented, and followed are sometimes described as Standard Work. Standard Work is often more than following procedures. It usually means that personnel are following an exact step by step process (or set of tasks) for doing the work. This process, through some form of consensus, should be the best way to do the work. This type of document is called a Work Instruction. It is important that a knowledgeable team reach consensus on the one right way to do the job.” Industrial Trainer, Gary Griffith, 3rd Edition, 2004.
At first glance one might ask how these work instructions are completed? I would argue that this is accomplished using the most knowledgeable people with the most experience with the work. Furthermore, to prevent tribal knowledge from creeping back into the process, a formal job/work skills certification program with certified trainers is necessary for the workforce to maintain and improve the work. Only then can you create repeatable best practice within the work that will be sustained.
Why, then, is Standard Work important?
Among the many, here are a few benefits achieved with Standard Work:
• Increased employee morale
• Higher quality
• Improved productivity
• Reduction of variation (consistency) among staff members performing the work
• Reduction or elimination of errors and mistakes (causes of defects)
• Increased employee safety
• Improved cost management as wastes are removed,
• Standard training tool for current and new employees
However, none of these benefits can be realized unless a system to measure each is put in place. Performance KPIs (key performance indicators) must be tracked on each work instruction, including actuals to current target.
Efficiency = Time
Safety = Total recordable case (TRC) rate
Quality = Percentage of work redone (% Rework)
Improvements must be directly correlated to financial benefits. In the case of efficiency, a reduction in time of a specific operation, or series of operations, may mean that more parts or assemblies are processed, opening up capacity and reducing overtime. Overtime savings have a direct benefit to the bottom line of any organization.
Standard Work has a direct influence on the way an employee performs their job. It will improve among many things, the Quality, Cost and Delivery metrics that most organizations use to track and trend their business success. Everyone working in the business knows that they all have the same ability to generate the same results as long as they follow the same best practice.
In summary, I’d like to relate a recent conversation that I had with a manufacturing CEO after a conference presentation that I made. He told me that his company had instituted an “Activity Based Accounting” system to track and record the financial impact of the new company standard work certification program for the shop floor employees. Although the program was only 7 months old, he estimated that his company was going to save close to 15% of their total COGS. I then asked if the ROI was worth it. His answer was , “yes it was magical”.