![\"\"](\"https:\/\/i0.wp.com\/oldleandude.com\/wp-content\/uploads\/2020\/09\/local.jpg?resize=109%2C164&ssl=1\")
<\/figure><\/div>\n\n\n\n\u201cWhat do you do for a living,\u201d a neighbor asks.\u00a0 As I try to explain about GBMP\u2019s attempts to help customers improve productivity and quality, my neighbor interjects with a smirk, \u201cOh . . . you\u2019re an efficiency expert.\u201d He thinks I walk around holding a stop watch, trying to find ways to make people work faster.\u00a0 \u201cWell,\u201d I respond, \u201cwe try to improve SYSTEM<\/em> efficiency, not just local efficiency.\u201d\u00a0 About this time, he has zoned out, not particularly interested in the distinction I\u2019ve made, and he changes the topic to football (see yesterday’s blog post<\/a>.)\u00a0 I\u2019ve written more than a few posts over the years about the difference between local improvement and system improvement. Here\u2019s one more.\u00a0<\/p>\n\n\n\n Lean Peeve #3 is Local Efficiency.<\/strong><\/p>\n\n\n\n Alluding to the stopwatch, I\u2019ll begin with the definition of efficiency: standard time \/ actual time X 100%.<\/em> \u00a0This is the one you\u2019ll see on your ERP system. Say that I\u2019m machining PARTA with a standard time of 60 seconds.\u00a0 That standard was measured by someone with a stop watch to determine that fastest repeatable time for the operation. But I actually take \u00a065 \u00a0seconds each for this lot.\u00a0 My efficiency is 60\/65*100% = 92%.\u00a0 Simple enough.\u00a0 However, PARTA is two levels deep on the bill of material of the final product sold to the customer and is therefore essentially decoupled from actual need by weeks or longer.\u00a0 \u00a0My efficiency is not based on the ability to provide what the customer needs, but on a standard that rewards me ala Lucy-in-the-chocolate-factory<\/a> to go as fast possible. Consider the implications of this definition of efficiency in context of the metaphor.\u00a0 \u00a0What would happen if each person in the canoe pictured paddled as a fast as he or she could?\u00a0 (Having been in the Boy Scouts, I know what happens.) That\u2019s classical efficiency, or, as Toyota calls it, local<\/em> efficiency. \u00a0SYSTEM efficiency would have everyone paddle at the same rate (call it Takt time),<\/em> which is pretty evident in a canoe.<\/p>\n\n\n\n But let\u2019s take this idea back into the factory: I have just completed an order for 360 PARTA\u2019s, built according to my MRP (based on EOQ, fixed lead-time, pan-size, safety stock and a raft of other order modifiers that will be the topic of a later post) with an efficiency of 92%.\u00a0\u00a0 These will subsequently be sub-assembled in a different department according their MRP requirements and ultimately built and shipped to the customer in a still different quantity from either upstream process, each department operating at high local efficiencies.\u00a0 There are no colliding paddles as in the canoe metaphor, just lots of squandered capacity and excess inventory.\u00a0<\/p>\n\n\n\n What do you think of the SYSTEM<\/em> efficiency is in this example?<\/p>\n\n\n\n It turns out that where efficiency is concerned, the whole is not necessarily equal to the sum of its parts. \u00a0In fact, in a functionally organized workplace (ironically set-up as such to maximize local<\/em> efficiency) we can expect system efficiency to be far less than the sum of its parts.\u00a0 \u00a0We can all be paddling as fast as possible, thinking we\u2019re doing great \u2013 but the boat is going in circles.\u00a0<\/p>\n\n\n\n Speaking at a Shingo Conference some years ago, my friend and mentor, Russ Scafede, who was a senior manager at both GM and Toyota during his career, reflected this way on local efficiency: \u201cAt General Motors, we use to joke that all of our divisions were making money; it was only the corporation that was losing its shirt.<\/p>\n\n\n\n How do you measure efficiency? Share a story. <\/p>\n\n\n\n O.L.D.\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/strong> Want to learn more about True Efficiency?\u00a0\u00a0 Please tune into the 16th<\/sup> Annual Northeast L.E.A.N. Conference to learn how taking the best thinking from Lean Transformation and Digital Transformation can accelerate your continuous improvement efforts.\u00a0 Only two weeks to go before opening day. Our three exceptional keynotes (there are also ten breakout sessions and lots of networking opportunities) include Fady Saad, co-founder of MassRobotics<\/a>, who will discuss the rise of robotics and AI technologies and how their applications will disrupt the way we understand and implement lean methodologies and approaches as we know it today. From applications in manufacturing, logistics, construction, agriculture and healthcare, robotics and AI will change the way we do things. Learn how the lean community can better prepare and adapt to this new era of smart systems. \u00a0 You can get more information and register here.\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" It turns out that where efficiency is concerned, the whole is not necessarily equal to the sum of its parts. In fact, in a functionally organized workplace (ironically set-up as such to maximize local efficiency) we can expect system efficiency to be far less than the sum of its parts. We can all be paddling as fast as possible, thinking we\u2019re doing great \u2013 but the boat is going in circles. <\/p>\n","protected":false},"author":1,"featured_media":3036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","om_disable_all_campaigns":false,"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","footnotes":"","jetpack_publicize_message":"Local Efficiency: Bruce Hamilton's latest blog post. \"It turns out that where efficiency is concerned, the whole is not necessarily equal to the sum of its parts. In fact, in a functionally organized workplace...\"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[46967213],"tags":[447884,133109,1136966,243761,74810,272643],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/oldleandude.com\/wp-content\/uploads\/2020\/09\/local-2.jpg?fit=212%2C77&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p1cOUS-MW","jetpack_likes_enabled":true,"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/posts\/3034"}],"collection":[{"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/comments?post=3034"}],"version-history":[{"count":4,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/posts\/3034\/revisions"}],"predecessor-version":[{"id":3041,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/posts\/3034\/revisions\/3041"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/media\/3036"}],"wp:attachment":[{"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/media?parent=3034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/categories?post=3034"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oldleandude.com\/wp-json\/wp\/v2\/tags?post=3034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/i0.wp.com\/oldleandude.com\/wp-content\/uploads\/2020\/09\/local-2.jpg?resize=212%2C77&ssl=1\")
<\/figure><\/div>\n\n\n\n![\"\"](\"https:\/\/i0.wp.com\/oldleandude.com\/wp-content\/uploads\/2020\/09\/local-3.png?resize=348%2C247&ssl=1\")
<\/figure><\/div>\n\n\n\n
<\/p>\n\n\n\n