Digital transformation for chiefs and owners. Volume 2. Systems thinking. Dzhimsher Chelidze

analysis – implement changes in business processes;

      – standardize the best techniques and techniques instead of inventing a wheel every time a manager changes, that is, describing business processes.

      Muda, Mura, Muri and Loss Types

      Mud, moody, moody are strange words, aren’t they? The essence is simple.

      Let’s look at these basic concepts.

      Muda is two kinds of loss:

      1. Actions that do not create value but are unavoidable. For example, transportation, paperwork – it is impossible to remove them from the process, but it is necessary to strive to reduce, say, automation of preparation of mandatory reporting. In my experience, with the help of ordinary Exel, I was able to reduce the labor cost of a mandatory and unnecessary report from 8 hours per month to 30 minutes.

      2. Actions that do not create value at all and should be excluded from the process completely. For example, waiting, stocks, marriage, etc.

      Mura is uneven. If demand is uneven, queues are formed, execution time increases. Additional materials and supplies are required to meet peak demand. Working in emergency mode tires people and reduces their efficiency and quality of work.

      All this also generates losses – marriage, waiting, excess supplies, the need to redo.

      Moody is an overload of people or equipment.

      We make machines or people work to the limit. Overloading people threatens their safety and causes quality problems. Overloading equipment leads to accidents and defects, which in the end also leads to losses.

      These three «M» represent a single system.

      Often the root of the problems – «Mura», as unevenness leads to overload «Muri», which in turn causes many other losses («Muda»).

      3M: Muda, Mura and muri

      Let me remind you that the goal of digitalization, automation and transformation is to reduce losses, mainly in working with information. Additionally, before we initiate any project, we need to understand what losses we want to eliminate.

      1. Overproduction

      The most common problem, which is the cause of most others. Remember the example in systems restriction theory where the sales department sold more than it could produce? Or when we make five copies of documents, when you only need one? All this is overproduction. This leads to overburdening of units, and high stocks of unfinished production or finished products in warehouses, which also increases the number of rejects.

      Reasons – large batches production and unexplored demand, long retraining / restructuring.

      Planning systems and deep market intelligence through big data collection can help.

      2. Waiting

      This is all the time during which people or equipment expect resources, technological operation, data, unnecessary coordination. The e-workflow projects are also designed to address these losses. It is only in such projects often forget to do rewrite processes, and then the electronic workflow begins to complicate the life of employees.

      The reasons for the occurrence – a violation in the logistics system. For example, the boss left, and documents can only be signed manually. Or equipment failure, lack of guidance from management, lack of planning.

      3. Inventories

      Many buyers like to buy large batches to get a discount, even if they do not need so much material yet. Excessive stockpiles freeze money in themselves, plus all this must be stored somewhere, large warehouses are required. In addition, in the warehouse may be defective raw materials. In this type of losses hide the problems of production planning and uneven processes.

      The reasons for the appearance – uneven production and poorly established relations with suppliers of materials, do not take into account the demand for products or raw materials.

      Example: storage of large quantities of materials needed for production during six months, excluding warehouse maintenance costs, or production of New Year’s goods without seasonal demand.

      4. Excess transport

      Moving materials or goods between units that do not add value to the final product or service. This leads to both idle / waiting equipment, and unnecessary marriage.

      Causes of occurrence – irrational use of production / office space, unnecessary intermediate storage areas, inconvenient equipment placement, non-optimized business processes.

      Example: Location of the spare parts warehouse and production at a greater distance from each other.

      5. Excessive displacement of people

      Unnecessary staff movements or chaotic organization of workplaces. This loss is often combined with the previous, especially in the office. Therefore, here’s an example. The organization has an electronic workflow system, but people still need to print and archive every application manually. As a result, unnecessary movement of documents and people. If we are talking about production, then while a person is walking on the floor, he can damage other products.

      The reasons for the emergence – irrational organization of the work space, lack of work standards, lack of visualization, violation of work discipline.

      Example: search for the necessary tool for the operation of the entire site, the lack of knowledge of the staff of the areas of responsibility and walking, the determination of who should perform a particular operation, the lack of visual standards that facilitate the search for necessary tools and materials.

      For example, a business process system, big data sensors and geolocation sensors for moving people within business processes will help.

      6. Marriage

      Marriage is dangerous because it is not only the disposal of raw materials and working time of machines and people in the junk, but also the reputation of customers.

      The reasons for the appearance – lack of control at different stages of the production process, lack of built-in system «Protection against Fool» (Bye-yoke), lack of qualification of people or equipment problems.

      Back to digitalization, the most common solution here is machine vision systems that analyze process and product.

      7. Overservice

      It means all those actions when we try to do better than the consumer needs.

      The reasons for this are an unknown demand or a lack of incoming information.

      If we go back to project and product management statistics, only 16% of the products are completely successful. Why?

      One of the factors is the excessive number of possibilities in products. Only 20% of the built-in functionality is in demand regularly, 30% – occasionally, and 50% – almost never. To be even more visible, let’s remember modern applications, for example, banking. What do you really use? Additionally, did it become more convenient to use your banking application in comparison with what was five years ago? Personally, I do not. Micro-service solutions are becoming more functional, but less convenient and demanded. But their development costs money.

      To simplify the example, remember the remote for the TV with a set of additional features that the consumer does not need.

      8. Untapped human potential

      The final loss type, according to Toyota, is unused or unrealized human potential. As the name suggests, this is the exclusion of the personal qualities, knowledge, skills and skills of the employee from the work performed by him. Unrealized human resource losses most often occur when the staff member is expected to perform exceptional routine operations, the manager does not listen to subordinates,