Friday, September 5, 2008

Setup - the great barrier to delivering more value

CUSTOMERS want different things, in different quantities, at different intervals – what we call VALUE. All value creators, be they manufacturing companies, service providers, such as healthcare, accounting, taxi drivers, or retail stores, community groups, government, and any other means of value creation, have customers. How they deliver value to customers has a significant bearing on the opinion the customer has of the value creator. There is no right or wrong in this opinion – it is just what the customer wants. When the customer has a choice of value creators, they mostly choose the one that delivers value as nearly as the customer wants it delivered.

As choice broadens, customers act more and more on their wants. But no two customers are alike – each one has different needs and desires. The value creator who wants to be the provider of choice to the largest number of customers, must be able to meet the broadest range of needs and desires. To do so economically is the challenge that has always faced value ceators – how to set up the value creating process to meet a multitude of different customer requirements.

Despite an increase in knowledge, about machinery, chemistry, information processing, ergonomics, consumer behavior, and all other aspects of the creation and consumption of value, it is still a challenge for most value creators to provide the low volume, high mix, offerings required to meet customer needs, in an economical and timely manner. The great barrier is setup – believing that it can be reduced, determining how to do it at relatively low cost, embracing it as a strategic business tool, simplifying it to sustain it, and constantly challeging the current method to do better in the future.

Success in setting up quickly and correctly is referred to as SMED or Quick Changeover. SMED stands for “single minute exchange of die”, and refers to the challenge of setting up a metal stamping press in under 10 minutes. Shigeo Shingo, who wrote “A Revolution in Manufacturing: The SMED System” developed many of his ideas about setup reduction from stamping press studies.

This blog is dedicated to exploring all aspects of setup reduction.

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