In this post we throw it back to the May 2002 issue of the Harvard Business Review. We rediscovered an article from this issue that talks about how to do a Rapid Plant Assessment. In the article, R. Eugene Goodson gives his tips for performing the best plant tour. These tips can also be used to assess and optimize your own warehouse operations.

The tools Goodson uses for assessing the leanness of a plant include a rating sheet with 11 categories and a questionnaire to determine if the plant uses best practices in these categories. During a tour, team members observe all aspects of a plant’s environment, talk to the workforce and managers, and look for evidence that the plant adheres to best practices. Immediately following the tour, team members meet to share their observations.

The categories Goodson considers for his RPA ratings are:

Customer Satisfaction

Workers in the best plants clearly know who their customers are – both internal and external – and make customer satisfaction their primary goal.

Safety, Environment Cleanliness, and Order

In a clean and orderly plant, parts are easy to find, inventory is easy to count or estimate, and products move safely and efficiently. The plant should be well lit, the air quality good, and noise levels low. A visual labeling system should clearly mark inventory, tools, processes, and flow.

Visual Management System

Tools that provide visual cues and directions are readily apparent in well-functioning plants. Such signage, clearly guiding employees to appropriate locations and tasks, can greatly enhance productivity.

Scheduling System

The best plants rely on a single “pacing process” for each product line and its suppliers. This process, usually at the end of the line, controls speed and production for all the upstream activities. Demand for product at each work center is triggered by demand at the next. This keeps inventory from building up, improves quality, and reduces downtime because production lines aren’t kept waiting for parts.

Use of Space, Movement of Materials and Product Line Flow

The best plants use space efficiently. Ideally, materials are moved only once, over as short a distance as possible, in efficient containers. Production materials should be stored at line side, not in separate inventory storage areas. Tools and setup equipment should be kept near the machines. And the plant should be laid out in continuous product line flows rather than in “shops” dedicated to particular types of machines.

Levels of Inventory and Work in Process

Internal operations seldom require high inventories, so the observable number of any component part is a good measure of a plant’s leanness. You can get a quick read on inventory by watching a production line and counting the inventory at each work center.

Teamwork and Motivation

In the best plants, people consistently focus on the plant’s goals for productivity and quality, know their jobs well, and are eager to share their knowledge with customers and visitors.

Condition and Maintenance of Equipment and Tools

Equipment is clean and well maintained in the best plants. The purchase dates and costs are stenciled prominently on the side of machinery, and maintenance records are posted. Such details ensure that workers know as much as possible about the machines and can plan for preventive maintenance.

Management of Complexity and Variability

This category judges how the operation manages, controls, and reduces the complexity and variability it faces in its industry. It can be difficult during a tour to judge how a plant performs in this category, but you can watch for certain indicators. For instance, many companies collect (and then must process) much more data about their operations than they need; if you observe many people manually recording data and a large number of keyboards for data entry, the company may be doing a poor job of handling complexity, especially if the data collection is done by hand.

Supply Chain Integration

The best operations keep costs low and quality high by working closely with a relatively small number of suppliers. If a company uses multiple suppliers for the same part or family of parts, it’s unlikely that the suppliers were directly involved in the development process.

A best practice for plants is to pay suppliers based on completed, shippable product: Payment is made automatically when the product comes off the line. This cuts down on paperwork and reduces the number of people involved in settling accounts.

Commitment to Quality

The best plants are always striving to improve quality and productivity, and it shows. Attention to quality is usually easy to spot. If employees are proud of their quality program, they usually give it a name and post banners displaying the plant’s vision or mission statement, business objectives, and metrics showing achievements to date.

Source: Read a Plant – Fast by R. Eugene Goodson, adjunct professor of operations management at the University of Michigan Business School in Ann Arbor.