Hidden factory
The hidden factory some Times called also hidden plant, stands for the unused factory capacity - maximum quantity of extra production that can be achieved without any additional investment. If the production goes 24/7 (no stoppage) means hidden factory is fully utilized.
24/7 production = fully productive time + lost time (hidden factory)
Term origin
Armand Figenbaum quality guru, had a big impact on popularizing term "hidden factory". His point was to show un-tacked waste. He proven that up to 40% of the manufacturing plan capacity can be spent on ovehaul the things that supposed to be done right in the very begging. Idea was mainly to aim in quality, waste and the cost of it [1]. Over the years hidden plant concept expanded and all kind of waste during manufacturing process became incorporated. Four main loss areas have been distinguish:
- Schedule (not scheduled production)
- Availability (not running production due to materials)
- Performance (limited production - machinery settings)
- Quality (waste of finish goods)
Hidden factory true size
Calculating hidden factory size 24/7 production - fully productive time = lost time (hidden factory) Fully Productive Time is the amount of quality approved finish goods multiplied by Ideal cycle time, the cycle time of end to end manufacturing process resulting good quality finish goods Fully Productive Time = finish goods x Ideal cycle time
Factors identification
In order to fully utilize hidden factory all losses that happen during production needs to be identified. For every loss there should be implemented key performance indicator to measure losses and be able to improve it. There is a set of tools that are often used to identify factores[2]:
- Total Effective Equipment Performance, calculate based on four factors, utilization, performance quality, availability
- Overall equipment effectiveness, framework that calculates true productive planned production
- Six big losses(tool to categorize losses caused by machinery/equipment)
- Unplanned Stops
- Planned Stops
- Small Stops
- Slow cycles
- Production Rejects
- Startup Rejects
Advantages
Including hidden factory into fully productive time. There are meaningful effects that comes from hidden factory utilization[3]. The biggest advantage is performance (productivity) of the factory without any extra expenditures. The other wins that company is gaining is reduction of conversion costs, secondly capability of production became more flexible ( very important factor for fast-moving consumer goods business), improve planning process, savings on machinery as you gain capacity without any investments.
Examples of Hidden factory
- The most common example of a hidden factory is the use of existing factory machinery for additional production. For example, a factory that has two shifts of machines but only operates one shift could use the second shift to increase output without any additional investment.
- Another example of a hidden factory is the use of existing employees to produce additional output. For example, a factory that has employees with specialized skills could train them to produce additional items or increase the number of items they produce in a given period of time.
- A third example of a hidden factory is the use of existing raw materials or inventory for additional production. For example, a factory that has excess inventory of a certain item could use that inventory to produce additional items without any additional investment.
- Lastly, a fourth example of a hidden factory is the use of existing space for additional production. For example, a factory that has unused space could use that space to expand operations or add additional machines and equipment to increase production without any additional investment.
Limitations of Hidden factory
The hidden factory has certain limitations that need to be taken into account when attempting to utilize its full potential. These limitations include:
- Lack of resources: The hidden factory requires additional resources, such as materials and manpower, to reach its full potential. Without them, it will not be able to produce the maximum capacity.
- Limited production time: Due to a lack of resources and other factors, the hidden factory might be limited in terms of how much it can produce in a given period of time.
- Quality issues: The hidden factory's production may not be of the same quality as fully-utilized factory capacity, due to the lack of resources and limited production time.
- Cost of production: The hidden factory might incur additional costs due to the additional resources and labor needed to reach its full production potential.
Hidden factory can be approached in multiple ways, such as :
- Reducing scrap rate: Scrap rate can be reduced by implementing proper maintenance plans, improving process and product quality, and optimizing material usage.
- Increasing productivity: Productivity can be increased by removing inefficiencies in the production process, improving process control and monitoring, and using advanced manufacturing technology.
- Implementing lean manufacturing: Lean manufacturing can be used to eliminate waste from production processes and improve efficiency.
- Reducing setup and changeover times: Setup and changeover times can be reduced by streamlining processes, automating operations, and improving communication between departments.
- Utilizing capacity planning: Capacity planning can be used to identify and utilize the maximum potential of a factory's capacity.
In summary, there are various approaches to utilizing hidden factory capacity, including reducing scrap rate, increasing productivity, implementing lean manufacturing, reducing setup and changeover times, and utilizing capacity planning. By utilizing these approaches, companies can maximize their use of capacity and increase their production output.
Footnotes
| Hidden factory — recommended articles |
| Direct labor efficiency variance — Overall equipment effectiveness — 7 wastes of lean — Variable overhead efficiency variance — Line balancing — Material flow execution function — Poka yoke — Lean manufacturing — Operational effectiveness |
References
- Czabak-Górska I.D., (2017), an analysis of occurrence of the hidden factory phenomenon in production - based on the selected yields - case study, "CBU International Conference Proceedings ", 5. page 94
- Rødseth H., Schjølberg P., (2014) The Importance of Asset Management and Hidden Factory for Integrated Planning, "Advanced Materials Research",. 1039. pages 577-584
- Sondalini M., (2010), The Easy Way To See If You Have A "Hidden Factory" Inside Your Operation, "Lifetime-reliablity"
- Vorne, (2019), Six Big Losses
- Yarrow D., Yarrow M., Andy R., Any R.,(2010), The hidden factory: The naked truth about business excellence in the real world, "Total Quality Management". 11. pages 439-447
Author: Bartosz Aleksander
