If you have a shop with more than one person in it, I’m willing to bet there isn’t more than a four-hour stretch where you don’t see a mistake happening, find a mistake that happened, or find yourself making a mistake. Typically, when mistakes are mentioned to the poor person who made it, the catchall phrase is, "We’re all humans, and humans make mistakes."
Think of the last few mistakes you’ve encountered. Upon reflection, do you truly believe there was absolutely nothing that could’ve been put in place to prevent that mistake from occurring? So, how do we turn hindsight into foresight? Believe it or not, the answer is very simple, and you probably already know it. What is it you ask? It’s elementary, my dear Watson: standard work.
Cost of mistakes
There are two ways of looking at mistakes. You can consider what not making mistakes would save you, but that would be a hypothetical calculation of a future event that has not occurred. This leaves our spidey senses tingling that it might not be accurate, therefore motivation is low for going through the pain of fixing it. The other way of looking at it is how much do mistakes actually cost? To answer this we have thousands of years of historical data that leave almost no room for feeling the calculation is inaccurate.
Let me take you on a trip to Japan for the answer. I was first exposed to the true cost of a mistake while studying with Ritsuo Shingo, (son of Shigeo Shingo co-creator of the Toyota Production System) He drew a sketch on the board telling a story of a river that starts as melting snow on a mountaintop. It then flows down to a river that meets the ocean. He drew arrows each time the river got wider.
This example is analogous to a job moving through a factory. Starting as a concept where no work has been done yet, as in the unmelted snow on the mountain. It then flows all the way down to where the river meets the ocean, the ocean being a final destination, representing a completed job.
Compare this to production flow in a factory. Each time a mistake passes to the next department or process the cost to repair it is a multiple of 10 times. Yes, you heard that right, 10 times! Toyota learned long ago the counterintuitive principle of high quality is actually cheaper in the long run. This is why a total focus on eliminating mistakes and being defect-free will always produce a higher quality product at a lower cost to manufacture.
If numbers aren’t your thing, let’s go back to the image of the river. The Japanese are experts at teaching valuable and powerful lessons through simple and relatable stories. Now just imagine the effort required to stop the water at each level in the river. At the top, you only have to prevent a drip, easily done with one fingertip. Near the end of the river, the undertaking to stop that water would be nothing short of a monstrous undertaking
Mistake costs multiply
An easy example would be something that an engineer could have fixed in the drawings for $10 in labor. If that mistake reaches the shop floor, it’s $100 to have someone on the shop floor figure it out, rework or remake the parts and catch it up to the rest of the job. If that mistake manages to escape the shop floor and get to the job site, it’s now $1,000 to fix.
Everyone reading this article likely recalls a mistake that led to one extra trip to a job site. I might even be surprised to find out through eliminating predictable mistakes we all couldn’t shave one day off each install. So now the math is easy. How many jobs do you do in a year? If you have a factory that does one project a day not creating standard work and adhering to it, it’s costing you $220,000 per year!
If a company works diligently on root cause analysis, implementing standard work that eliminates mistakes while they are still a snowflake on a mountaintop after one year you will double your net profit. If you’re in a competitive market and you don’t take the time to create standards, but your competition does, you probably won’t have to worry about doing it. You’ll be out of business.
The whole world universally agrees we hate sales tax when we buy something. Think of mistakes as an additional tax you’re charging to your customers every time you ship product. And since we can’t eliminate the tax imposed by our governments, the least we can do is eliminate the tax we add with our sloppy processing.
Have something to say? Share your thoughts with us in the comments below.