operator training slides
DESCRIPTION
Chita Program HPO Describe how to work with CHITA Metodology in companies.TRANSCRIPT
© ChitaHPO 2015
HIGH-PERFORMANCE
OPERATIONS
Introduction to CHITA
CHITA combines operator Knowledge of the
processes with simple Process Improvement Tools
to create a powerful process improvement program.
Tools + Working
Knowledge + Resources = Better
Processes
7
6 6
3
1
0
1
2
3
4
5
6
7
8
Laceration Strain Contusion Eye Burn
Injury Pareto ChartInjuries by Type
(Year)
Nu
mb
er
of
Inju
rie
s
Employee
Lacerations
Protective shields are
sometimes missing
Employees not using
equipment properly
Wood components
have sharp edges
Employees not using box cutters properly
Management doesn’t
require box cutter training
Management does not
train employees to use equipment properly
Gloves are not provided
for employees
+ + =
Input
Change or
Add ValueOutput
© ChitaHPO 2015
Why Improve processes?
– Reduce operator frustration.
– Better quality outputs.
– Increase customer satisfaction.
– More sales.
– Opportunity to earn more.
The CHITA Program
The Goals of the CHITA program:
– Operators learn how to use basic process improvement tools.
– Operators and managers work together to improve the processes.
– Customers, operators, managers and owners all benefit from
better processes.
© ChitaHPO 2015
Page 8 - What is a Process?
Process = Input, Transformation, Output.
Bottle,
Cap,
Water.
Fill bottle,
with water,
Put on cap.
Bottle of
Water.
Input
Change or
Add ValueOutput
© ChitaHPO 2015
Page 10 – Flowchart Symbols
Using Flowcharts to Document Processes
– Parallelogram = Input or Output
– Triangle = Queue (Materials Waiting)
– Rectangle = Process Step
– Diamond = Decision
– Circle = Connector
© ChitaHPO 2015
ConnectorInputYes
No
Decision OutputQueue
Process
Step
Page 11 – Process Flowcharts
Various levels of detail can be used depending on
information needed.
– Summary for an overall perspective.
– Detailed to trouble shoot or improve a process.
© ChitaHPO 2015
Paint Chair Process - Summary
To
Packaging
Input
Un-finished
Chair
Paint ChairOutput
Painted
Chair
From
Assembly
Page 11 – Process Flowcharts
© ChitaHPO 2015
To
Packaging
Input
Un-finished
Chair
Wipe Chair
With Tack Cloth
Output
Painted
Chair
From
AssemblySet Chair On
Conveyor
Remove Chair
From Conveyor
Spray Paint
On Chair
Input
Paint From
Drum
Air Dry PaintPass
Fail
Inspect
Paint Coverage
Touch Up
Paint
Date Stamp
Under Seat
Cover Chair
With Plastic Bag
Input
Plastic
Bag
Wait
Paint Chair Process - Detailed
Page 14 - Seven Process Measurements
Injuries – Reduce.
On-Time Performance – Increase.
Cycle Time – Reduce.
Throughput – Increase.
Variability – Reduce.
Inventory – Reduce.
Cost – Reduce.
Achieving any of the above will improve the process.
Input Output
Change
Add Valueor
ThroughputTime
Cycle Time
© ChitaHPO 2015
1
0
2
1
2
3
2
3
1
2 2
4
0
1
2
3
4
5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Injury - Bar Run ChartEmployee Injuries
(Year)
Nu
mb
er
of
Inju
rie
s
Page 18 – Bar Run Chart
Use run charts to visually track the seven
measurements.
Bar run charts for few measurements.
© ChitaHPO 2015
Page 20 – Line Run Chart
0
1
2
3
4
5
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Injury - Line Run ChartEmployee Injuries
(Year)
Nu
mb
er
of
Inju
rie
s
Line run charts for many measurements.
© ChitaHPO 2015
7
6 6
3
1
0
1
2
3
4
5
6
7
8
Laceration Strain Contusion Eye Burn
Injury Pareto ChartInjuries by Type
(Year)
Nu
mb
er
of
Inju
rie
s
Page 22 – Pareto Chart
Use Pareto charts to rank undesirable events
and prioritize efforts to remove the events.
© ChitaHPO 2015
Page 25 – Fishbone Diagram
To eliminate a problem, the root-causes need to
be identified and removed.
Employee
Lacerations
Protective shields are
sometimes missing
Employees not using
equipment properly
Wood components
have sharp edges
Employees not using
box cutters properly
Management doesn’t
require box cutter training
Management does not
train employees to use
equipment properly
Circled items are the root causes
of Employee Lacerations.
Gloves are not provided
for employees
Why are employees lacerated?
Because of box cutter use, handling wood
components or equipment use.
Why are employees lacerated when using box cutters?
Because they are not using box cutters in proper manner.
Why are employees not using box cutters properly?
Because they have not been trained how to properly use box cutters.
Why haven’t the employees been trained to properly use box cutters?
Because management has not included box cutter use in the training.
Corrective action:
Management set up box cutter training and require that employees are trained to use box cutters properly, before being allowed to use a box cutter.
© ChitaHPO 2015
Page 24 – Fishbone Diagram
Fishbone diagrams are used for:
• Identifying all the root-causes of complex problems.
• Communicating to others the root-causes of a problem.
• Brainstorming on a problem as a group.
• Determining the corrective actions needed to remove the
problem.
© ChitaHPO 2015
Assigning Action Items:
• What needs to be done as determined by the fishbone
diagram?
• Who #1 has the greatest knowledge needed to
complete the item?
• What resources will be needed, including employee
time?
• Who #2 in management will ensure that the resources
are made available?
• When will the action item be complete?
Page 24 – Fishbone Diagram
© ChitaHPO 2015
Page 28 – On-Time Performance
To keep our customers pleased and buying from
us, they need to receive their orders:
or
On-time & Correctly!
© ChitaHPO 2015
Page 28 – On-Time Performance
– Start tracking with a run chart.
– Prepare a Pareto chart of On-Time
Performance failures.
– Root-cause analysis of On-Time
Performance failures.
– Assign action items to correct each
root-cause.
50%
55%
60%
65%
70%
75%
80%
85%
90%
95%
100%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Ord
ers
Sh
ipp
ed
Co
rre
ctl
y O
n T
ime
Goal 97%
Monthly On-Time Performance - Run ChartPercent of Orders Shipped Correctly, On Time
120
75
3025
17
0
20
40
60
80
100
120
140
Missing Materials Unacceptable
Quality
Incorrect
Paperwork
Machinery
Breakdown
Other
Causes of Late or Incorrect Customer OrdersPareto Chart
Nu
mb
er
of
Inco
rre
ct o
r La
te O
rde
rs
Employee
Lacerations
Protective shields are
sometimes missing
Employees not using
equipment properly
Wood components
have sharp edges
Employees not using
box cutters properly
Management doesn’t
require box cutter training
Management does not
train employees to use
equipment properly
Circled items are the root causes
of Employee Lacerations.
To truly solve the problem of Employee Lacerations, all
of the root causes need to be corrected and removed.
Gloves are not provided
for employees
To improve On-Time Performance:
© ChitaHPO 2015
Page 34 – Cycle Time
– Customers get their orders faster, leading to more sales.
– Increases Throughput, leading to more sales.
– Reduces Inventory freeing up space and cash flow.
– Reduces Costs, leading to more profits.
The time it takes for inputs to become outputs.
Input Output
Change
Add Valueor
Cycle Time
Why reduce cycle time?
© ChitaHPO 2015
Page 34 – Cycle Time
– Processing time
– Queue time
– Setup time
– Down time
Change
Add Valueor
Wait
STOP
STOP
Four components of Cycle Time:
© ChitaHPO 2015
Page 35 – Process Formula
Cycle Time = In-Process Inventory / Throughput
Wait
Input
Unfinished
Chair
Throughput
10 chairs/hr.Wait
Clean
ChairPaint
Chair
Wait Dry
Chairs
In-Process Inventory – 40 chairs
Cycle Time – 4 hours
40 Chairs / 10 Chairs per hour = 4 Hours
© ChitaHPO 2015
Page 37 – Value-Adding
• Value-Adding processes:
– Filling a clean bottle with clean water.
– Delivering a case of bottled water to customer.
• Non-Value-Adding activities:
– Filling a defective bottle with unclean water.
– Moving empty bottles from dock to filling machine.
– Setting up the machine to begin production.
– Searching for tool needed to set up the machine.
– Repairing the machine.
Creating features or services that our customers
want and will pay for.
© ChitaHPO 2015
Page 40 – Reducing Processing Time
Cleanliness & immaculate organization.
© ChitaHPO 2015
• Only necessary tools or material should be in the
work area.
• An assigned place for everything needed.
• A shadow for anything that can move.
• Tools should be easy to find and in reach.
• Clean work areas often.
• Keep personal belongings in a clean secure area out
of the work space.
Page 40 – Non-Value-Adding Activities
© ChitaHPO 2015
• Identify value-adding activities. Eliminate
or minimize the other activities.
• Minimize operator motion.
• Stage materials next to operators.
Page 40 – Value-Adding Activites
• Empower operators to make
common decisions.
Yes
No
Decision
• Combine process steps.
Install
Right
Handle
Install
Left
Handle
Install Left
& Right
Handles
Wait
• The right tools or automation.
© ChitaHPO 2015
Page 40 – Reducing Queue Time
• Reduce transfer batch size.
• Balance process steps.
• Eliminate bottlenecks.
5 Min 5 Min5 Min5 Min
© ChitaHPO 2015
• Conveyors to move inventory.
Page 41 – Reducing Setup Time
• Specialized tooling or jigs.
• Reduce the cycle time of setup processes.
• Pit stop mindset.
© ChitaHPO 2015
Page 41 – Reducing Down Time
• Preventative maintenance.
• Rapid response when equipment
goes down.
• Pareto chart of down time events.
• Root cause analysis of down time
events.
120
75
3025
17
0
20
40
60
80
100
120
140
Missing Materials Unacceptable
Quality
Incorrect
Paperwork
Machinery
Breakdown
Other
Causes of Late or Incorrect Customer OrdersPareto Chart
Nu
mb
er
of
Inco
rre
ct o
r La
te O
rde
rs
Employee
Lacerations
Protective shields are
sometimes missing
Employees not using
equipment properly
Wood components
have sharp edges
Employees not using
box cutters properly
Management doesn’t
require box cutter training
Management does not
train employees to use
equipment properly
Circled items are the root causes
of Employee Lacerations.
To truly solve the problem of Employee Lacerations, all
of the root causes need to be corrected and removed.
Gloves are not provided
for employees
• Empower operators to make
common decisions.
Yes
No
Decision
© ChitaHPO 2015
Page 44 – Throughput
– 10 chairs per minute.
– 100 chairs per hour.
– 10,000 bottles of water per shift.
The outputs generated per period of time.
Input OutputChange
Add Valueor
Throughput
Time
© ChitaHPO 2015
Page 44 – Throughput
– Increasing On-Time Performance.
– Reducing Variability.
– Reducing Cycle Time.
– Reducing Costs.
Can process Throughput keep up with customer
demand without overtime?
• YES – We do not need to increase throughput.
Focus resources on increasing sales by:
• NO – We need to increase throughput.
© ChitaHPO 2015
Page 46 – Process Bottlenecks
1. Identify the bottleneck process step.
2. Remove the bottleneck by increasing the
throughput of the process step.
• A bottleneck process step:
Improving bottleneck process steps is often the
quickest and easiest way to increase throughput.
– Is the process step with the lowest throughput.
– Determines the throughput of the process.
• To remove a bottleneck process step:
© ChitaHPO 2015
Page 46 – Process Bottlenecks
– Inventory may pile up in front of bottleneck.
– Process steps downstream may sit idle.
– May require overtime to keep up.
• Locating bottleneck process steps:
Input
Unfinished
Chair
Throughput
10 chairs/hr.Wait
Clean
ChairPaint
Chair
Dry ChairsWait
Bottleneck
Process Step
Queue Inventory
Backed Up
Process Step
Sometimes Idle10 chairs/hr.
© ChitaHPO 2015
Page 48 – Process Formula
– Reducing Processing time will increase Throughput.
– Reducing Down Time will increase Throughput.
– Reducing Setup Time will increase Throughput.
Throughput = In-Process Inventory / Cycle Time
10 Chairs per hour = 40 Chairs / 4 hours
• The process formula tells us:
© ChitaHPO 2015
Page 50 – Increasing Throughput
After identifying the bottleneck process step:
1. Prepare a Task Sheet:
Task
# Task Description
How to
Minimize
1 Set dolly on turntable 5 Seconds Conveyor 0
2 Set chair on dolly 5 Seconds Conveyor 0
3 Switch on turntable 2 Seconds Footswitch 1 Second
4 Pick up spray gun from table 3 Seconds No longer needed 0
5 Wipe nozzle with cloth 4 Seconds 4 Seconds
6 Spray paint on chair back (VA) 9 Seconds 9 Seconds
7 Spray paint on seat (VA) 7 Seconds 7 Seconds
8 Spray paint on legs (VA) 8 Seconds 8 Seconds
9 Set paint gun on table 3 Seconds No longer needed 0
10 Switch off turntable 2 Seconds Foot switch 1 Second
11 Roll chair to paint dry staging area 8 Seconds Conveyor 0
Total Cycle Time 56 Seconds 30 Seconds
Value-Add 24 Seconds 24 Seconds
Non-Value-Add 32 Seconds 6 Seconds
Task Sheet: Paint Chair Process Step
Cycle Time
New
Cycle Time
2. Suggest ways to reduce the cycle time of tasks.
(Review pages 40 & 41.)
© ChitaHPO 2015
Page 52 – Increasing Throughput
After identifying the bottleneck process step:
3. Prepare a Setup & Down Time Sheet:
Setup or Down Time Description Frequency
Minutes
Per Day How to Minimize
New
Frequency
Minutes
Per Day
Operator goes to cage to get clean rags 5 Minutes 3/Day 15 Helper brings rags 1x day 0 Minutes 0/Day 0
Clean paint gun nozzle. 5 Minutes 2/Day 10 Have clean nozzle ready 1 Minute 2/Day 2
Clean paint lines. 30 Minutes 3/Week 18 Have clean paint lines ready 5 Minutes 3/Week 3
Change paint containers 10 Minutes 2/Week 4 Have new container staged 2 Minutes 2/Week 4
Total Downtime Minutes Per Day 47 9
Seconds 2820 540
Cycle Time
New
Cycle Time
Setup & Down Time Sheet: Paint Chair Process Step
4. Suggest ways to reduce the Cycle Time or
frequency of Setup tasks or Down Time events.
© ChitaHPO 2015
Page 53 – Down Time Event Log
To reduce Down Time:
1. Collect data using a Down Time Event Log:
Date Down Time Event Description
Time Process
Down
Time Process
Up Down Time
2/20/2013 Clogged paint lines 3:27 PM 4:00 PM 0:33
2/20/2013 Clogged nozzle 10:08 AM 10:13 AM 0:05
2/20/2013 Clogged nozzle 2:33 PM 2:39 PM 0:06
2/21/2013 Turntable motor shorted 9:15 AM 11:25 AM 2:10
Down Time Event Log: Paint Chair Process Step
2. Can you remember what to do next?
See page 41 for answer.
© ChitaHPO 2015
Page 54 – Variability
Process Consistency
– Input variability.
– Process variability
– Output variability
• Three types of Variability:
• If the process and inputs are consistent,
the outputs should be consistent.
Why is it important that outputs be consistent?
© ChitaHPO 2015
Page 56 – Reducing Process Variability
– Late customer orders.
– Customer complaints & returns.
– Scrapped or reworked outputs.
– Operator complaints about equipment,
inputs or other operators.
• Identify problems caused by process
variability:
• Prioritize and correct variability problems.
– Prepare a Pareto chart of the problems.
– Do root-cause analyses of the problems.
– Develop action items to remove each root-cause.
© ChitaHPO 2015
Page 58 – Critical Measurements
– Identify the critical attributes.
– Set measurement standards for the attributes.
– Document the standards with a Critical Measurement grid.
• To determine if outputs are satisfactory, critical
measurements are needed:
Product Description Critical Attribute
How to
Measure How Often
16 oz bottle of water Volume of water 16.1 oz +/- 0.1 16.0 oz 16.2 oz Grad Cylinder After setup & every 3000
32 oz bottle of water Volume of water 32.1 oz +/- 0.1 32.0 oz 32.2 oz Grad Cylinder After setup & every 2000
16 oz bottle of water Volume of water 16.1 oz +/- 0.1 16.0 oz 16.2 oz Grad Cylinder After setup & every 3000
16 oz bottle of water Volume of water 16.1 oz +/- 0.1 16.0 oz 16.2 oz Grad Cylinder After setup & every 3000
Critical Measurements: Bottle Fill Process Step
Target
Measurement Tolerance
Minimum
Acceptable
Maximum
Acceptable
– Post the standards for quick reference.
– Tools and methods for rapid measurement.
© ChitaHPO 2015
Page 60 – Critical Measurement Rejects
– Track rejects with a Reject Log.
• To reduce rejects, data needs to be collected:
– Prepare a Pareto analysis of reject types.
– Do a root-cause analysis for each reject type.
– Assign action items to remove each root-cause.
Date Time Product
Attribute
Measured
Quantity
Rejected
Cause of
Rejects Corrective Action Taken
Downtime
Minutes
4/18/2013 10:03 AM 16 oz bottle of water Volume of water 15.9 oz 50 Filler calibration Stop line, Recalibrate filler. 3 Mins
4/18/2013 2:23 PM 32 oz bottle of water Volume of water 32.3 oz 110 Plunger leak Stop line, Replace plunger. 11 Mins
4/18/2013 3:01 PM 32 oz bottle of water Volume of water 31.9 oz 27 Filler calibration Stop line, Recalibrate filler. 5 Mins
Reject Log: Bottle Fill Process Step
Actual
Measurement
© ChitaHPO 2015
Page 61 – Control Charts
– Like a run chart but with a Target, an Upper Control Limit (UCL)
and a Lower Control Limit (LCL).
– Measurements within the UCL and LCL are acceptable.
– Measurements outside the UCL and LCL are not acceptable.
– Improve the process to bring the measurements consistently
closer to the target.
Control charts are used to reduce the variability of a
measurement:
0.980
0.985
0.990
0.995
1.000
1.005
1.010
1.015
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Variability - Control ChartDiameter of Finished Knob
Dia
me
ter
in I
nch
es UCL
LCL
Target
© ChitaHPO 2015
Page 62 – Standard Operating Procedures
To ensure process are performed consistently, a
Standard Operating Procedure (SOP) should be
developed and documented.
– Detailed instructions of the best practice.
– Use diagrams and pictures as needed.
– Create a format that works best for the situation.
– All operators should follow the same SOP.
Task
# Task Description Instructions
1 Set dolly on turntable Set dolly on turntable with beveled edge
adjacent to the raised turntable lip. Fig. 1.
2 Set chair on dollySet chair on dolly with all legs resting in
indentations. Front legs fit in indentations
closest to the beveled edge of the dolly. Fig 2.
3 Switch on turntable
4 Pick up spray gun from table
5 Wipe nozzle with cloth Wipe clean the front of the spray gun nozzle
with a clean rag.
Standard Operating Procedure: Paint Chair Process StepEffective Date: 3/18/2013
© ChitaHPO 2015
Page 63 – Input Variability
To reduce input variability:
• Inspect raw materials using critical measurements.
• Track On-Time Performance of suppliers.
– Late or incorrect deliveries.
• Work with suppliers to improve their On-Time
Performance
– Provide supplier with a Pareto chart of failures.
– Discuss possible root-causes of failures.
© ChitaHPO 2015
Page 63 – Variability Recap
Reducing variability is critical for increasing profits:
• There is much opportunity to reduce variability.
• Where do we begin?
– Take it one step at a time.
– Identify and remove variability problems.
– Where do Critical Measurements need to be
documented?
– Reject Logs are the first step to reducing rejects.
– Initially create SOPs where needed most.
– Employ Control Charts and SPC when variability needs
to be reduced to very small amounts.
© ChitaHPO 2015
Page 64 – Inventory
Four types of Inventory:
• In-process inventory:
– Having Value-Added
or
– Waiting in a Queue.
• Raw materials.
• Finished goods.
© ChitaHPO 2015
– Reduces the effort of managing processes.
– Inventory can be damaged or become obsolete.
– Inventory hinders process flow.
– Increases cash flow.
Why reduce inventory?
Page 65 – In-Process Inventory
Why we have in-process inventory:
• Processes take time to add value.
• Splitting a process into multiple process steps
can increase throughput.
• Queue inventory is created when:
– Process steps have different cycle times.
– Processes are done in batches.
– There are bottleneck process steps.
QueueProcess
Step 1
Process
Step 2
Queue Queue
Queue Bottleneck Process
Step© ChitaHPO 2015
Page 67 – Process Formula
– Reducing Queue Time will reduce queue inventory.
– Reducing Processing Time by combining process steps
will reduce in-process inventory.
– Reducing the Cycle Time of bottleneck process steps will
reduce queue inventory.
In-Process Inventory = Cycle Time X Throughput
40 Chairs = 4 hours X 10 Chairs per hour
• The process formula tells us:
© ChitaHPO 2015
Page 67 – Reducing In-Process Inventory
• Reducing transfer batch size.
• Balancing a process.5 Min 5 Min5 Min5 Min
• Removing bottlenecks.
• Issuing inventory to the process to match
the throughput of the bottleneck.
• Combining process steps.
Install
Right
Handle
Install
Left
Handle
Install Left
& Right
Handles
Wait
© ChitaHPO 2015
Page 69 – Raw Material Inventory
Why we have Raw Material inventory:
• Difficult to exactly predict when we will need
materials to be input into a process.
• Suppliers may not be able to deliver materials at
the exact time they will be needed.
• Shipping materials in batches usually reduces the
cost of shipping.
© ChitaHPO 2015
Page 69 – Raw Material Inventory
Reducing Raw Material inventory:
• Improved internal inventory controls.
– Kanban (visual reorder point) system.
• Reduce order quantities.
• Reduce cycle time by suppliers.
• Improve supplier On-Time Performance.
© ChitaHPO 2015
Page 70 – Finished Goods Inventory
Why we have Finished Goods inventory:
• Difficult to exactly predict when customers will want to
buy our product.
• Shipping materials in batches usually reduces the cost
of shipping.
Reducing Finished Goods inventory:
• Reduce process batch size.
• Reduce setup cycle times.
• Shorter and more consistent cycle times.
• Increased communication with customers.
© ChitaHPO 2015
Page 72 – Costs
Two types of Process Costs :
• Variable or Direct – Vary with output:
– Direct labor
– Raw materials
– Supplies
– Services
• Overhead Costs – Fixed in the short term:
– Rent
– Insurance
– Maintenance
– Depreciation
• Some may be partly fixed and partly variable.
© ChitaHPO 2015
Page 73 – Cost Reporting
Variable cost per unit of output :
Cost
Cost/
Unit
Units Produced 27,106
Labor $43,070 $1.59
Materials $32,026 $1.18
Hardware $4,599 $0.17
Electricity $4,205 $0.16
Solvents $3,845 $0.14
Packaging $3,706 $0.14
Freight $3,624 $0.13
Hand Tools $3,281 $0.12
Abrasives $2,468 $0.09
Gloves $1,407 $0.05
Brushes $1,207 $0.04
Total Variable Costs $103,438 $3.82
Fine Furniture CompanyVariable Costs - January
© ChitaHPO 2015
Page 74 – Cost Reporting
Overhead costs by month:
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rent 18,532 18,532 18,532 18,532 18,532 18,532 18,532 18,532 18,532 18,532 20,287 20,287
Depreciation 6,235 6,235 6,235 6,235 6,235 6,308 6,308 6,964 6,964 7,185 7,185 7,258
Liability Insurance 14,026 14,026 14,026 14,587 14,545 14,026 14,026 14,026 14,026 14,026 14,026 14,026
Worker's Comp Ins. 20,599 29,691 20,599 20,599 20,599 20,599 20,599 20,599 20,599 26,473 26,473 26,473
Outside Serv ices 175 270 937 1,611 918 1,667 - 169 277 324 - 1,227
Repairs & Maint. 2,637 - 351 1,277 561 440 2,455 165 - 1,181 3,873 356
Supplies 3,706 3,894 1,158 4,789 3,185 2,924 2,734 2,740 3,799 1,023 4,508 2,867
Utilities-Gas 1,006 984 1,043 863 694 534 463 408 576 765 894 972
Utilities-Electricity 6,335 6,248 6,354 6,446 6,844 7,088 7,459 7,807 8,784 7,201 6,104 5,901
Utilities-Water 174 190 201 171 176 215 226 231 217 173 169 160
Telephone 675 675 550 550 550 575 575 575 575 700 700 700
Total Overhead 74,100 80,745 69,986 75,660 72,839 72,908 73,377 72,216 74,349 77,583 84,219 80,227
Fine Furniture Company
Overhead Costs
© ChitaHPO 2015
Page 74 – Reducing Costs
• Improving processes should reduce both
variable and overhead costs.
• Reducing waste of supplies:
– Ear plugs
– Safety glasses
– Paper towels
– Rags
• Collaborating with suppliers.
• Changing suppliers.
© ChitaHPO 2015
CHITA – Getting Started
• Start a list of process problems:
– List as many as you can think of.
– Do not try to resolve each problem as it is listed.
– Many of the problems will be resolved as you work through the program.
• Clean and immaculately organize work areas:
– See page 40 of workbook.
– This will improve ALL seven measurements.
– Makes it easier to improve processes.
• Look out for Low-Hanging fruit:
– Easy improvements that will have a big impact.
– What are pressing issues or needs?
© ChitaHPO 2015
Get Started and Push On!