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What is production fluctuation and why does it matter?

It is likely that everything in the universe fluctuates. Up and down, forward and back. This also applies to the pace of manufacturing of industrial products, the production rate. In all processes. At times, the process comes to a standstill, then it is re-started and accelerated, reaching top speed, then overspeed. The process is slowed down, fast and slow speed changes are made, it runs at a crawl and stops. The process is then started again and accelerated. Why?

The obvious explanation is that production must meet demand, and demand varies. Production resources may also be unevenly available, and variations in production conditions and disruptions in production equipment also add to the fluctuation. Muda, mura and muri are the familiar non-value adding themes of the Lean philosophy. In production, efforts are made to eliminate or at least reduce them. Mura means unevenness, which can also be understood as fluctuation. From time to time, fluctuation leads to overburdening, muri, which in turn causes waste, muda. Waste can also be thought of as resulting directly from fluctuation. In the end, perhaps it is most appropriate to think that all three are intertwined and cross-interfere with one another. Nevertheless, I would like to argue that fluctuation is the most significant of the three, and that efforts to thoroughly understand it pay off.

This argument is supported by criticism of the Lean philosophy: muda, the elimination of waste, is manifestly easy to understand. It is therefore simplest to start production development with the elimination of waste. It is easy to get carried away with the quick results and solely focus on pinpointing waste.

Furthermore, it has also been argued that overlooking mura and muri is the main reason for the halting of positive development and backsliding from the results already achieved. Combined with variation in demand and other fluctuation, an obsessive focus on eliminating waste may lead to overburdening people, equipment and control systems and, eventually, even more waste. The time needed for thinking in connection with expert work, for example, as well as the necessary learning that takes place through trial and error, may be dismissed as waste. That would be a crude mistake in the application of the philosophy. An obvious example to analyse in this connection would be the disruptions in the global value production chains, cleansed almost entirely free of waste, in the face of the corona pandemic, but perhaps it is not appropriate to dwell on that at this time. The idea, however, is clear.

With complex and interconnected production processes, it is of the utmost importance to understand the dynamics of system fluctuations as a whole. Which factors are likely to offset or strengthen fluctuation in the system and its various parts? How can the system be made to withstand variations in demand and circumstances? How can equilibrium at the level of the entire plant – plant balance – across all parts of the process that affect production, including the power plant, be achieved and maintained? The keys to the solution do not lie in individual tools and methods, but in the creative application of various methods. For example, Six Sigma provides suitable methods for understanding the fluctuations, opening up a statistical-mathematical perspective.

In production development, experience and familiarity with the sector concerned are essential. However, even more important is cooperation between people working in different organisations. The power of cooperation is strongest when it is based on mutual respect, trust and openness between the parties involved. On the other hand, when these are lacking, it causes systemic overburden, fluctuation and waste. The procurement models and contract practices used can create a basis for smooth-running cooperation. Or they can harm it. On the other hand, one of the principal tasks in project management is to maintain the smooth running of things.

Lastly, let us mention the eighth type of waste that is not found in the original Toyota classification: unutilised human creativity, i.e. the overlooked employee’s contribution to improving the quality of work. Definitely the favourite object of my attention.

F.R.R - The writer has long experience in industry and energy sector.

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