Something’s not working. You’re already starting to see a drag on important metrics.
Very soon you face a common question.
Do you aim for a quick fix to boost the numbers? Or do you spend more time investigating, but risk the drag growing in the meantime?
Effective problem solving is so important for factories because there are no quick fixes in the long run. Ultimately, you need to resolve issues at the root.
To explain how, and why, we’ll take you through:
- The cost of recurrence
- Removing the Hidden Factory for good
- The cultural benefit of problem solving
- KPIs for problem solving
- Getting started with the mPS
Let’s dive in!
The cost of recurrence
Before we look at how to adjust your problem solving routines, we need to address the elephant in the room.
Only 26% of factories have a predictive maintenance strategy in place. This means that reactivity, and the ‘run-to-failure’ model, still rule in the majority of cases.
This can have a huge influence on problem solving. Only jumping into action when work has stopped makes the recurrence of problems both inevitable, and designed into your shop floor processes.
You’ll already know what recurrent problems might mean for your scrap & rework figures, or for your various quality measurements.
What you might not know is how recurring problems can lead to an alternate, hidden reality on your shop floor that costs you much more than a few isolated KPIs.
Exposing the 'Hidden Factory'
The structures, processes, and workarounds that develop to deal with waste become what’s known as the ‘Hidden Factory’ within your factory.
In a nutshell, fixing mistakes becomes like a parallel production line.
This concept has been discussed extensively within the industrial community for decades. But despite the problem being well known, the Hidden Factory persists as a shop floor reality.
This is because it’s rarely measured properly. Though tangible products like direct waste are hard to miss, the ‘tax’ that planning for and dealing with waste places on managers and machines often goes unnoticed.
We’re talking about;
- The cost of indirect labor: the planning, admin, and duplicated efforts associated with leaky shop floor processes.
- Accumulated technical debt: all the band-aid fixes combining to reduce your capacity to innovate.
- The managerial tax: the time white collar workers spend dealing with ‘exceptions’, when measured against their annual salary.
All of this means that your factory faces a limit on its capacity.
This is the real toll the Hidden Factory takes.
The American Society for Quality finds that industrial organizations sustain Cost of Poor Quality (CoPQ) at 15-20% of sales revenue; a number directly attributable to your Hidden Factory.
So improving your problem solving process will help you expose and dismantle the Hidden Factory by making it a capacity-recovery tool, not simply a ‘let’s fix-it’ one.
A Hidden Factory audit
To help you understand how much this issue affects your shop floor, here’s a quick check you can run through now.
If you answer ‘no’ or ‘I don’t know’ to more than 2 of these questions, there’s a good chance the Hidden Factory is draining your capacity by as much as 20%.
The recurrence audit
Q: “Do we have a metric that specifically tracks how many ‘closed’ problems recur within 6 months?”The Standardization audit
Q: “When a root cause is found, does it trigger an immediate update to the Visual Standard or TPM schedule?”The “managerial tax” audit
Q: “Can my Shift Leads and Engineers account for the 20-30% of their time spent firefighting, or is this labor cost simply absorbed into the overhead?”The data fidelity audit
Q: “Is the data used for our 8D or 5-Why analysis captured at the moment of failure, or is it reconstructed from memory hours (or days) later?”The institutional memory audit
Q: “If my best Maintenance Lead walked out today, would the logic behind our last 50 corrective actions be instantly accessible to their replacement?”
Why you need to rethink your problem solving system
If your Hidden Factory audit came out with a high number of ‘No’ answers, you’re officially in firefighting mode. Your current problem solving system is best described as a reporting tool, not an improvement one.
But problem solving is not firefighting.
You can run as many 8Ds or Ishikawas as you want to resolve problems as they emerge. So long as they remain disconnected from your work systems, they’ll patch the problem but won’t solve it.
This is how your Hidden Factory thrives.
Instead, your system has to create a natural, routine relationship between your problem solving methods and your work processes. That means your Visual Standards and TPM schedule being updated to design freshly solved problems out of existence.
Where managers fall down here is with a mistaken belief that they already have a closed loop when in fact it’s a broken one.
It’s broken because the 8D analysis lives on a document. It’s broken because the recent history of problem solving lives in a filing cabinet silo, or in the memory of a lead engineer who will soon be retiring.
In other words, it’s broken because your knowledge management is.
Removing the Hidden Factory for good
Reduce the discovery lag
You can’t afford to wait to start the problem solving process if you want to address the Hidden Factory.
Any lag between the emergence of a problem and isolating that problem will produce waste.
So one of the first measures you need to take is to enable instant detection of problems.
Tighten your methodology
A bad 8D is worse than no 8D at all. Getting this method wrong bakes a problem in rather than solving it.
So as a critical step towards solving the Hidden Factory, you need to be disciplined. The standards must be updated to prevent the problem recurring.
This step moves you away from “fixing the machine” to “fixing the process standard”; a scalable, permanent resolution to the problem at hand.
Converting tribal knowledge into digital assets
The Harvard Business Review and other experts argue that the one true sustainable advantage a factory has is its ability to learn.
Knowledge management is the key to effective problem solving, and to creating a factory that learns from itself.
When you fail to standardize a dependable solution and your operators develop workarounds in response, your Hidden Factory thrives.
A solution that brings it all together
To hit these three birds with one stone, the mPS gives you a digital nervous system that bridges the gap between detection and standardization.
It does this through three key functions.
- Enforced connectivity (the silo buster)
In the mPS, a Problem Solving event is a trigger for action and change. So for example, if a ‘lack of lubrication’ is identified as a root cause, the mPS doesn’t just record it. It prompts an immediate, mandatory update to the TPM module. Therefore, the Problem Solving process is an engine of maintenance and standards. - High fidelity capture vs. retrospective guessing
Data decay happens within minutes of a stoppage. By using the mPS with the Gemba, you capture all the ‘physics of failure’ (photos, sensor states, immediate context) before maintenance even arrives. No more relying on memory; here we have raw evidence itself. - A library of standards
This is where you get true scalability. Let’s say plant A solves a vibration issue on a specific CNC model. That solution is then pushed out as ‘best practice’ to every other plant in the group using the same asset. That’s how you take problem solving global.
The cultural benefit of problem solving
With a digital ‘nervous system’ fusing the connections between problem detection and long-term resolution, you can turn your attention towards shop floor behavior.
It’s true that there’s no perfect system for production. A 100% efficient and productive line would be impossible in practice.
However, this means by definition that you can always improve.
Problem solving is therefore the bread and butter of continuous improvement practice.
With an effective problem solving process you get a resilient, self-sustaining model of improvement.
And as McKinsey reports, companies with a strong continuous improvement culture see significant productivity gains.
So with continuous improvement working as your operational philosophy, you make the Hidden Factory logically impossible.
KPIs for problem solving
We want to give you a handful of metrics to keep an eye on when implementing your new problem solving routine.
These are ‘Rolled Throughput Yield’ (RTY), problem solving recurrence rate, ‘Lag Time to Standard’ (LTS), and OEE impact per countermeasure.
Together, these numbers will help you understand the effectiveness of your problem solving process.
Rolled Throughput Yield (RTY)
This metric describes the probability that a unit will pass through your multi-step process without a single rework, adjustment, or scrap incident.
Why this matters:
- Instead of focusing on Final Yield, RTY exposes the Hidden Factory loops where parts were fixed mid-line. So if your Final Yield is 99% but your RTY 75%, it means a quarter of your factory’s labor is spent on fixing mistakes instead of making products.
- The gap between these numbers measures the size of your Hidden Factory.
Problem solving recurrence rate
What percentage of root cause analyses are reopened for the same failure mode on the same asset within 6 months? Answer this for your problem solving recurrence rate.
Why this matters:
- In short, if this number is high, your problem solving process isn’t working well.
- Any number above 10% and your system is likely a tick-box exercise rather than a technical improvement process
Lag Time to Standard (LTS)
The length of time between the identification of a root cause and the official update of the Visual Standard/TPM task.
Why this matters
- This measures the speed of your factory’s institutional learning. During this time span, the Hidden Factory does its work.
- The mPS directly intervenes with this number, reducing the lead time from weeks to minutes.
OEE impact per countermeasure
The possible increase in OEE you could attribute to a closed problem solving event.
Why this matters
- It helps you and your team prioritize certain actions, and keeps you focused on improving your factory.
- It has the added benefit of connecting the analysis part of your operation to your performance, because it requires your team to ask; ‘we did this 8D – did the machine stay up longer this month?’
Get started with the mPS
To systematically remove the Hidden Factory and receive all the benefits of an effective problem solving process, you’ll need a centralized digital tool.
One that specializes in problem solving, that works as a single source of truth, and that can help you scale up best practice across multiple plants.
And the mPS is ready to help.
Book a discovery call with us today and we’ll show you how we can adapt the tool to your factory’s needs.
Whether you want to go all-in and digitalize your factory’s processes for greater traceability and efficiency, or begin by focusing on smartly identifying and solving problems, we’ll build a package to suit you.
Move from firefighting to sustainable, permanent problem solving through a targeted package of digital tools with the mPS.
To learn more, book your discovery call today.
