Operational Costs and Investment
The rightmost portion of the decomposition deals with reducing
operation and investment costs. Elimination of non-value adding
sources of cost (DP-12) is the means for reducing production
costs (FR-12). Three sources of waste are considered: direct
labor (FR-DP 121), indirect labor (FR-DP 122), and facilities
(FR-DP 123). Note that other “wastes” in manufacturing systems
such as storage, transportation, and overproduction have already
been considered in the decomposition as they increase throughput
time as well as cost. Decomposition of DP-121 and DP-122 focuses
on the effective utilization of labor, rather than on elimination
of labor content and headcount reductions.
The decomposition provides some detailed steps in designing
efficient work loops for operators. Suggested means are multi-functional
operators, autonomous operating equipment, balanced work loops.
Factors such as training and mutual relief systems are discussed
in the quality branch (FR-Q121) and the predicable resource
branch (FR-P133). The layout of work loops and direct labor
work content must consider the requirements from the left
side of the decomposition according to the path dependency
stated in the MSDD.
Finally, FR-13, minimizing investment over the system life
cycle, is achieved by making investments based on a long-term
system strategy. No further decomposition of this FR-DP pair
is presented in the MSDD, as the specifics were found to be
too dependent on the particular application. Decisions here
might affect, for example, how flexible the system will be
to changes in production volumes, or to changes in product
design, or to the variety and mix of products demanded. There
is no general answer as to how much flexibility is “the right
amount,” instead, the desired flexibility must be evaluated
based on the firm’s competitive environment and desired niche
in the market.