The Hidden Factory is a term that refers to non-value-added unnecessary activities in an operation or activities out of standard operating procedure (SOP). It reduces the quality or the efficiency of a manufacturing operation or business process, but are not initially known to managers or others seeking to improve the process.
The Hidden Factory is where the largest amount of money, time and resources are spent that are considered as ‘waste’. The Hidden Factory coexists with the actual, visual factory.
What is a Process?
A process is a systematic activity comprising of smaller activities that culminate in an outcome (end product). A process can take up time, space, and resources.
Categories of Process
1. Value-added: This step in the process adds form, function, and value to the end product and for the customer.
2. Non-value added but necessary: This step does not add value but is a necessary step in the final value-added product.
3. Non-value added: This step does not add form, function, or assist in the finished goods manufacturing of the product.
(2.) & (3.) naturally create waste, which causes ‘Hidden Factory’.
Types of waste that can contribute to ‘Hidden Factory’
i. Over-Production: Producing more than is needed, faster than needed or before needed.
ii. Wait-time: The Idle time that occurs when co-dependent events are not synchronized.
iii. Transportation: Any material movement that does not directly support immediate production.
Effects of Hidden Factory
- In 1977, the quality guru ‘Armand Feigenbaum’ estimated the endeavor within the hidden factory might be 15% to 40% effort of the total company.
- Reduce the profitability of the company.
- Impact on the competitiveness of the company.
- Impact ability to satisfy the Customers.
- Prevent the company from achieving the world-class Performance.
Hidden Factory in the garment industry
The Hidden Factory can be seen to those who look for it. It exists right in front of our eyes. Yet, most of us are blind to its existence and the Hidden Factory continues to eat profits.
Signs of ‘Hidden Factory’ in the Garment Industry
- Less production than target due to rework.
- Carton audit failure due to unacceptable quality level.
- Reproduction of short quantity to meet up shipment quantity.
- Over time working hour of the factory.
- Recruitment of sub-contractual manpower.
Cause: Unplanned production of short quantity due to damage after washing.
Effect: Total cycle of production (spreading, cutting, sewing, washing etc.) need to be done again separately.
Contribution in Hidden Factory: The resources (time, manpower, money, raw material) that required to recover the damage of washing is totally waste.
Cause: Wrong label is attached to the garment due to the carelessness of operator or miscommunication with a supervisor.
Effect: After finding the wrong label in the QI table, the garments are given back to the label attach operator. Wrong labels are removed and correct labels are attached.
Contribution in Hidden Factory: The time that required to remove the wrong label and attach the correct one is totally waste.
Cause: Different types of marking, turning, trimming, de-chaining is done in the garment industry.
Effect: Requires extra manpower and time.
Contribution in Hidden Factory: The resources (time, manpower) used in marking, turning, trimming, de-chaining is totally waste as all these add no value at all.
Cause: Production of more garments than order quantity due to lack of planning.
Effect: Remain excess garment after shipment.
Contribution in Hidden Factory: The resources (time, raw material, manpower, money) to produce these extra garments all are waste.
Steps to eliminate ‘Hidden Factory’ from Garment Industry:
I. Find out ‘Is there any sign of Hidden Factory?’
I. Find out the root cause of that sign
II. Eliminate the cause that feeds ’Hidden Factory’
There are hundreds of ways you can find ‘waste’ in every department; in every process; in every action. It is everyone’s responsibility in the organizational team to find the Hidden Factory in his or her area. If someone finds any Hidden Factory, he or she should expose it and implement solutions that will eliminate the waste.