Lean manufacturing aims to improve manufacturing. In this post, I would like to look at the 6R goals and clarify them. The 6R are right product, right place, right time, in the right quantity and quality, and at the right cost. It has a lot to do with logistics, not only for the final product, but also for the raw materials and intermediate components. Let’s have a look:
Introduction
The goals of lean are often summarized in a simple sentence: the right product at the right place, the right time, in the right quantity and quality and at the right cost. These are also sometimes simply called the 6R. The first four (right product, right place, right time, and right quantity) are all about logistics, highlighting again how important functioning logistics is for an efficient manufacturing process – or really anything related to products.
Taichi Ohno mentions this in similar form multiple times, e.g., each process receives the exact item needed, when it is needed, and in the quantity needed (Ohno, Taiichi. 1988. Toyota Production System: Beyond Large-Scale Production. p. 4). Or similarly for logistics in the same book (p. 15): to procure only what is needed when it is needed and in the amount needed.
Right Product
This is the obvious one. You need the right product. Surely you’ve had the experience in your factory, too, where the incorrect product was delivered. Maybe the label was wrong, and the content of the delivery did not match the description. Maybe the delivery order was incorrect, even though the label of the shipment was good. In any case, the wrong stuff arrived.
This could be either raw materials or semi-processed parts within your factory for further processing or for shipping, or a finished product to the customer. If it is within your factory, you are now unable to produce or transport the desired item, and have to reschedule your production or find the right item – fast. It also does not matter how valuable or expensive the product is. Even if you are missing a simple O-Ring, you cannot complete the car. You also have to find out what item the incorrect item was and bring it back to storage, return it to sender, or scrap it.
It may be even worse if the incorrect item arrives at the customer. The shipping back of the old item and the outbound shipping of the new item probably takes more time than an item moved around within your factory. All the while the customer has to wait for the missing item, which causes additional expenses on the customer side.
Right Place
This is also pretty obvious. You need the items where you need them. Having the right product but at the wrong location is a hassle, as again it causes delays where it is needed, and extra work to reroute the item to the correct location. If you receive parcels at home, you may have gotten the message “Parcel is at a neighbor’s.” Well, have fun running after your goods.
Right Time
The right time is probably the toughest one. Because the right time means not too late but also not too early! If the item is late, you again cause delays and rescheduling at the receiving side. Earlier is better than late, but earlier increases inventory, which also requires storage space, tied-up capital, and a multitude of other unpleasant side effects. Ideally, the goods arrive neither too early nor too late, but just on time, which in lean, due to a grammar mistake in Japan, is called Just in Time (JIT).
JIT is best achieved in a balanced production line where all processes have similar speeds. The previous process is likely to have a part ready just when it is needed by the next process. It becomes more complicated if there are separate logistic processes involved (e.g., forklifts or trucks) or if you do not have a flow shop but a job shop. In this case, it is better to be early than late, but try to reduce the “earliness.” Average Western plants have around two weeks of inventory in the inbound warehouse, excellent Western plants have around two days, but the best Toyota plants have around two hours of inbound inventory. There is also no formal definition of just in time, and I remember a tour at a major German car maker where the guide in the middle of a overflowing warehouse called this their “just in time inventory.” Well, in my view piles of warehoused materials are not a Just in Time inventory. Or for another example, a plant that shipped just in time within three days from the external warehouse across the street. Three days to cross a road is also not just in time for me!
Right Quantity
The right quantity is sort of a combination of the above. If you have too many parts, you build up inventory. If it is a customized item, you may not even need it and have to return or scrap it. If it is an item with future use, you have to store it somewhere (including all the data management). But having too much is still better than too little, where again the processes have to stop and cannot make all of the required products.
Right Quality
Quality is an important aspect in lean. Making defective products will cause lots of follow-up problems. At the least, you need to rework or scrap the defective item, and this is if you find the problem right away. The farther a problem goes down the value stream, the more expensive it will be to fix it.
What not everybody knows is that bad quality also influences the problem with the right quantity. If you have an average defect rate of 20%, in average 20 out of 100 parts are defective. If you need 100 parts, how many do you produce? Mathematically this would be 100/80%=125 parts. Unfortunately, your defect rate is not constant but fluctuates. If you make exactly 125 parts, assuming 20% (25 parts) are defect, you may end up with more good parts if the pass rate fluctuates better than 80%, and you will end up with more than 100 good parts, having again all the storage issues for excess material, or you may have to throw them out if they are custom made. If the pass rate fluctuates below 80% and you have less than 100 parts, you are again short on parts. At one point I worked in a plant that printed cardboard packages, and their defect rate was not so hot. They constantly had to overproduce and throw away perfectly good products because the customer did not need more than he ordered.
Right Cost
The “right cost” is probably hardest to understand. While the requirement is sensible, it quickly becomes fuzzy if you try to define the “right cost.” All other rights above are usually pretty clear. Right product? Part number! Right place? At the place of consumption. Right time? Exactly when it is needed (although here fluctuations in the demanding process make this also a bit trickier). Right quantity? As much as is needed! Right quality? All within the specifications. But what is the right cost?
If you think about it, the answer is easy in theory: The minimum cost you can get away with while still having a good product in a safe work environment with motivated employees and satisfied suppliers. In practice all of these are fuzzy and hard to determine. This is a bummer. Unfortunately, in lean there are many things that are hard to measure, even though they are important, often putting lean in conflict with accounting, which ignores things that they cannot measure. Nevertheless, this is one aspect you have to work on, especially by reducing the three evils in manufacturing: waste (muda), unevenness (mura), and overburden (muri). In fact, the 6R here also help with reducing waste, unevenness, and overburden.
Even More Rights!
If you want, there are even more rights. Logistics sometimes uses eight rights (8R). They add the right source, right type of transport, and the right contract. Oops… we had six rights, plus three, now we have nine rights instead of eight. It seems that the 8R fraction has not quite agreed which two of the additional three you need to make eight. Does it matter? It depends on your system. Which of these are important for the performance of the system? I personally often stick with the 6R (or sometimes even the 5R, skipping the right cost). But again, this depends on your needs. Some people in lean want to implement methods, but in my view the goal in lean is to solve problems, and the method does not matter as much as long as it helps you to improve. Now, go out, follow up on any of the 5, 6, 8, or 9 rights you fancy, and organize your industry!
I like your comment about the printed cardboard packages. I have seen it multiple times, that such an order you refer too comes in several times a year from that client. In my opnion, as along as it is not driven by a strict lot# number they have printed on the box, you should store the overproduction (on your own risk) for the next order coming in.
Very often your production planners know the needs of the client much better as the client himself- but this needs good communication with the saless departement .
Just in Time and inventory are two concepts that need a serious second look now that the pandemic has shown how quickly and how badly things can fall apart in case of disruptions. Excessive inventory is not good, BUT too little inventory that leaves no breathing room in case of hiccups is much, much worse.
Two hours max of inventory may work great when you have dependable suppliers literally across the street that can consistently deliver in less than 15 minutes from the pull, but two weeks niffer (or more!) is just common sense when your supply chain stretches over the oceans as is common for western plants.
A couple years ago, I used to take medication that I would order from a pharmacy somewhere in the Pacific and I had a simple pull system. Each pack was about a month and a half supply and the usual delivery time was about two weeks. My system was to have one open pack, and one unopened pack on hand. When a pack is opened, place the order for the next one. One time I switched to a vendor in India, and all I had to do was simply increase the buffer size by 1.
And that is why Toyota tries to get suppliers close to their plants, especially for large and/or expensive parts.
The most important sentence in your post is the second last one: “Some people in lean want to implement methods, but in my view the goal in lean is to solve problems, and the method does not matter as much as long as it helps you to improve.” We have to remember that Toyota, who many are trying to emulate, was not trying to invent a system. They were trying to methodically solve difficult problems, and over time, invented practices that helped them do it. It was the methodical, systematic effort to make improvements that was the genius… not the methods they settled on – for the moment!
Many thanks for noticing. I am always trying to push “solving a problem” over “using a method”. Glad you heard me 🙂