OTM 300 Exam

Six Sigma

A business process for improving quality, reducing costs, and increasing customer satisfaction Can tolerate 6 stdev on either side before reaching spec limits 3.4 defects per million opportunities Improve by: -Mean improvement -Variation reduction Mgmt by fact and data; no intuition

Process flow diagram

A graphical way to describe the process. It uses boxes to depict resources, arrows to depict flows, and triangles to depict inventory location.

DMAIC

A six-sigma process: define, measure, analyze, improve, and control. Define the problem in the process Measure the magnitude of the porblem Analyze: looking at data; find ways to imporve your process Improve: Implement new idea into the process, support your recommendations with data Control: maintan improvement in the process over time Overall a constant/continuous feedback loop exists

Andon cord

A system that enables a line worker to signal that he or she needs assistance from his or her supervisor, for example in the case of a defect. Used to implement the Jidoka principle.

Efficient

Achieve a high flow rate with few resources

Six Sigma Process

Afford moving 6 standard deviations until hitting specification limit

Line Balancing

Allocate activities that need to be carried out in the process across the resources as evenly as possible so that all resources have a comparable utilization level Balancing for a fixed sequence of activities Balancing for activities with no fixed sequence: flexibility

Five Whys

An approach used during the narrow phase of root cause analysis, in which teams brainstorm successive answers to the question "Why is this a cause of the original problem?" The name comes from the general observation that the questioning process can require up to five rounds.

takt time

Available time/Demand Rate 1/Demand Rate Ratio of time available and quantity that has to be produced to serve demand ex) 4 tacos per minute

Average labor utilization

Average utilization across employees Average(80.4%, 100%, 80.4%) =87.0% =Labor content/(Labor content + Idle Time) =(Labor content/#employees)/Cycle Time remember utilization is ratio of flow rate and capacity

Overview of the toyota production system

Bases: continous process improvement and stable processes (lower variability) Just in time flow (amts needed when needed, single flow unit) Built in quality: Detect and address issues when and where they occur and prevent them from recurring Better flow (no wasted time) Better use of resoruces (no wasted capacity)

Capacity of process with batches

Batch Size/(Setup time+[Processing time*Batch Size]) increasing the batch size does increase capacity, but capacity increases ever more slowly as the batch size gets large.

It all starts with the clues

Behaviors: how they act as customers Emotions: how the customers feel Attitudes: how the customers feel abouit the company Experience clues (functional, mechanic, humanic) ALL IMPACT THE SERVICE EXPERIENCE

How to Look for Assignable cause variation?

Control charts monitor output of provess so that we know when assignable cause variation is present Assignable cause suspected IF: Runs of values steadily above/below center line Upward/downward trend Periodicity Any points outside the control limits When assignable cuase present; try to improve your process ***If any of the four conditions are met, we say the process is out of control

Quality Cost Framework

Control costs: appraisal: inspection prevention: training, upgrading Failure costs: Internal failure External failure (WORST)

Just-in-Time Flow

Deman levling (heijunka) Value stream mapping 1) Steps that create value 2) Steps that don't create value but are unavoidable with current technology (ex: inspections to reduce defects) 3) Non value adding activities that can be eliminated (waste) Use of preventive maintenance to make the system more predictably reliable Use pull system of production control: produce what is needed, when it is needed, and nothing more: REACT TO DEMAND

Taiichi Ohno

Developed the first "lean" system (aka, the Toyota Production System)

4) Leader Standard Work

Ensures standard work practices are being followed Reports are metrics Encourages action and accountability Inspire

Genchi genbutsu

Going out to the front line and observing the problem yourself, collecting data, and analyzing the data instead of emphasizing personal opinions or management seniority. Everyone should gather firsthand information from the situation. This principle explicitly includes senior management.

What OTM Can do to Help?

Help making operational tradeoffs (provides tools) Overcome inefficiencies (benchmarking, changing current system)

Flow rate:

How fast thru your process Min(process capacity, Demand Rate)

Heijunka

Leveling production by reducing variation in the work schedule that arises from either demand variation or the desire to run production or transports in large batches. have production match the true rate of demand. Challenging, will be inefficient if setup times are not reduced greatly, otherwise switching times will add up quickly

Bottleneck

Lowest individual capacity in total system Unless demand is lower than capacity, bottleneck will always have 100% utilization nonbottlenecks will always have excess capacity, idle time

Understanding a service gap

Managment's percpetions of consumer expectations may be off Translations of the perceptions into service quality specification (magnitude of the expectation Service delivery: is it fit for actual use External communications to consumers: expectations too high or too low here?

Process capacity

Maximum flow rate a process can achieve

How can we make a process robust

Overengineering Foolproofing against human errors Have early warning signs on input and environmental variables; mitigate time lag

Making cars - The early days

P&L: worlds leading auto mnfctr: 100 autos per year. -Decentralized production system -Independent contracts w/in plant, independent machine shops supplying parts **lack of standardization: diff guaging systems Machine tools couldn't cut hardened steel Resulted in warping Parts needed to be filed to fit together

Yield

Percentage of good units that are processed at a resource Flow rate good output/flow rate of input 1-(flow rate defects/flow rate input))

Metrics of quality

Process capabiliy CP CPK Defect Rate Sigma quality level

7 typesof basic quality tools for problem solving

Process flow diagram: good for showing process, identifying failure points Checksheet: quick/easy, flexible to get data qucik Pareto diagram: separate causes from most to least freq Histogram shows # observations w/in groups Fishbone helps organize causes problems RUn chart: over time Scatterplot: relation btw two variables

Demand during replenishment time

Replenishment time*Demand Rate

Taylorism

Taylor believed in scientific principles of designing work and so organizations following Taylor's work recruited armies of industrial engineers who would carefully study the movements and the work of the workers. Their goal was, simply stated, to squeeze out the last bit of productivity from the workforce. This had substantial organizational consequences.

kaizen

The process of making small changes to the process with the goal of eliminating waste

root cause

a change in an input or an environmental variable that initiated a defect

Pareto dominated

a firms product or service is inferior to one or multiple competitors on all dimensions of the customer utility function

Process layout

a layout that organizes the transformation process into departments that group related processes

upstream

beginning of the flow downstream is the end of the flow for production processes

4Ps of Toyota

business principles embraced by Toyota that include philosophy, processes, people, and problem solving Philosophy: quality/capabil over short term financials Processes: Continuous process flows match supply with demand; reduce wastage of flow time and capacity People and partners: respectful interactions/increasing development/growth Problem-solving: ongoing improv ops by leveraging experience of front line emplys

robust process

can tolerate variation in input/enviro variables without leading to a large amount of variation in outcome variables,which could lead to defects

Humanic clues

clues emitted by stimuli associated with people - choice of words, tone of voice, level of enthusiasm, appearance, body language EMOTIONAL

Waste

consumption of inputs and resources that do not add value to the customers

Specification limit

determine which units are acceptable and which ones are defective tightness of the design specification, which we can quantify as the difference between the upper specification level and lower specification level (USL − LSL).

Waste of time of a flow unit

flow time of unit longewr than preferred by customer Too long for pizza to reach customer

Ikko-nagashi

flow units can flow one unit at a time from one resource to the next

Efficient Frontier

in an industry as the set of firms in the industry that are not Pareto dominated. In other words, firms that are on the efficient frontier have no firms in the industry to their upper right (i.e., are better on all dimensions).

Process capability index

index that measures the potential for a process to generate defective outputs relative to either upper or lower specifications (USL-LSL)/6σ^

Baton passing zone

instead of having fixed allocations of activities to workers, the idea of a baton passing zone is that the process can absorb variations in speed and starting time

Little's Law

inventory = flow rate x flow time I=R*T Works for any process, even if variability in flow exists, as it represents holistic averages

Calculating number of kanban containers

k=((D*L)+S)/C

Production leveling

lower the peaks of production and raise the valleys in production as much as possible so that the flow at the surface is smooth cakked heijunka

Process capacity

lowest capacity in system, defined by your bottleneck

Apostles

loyal customers avengers are the shitty customers who hate ya and will destroy your buz MOST LOYAL CUSTOMERS ARE THE ONES WHO HAD PROBLEMS, AND THE FIRM WAS ABLE TO FIX IT PROPERLY FOR THEM

Consumption Utility

measures how much you like a product or service, ignoring the effects of price (imagine somebody would invite you to the restaurant) and ignoring the inconvenience of obtaining the product or service

Poka-yoke

mistake-proofing methods aimed at designing fail-safe systems that minimize human error

Customer Feedback and word of mouth

most dissatisfied customers don't complan Complainers more likely to be retained Speed matters: hate waiting WOM is vitally important RECORD COMPLAINT DATA IT WILL HELP, MAKE A DATABASE ON IT

Kanban

production instructions and parts delivery instructions are triggered by consumption of parts downstream upstream replenishes the downstream

flow rate

rate at whcih flow units travel thru a process PER UNIT OF TIME ALWAYS

Service gap

results when a service fails to meet the expectations that customers have about how it should be delivered

Parts per million

the expected number of defective parts in a random sample of one million

inflexibility

the inability to adjust to either changes in the supply process or changes in customer demand

Value-added percentage

value added time of a flow unit/flow time shortening flow time increases extent of leanness of operation

Muda

waste, anything other than that which adds value to product or service

Strategic tradeoffs

when selecting inputs and resources, the firm must choose between a set that excels in one dimension of customer utility or another, but no single set of inputs and resources can excel in all dimensions.

fLOW TIME

The time it takes a unit to flow through a process from beginning to end.

Idle Time

The total unproductive time for all stations in the assembly of each unit (for indiv and total calculations) Cycle Time - Processing time

Functional clues

The way the service works Simplify understanding of the process Welcome please ring the bell RATIONAL

Capacity with Setups

USE TRUE CAPCITY OF SETUP RESOURCE (DON'T DEDUCT FOR SETUP TIMES, SINCE THIS IS IDLE AND A CONSEQUENCE OF THE CURRENT SYSTEM

3) Problem Solve

Use scientific method Eliminates chaotic doing Narrows focus Understand gaps (should vs. is), cause of gap, and IMPACT OF GAP Getting people to problem solve -BUild capability: Blue belt trainging: going through process and give tools to do own their own Kaizen events Individual contributors perform the problem solving Leaders must support sustainable change

Buffer inventory

Waiting flow units to be processed inventory is mismatch btw supply and demand

7 sources of waste

Waiting: for machine to finish Overproduction: beyond custs wants Inventory: waste, extra handling, defects Overprocessing: time wasted polishingg too much Transport: internal transport far Rework Unnecessary Motions *Wate of worker intellect

Fit

With some attributes, customers do not all agree on what is best. Roasted salmon sounds good to us, but that is because we are not vegetarian

Total Demand Rate

# of Flow Units need to be processed at one resource across all different types of flow units

Capacity

#Employees/Procesing Time Doesn't factor that not all flow units go to every resour

Number of kanban cards

(Demand during replenishment time + Safety stock)/Container size

Circle of Love

-> Standard work -> Visual management -> Problem Solving -> (Leader standard work)

Capacity in good units per unit of time

1 Good unit per unit of time/Implied utilization To find the capacity of the process in good units per unit of time, divide one good unit per unit of time by the highest implied utilization

lean aspires to create the "ideal process":

1) Achieve synchronization across process stages to deliver immediately (version requested, zero defects, batch size of one) -Key: Reduce unexpected variability thru constant experimentation and improvement 2) Achieve high levels of efficiency by eliminating waste -Better flow (from view of flow unit) -Better use of resources 7 forms of waste Overproduction, waiting time, material movement, inventory, overprocessing, worker movement, deffective products

Three Inhibitors leading to inefficiencies

1) Waste 2) Variability 3) Inflexibility (not cross train, equipment)

Calculating Daily Flow Rates for Each product

1) are we demand or capacity constrained (if demand constrained, use demand rate) 2) If capacity constrained: flow rates for each product = Daily demand/(max implied utilization) More than 1 resource can have implied utilizaiton over 100%

genchi genbutsu

A Japanese phrase meaning visit the shop floor to observe what is occurring.

Pareto diagram

A Quality Control technique used to rank importance of a problem based on its frequency of occurrence over time. This diagram is based on the Pareto principle, more commonly referred to as the 80/20 rule, which says that the majority of defects are caused by a small set of problems.

Fishbone diagram

A visual identification of many potential causes of a problem graphically represent the input and environmental variables that are causally related to a specific outcome, such as an increase in variation or a shift in the mean.

Kanban card

Card or other device that communicates demand for work or materials from the preceding station a kanban system is that there can never be more inventory between two resources than what has been authorized by the kanban cards

Price and convenience utility

Cost, ppl like cheaper Convenience: easy to get -Location, timing transaction costs

Four dimensions of performance - tradeoffs

Cost: Efficiency; cost per unit, utilization Variety: Customer heterorgeneity; # options, flexibility/set ups, make-to order Time: Reponsiveness to demand: Customer lead time, flow time Quality: 1) Product quality (how good): higher price 2) Process quality (defect rate)

Time to make Q units

Cycle Time*Q

Utilization

Flow Rate (of system)/(Capacity[for indiv process]) How fast the process is operating compared to how fastr itg could be operating if there was sufficient demand

Utilization with Setups

Flow Rate/(Output rate when producing) Flow rate*Processing time

Attrition Losses

Flow units that exit before completing

Toyota Production System

Framework used to run ops with goal of reducing wasste of capacity and waste of flow time (goal to match supply and demand just in time)

Number of flow units that have to be processed for certain ouput

Q/Process yield Q is the number of good units

5 key concepts of quality

Quality is defined by the customer Adopt a prevention orietnation Focus on continuous improvement Get to the root cause PRactice quality at the source

Implied Utilization

Ratio of demand to capacity Total demand @resource/capacity@resource Captures mismatch between supply/demand Looks relative to each resource, rather than the whole process as in utilization If above 100%=capacity constrained, otherwise demand constrained

Off-loading the bottleneck

Reassign activities to other resources with more capacity Automating some of the activities consuming time at the bottleneck by using technology Outsourcing some of the activities consuming time at the bottleneck Along with this, you can increase process capacity (ex: adding more employees)

Benefits of Specialization

Reduction in process times due to less setups Reduction in time to learn Can higher cheaper, less skilled labor Less equipment replication (purchases needed) *Work cells are exact opposite of specialization (full product work in cells of small teams)

1) Standard Work

Refers to the goal of eliminating the variation in how a process or process step is completed. Documents best practice for a process Check and adjust Repeatable: -target audience can complete task -Always validate repeatability Benefits: See imporvements, training tools, ensures quality Exampels, model T-->Production line

Demand Leveling

Sequence production so that product mix always approximates consumer demand

Service Quality is multidimensional

Services are experienced: INTANGIBLES MATTER HERE A LOT Relaiblity of service ove rtime Responsiveness to problems by the company Assurance by providers to reassure of uncertainty Empathy by people: show em' you care Tangibles: matter with goods, tangible products sometimes are combined with goods also

Standard deviation of X bar

Standard deviation of all parts/Sqroot(n))

Labor content

Sum of processing times with labor across all workers The amount of time work that goes into serviing one customer

SMED

The SMED method is designed to reduce the time required for a series changeover and thus reduce the minimum lot size. Single minute exchange Process can quickly switch btw diff things while maintaining capacity. No high inventory carrying costs then Internal and external setups

Fill Rate

The percentage of demand filled from stock on hand.

Costs of direct labor

The labor cost associated with serving one customer, which is the total wages paid per unit of time divided by the flow rate. Wages per unit of time/(Flow Rate)

Pull system

The resource furthest downstream (closest to the market) is paced by market demand. In addition to its own production, it also relays the demand information to the next station upstream, thus ensuring that the upstream resource also is paced by demand.

Efficient frontier

The set of firms that are not Pareto dominated

Resources

Things that can be used to produce a good or a service

non-value added work

Those operations that do not add value in the eyes of the customer but must be done under the current conditions of the process in order to complete a unit worker must move from one machine to another for production, customer doesn't care

value-added work

Those operations valued by the customer because they are absolutely required to transform the flow unit from its inputs to being the output the customer wants.

Time to finish X units starting with an empty system

Time through an empty process + [(X − 1) × Cycle time]

Mortgage Example Notes

Tradeoffs between accuracy and # complete Efficiency frontier: farthest point out, superior Pareto dominated: inferior on dimensions If not pareto dominated, then on effic frontier In real mkt, there are more than two critical dimensions

Process Capability

acceptable variation/actual variation

External setups

activities that can be done while production continues to occur

Overall Equipment Effectiveness (OEE)

the percentage of the total available time that is used in a way that adds value to the customer Value added time/(Total available time)

Detect-stop-alert

the philosophy of halting production when a quality problem is discovered shut down machine, human intervention then

mura

uneven flow

Six sigma as a business strategy

-Identify core processes that drive an organization's strategic business objectives -Two ways to improve a process: mean improvement and variation reduction -Management by fact and data -Use of a structured problem-solving approach Lead Generation: Customer acquision: turning leads into customers Order fulfillment: understand needs/products Customer maintentance Employee development

5 Step procedure for multistatge process with multiple types of flow units

1) Compute demand matrix showing demands for each product (column) and for each resource (row) 2) Compute total demand on each resource by summing it up 3) COmpute capacity of each resource 4) Compute total demand on each resource to the acpacity of each resource by finding the implied utilization for each resource 5) Compute flow rates for each type of flow unit Total demand @resource/capacity@resource *****remember conditions when to divide by maximum implied utilziation

Cycle Time

1/(Flow Rate) Ex) time to finish an application Time between two successive flow units Depends on process capacity. Measures current reality of process flow (min of demand or capacity)

Capacity

1/(Processing Time) Maximum number of flow units that can go through a resource for a given unit of time

Process acpacity for each type of flow unit

Demand Rate for Flow unit/Highest Implied Utilization

Demand Matrix

Determines how many flow units of each type are flowing through each resource. That is, each row corresponds to a resource and each column in the demand matrix corresponds to a flow unit type.

Exposing problems

High inventory can hide poor quality; think of iceberg hidden by deep water

Drawbacks of Craft Production

High production costs: costs don't drop w/volume Lack of consistency and reliability Limited ability to innovate -Small indep shops lacked resources for systematic research to develop innovations Opened the door to mass production

Larger batches cause

Higher capacity, higher utilization, higher inventory Less total setup times generally

Goldratt's Rules of Production Scheduling

Hour lost at bolttleneck is hour lost for whole system Hour saved at non bottleneck is a mirage Bottlenecks govern both flow rate and inventory *Increasing yield (decreaseing defect rate) could change the bottleneck location

What is quality

How good or bad, conformance to requirements excellence in goods/services Juran: Design quality: : tradeoffs in how well it meets customer's needs COnfromance quality: does it live up consistently to customer's specifications?

Push system

Inventory is "pushed toward the consumer in anticipation of consumer demand independent of inventory and demand

Kanban vs. made to order

Kanban should be used for products or parts (a) that are processed in high volume and limited variety, (b) that are required with a short lead time so that it makes economic sense to have a limited number of them (as many as we have kanban cards) pre-produced, and (c) for which the costs and efforts related to storing the components are low. Make to order should be used for products or parts (a) that are processed in low volume and high variety, (b) for which customers are willing to wait for their order, and (c) for which it is expensive or difficult to store the flow units.

Target Manpower

Labor Content/Takt Time Ratio between labor content and takt time Minimum number of resources required to meet demand. **Assumes all resources are perfectly utilized, so it's flawed in that zero idle time is accounted for

Service recovery

Measrue cost/benefits of how you provide recov Break customer slience: encourage them to speak up Anticipate needs for recovery Train and empower the front line employeesd

Cpk

Min((USL-U), (U-LSL))/(3*stdev))

Rise of Mass production

Model T Two key innovations for parts 1) Same gauging system for parts 2) Machine tools able to work on pre hardened metals Result: completely interechangeable parts Key innovations for work flow 1) Specialization of labor: one simple task/worker 2) Moving assembly line cars move down line while workers remain still, saved time Benefits of mass production High volume, low variety, interchangeable parts, extreme division of labor Inflexible machines, assembly line

Abnormal Outcome variation

Not behaviing with past data over a time series chart. Lets us conclude that we're dealing with assignable cause variation and not just facing randomness

environmental variables

Not under mgmt control, but may impact outcome of process

Performance attributes

Performance attributes are features of the product or service that most (if not all) people agree are more desirable. For example, consumers prefer roasted salmon cooked to perfection by a world-class chef

Denning Cycle

Plan DO Check Act sturctued problem sovlivng approach

Mechanic clues

Presentation associated with the service associated with your emotional impression artfowrk, the atmosphere of the store

Probability of good units

Prob{Step 1 correct} × Prob{Step 2 correct} × Prob{Step 3 correct} Prob defect = 1-P(good unit)

Matching the recovery strategy to the failure

Relatively severe and customer screwed up: provide hlep to extent possible and apologize Relatively severe and org screwed up: Red carpet treatmetn and apology Mild and cust cuased it: apologize and extend sympathy Mild and org caused igt: apologize and fix/replace/repeat

Experience management

Requries monitoring of the exectuion and the effect (perception by customers in their minds)

2) Visual Managment

See together, know together, act together: RED/GREEN INDICATORS BINARY Should be: -Visible, understandable, timely responsiveness, real-time views (instant, up to date), clear targets, BINARY Process Hierarchy: Overall objective is linked to smaller objectives that can lead to it Visual real-time indicator, knows how to take action, easy to read/interpret Ex) indicator that your phone is dead: you need to either charge it or not

Statistical Process Control (SPC)

The process of testing statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards. 1) Measure current amt of variation in process and compare it to specifications and chance of defects 2) Monitor process and determine outcome variation that is abnormal 3) Investigate root cause of assignable cause variation by finding var that caused 4) Avoid recurrence in future of similar variations by changing process or making it more robust to prevent

Natural variation

The randomness inherent in a process; also known as random variation.

Scientific management

a management theory using efficiency experts to examine each work operations and find ways to minimize the time needed to complete it

Machine paced

a process in which all steps are connected through a conveyor belt and all of the steps must work at the same rate even if some of them have more capacity than others

Worker paced

a process line in which each resource is free to work at its own pace: if the first resource finishes before the next one is ready to accept the flow unit, then the first resource puts the completed flow unit in the inventory between the two resources

Process

a set of related activities that transform inputs into outputs, thus adding value

Multitask job assignment

a technique to reduce idle time by avoiding a worker watching a machine do work

assignable causes of variation

any variation-causing factors that can be identified and eliminated

Distributive justice

apporporiate compensation, also for inconvenience Procedural compensation: fairness of company's policies and practice that govern the rcovery process Interactional justice: behavior of firm's emplyees in resolving the complaint fAILURE IN JUST ONE DIMENSION CAN SCREW YA OVER

p-chart

control chart for attributes, used to monitor the proportion of defective items in a process Within each sample, we evaluate the percentage of defective items.. We then compute the average percentage of defects over all samples, which we call p— . This "average across averages" Estimated stdev=(Sqroot(p(1-p))/n))

Control charts

graphic presentations of process data over time, with predetermined control limits For the y-axis, we plot the mean of each sample. Such control charts are often called X— charts ( X— charts can be used to document trends over time and to identify unexpected drifts (e.g., resulting from the wear of a tool) or jumps (e.g., new person operating a process step), corresponding to assignable causes of variation Xbar bar is mean of xbar=center line Being within control may mean it can still fail specification limits!

Make-to-order

making the activation of resources in a process contingent on receiving a specific order

Inventory

number of flow unites in a process

single-flow unit

one flow unit at a time from resource to resource to next instread of operating on transfer batches Benefinits: Less inventory Shorter flow times Faster feedback Simpler/flexible staffing Shorter processing times More transparency in discovering defects Required changes: Implementing pull system Transporting units piece by piece (layout change) Operating on takt time Leveling demand rate so flexibility and no constant takt time changes happen

Variability

predictable or unpredictable changes in the demand or the supply process

Internal setups

setup activities that can be performed only when a process is stopped, not producing try to reduce internal activity as much as possible, convert to external whenver possible

Line balancing

the process of assigning tasks to workstations in such a way that the workstations have approximately equal time requirements WORKS BEST FOR ACTIVITIES WITH NO FIXED SEQUENCE (SUBWAY)

Information turnaround time (ITAT)

the time between creating a defect and receiving the feedback about the defect

Lead Time

the time between when an order is placed and when it is filled

Processing time

the time it takes a resource to complete one unit flow

Time through the empty system

the time it takes the first flow unit to flow through an empty process; that is, a process that has no inventory #stations*cycle time

Flow unit

the unit of analysis that we consider in a process analysis; for example, patients in a hospital, scooters in a kick-scooter plant, and calls in a call center Use consistent metrics, make sure it's what you want to track, that can describe all activities in the process

input variables

the variables in a process that are under the control of management

Waste of time at a resource

the waste of time from the perspective of a resource, which reduces the capacity of the resource idle time, rework, non value added

Tradeoff with setups

while there are negative consequences to setups, a resource with a setup generally also has the advantage of a short processing time, much shorter than the next best alternative. The advantage of a fast processing time can outweigh the disadvantage of the setup.\ Setup times can be expensive, along with more variety causing more machines to be needed