What the heck is a “standard rate” and what’s it good for?

I got into one of those not infrequent “lean discussions” recently that focused on “standards”.  Now, the first thing that anyone discussing standards needs to do is to define terms.  I’ve found that, when using the term, some folks mean “standard practice” or “standard operating procedure”, as in, “It may or may not be documented, but it’s the way we’re supposed to be doing it.”  Other folks mean about the same thing but it’s not “standard” unless it’s documented.  Other folks will be using the term to mean “standard or target performance at a task or function” as in “The standard for this part on this machine is 150 pieces per minute.”  I’m going to focus on that use of the  term “standard”.

This discussion started as most do…why can’t our operators just produce to “standard”?  Often in these discussions, I find that managers actually are most pleased when operators perform at better than standard but they learn that they dare not wish for that.  Just as often, these discussion involve some disparaging of such standards as exist:  “They’re all wrong.”

My position is that, for the reasons alluded to above, standards in most manufacturing operations are almost (almost, mind you) meaningless.  I’ve seen standards that were never met, ever, while other products or parts had standards that were exceeded by several hundred percent. (It’s always struck me as odd that a part that runs regularly at “850% of standard” doesn’t seem to generate much discussion.  I guess managers figure they’re making money on that part, so why fuss about it?  My response is that, if that standard is that far off, why would we assume that any of our other standards are correct?)  I’ve seen too many situations where meeting the standard was seen as solely the operator’s responsibility.  In some of these cases,  a list of operators and the average rate they ran each day was posted.   Jim ran at 55% yesterday so Jim didn’t perform well.  Andy ran at 105% so he ran very well.  But the report doesn’t tell you that Jim fought bad material  or bad tooling all day and Andy ran for only three hours at that rate, after which his machine went down.

Too often, the process for setting standards is faulty and the process for assessing and updating standards is often missing altogether.  (I one heard a story about a standard being set by an engineer’s off-hand guess at what the production rate for a new part should be.  And that remained the standard for years.)  So, supervisors and operators alike tend to ignore them for the most part.

I’ve sometimes, just to be provocative, argued that most manufacturers could just toss all their standards out and be as well off.  I’m not actually sure that’s the case, mind you, it’s just that I don’t see many examples of manufacturers being helped by their out-of-date standards.  Even if standards were updated, it might only further encourage the “let’s blame the operator” approach.

So, what, if anything, are standards good for?  To my way of thinking, they’re helpful in establishing a schedule and that’s about it.  If I need 1000 widgets and the “standard rate” is 100 per hour, I know I need to schedule ten hours (or so) to make those widgets.  If we “run at rate”, I know we’ll stay on schedule.  If not, I know we’ll fall behind and I’ll need to be modifying the schedule.  And I can do this even if we typically run below rate by a good bit so long as we run at a consistent rate.