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How to assess a factory in 30 seconds

Posted by Zeeshan Zia, PhD

We define five levels of factory organization that roughly correspond to growth along the lean manufacturing house.

I was just counting our internal travel logs, and it turns out that over the past year and a half, right in the midst of COVID, our team has somehow been able to visit slightly more than a hundred factories. Many of them multiple times.

Several of these visits were arranged by our friends at the Center for Advanced Manufacturing in Puget Sound (CAMPS), Techstars, Plug and Play Detroit, and Unknown Workforce Technologies. Some were customer exploration opportunities, others, preparations for actual deployments.

Obviously we wanted to maintain a record of what we were learning from these visits, and we spent a lot of time discussing various formats and dimensions along which to quickly assess and summarize what we were seeing. The most valuable insights came from David Crawley, currently CEO of Ubiquity Robotics, who has spent more than a decade visiting factories and running such assessments from his career at McKinsey. Today we share those five dimensions along which we analyze a factory for its organization. You will undoubtedly find relations between our approach and ideas from the Toyota Production system including 5S and the Lean Manufacturing House.

Assess along five dimensions to distinguish between five levels of factory organization

We wanted a quick and clean way of thinking about the floor that will be scalable, and we arrived at the following five dimensions: man, machine, materials, mother nature (environment), and melioration (or continuous improvement).

We define five levels of factory organization that roughly correspond to growth along the lean manufacturing house as follows.

Only 3% of factories in the US fall in the Level 4 bucket.

Level 0 factory: A “level 0” factory looks like a badly organized local garage. There is a general disorder, where we see equipment not in a logical place. There are piles of large quantities of inventory found placed at random locations. We see workers operating in a very casual and unstructured way. When we talk to the plant manager or equivalent, it becomes immediately clear that there is no formal or informal process improvement plan in place. We roughly see 10% of factories as falling in this category.

Level 1 factory: A level 1 operation already looks significantly more standardized than a level 0 operation. All equipment is structured in a logical sequence, but not necessarily marked. We find large quantities of inventory placed at standardized locations. We can clearly see workers operating with a sense of purpose. We find that process improvement happens occasionally in a strict top-down manner, directed by the plant manager. We put approximately half of the factories we visit in this category.

Level 2 factory: We define a level 2 factory as one where there is a clear workflow for the equipment. You step on the factory floor and it’s clear what’s going on. Work is standardized. There is not a lot of inventory lying around everywhere. Workers seem over run with work. There is lighting in key locations, and the floor may be immaculate. Quality circles are regularly organized where groups of workers who do similar tasks meet to identify, analyze and solve work-related problems. We find that less than a quarter of factories in the US fall in this category.

Level 3 factory: A level 3 operation is ordered, tidy, and the steps are clear even on a first glance to an outsider. There are clearly market inventory locations, but there is very little inventory there. Everyone is busy but not rushed. It’s obvious that the organization has an active 5S program, e.g. its clear they are tidying up daily. There is an energetic and active improvement program in which everyone is involved. We classify around 17% of factory floors we visit to fall into this bucket.

Level 4 factory: We have visited only three factories that completely fall in Level 4, and one which satisfies our criteria for Level 4 along 3 or 4 out of 5 dimensions. In these operations, it is impossible for the product not to go in the right place. The placement of equipment has gone through multiple rounds of optimization. You don’t see any inventory that isn’t being conveyed or worked on. The workers look like the interior of a swiss watch or like a military marching band. They will be operating with a rhythmic motion. There is no more lighting or cleanliness than is strictly necessary. There is a professionally led improvement program that is fully driven by worker input. Obviously, we were intrigued when we saw such operations and tried to learn more from plant leadership and workers. Across all three of these factories, we learnt that it took them decades of discipline, continuous improvement, transfer of knowledge from their sister factories and training in lean manufacturing to get where they are today!

Relation with the Lean Manufacturing House

If you have read this far, you must be seeing parallels to the Lean Manufacturing House, which is a more comprehensive analysis and improvement framework. Our objective here was to assess a factory floor within seconds and minutes, whereas workshopping growth along the lean manufacturing house is an activity that requires days and weeks.

Here we want to briefly point out some of these parallels. Our “level 1 factory” roughly corresponds to just the foundation of the lean manufacturing house. When applied to a production system, this refers to team stability, standardized work methods, continuously monitored strategy, etc. A Level 2 factory corresponds to the base of the lean manufacturing house, where Kaizen and reduction of MUDA are high priorities. The third level roughly indicates the two pillars of the house namely, JIT and JIDOKA, and so on.

Several Level 4 factories are in danger of slipping down this hierarchy.

Who do we work with?

So why do we assess factories along these dimensions? We find that the ideal customer for our RetroActivity platform lies between Level 2 and 3. Our objective is to accelerate their journey towards a Level 4 factory. In the lean manufacturing house, you will notice that our solutions correspond to the pillars of JIT and JIDOKA. At the same time, we find that in several verticals such as automotive, several Level 4 factories are in danger of slipping down this hierarchy. This is because changes in customer demands are forcing these factories to change processes and introduce new ones at an unprecedented pace. We are deploying with at least one such factory and hope to continue growing our Level 4 customer base.

We don’t work with Level 0 and 1 factories. We find that such factories are able to capture the largest gains from non-technological initiatives, such as better lean manufacturing education.


The Lean Manufacturing House (link)