Co-Location

Co-location describes dissimilar processes being placed near each other to facilitate flow. This typically happens when you are creating a product-oriented work cell on the shop floor, or when you use value stream management and have administrative teams assigned to specific product groups in the office.

Like all things, there are tradeoffs to co-location.

The first is that it can create balancing problems. If you have three Widgematic machines in your fabrication side and organize into three product lines, it seems like the natural organization is to move one machine to each work cell.

But how often do multiple product lines all have the same demand? You might have one line that the machine is balanced to, one that it sits idle much of the time, and one in which it is a bottleneck. As you can imagine, co-location can also be a challenge when you have unique, large CNC machines that serve all groups in the company.

Do the best you can. Move a few bending machines and saws near a weld cell and create a bit of flow there. Deal with the barriers to flow with the idea that all future decisions should be made with co-location in mind. That often means right-size machines or outsourcing some of your production. You also might accommodate some of the low demand areas by running a second shift to act as a parts supplier using machines in other cells. It is a workaround, but lets you create flow and co-location in your highest volume cells.

In the office, it is much easier to assign people to match demand. Individuals can be moved to where they are needed much more easily than giant machines can be. And people can be trained to do additional tasks as needed. Machines can be rigid in what they can do.

Functional Leadership vs. Co-location

When you have a weld cell, a cutting center, or an accounting team, the leadership team tends to have expertise in the jobs of their team. It is easier to manage 3 people all doing welding than it is to manage a team with one welder, one press operator, and one person operating a saw and doing grinding.

On the administrative side, the problem can be even more pronounced. The accounting manager, for example, may have specific requirements for filing taxes. If the accounting team is split up working for value stream managers, it is harder to make sure those processes are followed.

The key lies in that word: process. It is important to have good processes in place, and to share best practices to make sure that each person doing the same job is equally proficient. You may also benefit from having a secondary leader who oversees a function, while the value stream leader manages the team. It can be tricky to serve two bosses, though, so be clear about how to resolve differences of opinion.