Most operations, whether a factory, an office or a distribution center; have losses in the form of wasted materials, excessive labor, lost capacity and missed management opportunity. We come to accept these “standard losses” as part and parcel of the work environment and quite often opportunities for improvement go unrecognized.
The concept of the hidden factory awakens us to this mental block that we tend to form. If we can imagine that there is a factory that produces defect free product at optimum material yield, then we can also imagine that there is a “hidden factory” where we buy materials, hire employees, spend management time and allocate capacity to produce and rework defects.
Once everyone develops this perspective, the mission is clear, shut down the hidden factory.
John Demo Consulting Inc 
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