Lean

a. Definition:

Lean is finding and eliminating all non-value adding wastes in order to create flow in every possible way. Lean is bringing out the infinite creative improvement capacity from every single member of the organization.

“Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes.” (Lean Thinking is Process Thinking, from Toyota’s Lean Strategy)

b. Lean History:

• 1950 – 1975 :
  Taiichi Ohno, manufacturing engineering manager with Toyota developed and implemented a vision of mass production efficiency solution to low volume, high variety demand, known as the Toyota Production System (TPS), with the help of Dr. Shigeo Shingo, the father of SMED (Single Minute Exchange of Die).
  
• 1975 – 1985 :
  Western manufacturing business becomes faced with low volume, high variety demand and selected Japanese companies take large portions of Western manufacturing business through applying TPS. The West is stunned and tries to find out what the Japanese do differently; Just-In-Time, Kanban, Kaizen as elements of TPS are discovered and implemented by early adopters of the West (e.g. HP).
  
• 1985 – 2000 :
  The West learns about TPS (reluctantly at first) but finally realizes its great value and starts vigorously applying it; the Japanese competitive edge slows down significantly as the Japanese economy suffers through the nineties.
  
• 1993 – Today
  The West enhances the TPS body of knowledge into “Lean Thinking” and “Lean Enterprises” and from the beginning of the 21st Century, embarks on enterprise-wide Lean initiatives
  

c. Lean Principles

• “Customer First”
  Specify what creates value from the customer’s point of view
  
• “Process Value”
  Identify value in all the steps across the  entire value stream (materials, information, money)
  
•  “Keep on Moving”
  Eliminate all steps that don’t add value make the value-adding steps flow (materials, information, money)
  
•  “Customer Pull”
  Only make and deliver what is pulled by the customer just-in-time
  
•  “Continual Improvement”
  Strive for perfection by continually removing successive layers of waste
  

d. Lean Tools

The body of knowledge on Lean tools is substantial. We mention the ones that we have found the most useful. Beware that each one of them is not just a technique but also a supporting element towards an overall management philosophy towards eliminating waste and increasing flow.

• Jidoka: Stop the line when defects are discovered and solve the problem
• Poka-Yoke: fail-safe processes
• Auto-quality matrix: eliminate problems at source
• Andon: visibility and transparency at the work space
• Heijunka: level workload for maximum stability
• Kanban: consumption driven demand pull
• SMED (Single Minute Exchange of Die): changeover time reduction
• Kaizen: continual improvement
• Kaizen Event: fast radical improvement event using lean tools
• Muda: ‘7 deadly wastes’ analysis
• Gemba: Go and look for yourself at the work place
• 5S: clean and organized work place
• 5-Why, Cause-Effect, Fishbone: root cause analysis tools
• 6-Sigma, Cpk: process variability minimization, process performance reliability
• Lean U-shaped cell layout: for communication and job flexibility
• TPM: total productive maintenance
• QFD: Quality function deployment
• Hoshin Kanri: Policy deployment
• Value stream mapping
  

e. Benefits from Lean

Reported benefits from lean are:

I. On the “hard” side:

• Up to 90% lead time reduction
• 25 % + growth in 1 year
• 20 – 50 % + efficiency improvements in 1 year
• 50 - 90 % Work-in-Progress inventory reductions in 1 year
• 50 – 75 % space reductions in 1 year
• Close to 100% customer delivery service
• Significantly improved customer satisfaction
• Significantly improved supplier performance
• Significantly decreased total cost of quality

II. On the “soft” side:

• Increased flexibility
• Company alignment
• Customer and Process driven culture
• Visualization and transparency for everyone
• Increased employee morale
• Company-wide employee participation in improvements
• Predictability of results

f. Getting Lean

Toyota started some 50 years ago and it took them several decades of development to achieve levels of process performance that outperformed Western Companies. Toyota has continued to move forward ever since they started, so ‘getting lean’ is not a project but part of a company’s never-ending endeavours.

Getting lean underway is a major challenge but keeping it going may even be more challenging. In order to transition your company to a Lean Enterprise we suggest the following as elements in a Lean roadmap:

I. Do a lean assessment, using e.g. the CMI Lean Agility assessment scheme that is explained at ***LINK*** in order to get a good feel for where you are positioned today in terms of lean competence and performance.

II. Obtain top team alignment on what lean means to your company:

• Obtain an agreed clear vision on long-term lean performance and ambition levels for the immediate and medium-term future
• Allocate lean responsibilities for all leaders

III. Go for a pilot implementation in order to demonstrate the value of lean agility within a limited scope such that 

• a momentum builds up to apply lean agility throughout the company.
• the basics of lean agility are learned and experimented and knowledge starts to develop

IV. Evaluate the pilot implementation and decide on the roll-out throughout the organization with emphasis on:

• Learning to improve on lean agility through applying the principles
• Allocating sufficient time to do problem solving

V. Proceed towards the development of a culture of lean agility by introducing and institutionalizing continuous improvement in lean agility.

g. Who should go for Lean?

Every organization can benefit from becoming Lean: both manufacturing as well as service organizations, both private as well as governmental agencies. The principles of eliminating waste, focusing on customer value and speeding up the flow are valid everywhere; the focus, relevance and use of the tools will be different.