what is lean? · what is lean? the purpose of this ... “lean” company. copyright: management...

What is Lean?

The purpose of this module:

• This module is designed to provide a general

background regarding Lean methodology.

• The content includes basic information on its

development and creation as a process improvement

vehicle and some of the concepts upon which it is built.

• We will also cover some of the frequent Lean terms and

discuss the reasons for applying Lean in the workplace.

• Timing: 30 – 45 minutes

Copyright: Management and Strategy Institute

The Basics of Lean

• When you think of the word “lean,” the images that come

to mind may be of a long distance runner or some other

athlete who has no body fat; someone who is dedicated

to achieving the best for their body by keeping it toned

and in the best physical shape possible by exercising

and incorporating disciplined lifestyle changes.


The Basics of Lean

• In 1988, a research exercise by the Massachusetts

Institute of Technology (MIT) reviewed the workings of

the Toyota Motor Company.

• Their findings showed a company that required less

efforts, less suppliers, and less investment; all this while

running its main production processes with fewer

employee injuries and less production defects.

• After struggling to find an appropriate term for this work,

they settled on “lean” and described the company as a

“lean” company.


The Basics of Lean

• Just like the sportsman considered in the first paragraph,

a lean company is disciplined and dedicated to achieving

optimum performance with the lowest or least amount of

effort and energy.


The Basics of Lean

• Lean is generally referred to as a manufacturing or

production improvement methodology.

• As a term in business, it has a broad-based customer

focus that concentrates on providing more to the

customer.

• It does this by supplying the product that is just what the

customer needs, when needed, in just the right amounts

and for the right price, using the minimum materials,

equipment, workspace, labor resource, and time.


The Basics of Lean

• The whole concept of Lean is focused on the removal of

any unnecessary waste from the production process.

• It focuses on producing a high quality output.


The Basics of Lean

• The core activity in examining any Lean process is to:

– Map out the current components

– Identify which elements are waste

– Change or improve those wasteful elements and

construct a new or improved process that is leaner

• That is a very simple description of Lean but is the

essence of the process.

• The ways to find that waste and change it are what

makes the process and will be examined in the following

modules.


Muda, Mura, Muri.

• This is not some magic spell, but 3 Japanese words that

are often used to describe the Lean process in action.

• Actually, they would be better used to describe what is

being changed or improved.


Muda, Mura, Muri.

• Muda is the word for waste, and as we’ve already said

on the previous page, Lean is all about removing

waste.

• In fact, it is so focused that we will explore the different

types of waste and the 7 letter acronym TIMWOOD for

describing these wastes in the next module.


Muda, Mura, Muri.

• Mura describes unevenness in a process; a stopping

and starting process or variable volume process rather

than a smooth and constant process.


Muda, Mura, Muri.

• Muri refers to overburdening or placing too much upon

one thing.

• Where you push a production machine to perform above

its capability – the end result is likely a broken machine

and potentially poor quality products.


Muda, Mura, Muri.

• So, this is about not just reducing waste, but optimizing

how you remove that waste by maximizing efficiency and

logistics. Consider this simple example:


Muda, Mura, Muri.

You are given the job of moving 6 tons of earth and you

have four 3-ton trucks available.

• You can choose to put all 6 tons in one truck, but this

would likely break and fail – MURI

• You can fill the first truck with 3 tons and then put a ton in

each of the other 3 trucks, but this is uneven – MURA

and wasteful of available space - MUDA

• You could send the same truck twice, but this would be

time wasting – MUDA

• You could put the same amount in each of the four trucks

but then everyone would be wasting capacity – MUDA


Muda, Mura, Muri.

• The most efficient and effective way is to send 2 trucks

at the same time with 3 tons in each – maximizing

capacity and minimizing waste.

• In fact, you probably knew the answer to that problem

without thinking too hard, which shows that your natural

inclination is to be lean and effective.


The Language of Lean

• We’ve already started to explore some terms and words

used in Lean in the previous pages.

• Here are some terms and phrases you will discover in

the following modules. It is well worth getting a basic

understanding of them now.



• Value Stream – This describes the activities that provide

the customer with value in delivering their product. We

will explore this in far more detail in the next module, but

it is a core element to Lean as it describes the parts of

the process that meet the customer needs and add value

to the process, as opposed to those that are not needed

because they have no value.



• Kaizen – A workshop or event to identify waste areas or

functions.



• Kanban – The signal to pull the next element in the

production where there is space.



• Just-in-Time (JiT) – Describes the provision of items in

the production process only at the exact point they are

needed.



• Muda – Japanese word for waste.



• TIMWOOD – An acronym for types of waste that may

arise and need removal. We will discuss this in more

detail in the next module.


Module Summary

In this module, you have learned about:

• The background to Lean

• What Lean refers to and means

• The concept of waste and its reduction and removal

• The most common terms that will be used in Lean

processes


Lean in Action


• This module discusses some of the analysis and

procedural activities of undertaking a Lean review.

• We will discuss what they are and give appropriate

examples where possible. The module is the core for

understanding the actions of a Lean review of a

production process.



Value Streams

• One of the most important elements about Lean is to

understand its focus on the customer or consumer.

• Whenever a process is looked at, it is considered from a

view of the desire and needs of the customer.

• Answering questions about what they want, when they

want it, and what is the right price are part of the process

of identifying customer value to a process.


Value Streams

• When you know what the value is to the customer, then

you examine the process to see how effectively you are

meeting those needs.

• In Lean, you deliver your products to the customer via a

value stream.


Value Streams

• The use of the word “stream” is no mistake; consider the

flow of water in a river or stream. If there are no

obstructions, then it flows freely and almost effortlessly.

However, rocks and debris cause white water and

inefficient flow. Lack of water can cause wide empty

beds with little streams of water almost stranded.


Value Streams

• The manufacturing or production process can be seen in

much the same way.

• Ensure the right amount of resources are allocated and

avoid any “excess” being carried.

• Removing those obstructions will enable the most

efficient and effortless process flow.


Value Stream Mapping

• A Value Stream Map (VSM) is a graphical representation

of all the elements that make up a process or production.

• It includes all information sources and also describes the

resources at each stage and how they have arrived.

• It will be mapped as a start-to-finish process map with

the far left being the ‘start’ and ‘conclusion/output’ at the

far right.



• The VSM can often be very complex, because you want

to include every element of the process you are

examining, and you need to ensure that the customer of

that process – which could be another part of the factory,

is being considered for added value with each process

point.



Every VSM will be different, but there are key elements that

are required within it. It should include:

• The Process steps in some form of process map

• Storage, inventory, or volumes at each point of the

process

• Information flows detailing things like order requests,

scheduling, or shipping information

• A box score or activity score for timing and other metrics

associated with key activities

- continued




- continued

• A timeline or timing indicator should underpin the whole

VSM, showing timing for each stage as you move from

left to right, indicating lead times and activity times for

each part of the process

• Linked to the final output or customer end box in the far

left, you should indicate the customer demand or need

for the product within the process. This is sometimes

called the Takt box, which comes from the original Toyota

systems manufacturing system name.

An Example of a Value Stream Map (© www.evsm.com 2011)



• This is a very complex diagram at first glance, but if you

look at the previous paragraph, you can find all those

key elements within this VSM.

• You may ask how you create such a map. There are 2

main ways: you can either use technology options, such

as those provided at websites like www.evsm.com, or

you can use the more common paper process. It will be

a process with lots of paper!


http://www.evsm.com/


• To create the VSM, you need to get together key

stakeholders who understand the process. This will

undoubtedly be a cross-functional team.

• Find yourself a large room with a big table or lots of wall

space to use. Get lots of paper, pens, and Post-It™

notes and start to write up the current process.



• There is really no best way to do this, although most people choose to start with the left hand entry point and move across to the right.

• Be prepared to move things as you remember all the elements of the process. As you remember something, place it in the correct order of the process.

• When all in the team are satisfied that all elements are included, it’s time to add the metrics and information flows.

• A good use of sticky notes is to use these to identify the metric box values, and position the box scores using them against each element of the VSM.



• So, after much time and deliberation, you should get

something not dissimilar to the above example.

• But what do you do with this map now that it’s been

created?

• You now have a current state map – that is a diagram

representing what the process is now.

• From this, you want to get to a future state VSM, which

identifies the new process and functions that are Lean.


Kaizen

• To get to the future state, you undertake a workshop that

looks at each element of the current state and sees what

can be done to make it better.

• This workshop is the Kaizen experience.


Kaizen

• Kaizen comes from two Japanese words – Kai meaning

change and Zen meaning wisdom or insight.

• There are lots of discussions about Kaizen philosophy

and how to make it happen in the workplace, as being an

intricate part of the company culture for all people within

the organization.

• In fact the success of Japanese manufacturing is often

attributed to its integration within Japanese production.


Kaizen

• Before you start a Kaizen workshop, you need to

prepare for it.

• Ensure that the project is clearly defined – in effect, what

are the limits to the scope of your review.

• You will need a broad base of attendees made up of

senior managers, value stream owners (a local manager

or similar position with responsibility for the process),

some people who work in the area being reviewed, and

some objective contributors who can comment without

prejudice to the process.


Kaizen

• The Kaizen will include the activity mentioned above to

identify the current work processes and will normally run

through a week, beginning with an education on Lean,

then moving to develop the current state, process

analysis change identification, and future state

outcomes.


Kaizen

• Kaizen uses the Plan-Do-Check-Act (PDCA) cycle as a

Lean operating model.

• It is based on the idea that you create a plan for change,

do a trial of the change, check the outcomes or results,

and then act upon the results to implement the change.


Kaizen

• In fact, you will repeat this activity time and again until

you have exhausted all potential changes that can be

made to the existing processes.

• When you have completed all this activity, you will be left

with a future Value State Map identifying the future

processes to be implemented.


Kaizen

• Sometimes the changes required as part of the Kaizen

are obvious to identify, but there are a number of tools

and methods used within Lean to help identify the waste

that can be removed.

• The following pages identify the key and most popular

tools and methods.


Lean Analysis Tools

Critical Path Analysis

• Within every workflow or production path, there are core

elements that are essential to its success. These

elements are critical.

• When you look at the current state VSM, you need to

identify those elements that are critical and highlight their

interactions.

• These will be the fundamental components of the

production or manufacturing system.


Lean Analysis Tools


• For example, if you are making chicken pies, the delivery

of the chicken meat, cooking it, and adding a pie crust

will be essential elements – without those, it’s just not a

chicken pie.


Lean Analysis Tools


• Understanding how to find and create a critical path is

important and can be a bit of a challenge for the novice.

• If you have any technology or project management

experience, you may have created a critical path before.

• The critical path is constructed with the following

elements:


Lean Analysis Tools


1. Begin by creating a list of all activities required, the

timings for each element, and notes of any prior or

future dependencies for each one (e.g., getting the

chicken meat would be a prior dependency to cooking

the chicken pie).


Lean Analysis Tools


2. You then need to put these activities into their sequence

of events. A good guide here is to use Post-It™ notes

which can be moved around on a white board. The

important thing here is to identify those activities

that can be done at the same time as another and

show these in parallel.

In our Example of the chicken pie makers, we can be

creating the pie crust at the same time as cooking the

pie filling. While the whole pie is cooking, we can be

creating the boxes for packaging.


Lean Analysis Tools


3. When you are satisfied that the sequence is correct, you

examine the process map you have just created and find

the longest timed route of activity you can follow through

the process. With this in mind, you can identify that this

is the critical path, as these are essential components to

creating the end product. There may be others that are

also essential but can be completed while the critical

path is moving forward (the crust and filling discussion

above).


Lean Analysis Tools


• There are many methods of displaying Critical paths.

Using the Post-It™ notes allows you to physically create

a flowchart and then sketch it onto paper if needed.

• You may also choose to use software like Microsoft

Visio® to draw the flow. There are a number of software

products available that will show these in PERT

workflows or GANTT charts. PERT flowcharts are most

commonly used within Lean as they are easier for most

people to see the path of activity and develop value

streams from.


Lean Analysis Tools


• There is also some discussion about how you show the

timings for each activity in a PERT workflow.

• Current thinking is that the timings are displayed with the

activity at an end point to each flow and the diagram

below is what that would typically look like.

• You may find some people will place timings on the

connectors for each activity, but that is becoming less

popular.


Lean Analysis Tools


A typical critical path PERT workflow diagram


Lean Analysis Tools


Looking at the above diagram, you can follow 3 potential

paths of activity:

• Start, Activity 1, Activity 3, Activity 4, Finish – time of

3+7+2=12

• Start, Activity 2, Activity 3, Activity 4, Finish – time of

5+7+2=14

• Start, Activity 2, Activity 5, Finish. – time of 5+4=9


Lean Analysis Tools


• So here we have the second route, with a timing of 14,

as the longest timed option and thus the critical path.

• You can see how understanding critical path analysis

can benefit Lean considerations, when looking at

reducing times or options for travel of a product creation

process.


Lean Analysis Tools

TIMWOOD

• This is not so much a method but a guide on all the

potential areas for waste that need to be considered.

The word is an acronym made up as follows.


Lean Analysis Tools

TIMWOOD

• Transportation: Is there unnecessary or excessive

movement between activities?

• Inventory: Do you have any excess raw materials: partly

processed or completed products without value at any

point in the process.

• Movement: How much do you move things about the

production process? Are there repeats or extended

movements without value?

• Waiting: Are things waiting for another action or held

pending in the process?


Lean Analysis Tools

TIMWOOD

• Overproduction: Are you creating too quickly or too many

of the product for the customers’ demand?

• Over-processing: Are you creating something greater

than that needed by performing beyond expectations

without value?

• Defects: Are there items being produced that would be

unacceptable to the customer from a quality viewpoint?


Lean Analysis Tools

Kanban, JiT, Push & Pull

• When you look at the process, determine whether it is

pulling products from the previous part of the process or

pushing items to instigate the next part of the process.

• Pushing items to the next part of the process relies on

statistical forecasting and is prone to errors as demand

changes and customer needs alter.

• Consider if you are using push processes and whether

they can be changed to a pull process.


Lean Analysis Tools


• This means that it is the next step that identifies the

demand based on its needs.

• So only enough items are produced to meet that need,

avoiding unnecessary inventory waste but always

providing enough to meet the requirement of the process

element that follows.


Lean Analysis Tools


• Kanban describes the way this information is

transmitted, so that metrics are passed along the

process flow to ensure needs are met.

• Similarly JiT or Just-in-Time examines the way delivery

is scheduled at each stage of the process, so that only

those items required arrive when they can be used.


Lean Analysis Tools

Five S

• The 5S tool allows examination of a process to identify

non value-added elements.

• Although the original 5S words were Japanese, an

Anglicized version has been created using the following

words: Sort, Straighten, Shine, Standardize, and

Sustain.


Lean Analysis Tools

Five S

• Sort: Remove what is not needed

• Straighten: Organize what remains

• Shine: Clean the work area

• Standardize: Make sure a regular cleaning and

maintenance schedule is in place

• Sustain: Embed 5S as part of the culture


Lean Analysis Tools

Five S

• It is worth using these 5 tenets and plotting the current

effort or activity on each of these against a regular

pentagram to see what needs to be moved to achieve

the right levels.

• You can even award a score matrix and measure all

locations within a business on these scales.


Lean Analysis Tools

Cause and Effect Diagram (Fishbone)

• Cause and effect diagrams are often referred to as

Fishbone diagrams because of the nature of their shape.

• They are graphical representations of brainstorming

ideas as you analyze waste presence.


Lean Analysis Tools


• Begin by brainstorming all potential relationships.

• Next, state the outcomes in terms of problems or issues.

Choose significant branches to form the main bones of

examination.

• Follow the path along the bone to agree or dismiss

potential causes – remembering that these are potentials

and not known until validated or verified.

• An example of a fishbone examination is shown below:


Lean Analysis Tools



Lean Analysis Tools

Mistake Proofing ─ Poka Yoke

• Mistake Proofing or Poka-Yoke means taking steps to

eliminate product defects by preventing, correcting, or

drawing attention to human errors as they occur.

• Poka-Yoke is a Japanese term that means "fail-safing" or

"mistake-proofing,” adopted by Shigeo Shingo as part of

the Toyota Production System.


Lean Analysis Tools

Mistake Proofing ─ Poka Yoke

1 Contact Type

Testing shapes, size or physical attributes to detect errors

3 Motion-Step Type

Determine whether the prescribed steps of the process have been followed

2 Fixed-Value Type

Alerting operator if a certain number of movements are not made

Poka

Yoke


Module Summary


• Value streams

• How to undertake Value Stream Mapping

• Tools for analyzing the current state Value Stream Map

• What a Kaizen workshop is and what should be included


The Impact of Lean


• This module looks at how to manage within a Lean

environment and what considerations need to be taken

account of when making management decisions.

• We will look at the impact of Lean across several

industry sectors and conclude by looking at the way

Lean and Six Sigma have become closely integrated.



Lean Process Management

• When you start to undertake Lean reviews within an

organization, you have the opportunity to integrate it into

the corporate strategy and long term vision for the

business.

• Agreeing to review all production areas within a business

to ensure they are efficient using Lean methodology can

make a big difference to the way you perform and

deliver.



• Many organizations use the balanced scorecard to report

on their performance.

• The balanced scorecard reports on performance by four

quadrants or areas to demonstrate how the business is

moving towards its vision or corporate strategy. These

areas are Financial, Customer, Internal Business

Processes, and Learning and Growth.

• Lean has significant overlap with these areas to help

develop and achieve the corporate goals.



• It focuses on the customer and their values

• It measures structured improvements, often with

financial values

• It puts quality and internal process improvement as a

continual cycle

• It engages with all employees offering development

opportunities



• As well as the strategic impact of Lean, there is the need

to consider how the impact of its integration is reflected

at lower levels within the business.

• If your work area has had a Lean review, then it is likely

that you have changed the way you work.



• It is important that you maintain the new future state as a

working process, to ensure the benefits are fully realized.

• All managers recognize that things change, new

systems, people, and legislation can all bring change.

• If a new requirement or additional work process comes

into your area of responsibility, you need to ensure that it

is accounted for with an equally robust Lean review and

integration that maintains the existing Lean process.



• As Lean becomes embedded within the culture of the

organization, it should be expected that employees

highlight opportunities for Lean reviews.

• It is important to put in place a way to deal with these

suggestions and take on board as many as possible.

The more that can be taken forward, the better the

respect will be developed for Lean as an improvement

tool.



• Finally, remember that Lean is not just a phase or a one

off tool, but needs to be integrated as a continual part of

the business.

• It must be managed properly to improve the efficiency

and effectiveness of its operational delivery.


Lean Industries

• Although Lean principles were developed for

manufacturing, it is now recognized within a whole range

of business sectors.

• Service industries, government, and retail are all taking

up the idea as a way to improve customer delivery.

• Lean has also been taken into new business areas;

human resources, IT, and finance are now being

reviewed in light of Lean practice.


Lean Industries

• Wherever a process flow exists, a Value Stream Map

can follow.

• Looking at the administrative processes of financial

departments, as well as their frequent love of paper

creation, needs to be tempered with legal requirements.

• However, identifying critical paths for the workflow allows

the rest to be examined and remove waste. Their

customers may be internal, but they can still see value

and have needs and expectations.


Lean Industries

• Human resources can incorporate Lean processes into

their recruiting workflow, new hire training methods, and

general administrative responsibilities.

• Looking at meeting training and development needs

through Lean review involvement can also be a value-

added incentive to run good quality Kaizen events.


Lean Industries

• Information Technology and Lean are not often put

together, unless it is a new piece of software that is

assisting the process.

• However, the opportunities to bring a customer value

focus to IT and needs-based delivery can challenge IT

development that is used to provide the best outcome

rather than just what the customer needs.


Lean Industries

• Within the service industry, it can be hard to define the

product, but in effect the service is the product.

• Any service being delivered is an opportunity for Lean

review to ensure it meets the customer needs, and all

elements that build up to that final delivery are of value in

the process.


Lean Industries

• Within retail there are huge opportunities for inventory

control and customer demand to influence the process.

• Similarly, within government all of these types of roles

are present within some area, and the opportunity to

display reduced waste for taxpayer dollars is a very well-

used political driver.


Lean Industries

• As you can see, the opportunity for Lean across a wide

range of sectors is phenomenal and surely will expand

into the future.


Lean & Six Sigma

• There is a great deal of discussion about the

collaboration of Lean and Six Sigma.

• Although Six Sigma has borrowed a number of Lean

tools and terms to describe its improvement processes,

a true Lean operation does not need or use Six Sigma.

• However, it is more realistic for an organization

incorporating Six Sigma to also incorporate a few select

elements of Lean to support its efficiency drives.


Lean & Six Sigma

• Any Six Sigma practitioner will benefit from having the

understanding of Lean and its opportunities to reduce

waste and improve process flow by reducing or removing

process variations.

• However, Lean needs to be applied on its own within the

workplace, independently of the statistical number

crunching and structured workflow analysis of Six Sigma.


Lean & Six Sigma

• There is a large swell of reference to Lean Six Sigma as

if it is an entity in itself.

• This is effectively Six Sigma with the most appropriate

bits of Lean added in.

• Because of a number of overlapping tools and terms,

this new brand of business improvement has gained

momentum in later years and is now seen as one of the

fundamental improvement vehicles for business

processes.


Module Summary


• Managing strategically and day-to-day in a Lean

workplace

• How Lean is now being used across more than

manufacturing

• The interaction and challenges of Six Sigma and Lean


what is lean? · what is lean? the purpose of this ... “lean” company. copyright: management...

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