Organizations can profit from learning to think in terms of Lean, a philosophy that aims to eliminate waste (in Japan, where Lean was developed, the term is muda). Lean attacks waste mainly by shortening the time between the customer order and shipment. Based on a customer-focused view, six steps can provide a strong foundation for any organization that wants to incorporate Lean into its operating philosophy. These steps in Lean thinking can be best evaluated at the producer end by verifying and reviewing each step one at a time.
Lean thinking can best start by giving due consideration to value, which ultimately is the customer’s requirement. The value of any product (goods or services) is defined by customer needs and not by any non-value-added activity at the supplier or producer end. That is, the customer is prepared to pay for operations by producers or their suppliers that transform the product in a way that is meaningful to the customer. Customers do not want to pay for waste at the producer end.
Value is determined by the customers who want to buy the right product with the right capabilities at the right price. That is, the product must be “right” every time – from design to manufacture, from delivery to error-free operation. Lean companies work on making their processes right by eliminating waste – something no customer wants to pay for.
While linking the term “value” generally with customer requirements, the following questions can be asked to review the value for the customer as it relates to any specific product issue:
Once value is specified by the customers, the next Lean step is to identify the right process – a process that only adds value to the product, in other words, a waste-free process. The value stream for a product has three categories of activities:
1. Process steps that definitely create value: In any manufacturing process, the steps that are actually transforming the fit, form or function of the raw material, and bring it a step closer to the finished product.
2. Process steps that create no value but are necessary, due to current state of the system: In any manufacturing process, activities like inspection, waiting and some transportation steps.
3. Process steps that create no value and can be eliminated: Any activity that does not fall into the above two categories.
While the parts of a process that create no value should be eliminated, any action or activity that is recognized as non-value-added but currently necessary should be targeted for improvement. At this point a detailed process flow diagram should be generated for each product or product category. To ascertain which steps in the process are unnecessary, an intense questioning and re-examining method (Japanese term is kaikeku) is applied to every aspect of the process under consideration.
The review points at this stage are:
This Lean step focuses on rapid product flow (RPF). The specific process waste is identified at each stage of process flow and is eliminated. The team involved in Lean will physically walk the process and write down the distance the product travels during its process flow. The non-value-added distances are eliminated by physical layout change, which involves both human and machine. Factory floors are laid out in cells rather than in functional groupings, which reduces the distance the parts travel in the process flow.
It is at this point that the Lean enterprise implements 5S, a tool developed for reducing the slack hidden in manufacturing processes. 5S is the basis for Lean manufacturing and the foundation for a disciplined approach to the clean workplace. The five steps of 5S are (in Japanese and English):
Questions to be asked at this point are:
The benefits of Lean Steps 1, 2 and 3 allow a company to produce more than before and in a way that value is added at every step in the production process. The fourth Lean step can be directed toward either removing excess capacity (inventory) or increasing the rate of pull.
Lean, which identifies the seven deadly wastes as defects, over-production, transportations, waiting, inventory, motion and processing (or the acronym, DOTWIMP), lists inventory as a source of waste. Hence, producing anything that is not sold immediately and is waiting at any point of time for delivery is waste. A pull system, which on the production side is making a product at the same rate at which it is being sold, also is a waste-eliminating step. On the supply side, a pull system is flowing resources into a production process by replacing only what has been consumed.
The review points here are:
This Lean step emphasizes that continuous improvement has to be a part of the organization and is always possible. This is the desired state of any change in any environment. The organization should always try to achieve what is the perfect system for that kind of operation and should aim at continuously improving the present system. The word for this in Japanese is Kaizen.
Questions to be asked here are:
This Lean step is a confirmation of the system implemented and improvements achieved, and determining that these same system procedures, tools and techniques can be deployed anywhere in the operation or in any business process. The main benefit of this step is that any time spent in analysis is reduced.
Now is the time to ask these questions: