Becoming Lean

Lean tools are a means to building.

Lean's growing popularity with manufacturing companies in recent years is due largely to Lean Thinking written by James Womack and Daniel Jones in 2000 as well as continued competitive pressure from globalization. For decades many of us solved specific manufacturing problems using lean techniques such as pull systems, 5S (sort, set in order, standardize, shine and sustain) and others introduced by Richard Schonberger's 1982 book, Japanese Manufacturing Techniques. Now we know we were missing the big picture, Lean is a total operating system for manufacturing plants and has broad application in product or service businesses.

In his book Toyota Production System, Taiichi Ohno (Toyota engineer and manager who later became President of Toyota Motor Company) tells the Toyota Production System story. Toyoda Kiichiro, founder of Toyota Motor Company, observed American automobile manufacturers were nine times more productive than Toyota. He challenged Ohno to catch up with America in three years. This challenge required radical elimination of waste and stimulated the Toyota Production System's (TPS) innovative thinking, values and principles. Ohno said, "a total management system is needed that develops human ability to its fullest capacity and fruitfulness, utilizes facilities and machines well, and eliminates all waste. This system will work for any type of business."

These values and principles were not derived from theory but from Toyota's real need to improve rapidly after World War II. In developing Lean they eliminated waste, increasing customer value forever by optimizing people, materials, space, and equipment resources. The "seven wastes" principle includes:

  1. Overproduction – making more than needed
  2. Transport – moving of materials
  3. Motion – inefficient people movement
  4. Waiting –underutilizing people
  5. Inventory – underutilization of costs
  6. Over-Processing – making to a higher standard than customers expect
  7. Defects/Correction – time spent detecting, correcting, disposing of and preventing defects

Lean uses four high level metrics to measure supply chain operation results and process effectiveness: Safety, Service, Cost and Inventory. Lean initiates metric improvement by assessing the system using Value Stream Mapping (VSM). VSM has a standard set of icons and instructions for documenting material and information flows based on actual shop floor observation. Value stream observation starts at the process closest to the customer and follows upstream step-by-step to raw material receiving. Observers note product flow, non-value added operator activities, utilization of material handling team members, piles of inventory, scrap in waste bins and seven other wastes. Scheduling in formation flow is also documented for each operation. These observations create the value stream cur rent state and identify potential improvement projects. Many projects are identified, so Lean experience is essential to make good judgments in project prioritization and Lean tool or technique selection. The future state VSM is developed to show the optimum system operation when all identified projects are complete. Because a first priority in Lean implementation is gaining value stream stability, 5S quick changeover, work cell design for flow, inventory super markets and visual management tools are likely initial projects. This continuous improvement cycle is repeated every 90 to 180 days by going deeper into the value stream system to standardize, level-load, stabilize and improve flow. Each succeeding cycle of flow improvement raises and resolves new barriers generating continuous improvement.

Making change is a risk which could disrupt short term product flow. A fundamental rule in Lean implementation is "always protect the customer" by applying sufficient project resources to be sure any problems are dealt with immediately or mitigated by using resources to "work around" the problem until it is solved.

During its first 20 years the Toy ota Production System's myriad tools and techniques were developed to expose and solve problems, eliminating waste and creating single piece flow. These well defined tools and techniques allow quick value stream improvement.

  • 5S
  • TPM
  • Kanban
  • Supermarkets
  • Change over wheel
  • Pacemaker scheduling
  • Material delivery routes
  • Source Quality
  • Takt Time
  • Work cell design
  • Standardized work
  • Error proofing
  • Plant flow layout
  • Level loading-Heijunka
  • Jidoka
  • SMED

Lean tools are the means to building, sustaining and improving the Lean System. Lean optimizes resources by deploying only those required to sup port leveled customer demand. This is accomplished through applying Takt time, a term meaning the required cycle time in seconds to produce a unit of product at a rate sufficient to meet customer demand. It is the drum beat that synchronizes all operations and resources. Production control schedules a single operation in Lean, called the pacemaker, and Takt time is determined for this operation. The remaining operations are planned to produce at a cycle time slightly lower than Takt time and synchronized by pull signals from down stream operations.

Lean standard work defines the role of every team member in the operation. We typically think of standards and standardized work applying only to shop floor team members but, Lean is a people based system that relies on the direct shop floor engagement of every level of the organization. Every team member has well defined standardized work critical to both building the Lean System and creating accountability. Shop floor job activities are classified in three categories: value-added, non-value-added and non-value-added but required. For example, handling or moving parts is non-value- added, assembly is value-added and quality checks are required non-value-added. Typically a company beginning its Lean journey has 65% of the shop floor operators' time dedicated to value-added and required non-value-added tasks. Further shop floor team member productivity improvements are achievable by transferring non-valued material replenishment to underutilized material handlers. The fork lift truck is usually loaded either to or from the warehouse resulting in 50% non-value-added time. Standardized work and cell design will improve value-added time percent ages for all shop floor team members. Standardized work also applies to every level of management including the plant manager, who must have structured time in their agenda, often the first hours of the day, for shop floor time. The daily agenda must be arranged so all operations are audited over time. The purpose of shop floor time is to: 1) audit standardized work; 2) coach team members about Lean and continuous improvement; 3) follow up with the organization on deviations identified through visual management and; 4) identify the next levels of system improvement. This critical management activity creates Lean system sustainability. Lean is a people based system, so monitoring and control relies on layered audits. Each day standard work audits are completed by every level of the leadership structure, so each level is auditing something that has already been audited by another level. The result of the audit may be coaching for the leader due to non-compliance, congratulations and thank you, or an improvement suggestion. Value stream stability depends on standardized operational discipline and audits are the control mechanism to maintain this discipline. Lean audits are serious business and included in annual review of every plant leader.

Visual management is the Lean System sensing mechanism. It provides transparency of operational reality and clarity of deviations against detailed standards of performance, work procedures, scheduling, inventory, and scrap. The plant manager's daily walk also builds a healthy tension of joint accountability between plant managers and shop floor operators. If problems occur repeatedly at an operation, shop floor team members expect the manager to resolve them. This reinforces a positive work environment as the plant manager conveys support and respect for shop floor team members, the only plant positions adding customer value. Daily deviations exposed through visual management also stimulate shop floor teams to identify root causes and implement permanent solutions.

The Lean practice for identifying root cause is the "five whys". The process starts by asking why a problem is occurring. The process continues with each successive response met with another "why" until the root cause is determined. Through experience, practitioners learned it never takes more then five cycles to locate the root cause.

Next, the four step "Plan Do Check Act" (PDCA) improvement process is applied. This simple four step method is based on the scientific method taught to the Japanese by Edward Deming. These standardized tools are simple, allowing shop floor team members to learn and apply them. When the first set of Lean System improvement projects are completed the current state is up dated defining projects to achieve the next level of system improvement. Simultaneously, the shop floor teams continuously implement solutions to day-to-day variation. The system improvements and shop floor operations improvements follow the same four step improvement sequence – Standardize, Level Load, Stabilize and Create Flow – repeating it continuously, forever.

Lean Strengths:

  • Scope is all operational supply chain processes
  • Focuses on value creation for customers
  • Builds company wide operational system
  • End-state driven project selection
  • Regenerates opportunity forever
  • Metric and activity alignment across organizational boundaries
  • Prescriptive best practice solutions
  • Scientific problem solving method
  • Total organization involvement
  • Establishes common language and tools
  • Builds continuous improvement culture

Lean Limitations:

  • Top management understanding is usually superficial
  • Difficult to scale
  • Rigor can suffer without management engagement
  • Initially difficult to tie to the bottom line
  • Only includes operational processes

Taiichi Ohno believed the best approach to deliver end customer value and share benefits with all supply chain participants is improving the integrated value stream. Lean has proven it's timelessness by delivering results for more than fifty years and has become the sup ply chain operation's best practice. There are number of excellent Lean books and training materials avail able through Productivity Press and the Lean Enterprise Institute.

Paul Husby recently completed a 38-year career with 3M, including managing director of 3M Brazil, division vice president of the Abrasives division, and corporate staff vice president of manufacturing and supply chain services. He practiced all four of the methodologies during his career.. SCOR was used in 2004 to assess 3M processes and develop a direction for improvement. Lean was implemented in all 3M plants world wide as one of the initiatives from SCOR benchmarking. Paul is a certified Six Sigma Champion with five years of successful application at 3m. As the Managing Director of 3M Brazil, TOC was utilized in all plants and made significant contributions to the business. Comments and critiques are welcome ([email protected])

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