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Lean manufacturing



 
 
Lean manufacturing or lean production, which is often known simply as "Lean", is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. In a more basic term, More value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System
Toyota Production System

The Toyota Production System refers to an integrated Socio-technical systems, developed by Toyota, that comprises its management philosophy and practices....
 (TPS) (hence the term Toyotism is also prevalent) and identified as "Lean" only in the 1990s.






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Lean manufacturing or lean production, which is often known simply as "Lean", is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. In a more basic term, More value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System
Toyota Production System

The Toyota Production System refers to an integrated Socio-technical systems, developed by Toyota, that comprises its management philosophy and practices....
 (TPS) (hence the term Toyotism is also prevalent) and identified as "Lean" only in the 1990s. It is renowned for its focus on reduction of the original Toyota seven wastes in order to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker, has focused attention on how it has achieved this.

Lean manufacturing is a variation on the theme of efficiency
Efficiency

Efficiency may refer to:...
; it is a present-day instance of the larger recurring theme in human life of increasing efficiency, decreasing waste, and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas of what matters. Thus it is a chapter in the larger narrative that also includes, for example, the folk wisdom of thrift, time and motion study
Time and motion study

A time and motion study is a business efficiency technique combining the Time Study work of Frederick Winslow Taylor with the Motion Study work of Frank Bunker Gilbreth and Lillian Moller Gilbreth Gilbreth ....
, Taylorism, the Efficiency Movement
Efficiency Movement

The Efficiency Movement was a major dimension of the Progressive Era in the United States. It flourished 1890-1932. Adherents argued that all aspects of the economy, society and government were riddled with waste and inefficiency....
, and Fordism
Fordism

Fordism, named after Henry Ford, refers to various social theory about production and related socio-economic phenomena. It has varying but related meanings in different fields, as well as for Marxist and non-Marxist scholars....
. Lean manufacturing is often seen, with the benefit of hindsight, as a progression from, or a better attempt at the same goal of, earlier efficiency efforts—that is, picking up where earlier leaders like Taylor
Frederick Winslow Taylor

Frederick Winslow Taylor , widely known as F. W. Taylor, was an United States mechanical engineer who sought to improve industrial efficiency....
 or Ford
Henry Ford

Henry Ford was the United States founder of the Ford Motor Company and father of modern assembly lines used in mass production. His introduction of the Model T History of the automobile revolutionized transportation and American industry....
 left off, and learning from their mistakes.

Overview

Lean principles come from the Japanese manufacturing industry. The term was first coined by John Krafcik in a Fall 1988 article, "Triumph of the Lean Production System," published in the Sloan Management Review and based on his master's thesis at the MIT Sloan School of Management. Krafcik had been a quality engineer in the Toyota-GM NUMMI joint venture in California before coming to MIT for MBA studies. Krafcik's research was continued by the International Motor Vehicle Program at MIT, which produced the international best-seller book co-authored by James Womack,Daniel Jones, and Daniel Roos called ‘The Machine That Changed the World’ (1990).

For many, Lean is the set of "tools" that assist in the identification and steady elimination of waste (muda). As waste is eliminated quality improves while production time and cost are reduced. Examples of such "tools" are Value Stream Mapping
Value Stream Mapping

Value Stream Mapping is a Lean manufacturing technique used to analyze the flow of materials and information currently required to bring a product or service to a consumer....
, Five S, Kanban
Kanban

Kanban is a concept related to Lean manufacturing and Just In Time production. The Japanese word kanban is a common everyday term meaning "signboard" or "Billboard " and utterly lacks the specialized meaning that this loanword has acquired in English....
 (pull systems), and poka-yoke
Poka-yoke

is a Japanese term that means "Fail-safe", "Foolproof" or "mistake-proofing" — avoiding inadvertent errors ) is a behavior-shaping constraint, or a method of preventing errors by putting limits on how an operation can be performed in order to force the correct completion of the operation....
 (error-proofing).

There is a second approach to Lean Manufacturing, which is promoted by Toyota, in which the focus is upon improving the "flow" or smoothness of work, thereby steadily eliminating mura
Mura (Japanese term)

Mura is traditional general Japanese term for unevenness, inconsistency in physical matter or human spiritual condition. It is also a key concept in the Toyota Production System and is one of the three types of waste it identifies....
 ("unevenness") through the system and not upon 'waste reduction' per se. Techniques to improve flow include production leveling
Production leveling

Production leveling, also known as production smoothing or ? by its Japanese original term ? heijunka , is a technique for reducing the Mura waste and vital to the development of production efficiency in the Toyota Production System and Lean Manufacturing....
, "pull" production (by means of kanban
Kanban

Kanban is a concept related to Lean manufacturing and Just In Time production. The Japanese word kanban is a common everyday term meaning "signboard" or "Billboard " and utterly lacks the specialized meaning that this loanword has acquired in English....
) and the Heijunka box
Heijunka box

A heijunka box is a visual scheduling tool used in heijunka, a Japanese concept for achieving a smoother production flow. Whilst heijunka refers to the concept of achieving production smoothing, the heijunka box is the name of a specific tool used in achieving the aims of heijunka....
. This is a fundamentally different approach to most improvement methodologies which may partially account for its lack of popularity.

The difference between these two approaches is not the goal but the prime approach to achieving it. The implementation of smooth flow exposes quality problems which already existed and thus waste reduction naturally happens as a consequence. The advantage claimed for this approach is that it naturally takes a system-wide perspective whereas a waste focus has this perspective, sometimes wrongly, assumed. Some Toyota staff have expressed some surprise at the tool-based approach as they see the tools as work-arounds made necessary where flow could not be fully implemented and not as aims in themselves.

Both Lean and TPS can be seen as a loosely connected set of potentially competing principles whose goal is cost reduction by the elimination of waste. These principles include: Pull processing, Perfect first-time quality, Waste minimization, Continuous improvement, Flexibility, Building and maintaining a long term relationship with suppliers, Autonomation
Autonomation

Autonomation describes a feature of machine design to effect the principle of jidoka used in the Toyota Production System and Lean manufacturing....
, Load leveling and Production flow and Visual control. The disconnected nature of some of these principles perhaps springs from the fact that the TPS has grown pragmatically since 1948 as it responded to the problems it saw within its own production facilities. Thus what one sees today is the result of a 'need' driven learning to improve where each step has built on previous ideas and not something based upon a theoretical framework. Toyota's view is that the main method of Lean is not the tools, but the reduction of three types of waste: muda ("non-value-adding work"), muri
Muri (Japanese term)

Muri is a Japanese term for overburden, unreasonableness or absurdity, which has become popularized in the West by its use as a key concept in the Toyota Production System....
 ("overburden"), and mura
Mura (Japanese term)

Mura is traditional general Japanese term for unevenness, inconsistency in physical matter or human spiritual condition. It is also a key concept in the Toyota Production System and is one of the three types of waste it identifies....
 ("unevenness"), to expose problems systematically and to use the tools where the ideal cannot be achieved. Thus the tools are, in their view, workaround
Workaround

A workaround is a bypass of a recognized problem in a system. A workaround is typically a temporary fix that implies that a genuine solution to the problem is needed....
s adapted to different situations, which explains any apparent incoherence of the principles above.

Origins


Also known as the flexible mass production. The TPS has two pillar concepts: Just-in-time (JIT) or "flow", and "autonomation
Autonomation

Autonomation describes a feature of machine design to effect the principle of jidoka used in the Toyota Production System and Lean manufacturing....
" (smart automation). Adherents of the Toyota approach would say that the smooth flowing delivery of value achieves all the other improvements as side-effects. If production flows perfectly then there is no inventory; if customer valued features are the only ones produced then product design is simplified and effort is only expended on features the customer values. The other of the two TPS pillars is the very human aspect of autonomation, whereby automation is achieved with a human touch. The "human touch" here meaning to automate so that the machines/systems are designed to aid humans in focusing on what the humans do best. This aims, for example, to give the machines enough intelligence to recognize when they are working abnormally and flag this for human attention. Thus, in this case, humans would not have to monitor normal production and only have to focus on abnormal, or fault, conditions. A reduction in human workload that is probably much desired by all involved since it removes much routine and repetitive activity that humans often do not enjoy and where they are therefore not at their most effective.

Lean implementation is therefore focused on getting the right things, to the right place, at the right time, in the right quantity to achieve perfect work flow while minimizing waste and being flexible and able to change. These concepts of flexibility and change are principally required to allow production leveling, using tools like SMED, but have their analogues in other processes such as research and development
Research and development

The phrase research and development , according to the Organization for Economic Co-operation and Development, refers to "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications [sic]" ...
 (R&D). The flexibility and ability to change are within bounds and not open-ended, and therefore often not expensive capability requirements. More importantly, all of these concepts have to be understood, appreciated, and embraced by the actual employees who build the products and therefore own the processes that deliver the value. The cultural and managerial aspects of Lean are just as important as, and possibly more important than, the actual tools or methodologies of production itself. There are many examples of Lean tool implementation without sustained benefit and these are often blamed on weak understanding of Lean in the organization.

Lean aims to make the work simple enough to understand, to do and to manage. To achieve these three at once there is a belief held by some that Toyota's mentoring process (loosely called Senpai
Senpai

and are an essential element of Japanese age-based status relationships, similar to the way that family and other relationships are decided based on age, with even twins being divided into older and younger sibling....
 and Kohai), is one of the best ways to foster Lean Thinking up and down the organizational structure. This is the process undertaken by Toyota as it helps its suppliers to improve their own production. The closest equivalent to Toyota's mentoring process is the concept of "Lean Sensei", which encourages companies, organizations, and teams to seek out outside, third-party experts, who can provide unbiased advice and coaching, (see Womack et al, Lean Thinking, 1998).

There have been recent attempts to link Lean to Service Management, perhaps one of the most recent and spectacular of which was London Heathrow Airport's Terminal 5. This particular case provides a graphic example of how care should be taken in translating successful practices from one context (production) to another (services), expecting the same results. In this case the public perception is more of a spectacular failure, than a spectacular success, resulting in potentially, an unfair tainting of the lean manufacturing philosophies.

A brief History of waste reduction thinking


The avoidance and then latterly removal of waste has a long history and as such is not the history of Lean but is its motivator. In fact many of the concepts now seen as key to lean have been discovered and rediscovered over the years by others in their search to reduce waste. Lean has developed as an approach and style that has been demonstrated to be effective.

Pre-20th century


Most of the basic goals of lean manufacturing are common sense and documented examples can be seen as early as Benjamin Franklin
Benjamin Franklin

Benjamin Franklin was one of the Founding Fathers of the United States of the United States. A noted polymath, Franklin was a leading author and Printer , Satire, list of political philosophers, politician, scientist, inventor, activism, statesman, and diplomacy....
. Poor Richard's Almanac
Poor Richard's Almanac

Poor Richard's Almanack was a yearly almanack published by Benjamin Franklin, who adopted the pseudonym of "Poor Richard" or "Richard Saunders" for this purpose....
 says of wasted time, "He that idly loses 5s.
Shilling

The shilling is a unit of currency used in current and former Commonwealth of Nations countries, and continued to be used in countries that left the commonwealth, such as Republic of Ireland and Tanzania....
 worth of time, loses 5s., and might as prudently throw 5s. into the river." He added that avoiding unnecessary costs could be more profitable than increasing sales: "A penny saved is two pence clear. A pin a-day is a groat
Groat

Groat is the traditional name of an England silver coin worth four History of the English penny, and also a Scottish coinage originally worth fourpence, with later issues being valued at eightpence and a shilling....
 a-year. Save and have."

Again Franklin's The Way to Wealth
The Way to Wealth

"The Way to Wealth" is an essay written by Benjamin Franklin in 1758. It is a collection of adages and advice presented in Poor Richard's Almanac during its first 25 years of publication, organized into a speech given by "Father Abraham" to a group of people....
 says the following about carrying unnecessary inventory. "You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you. Remember what Poor Richard says, 'Buy what thou hast no need of, and ere long thou shalt sell thy necessaries.' In another place he says, 'Many have been ruined by buying good penny worths'." Henry Ford
Henry Ford

Henry Ford was the United States founder of the Ford Motor Company and father of modern assembly lines used in mass production. His introduction of the Model T History of the automobile revolutionized transportation and American industry....
 cited Franklin as a major influence on his own business practices, which included Just-in-time manufacturing.

The concept of waste being built into jobs and then taken for granted was noticed by motion efficiency expert Frank Gilbreth, who saw that masons bent over to pick up bricks from the ground. The bricklayer was therefore lowering and raising his entire upper body to pick up a 2.3 kg (5 lb.) brick, and this inefficiency had been built into the job through long practice. Introduction of a non-stooping scaffold, which delivered the bricks at waist level, allowed masons to work about three times as quickly, and with less effort.

20th century


Frederick Winslow Taylor
Frederick Winslow Taylor

Frederick Winslow Taylor , widely known as F. W. Taylor, was an United States mechanical engineer who sought to improve industrial efficiency....
, the father of scientific management, introduced what are now called standardization and best practice deployment. In his Principles of Scientific Management, (1911), Taylor said: "And whenever a workman proposes an improvement, it should be the policy of the management to make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to the old, it should be adopted as the standard for the whole establishment."

Taylor also warned explicitly against cutting piece rates (or, by implication, cutting wages or discharging workers) when efficiency improvements reduce the need for raw labor: "…after a workman has had the price per piece of the work he is doing lowered two or three times as a result of his having worked harder and increased his output, he is likely entirely to lose sight of his employer's side of the case and become imbued with a grim determination to have no more cuts if soldiering [marking time, just doing what he is told] can prevent it."

Shigeo Shingo
Shigeo Shingo

, born in Saga, Saga, Japan, was a Japanese industrial engineer who distinguished himself as one of the world?s leading experts on manufacturing practices and The Toyota Production System....
, the best-known exponent of single minute exchange of die (SMED) and error-proofing or poka-yoke, cites Principles of Scientific Management as his inspiration.

American industrialists recognized the threat of cheap offshore labor to American workers during the 1910s, and explicitly stated the goal of what is now called lean manufacturing as a countermeasure. Henry Towne, past President of the American Society of Mechanical Engineers
American Society of Mechanical Engineers

The American Society of Mechanical Engineers is a professional body, specifically an engineering society, focused on mechanical engineering.The ASME was founded in 1880 by Alexander Lyman Holley, Henry Rossiter Worthington, John Edison Sweet and Matthias N....
, wrote in the Foreword to Frederick Winslow Taylor's Shop Management (1911), "We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference with them by the products of the cheaper labor of other countries. To maintain this condition, to strengthen our control of home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products of other industrial nations, we should welcome and encourage every influence tending to increase the efficiency of our productive processes."

Ford starts the ball rolling


Henry Ford continued this focus on waste while developing his mass assembly manufacturing system. Charles Buxton Going wrote in 1915:
Ford's success has startled the country, almost the world, financially, industrially, mechanically. It exhibits in higher degree than most persons would have thought possible the seemingly contradictory requirements of true efficiency, which are: constant increase of quality, great increase of pay to the workers, repeated reduction in cost to the consumer. And with these appears, as at once cause and effect, an absolutely incredible enlargement of output reaching something like one hundredfold in less than ten years, and an enormous profit to the manufacturer.


Ford, in My Life and Work (1922), provided a single-paragraph description that encompasses the entire concept of waste:

I believe that the average farmer puts to a really useful purpose only about 5%. of the energy he expends.... Not only is everything done by hand, but seldom is a thought given to a logical arrangement. A farmer doing his chores will walk up and down a rickety ladder a dozen times. He will carry water for years instead of putting in a few lengths of pipe. His whole idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense.... It is waste motion— waste effort— that makes farm prices high and profits low.


Poor arrangement of the workplace—a major focus of the modern kaizen—and doing a job inefficiently out of habit—are major forms of waste even in modern workplaces.

Ford also pointed out how easy it was to overlook material waste. A former employee, Harry Bennett, wrote:

One day when Mr. Ford and I were together he spotted some rust in the slag that ballasted the right of way of the D. T. & I [railroad]. This slag had been dumped there from our own furnaces. 'You know,' Mr. Ford said to me, 'there's iron in that slag. You make the crane crews who put it out there sort it over, and take it back to the plant.'


In other words, Ford saw the rust and realized that the steel plant was not recovering all of the iron.

Design for Manufacture (DFM) also is a Ford concept. Ford said (in My Life and Work)
...entirely useless parts [may be]—a shoe, a dress, a house, a piece of machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones, we also cut down the cost of making. ... But also it is to be remembered that all the parts are designed so that they can be most easily made.


The same reference describes just in time manufacturing very explicitly.

While Ford is renowned for his production line it is often not recognized how much effort he put into removing the fitters' work in order to make the production line possible. Until Ford, a car's components always had to be fitted or reshaped by a skilled engineer at the point of use, so that they would connect properly. By enforcing very strict specification and quality criteria on component manufacture, he eliminated this work almost entirely, reducing manufacturing effort by between 60-90%. However, Ford's mass production system failed to incorporate the notion of "pull production" and thus often suffered from over-production.

Toyota develops TPS

Toyota's development of ideas that later became Lean may have started at the turn of the 20th century with Sakichi Toyoda
Sakichi Toyoda

Sakichi Toyoda was a Japanese inventor and industrialist. He was born in Kosai, Shizuoka, Shizuoka Prefecture. The son of a poor carpenter, Toyoda is referred to as the "King of Japanese Inventors"....
, in a textile factory with looms that stopped themselves when a thread broke, this became the seed of autonomation and Jidoka. Toyota's journey with JIT may have started back in 1934 when it moved from textiles to produce its first car. Kiichiro Toyoda
Kiichiro Toyoda

Kiichiro Toyoda was a Japanese entrepreneur and the son of Toyota Industries founder Sakichi Toyoda. He made the decision for Toyoda Loom Works to branch into automobiles, considered a risky business at the time....
, founder of Toyota, directed the engine casting work and discovered many problems in their manufacture. He decided he must stop the repairing of poor quality by intense study of each stage of the process. In 1936, when Toyota won its first truck contract with the Japanese government, his processes hit new problems and he developed the "Kaizen
Kaizen

Kaizen is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers....
" improvement teams.

Levels of demand in the Post War economy of Japan were low and the focus of mass production on lowest cost per item via economies of scale therefore had little application. Having visited and seen supermarkets in the USA, Taiichi Ohno recognised the scheduling of work should not be driven by sales or production targets but by actual sales. Given the financial situation during this period over-production had to be avoided and thus the notion of Pull (build to order rather than target driven Push) came to underpin production scheduling.

It was with Taiichi Ohno
Taiichi Ohno

is considered to be the father of the Toyota Production System, which became Lean Manufacturing in the U.S.. He wrote several books about the system, the most popular of which is Toyota Production System: Beyond Large-Scale Production....
 at Toyota that these themes came together. He built on the already existing internal schools of thought and spread their breadth and use into what has now become the Toyota Production System
Toyota Production System

The Toyota Production System refers to an integrated Socio-technical systems, developed by Toyota, that comprises its management philosophy and practices....
 (TPS). It is principally from the TPS, but now including many other sources, that Lean production is developing. Norman Bodek wrote the following in his foreword to a reprint of Ford's Today and Tomorrow:
I was first introduced to the concepts of just-in-time (JIT) and the Toyota production system in 1980. Subsequently I had the opportunity to witness its actual application at Toyota on one of our numerous Japanese study missions. There I met Mr. Taiichi Ohno, the system's creator. When bombarded with questions from our group on what inspired his thinking, he just laughed and said he learned it all from Henry Ford's book." It is the scale, rigour and continuous learning aspects of the TPS which have made it a core of Lean.


Types of wastes


While the elimination of waste may seem like a simple and clear subject it is noticeable that waste is often very conservatively identified. This then hugely reduces the potential of such an aim. The elimination of waste is the goal of Lean, and Toyota defined three broad types of waste: muda, muri
Muri (Japanese term)

Muri is a Japanese term for overburden, unreasonableness or absurdity, which has become popularized in the West by its use as a key concept in the Toyota Production System....
 and mura
Mura (Japanese term)

Mura is traditional general Japanese term for unevenness, inconsistency in physical matter or human spiritual condition. It is also a key concept in the Toyota Production System and is one of the three types of waste it identifies....
; it should be noted that for many Lean implementations this list shrinks to the last waste type only with corresponding benefits decrease.

To illustrate the state of this thinking Shigeo Shingo
Shigeo Shingo

, born in Saga, Saga, Japan, was a Japanese industrial engineer who distinguished himself as one of the world?s leading experts on manufacturing practices and The Toyota Production System....
 observed that only the last turn of a bolt tightens it—the rest is just movement. This ever finer clarification of waste is key to establishing distinctions between value-adding activity, waste and non-value-adding work. Non-value adding work is waste that must be done under the present work conditions. One key is to measure, or estimate, the size of these wastes, in order to demonstrate the effect of the changes achieved and therefore the movement towards the goal.

The "flow" (or smoothness) based approach aims to achieve JIT, by removing the variation caused by work scheduling and thereby provide a driver, rationale or target and priorities for implementation, using a variety of techniques. The effort to achieve JIT exposes many quality problems that are hidden by buffer stocks; by forcing smooth flow of only value-adding steps, these problems become visible and must be dealt with explicitly.

Muri is all the unreasonable work that management imposes on workers and machines because of poor organization, such as carrying heavy weights, moving things around, dangerous tasks, even working significantly faster than usual. It is pushing a person or a machine beyond its natural limits. This may simply be asking a greater level of performance from a process than it can handle without taking shortcuts and informally modifying decision criteria. Unreasonable work is almost always a cause of multiple variations.

To link these three concepts is simple in TPS and thus Lean. Firstly, muri focuses on the preparation and planning of the process, or what work can be avoided proactively by design. Next, mura then focuses on how the work design is implemented and the elimination of fluctuation at the scheduling or operations level, such as quality and volume. Muda is then discovered after the process is in place and is dealt with reactively. It is seen through variation in output. It is the role of management to examine the muda, in the processes and eliminate the deeper causes by considering the connections to the muri and mura of the system. The muda and mura inconsistencies must be fed back to the muri, or planning, stage for the next project.

A typical example of the interplay of these wastes is the corporate behaviour of "making the numbers" as the end of a reporting period approaches. Demand is raised in order to 'make plan', increasing (mura), when the "numbers" are low which causes production to try to squeeze extra capacity from the process which causes routines and standards to be modified or stretched. This stretch and improvisation leads to muri-style waste which leads to downtime, mistakes and backflows and waiting, thus the muda of waiting, correction and movement.

The original seven muda are:

  • Transportation (moving products that is not actually required to perform the processing)
  • Inventory (all components, work-in-progress and finished product not being processed)
  • Motion (people or equipment moving or walking more than is required to perform the processing)
  • Waiting (waiting for the next production step)
  • Overproduction (production ahead of demand)
  • Over Processing (due to poor tool or product design creating activity)
  • Defects (the effort involved in inspecting for and fixing defects)


Some of these definitions may seem rather idealistic, but this tough definition is seen as important and they drove the success of TPS. The clear identification of non-value-adding work, as distinct from wasted work, is critical to identifying the assumptions behind the current work process and to challenging them in due course. Breakthroughs in SMED and other process changing techniques rely upon clear identification of where untapped opportunities may lie if the processing assumptions are challenged.

Lean implementation develops from TPS


The discipline required to implement Lean and the disciplines it seems to require are so often counter-cultural that they have made successful implementation of Lean a major challenge. Some would say that it was a major challenge in its manufacturing 'heartland' as well. Implementations under the Lean label are numerous and whether they are Lean and whether any success or failure can be laid at Lean's door is often debatable. Individual examples of success and failure exist in almost all spheres of business and activity and therefore cannot be taken as indications of whether Lean is particularly applicable to a specific sector of activity. It seems clear from the "successes" that no sector is immune from beneficial possibility.

System engineering

Lean is about more than just cutting costs in the factory. One crucial insight is that most costs are assigned when a product is designed, (see Genichi Taguchi
Genichi Taguchi

Gen'ichi Taguchi is an engineer and statistician. From the 1950s onwards, Taguchi developed a methodology for applying statistics to improve the quality of manufactured goods....
). Often an engineer will specify familiar, safe materials and processes rather than inexpensive, efficient ones. This reduces project risk, that is, the cost to the engineer, while increasing financial risks, and decreasing profits. Good organizations develop and review checklists to review product designs.

Companies must often look beyond the shop-floor to find opportunities for improving overall company cost and performance. At the system engineering level, requirements are reviewed with marketing and customer representatives to eliminate those requirements which are costly. Shared modules may be developed, such as multipurpose power supplies or shared mechanical components or fasteners. Requirements are assigned to the cheapest discipline. For example, adjustments may be moved into software, and measurements away from a mechanical solution to an electronic solution. Another approach is to choose connection or power-transport methods that are cheap or that used standardized components that become available in a competitive market.

An example program

In summary, an example of a lean implementation program could be:

Lean leadership

The role of the leaders within the organization is the fundamental element of sustaining the progress of lean thinking. Experienced kaizen members at Toyota, for example, often bring up the concepts of Senpai
Senpai

and are an essential element of Japanese age-based status relationships, similar to the way that family and other relationships are decided based on age, with even twins being divided into older and younger sibling....
, Kohai, and Sensei
Sensei

is a Japanese language Japanese titles used to refer to or address teachers, professors, professionals such as lawyers and Physicians, politicians, clergyman, and other figures of authority....
, because they strongly feel that transferring of Toyota culture down and across the Toyota can only happen when more experienced Toyota Sensei continuously coach and guide the less experienced lean champions. Unfortunately, most lean practitioners in North America focus on the tools and methodologies of lean, versus the philosophy and culture of lean. Some exceptions include Shingijitsu Consulting out of Japan, which is made up of ex-Toyota managers, and Lean Sensei International based in North America, which coaches lean through Toyota-style cultural experience.

One of the dislocative effects of Lean is in the area of key performance indicators
Key performance indicators

Key Performance Indicators are financial and non-financial measures or metrics used to help an organization define and evaluate how successful it is, typically in terms of making progress towards its long-term organizational goals....
 (KPI). The KPIs by which a plant/facility are judged will often be driving behaviour, because the KPIs themselves assume a particular approach to the work being done. This can be an issue where, for example a truly Lean, Fixed Repeating Schedule
Fixed Repeating Schedule

Fixed Repeating Schedule is a key element of the Toyota Production System and Lean Manufacturing. As its name suggests it is a production schedule which is 'unchanging' and repeated perhaps daily or over a longer period such as a fortnight or month....
 (FRS) and JIT approach is adopted, because these KPIs will no longer reflect performance, as the assumptions on which they are based become invalid. It is a key leadership challenge to manage the impact of this KPI chaos within the organization. A set of performance metrics which is considered to fit well in a Lean environment is Overall Equipment Effectiveness
Overall equipment effectiveness

Overall equipment effectiveness is a hierarchy of metrics which focus on how effectively a manufacturing operation is utilized. The results are stated in a generic form which allows comparison between manufacturing units in differing industries....
, or OEE.

Similarly, commonly used accounting systems developed to support mass production
Mass production

Mass production is the production of large amounts of standardized products, including and especially on assembly lines. The concepts of mass production are applied to various kinds of products, from fluids and particulates handled in bulk to discrete solid parts to assemblies of such parts ....
 are no longer appropriate for companies pursuing Lean. Lean Accounting
Lean accounting

Lean accounting is accounting for the Lean manufacturing enterprise. It seeks to move from traditional cost accounting to a system that measures and motivates good business practices in the lean enterprise....
 provides truly Lean approaches to business management and financial reporting.

Key focus areas for leaders are
  • PDCA
    PDCA

    PDCA is an iterative four-step problem-solving process typically used in business process improvement. It is also known as the W. Edwards Deming Cycle, Walter A....
     thinking
  • Genchi Genbutsu
    Genchi Genbutsu

    Genchi Genbutsu means "go and see for yourself" and it is an integral part of the Toyota Production System. It refers to the fact that any information about a process will be simplified and abstracted from its context when reported....
     "go and see" philosophy
  • Process confirmation


Differences from TPS

Whilst Lean is seen by many as a generalization of the Toyota Production System
Toyota Production System

The Toyota Production System refers to an integrated Socio-technical systems, developed by Toyota, that comprises its management philosophy and practices....
 into other industries and contexts there are some acknowledged differences that seem to have developed in implementation.

  1. Seeking profit is a relentless focus for Toyota exemplified by the profit maximization principle (Price – Cost = Profit) and the need, therefore, to practice systematic cost reduction (through TPS or otherwise) in order to realize benefit. Lean implementations can tend to de-emphasise this key measure and thus become fixated with the implementation of improvement concepts of “flow” or “pull”.
  2. Tool orientation is a tendency in many programs to elevate mere tools (standardized work, value stream mapping, visual control, etc.) to an unhealthy status beyond their pragmatic intent. The tools are just different ways to work around certain types of problems but they do not solve them for you or always highlight the underlying cause of many types of problems. The tools employed at Toyota are often used to expose particular problems that are then dealt with, as each tool's limitations or blindspots are perhaps better understood. So, for example, Value Stream Mapping
    Value Stream Mapping

    Value Stream Mapping is a Lean manufacturing technique used to analyze the flow of materials and information currently required to bring a product or service to a consumer....
     focuses upon material and information flow problems (a title built into the Toyota title for this activity) but is not strong on Metrics, Man or Method. Internally they well know the limits of the tool and understood that it was never intended as the best way to see and analyze every waste or every problem related to quality, downtime, personnel development, cross training related issues, capacity bottlenecks, or anything to do with profits, safety, metrics or morale, etc. No one tool can do all of that. For surfacing these issues other tools are much more widely and effectively used.
  3. Management technique rather than change agents has been a principle in Toyota from the early 1950s when they started emphasizing the development of the production manager's and supervisors' skills set in guiding natural work teams and did not rely upon staff-level change agents to drive improvements. This can manifest itself as a "Push" implementation of Lean rather than "Pull" by the team itself. This area of skills development is not that of the change agent specialist, but that of the natural operations work team leader. Although less prestigious than the TPS specialists, development of work team supervisors in Toyota is considered an equally, if not more important, topic merely because there are tens of thousands of these individuals. Specifically, it is these manufacturing leaders that are the main focus of training efforts in Toyota since they lead the daily work areas, and they directly and dramatically affect quality, cost, productivity, safety, and morale of the team environment. In many companies implementing Lean the reverse set of priorities is true. Emphasis is put on developing the specialist, while the supervisor skill level is expected to somehow develop over time on its own.


Lean services


Lean, as a concept or brand, has captured the imagination of many in different spheres of activity. Examples of these from many sectors are listed below.

Lean principles have been successfully applied to call center services to improve live agent call handling. By combining Agent-assisted Voice solutions and Lean's waste reduction practices, a company reduced handle time, reduced between agent variability, reduced accent barriers, and attained near perfect process adherence.

A study conducted on behalf of the Scottish Executive, by Warwick University, in 2005/06 found that Lean methods were applicable to the public sector, but that most results had been achieved using a much more restricted range of techniques than Lean provides.

The challenge in moving Lean to services is the lack of widely available reference implementations to allow people to see how it can work and the impact it does have. This makes it more difficult to build the level of belief seen as necessary for strong implementation. It is also the case that the manufacturing examples of 'techniques' or 'tools' need to be 'translated' into a service context which has not yet received the level of work or publicity that would give starting points for implementors. The upshot of this is that each implementation often 'feels its way' along as must the early industrial engineers of Toyota. This places huge importance upon sponsorship to encourage and protect these experimental developments.

See also


Those areas below are linked to this subject:
Closely related methodologies
  • Toyota Production System
    Toyota Production System

    The Toyota Production System refers to an integrated Socio-technical systems, developed by Toyota, that comprises its management philosophy and practices....
  • Value Network
    Value network

    A value network is a complex set of social and technical resources. Value networks work together via relationships to create social goods or value ....
  • Demand Flow Technology
    Demand Flow Technology

    Demand Flow Technology is a mathematically based approach to manufacturing that positions a company to become demand driven. It was created by John R....
  • Theory of Constraints
    Theory of constraints

    Theory of Constraints is an overall management philosophy introduced by Dr. Eliyahu M. Goldratt in his 1984 book titled The Goal , that is geared to help organizations continually achieve their goals....
  • Six Sigma
    Six Sigma

    Six Sigma is a Strategic management, originally developed by Motorola, that today enjoys widespread application in many sectors of industry.Six Sigma seeks to identify and remove the causes of defects and errors in manufacturing and business processes....
  • Statistical process control
    Statistical process control

    Statistical Process Control is an effective method of monitoring a process through the use of control charts. Control charts enable the use of objective criteria for distinguishing background variation from events of significance based on statistical techniques....


Terminology
  • Just In Time or JIT
  • Fixed Repeating Schedule or FRS
    Fixed Repeating Schedule

    Fixed Repeating Schedule is a key element of the Toyota Production System and Lean Manufacturing. As its name suggests it is a production schedule which is 'unchanging' and repeated perhaps daily or over a longer period such as a fortnight or month....
  • Kaizen
    Kaizen

    Kaizen is a Japanese philosophy that focuses on continuous improvement throughout all aspects of life. When applied to the workplace, Kaizen activities continually improve all functions of a business, from manufacturing to management and from the CEO to the assembly line workers....
  • SMED
  • Poka-Yoke
    Poka-yoke

    is a Japanese term that means "Fail-safe", "Foolproof" or "mistake-proofing" — avoiding inadvertent errors ) is a behavior-shaping constraint, or a method of preventing errors by putting limits on how an operation can be performed in order to force the correct completion of the operation....
  • Autonomation
    Autonomation

    Autonomation describes a feature of machine design to effect the principle of jidoka used in the Toyota Production System and Lean manufacturing....
     and Jidoka
  • 5S
    5S

    5S is a reference to a list of five Japanese words which, transliterated and translated into English, start with the letter S and are the name of a methodology....
  • Production levelling
  • muda, mura
    Mura (Japanese term)

    Mura is traditional general Japanese term for unevenness, inconsistency in physical matter or human spiritual condition. It is also a key concept in the Toyota Production System and is one of the three types of waste it identifies....
    , muri
    Muri (Japanese term)

    Muri is a Japanese term for overburden, unreasonableness or absurdity, which has become popularized in the West by its use as a key concept in the Toyota Production System....
  • workcell
    Workcell

    A workcell is an arrangement of resources in a manufacturing environment to improve the quality, speed and cost of the process. Workcells are designed to improve these by improving process flow and eliminating waste....
  • Takt time
    Takt time

    Takt time can be defined as the maximum time allowed to produce a product in order to meet demand. It is derived from the German word Taktzeit which translates to clock cycle....
  • Andon
    Andon

    Andon is a manufacturing term referring to a system to notify management, maintenance, and other workers of a quality or process problem. The centrepiece is a signboard incorporating signal lights to indicate which workstation has the problem....
  • Genchi Genbutsu
    Genchi Genbutsu

    Genchi Genbutsu means "go and see for yourself" and it is an integral part of the Toyota Production System. It refers to the fact that any information about a process will be simplified and abstracted from its context when reported....
  • Gemba
    Gemba

    is a Japanese language term meaning "the actual place" or "the real place" and implies that it is the place where value is created. In manufacturing the gemba is the factory floor....
  • 5 Whys
    5 Whys

    The 5 Whys is a question-asking method used to explore the cause/effect relationships underlying a particular problem. Ultimately, the goal of applying the 5 Whys method is to determine a root cause of a defect or problem....

Areas of implementation outside production
  • Computer-Aided Lean Management
    Computer-Aided Lean Management

    Computer-Aided Lean ManagementComputer-Aided Lean Management is a methodology of developing and using software-controlled, lean systems integration....
  • Lean construction
    Lean construction

    Lean construction is a translation and adaption of lean manufacturing principles and practices to the end-to-end design and construction process....
  • Lean laboratory
    Lean laboratory

    A lean laboratory is one which is focused on testing products and materials to deliver results in the most efficient way in terms of cost or speed or both....
  • Lean Services
  • Lean Office
  • Lean software development
    Lean software development

    Lean Software Development is a translation of lean manufacturing principles and practices to the software development domain. Adapted from the Toyota Production System, a pro-lean subculture is emerging from within the Agile software development community....


Other
  • Overall Equipment Effectiveness
    Overall equipment effectiveness

    Overall equipment effectiveness is a hierarchy of metrics which focus on how effectively a manufacturing operation is utilized. The results are stated in a generic form which allows comparison between manufacturing units in differing industries....
  • Cellular manufacturing
    Cellular manufacturing

    Cellular Manufacturing is a model for workplace design, and is an integral part of lean manufacturing systems. The goal of lean manufacturing is the aggressive minimisation of waste, called Muda , to achieve maximum efficiency of resources....
  • Agile manufacturing
    Agile manufacturing

    Agile manufacturing is a term applied to an organization that has created the processes, tools, and training to enable it to respond quickly to customer needs and market changes while still controlling costs and quality....
  • Industrial engineering
    Industrial engineering

    Industrial engineering is also known as operations management, management science, systems engineering, or manufacturing engineering; a distinction that seems to depend on the viewpoint or motives of the user....
  • Manufacturing
    Manufacturing

    Manufacturing is the use of machine, tool and labor to make things for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to Industry production, in which raw material are transformed into finished good on a large scale....
  • Preorder Economy
    Preorder Economy

    A preorder economy is a type of proposed future economy where the exact demand for goods is known ahead of time, before any material production takes place....
  • Process Reengineering
    Reengineering

    Reengineering is radical redesign of an organization's processes, especially its business processes. Rather than organizing a firm into functional specialties and considering the tasks that each function performs; complete processes from materials acquisition, to production, to marketing and distribution should be considered....
  • Training Within Industry
    Training Within Industry

    The Training Within Industry service was created by the United States Department of War, running from 1940 to 1945 within the War Manpower Commission....
  • Value Stream Mapping
    Value Stream Mapping

    Value Stream Mapping is a Lean manufacturing technique used to analyze the flow of materials and information currently required to bring a product or service to a consumer....
  • 3D's Dirty, Dangerous and Difficult
  • Systems thinking
    Systems thinking

    Systems Thinking is any process of estimating or inferring how local policies, actions, or changes influences the state of the neighboring universe....
  • Oscillatory baffled reactor
  • Lean accounting
    Lean accounting

    Lean accounting is accounting for the Lean manufacturing enterprise. It seeks to move from traditional cost accounting to a system that measures and motivates good business practices in the lean enterprise....


Books on lean production

  • Carlino, Andy and Flinchbaugh, Jamie (2005), The Hitchhiker's Guide to Lean
    The Hitchhiker's Guide to Lean

    SummaryThis book covers lean manufacturing principles and thinking, lean leadership moves, the road map for lean transformation, common pitfalls of lean journeys, building an operating system, lean accounting, lean material management, lean in service organizations, and how individuals can apply lean to improve themselves....
    , Society of Manufacturing Engineers , ISBN 0-87263-831-6
  • Chalice, Robert W, (2007), Improving Healthcare Using Toyota Lean Production Methods - 46 Steps for Improvement, ISBN 0873897137 or # ISBN-13: 978-0873897136
  • Cooper, Robert G. and Edgett, Scott J. (2005), Lean, Rapid and Profitable New Product Development, ISBN 0-9732827-1-1
  • Emiliani, B., with Stec, D., Grasso, L. and Stodder, J. (2007), Better Thinking, Better Results: Case Study and Analysis of an Enterprise-Wide Lean Transformation, second edition, The CLBM, LLC Kensington, Conn., ISBN 978-0-9722591-2-5
  • Ford, Henry and Crowther, Samuel (2003), My Life and Work, Kessinger Press, ISBN 0-7661-2774-5
  • Ford, Henry and Crowther, Samuel (1988), Today and Tomorrow, Productivity Press, ISBN 0-915299-36-4
  • Ford, Henry and Crowther, Samuel (2003), Moving Forward, Kessinger Press, ISBN 0-7661-4339-2
  • George, Michael L. (2003), Lean Six Sigma For Service, McGraw-Hill, ISBN 0-07-141821-0
  • Graban, Mark (2008), "Lean Hospitals: Improving Quality, Patient Safety, and Employee Satisfaction," Productivity Press, ISBN 978-1420083804
  • Hirano, Hiroyuki and Furuya, Makuto (2006), "JIT Is Flow: Practice and Principles of Lean Manufacturing", PCS, Inc., ISBN 0-9712436-1-1
  • Imai, Masaaki (1997), Gemba Kaizen, McGraw-Hill, ISBN 0-07-031446-2
  • Kennedy, Michael N. (2003), Product Development for the Lean Enterprise, The Oaklea Press, ISBN 1-892538-09-1
  • Levinson, William A. (2002), Henry Ford's Lean Vision: Enduring Principles from the First Ford Motor Plant, Productivity Press, ISBN 1-56327-260-1
  • Levinson, William A. and Rerick, Raymond (2002), Lean Enterprise: A Synergistic Approach to Minimizing Waste, ASQ Quality Press, ISBN 0-87389-532-0
  • Liker, Jeffrey (2003), The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer
    The Toyota Way

    The 14 Principles of the Toyota Way is a management philosophy used by the Toyota corporation that includes the Toyota Production System. The main ideas are to base management decisions on a "philosophical sense of purpose", to think long term, to have a process for solving problems, to add value to the organization by developing its people,...
    , First edition, McGraw-Hill, ISBN 0-07-139231-9.
  • Norwood, Edwin P. (1931), Ford: Men and Methods, Doubleday, Doran, ASIN B000858158
  • Ohno, Taiichi (1988), Toyota Production System: Beyond Large-Scale Production, Productivity Press, ISBN 0-915299-14-3
  • Ortiz, Chris (2008),, ISBN 0131584634,Prentice Hall Professional.
  • Rother, Mike and Shook, John (2003), Learning to See, Lean Enterprise Institute, ISBN 0-9667843-0-8
  • Schonberger, Richard J. (1986), World Class Manufacturing, Free Press, ISBN 0-02-929270-0
  • Womack, James P. and Jones, Daniel T. (1998), Lean Thinking Free Press, ISBN 0-7432-4927-5.
  • Womack, James P., Jones, Daniel T., and Roos, Daniel (1991), The Machine That Changed the World
    The Machine That Changed the World

    The Machine That Changed the World is a book based on the Massachusetts Institute of Technology's $5 million, five-year study on the future of the automobile, written by Jim Womack, Dan Jones , and Daniel Roos....
    : The Story of Lean Production
    , Harper Perennial, ISBN 0-06-097417-6


External links

: The Lean Advancement Initiative - articles, manuals and case studies by the Defense Acquisition University