In everyday, ordinary language ‘lean’ simply means ‘thin’, ‘trim’ or ‘slender’, which is not far from the understanding of the term in ‘quality circles’. By implication, lean is about avoiding excesses, overuse, delays and waste of any kind. The concept of lean applies to both the delivery of goods and services; and can be used to improve manufacturing, logistical and transactional processes. In short, lean endeavours to deliver better products and services in shorter times and at a lower cost. It is all about maximizing customer value while minimizing waste.
What is Lean?
It is almost impossible to find the perfect definition for ‘Lean Management’, or simply ‘Lean’. This is because the methodology is constantly evolving, with more tools constantly being added to the lean tool box.
Lean Management (or simply ‘Lean’) is a disciplined approach to management of processes which seeks to continuously improve processes by minimizing waste and improving efficiency with the view to improve quality and minimize costs. The improvements achieved are small and incremental and happen over the long-term.
The ultimate goal of lean is to put in place a system of delivering value to the customer, based on real customer demand, by optimizing resources and creating a steady flow of work. Lean has its origin in the Toyota Production System (TPS), which employs lean manufacturing principles in order to minimize waste within manufacturing processes – by removing non-value added steps from the process.
According to James Womack, “it is a process for measuring and reducing inventory and streamlining production. It is a means for changing the way a company measures plant performance. It is a knowledge-based system. It takes years of hard work, preparation and support from upper management. Lean is so named because it purports to use much less of certain resources (space, inventory, workers, etc.) than is used by normal mass-production systems to produce comparable output.”
What is the Focus of Lean?
The Lean methodology relies on 3 very simple ideas as illustrated in figure 1:
Delivering value from your customers’ point of view
Eliminating waste - things that do not bring value to the end product (from your customers’ view point)
Continuously improving processes in order to improve customer service.
Figure 2: 3 Pillars of Lean ( iSixSigma 2021)
Elimination of Waste Is the Soul of Lean
The methodology of Lean has identified 8 wastes which must be reduced or eliminated in order to achieve the aims of lean. These wastes are illustrated in Figure 2.
Figure 3 : 8 Wastes of Lean (Kiss Flow 2021)
Muda is a Japanese term which stands for an activity that does not add value. The idea forms the basis for lean control. Waste reduction is the key to increase profitability. Listed below are the 8 wastes identified by lean:
1. Transport:
Unnecessary movement of resources - people, tools, inventory, final products etc. - from one place to another with no value added to the product. Creating an efficient flow of work and enforcing WIP (Work in Progress) limits can help avoid this kind of waste.
2. Inventory:
This refers to excessive inventory that does not add any value for the end customer and often end up building up in the stores instead – adding to operating costs in the process.
3. Motion:
This includes unnecessary movement of goods and employees. The work environment must be arranged in such a way the movement of workers and machinery is minimized. This can be achieved -for example - by designing the ergonomics of the work place in a manner that reduces movements.
4. Waiting:
The flow of work must be continuous -one step of work (or process) must not delay the next task.
5. Overproduction:
Producing what the customer is not going to pay for immediately can be categorized as overproduction, and as such is considered a waste. It is good practice to avoid the temptation to keep on producing when workers have spare time. Overproduction can be avoided by enforcing strict work-in-progress limits and following the just-in-time philosophy.
6. Over-processing:
This refers to extra work which consumes effort and resources, but does not add value that the customer will pay for. In other words, over-processing means including more work or having more steps in the process to produce a product (or provide a service) than what is required by the customer.
7. Defects:
Defects can result in rework or defective products being scrapped. And items consigned for rework take up additional space, time, logistics, and manpower – all of which lead to loss in productivity and extra costs.
8. Non-utilized talent:
This is where the experience, skills, knowledge and/or creativity of employees is not utilized; usually because they are assigned to perform tasks below their skill level.
What are the Origins of Lean?
The idea of ‘lean’ was born when Kiichiro Toyoda, Taiichi Ohno, and others at Toyota revisited Ford’s original thinking and invented the Toyota Production System (TPS) after World War II (late 1940s). In this novel idea, instead of focusing on individual machines and their utilization in the manufacturing process, they shifted attention to the flow of the product through the total process.
Toyota discovered that it would be possible to obtain low cost, high variety, high quality, and high throughput times in response to changing customer needs by:
right-sizing machines for the actual volume of work needed
introducing self-monitoring machines to ensure quality
reducing set-up time,
lining up machines in process sequence
creating a pull system (each process step notifies the previous step of its current needs for materials)
These measures also made the management of information much simpler and more accurate.
The term "lean" was originally coined to describe Toyota's business during the late 1980s by a research team lead by Jim Womack, Ph.D., at MIT's International Motor Vehicle Program. It was popularized by the publication, in 1990, of the book “The Machine That Changed the World”, by James P. Womack, Daniel T. Jones, and Daniel Roos.
House of lean and Toyota Production System
The House of lean is a depiction of factors that must be perfected (continuously improved) when creating a system to consistently deliver value to the customers. This is illustrated in Figure 3. It helps one to visualize how they can create a true lean enterprise i.e. an efficient and effective business system. This model was originally created by Toyota from their lean production system. The house indicates the order of implementation of these important factors, with each part of the house representing a factor or factors, starting from the foundation as follows:
The Foundation is the creation of an organized work environment and stable processes
The Two Pillars depict making the delivery of value to customers consistent and ensuring defects are not passed on across processes.
The Centre of the house is the creation of empowered teams
The Roof is the result of continuously improving work processes, purposes, and people.
Figure 4: The house of lean focuses on process perfection and people engagement (leanopedia 2021)
Instead of holding total control of work processes and keeping the spotlight, Lean management encourages shared responsibility and shared leadership. After all, a good idea or initiative can be born at any level of the hierarchy, and Lean trusts the people who are doing the job to say how it should be done.
The 5 Principles of Lean Implementation
According to The Lean Enterprise Institute (LEI), founded by James P. Womack and Daniel T. Jones in 1997, there are five key lean implementation principles: value, value stream, flow, pull, and perfection, as illustrated in Figure 4.
Figure 5: The 5 Principles of Lean (Kanbanize 2021)
The Lean principles are explained below:
1. Identify Value
Identify value from the standpoint of the end customer. The product must be the part of the solution that the customer will readily pay for. This means that the value you want to deliver to the customer must first be identified.
2. Value Stream Mapping
This step refers to the process of mapping out the company's workflow, including all actions and people who contribute to the process of creating and delivering the end product to the consumer. The value stream mapping will show you where value is added and in what proportion different parts of the process do or do not produce value. Steps that do not create value are eliminated whenever possible.
3. Create Continuous Workflow
There is need to ensure that value-creating steps occur in tight sequence, so that the product will flow smoothly toward the customer. This prevents any interruptions or bottlenecks that may occur in a cross-functional teamwork scenario. Work is broken up into smaller batches, so that visualizing the workflow and detecting and removing process roadblocks becomes easy.
4. Create a Pull System
In order to establish a stable workflow, ensure to create a pull system. The pull system lets customers (downstream stations) pull value from the next upstream activity - the work is pulled only if there is a demand for it.
Having a stable workflow guarantees that your teams can deliver work tasks much faster with less effort. This also allows you to optimize resources’ capacity and deliver products/services only if there is actual demand for them.
5. Continuous Improvement
Once you go through all previous steps, you have established your Lean Management system. However, there is need to begin the process again and continue it until a state of perfection is reached, in which perfect value is created with no waste. A variety of techniques are used to identify what an organization has done, what it needs to do, any possible obstacles that may arise and how all members of the organization can make their work processes better.
Since the system is not isolated and static, it is necessary to get all employees on every level involved in continuously improving the process problems that may occur at any of the previous steps.
10 Common Lean Tools
The list of Lean Tools is long, and it keeps growing as the methodology evolves. However, below is a list of commonly used Lean tools:
1. Value Stream Mapping
It involves mapping out your processes and acts as a visual guide to the whole process. It helps team members to understand the entire process better.
2. Bottleneck Analysis
Bottlenecks are the stages that slow down the flow of work in your processes and are mostly caused by inadequate capacity. This analysis helps you analyze the process holistically, in order to arrive at the best solutions to overcome the challenges.
3. Kanban (Pull System)
This is a method of regulating the flow of goods both within the factory and with outside suppliers and customers. Goods or parts are replenished automatically by using signal cards that indicate when more goods are needed.
4. Just-In-Time (JIT)
Parts are supplied at work stations just when they are needed. The parts are pulled through the production system based on customer demand instead of being pushed through the production line. This pull is based on projected demand and relies on many lean tools, such as Continuous Flow, Heijunka, Kanban, Standardized Work and Takt Time. Thus, JIT prevents the buildup of unnecessary inventories.
5. Kaizen (Continuous Improvement)
In this strategy where teams work together proactively to achieve regular, incremental improvements in the manufacturing process.
6. Gemba (The Real Place)
A philosophy that encourages visits to the shop floor – the place where real action occurs. Promotes a deep and thorough understanding of real-world shop-floor issues – by first-hand observation and by talking with shop-floor employees.
7. 5S
This philosophy is applied to Organize the work area so that work can be performed efficiently and effectively. The “Five S’s” stand for the following:
• Sort (eliminate that which is not needed)
• Set In Order (organize remaining items)
• Shine (clean and inspect work area)
• Standardize (write standards for above)
• Sustain (regularly apply the standards to sustain the gains)
8. Andon
Visual feedback system for the plant floor that indicates production status, alerts when assistance is needed, and empowers operators to stop the production process.
9. Continuous Flow
This refers to work-in-process which flows smoothly through production with minimal (or no) interruption between steps of the process. Continuous flow eliminates many forms of waste (e.g. inventory, waiting time, and transport).
10. Muda (Waste)
Anything in the process that does not add value from the customer’s perspective. Muda means ‘waste’. The elimination of Muda (waste) is the primary focus of Lean Management.
Applications of Lean
In recent years Lean Management has found many applications in almost all industries, and in organizations of all kinds. Below are some of the areas where the concept of Lean is employed:
1. Lean manufacturing
Lean manufacturing is a methodology that focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity
2. Lean software development
This is a concept that emphasizes optimizing efficiency and minimizing waste in the development of software. It is now considered an integral part of the Agile software development methodology.
3. Lean six sigma
Lean Six Sigma combines the application of Six Sigma tools and techniques with Lean tools and techniques in order to achieve the best possible results.
4. Lean startup
Lean startup is an approach to building new businesses based on the belief that entrepreneurs must investigate, experiment, test and iterate as they develop products.
5. Value-based healthcare
Value-based healthcare is a healthcare delivery model in which providers, including hospitals and physicians, are paid based on patient health outcomes. The “value” in value-based healthcare is derived from measuring health outcomes against the cost of delivering the outcomes.
6. Applying a Lean Approach to Management
This about information getting to the decision-maker in a timely way. Global manufacturers have complex supply chains and multiple plants that often capture data in different ways and report in different formats. That data has to be gathered, transformed, cleaned, stored and analyzed, and then delivered to each person in the enterprise who needs it, in a form appropriate for their role.
7. A New Use Case for Enterprise Manufacturing Intelligence
Some enterprises are now implementing a new generation of manufacturing intelligence systems that provide global management reporting and analysis in close to real-time. These systems require real-time information gathering from all the plant floors, the ability to clean and aggregate the data from multiple sources, and the means to deliver that data up the corporate chain “as it happens”—all the way to the corner office if needed.
What are the Benefits of lean?
The following are the major benefits of lean when the methodology is applied successfully in any industry:
A more intelligent business process – By employing the pull system, work is only carried out when there is an actual demand and need for it.
Improved use of resources – Because The pull system is based on real customer demand, resources are used only when they are needed.
Improved focus – Because the number of wasteful activities is reduced in Lean management, the workforce can concentrate on tasks that produce value, and thus are more focused.
Increased productivity and efficiency - Improved focus leads to a more productive and efficient workforce as the non-value added tasks are reduced or eliminated.
The Lean Transformation Framework
Implementation of a Lean Management System involves a Total Transformation in thinking and in the way things are done. This transformation extends outside the organization to include customers and suppliers. It involves some of the following activities:
Creating an Organization to channel Value Streams (Reorganize your firm by product family and value stream).
Installation of Business Systems to encourage Lean Thinking, which includes utilizing Policy deployment and teaching Lean skills to everyone.
Convincing suppliers and customers to take the steps above
The Lean Enterprise Institute (LEI) has designed a framework to guide organizations through the transformation process as they implement Lean management. This is illustrated in Figure 5. In addition, there are questions, based on this framework, which organizations ought to ask themselves.
Figure 6: The Lean Transformation Framework (Lean Enterprise Institute 2021)
Questions of the Lean Transformation Framework
What is the purpose of the change–what true north and value are we providing, or simply: what problem are we trying to solve?
How are we improving the actual work?
How are we building capability?
What leadership behaviors and management systems are required to support this new way of working?
What basic thinking, mindset, or assumptions comprise the existing culture, and are driving this transformation?
The process of successful lean transformation relies on applying PDCA (Plan, Do, Check, Act) cycles at every level, everywhere, all the time.
Lean Leadership
In conclusion, leadership is required from beginning to end, at all levels of the organization, for successful implementation and management of a Lean Management system.
Lean leadership consists largely of best leadership practices, which, in this case, include:
Empowering all employees to take responsibility and to identify improvements
Providing training to teams, so that they are capable of making lean improvements
Teaching teams and individuals to apply Lean tools safely and proficiently
Incentivizing employees to achieve common goals
Rewarding employees and celebrating their successes
Giving teams the freedom to create their own action plans which align with organizational goals
References
Obergfell, Y 2021, Lean Framework, SkillFront, https://www.skillfront.com
What is Lean Manufacturing. Available at: https://www.isixsigma.com/methodology/lean-methodology [Accessed August 1st 2021]
8 Wastes of lean. Available at: https://kissflow.com/project/agile [Accessed August 2nd 2021]
House of Lean Better Practitioner. Available at: https://leanopedia.com [Accessed August 5th 2021]
What is Lean Management. Available at: https://kanbanize.com/lean-management [Accessed August 3rd 2021]
Transformation Framework. Available at: https://www.lean.org/WhatsLean [Accessed August 3rd 2021]
Womack, J. P., Jones, D. T., & Roos, D. (1990). The Machine That Changed the World. Simon & Schuster, Inc., New York, NY 10020
This article will be very helpful to anyone who wants to refresh their knowledge in Lean Management, to prepare for Lean professional certification, to train employees; and even to gain foundational knowledge in Lean.
You may contact me directly for any of the following reasons:
1. Comments on the article
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About the Author
Andrew Salimu is an independent Consultant who works with organizations of all kinds to help them Improve their processes, improve productivity, and to implement ISO Standards. Andrew believes Process improvement and optimization are key for any organization to grow and remain profitable and competitive in today’s global economy. Andrew has various certifications, including Project Management, ISO Management Systems, Six Sigma, Lean, Digital Marketing, Strategic Management, Kaizen and Toyota Production System. He holds a BEng degree in Mechanical Engineering from The University of Birmingham, England.
E-mail: andrewsalimu@yahoo.com
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