You may be asking yourself: What is Lean? Lean is the concept of efficient manufacturing or operations which grew out of the Toyota Production System in the early 20th century. It is based on the philosophy of defining value from the customer’s viewpoint, and continually improving the way in which that value is delivered, by eliminating every use of resources that is wasteful, or that does not contribute to the value goal. This continual improvement of processes requires the involvement and empowering of every member of staff at every level.
What Lean Is Not About
There are many misconceptions of what Lean is about, based on the idea that it is simply to do with eliminating waste. This is sometimes interpreted as, for instance, cutting down on staff through redundancies, whereas, in fact, the successful implementation of Lean is likely to result in more staff being required, because of increased orders. Alternatively it is often used as a reason for cutting down on expenditure, to achieve cost savings. If this is done without true value increase as the goal, it will certainly be counter-productive. If a business wishes to start implementing Lean, it is essential first to understand the principles and philosophy behind it.
The Goal Of Lean
The goal of Lean operations or manufacturing is to enable the whole company to achieve maximum efficiency, and thus to provide maximum value to the customer. This has to be done by empowering every individual worker to achieve his or her full potential, and so to make the greatest possible contribution. Various tools can be utilized as a help towards these aims.
Five Principles Of Lean
Working towards lean manufacturing is based on five main principles, the first of which involves identifying exactly what is meant by the value goal. The essential requirement is that value is defined by the customer’s perception, not defined internally by the organization. Having specified value for each product, the second principle is, again for each product, to identify the value stream – that is the entire process from raw materials to the possession of the customer. Analysis of this flow will almost certainly reveal waste, including components of the process that add no value and can be eliminated – known as process re-engineering. The third principle is, having eliminated wasteful processes, to create a continuous flow for the product, instead of the traditional way, where processes are grouped in stages based in different departments, with bottlenecks at each stage.
The fourth of the five principles is that of Pull, one of the distinctive concepts of Lean manufacturing. When continuous flow is introduced, there is a dramatic reduction in lead times to the customer, and consequently customer demand becomes more stable. This means that demand can pull production, rather than making the products first and pushing them at the customers, trying to persuade them to buy. The fifth principle is the drive towards perfection through Kaizen, which means continuous improvement in productivity and quality.
Tools For Implementing Lean
There are a number of specific concepts, which mostly originated in the Toyota production system, and which companies have adapted for their own use, to help in implementing Lean. These are often referred to as the tools of Lean, and contribute towards the process of Kaizen or continuous improvement. One of the best-known is the five-step method known as 5S, because each of the five steps is called by a Japanese word beginning with S. Each step forms part of creating a visually well-organized workplace. The aim of this tool is not simply to tidy up, but to identify problems, and to eliminate everything that leads to wasted or unnecessary effort. Another well-known tool is known as the 5 Whys. The idea is that when a problem is identified, the question is asked as to why the problem occurred, then when the cause is identified, asking in turn why this occurred. This is repeated five times, with the aim of getting to the fundamental cause of the problem. A third tool is known as visual management. This is based on the principle that it should be possible for every worker, whether on the shop floor or the office, to use visual data to manage every stage of the flow at a glance.
Another distinctive tool is Jidoka, which is sometimes known as autonomation, because it is seen as the humanized side of the process of automation. The idea of this is that automation does not become an end in itself, which rules all other processes, but can be stopped for correction at any stage if somebody notices a problem. A further tool which has been widely adopted in efficient operations is Kanban. This is the process of using a signal to request a part from the upstream, or supply, process that is needed in the downstream, or customer, process, for immediate supply. The idea of this is to create a clear connection between customer and supplier.
The main point of these tools is not that they should be adopted in a mechanical way, with the idea that bringing them into the workplace is an instant way to improve production. They can only be effective if seen as ways to implement the whole process of Lean, and if the underlying philosophy is understood and taken on board. For instance, if 5S is simply introduced as a clean-up exercise, it is not likely to be effective. It has to be seen as a contribution to the whole process of getting people to work more efficiently, and of eliminating anything that hinders this.
Benefits Of Lean
Many business owners have reported that changing over to Lean has been a painful process for people in the company, with workers being forced to leave their comfort zones, and to change ways of working to which they may have become accustomed over many years. However, once the process is under way, provided it is done correctly and not superficially, they find it brings many benefits. Because waste is eliminated, costs of production, as well as costs of plant and premises, are substantially reduced, leading to much higher ROI (return on investment).
Along with this should go a significant increase in sales. This results from two main factors. One is that there are far fewer errors in production, leading to better quality products and fewer product recalls. The other is greatly reduced production times, meaning customer orders are fulfilled promptly. Because the customer is defining value at every stage, the company’s reputation will greatly increase. Once these benefits begin to come through, worker satisfaction will increase and the whole company becomes a happier place.