What Is Lean? Company Resources


Lean as the name suggest is the production of products or services using the least of everything – human effort, investment in inventory, machines, space, tools, time, development, transport / movement. The term is called Lean, Lean Manufacturing and Lean Enterprise all meaning the same thing and deriving from the Toyota Production system and some other sources. It is however very simply the reduction of waste from your processes it has enabled Toyota to become one of the biggest and most reliable car companies in the world.

Lean is therefore the identification and steady elimination of waste through the implementation of perfect first time quality approaches to work, standardisation of processes, smoothing of flow, flexibility of work, long term relationships with customers and supplies and reduction in time leading to cost reduction and business improvement. To achieve this a number of tools have been developed which facilitate the removal of waste from processes and a number of methodologies to implement the principles.

In organisations where the principles of Lean are fully understood the people use the tools and techniques with out thought as eliminating waste and improving flow become the norm. Lean in its many guises has been around since the 1940’s and has developed and adapted over the years to become one of the key business improvement methodologies used in many of the worlds leading companies. At its heart lean is effectively simple and easy to understand. 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 inventor while being flexible and able to change if the customer requirements change.

However, no matter how simple, at the heart of any lean implementation is the cultural and managerial aspects of Lean which are just as, and possibly more, important than the actual tools or methodologies of lean itself. There are many examples of Lean tool implementation without sustained benefit and these are often blamed on weak understanding of Lean in the organisation.

The first concept which must be understood is that waste is bad. This has been the ethos for successful companies from Henry Ford onwards. So what is waste?

Waste or non value added work is anything which doesn’t add value to your product or service. When you examine your processes in real detail you discover that the vast majority of what we do is non value added. To illustrate this Shigeo Shingo (a deep lean thinker) observed ‘that it’s only the last turn of a bolt that tightens it – the rest is just movement’. If we review everything we do to this extent we see that most of our activities are waste. To eliminate waste we must examine three aspects – the design and planning of our activities, the fluctuation at our operations such as quality and volume and thirdly the waste in our processes themselves in the movement of people and materials and the machines they use.

When you examine your processes in this way you can be said to be ‘learning to see’ and can start to eliminate the waste and improve the processes. To make things easier there are 7 ways to think about waste.

The original seven wastes are:

o Overproduction (production ahead of demand) – making things ahead of when the customer actually wants them. We do this because our processes are not reliable, or we like to manufacture or do task in big batches (traditionally accountants tell us this is the most efficient way)

o Transportation – moving parts, materials or work in progress around a factory or paper around an office

o Waiting – for parts or information so you can perform at task

o Inventory (all materials, work-in-progress and finished product) – Items produced which can’t be used or sold straight away go into inventory tying up money, space and causing multiple management issues

o Motion -people or equipment moving or walking more than is required to perform the processing

o Over Processing – making more than is needed or doing more work than is needed because you can’t guarantee what the outcome will be ie I need 20 but I will make 25 just in case something goes wrong

o Defects / Rework – the effort involved in inspecting for and fixing defects, reworking items or having to scrap them

There has now been identified an 8th Waste

o Human talent – the waste of peoples talent – training, enthusiasms and brain power.

By identifying waste and non value added activities in our processes we can then start to use the lean tools to eliminate them. Typical Lean tools include – 5S, visual management, TPM, SMED, Pokie Yokie, Standardised work, pull systems, takt time, single piece flow, Kanban, cellular manufacturing, design for manufacture, kaizen etc.

Lean thinking and the tools associated with it have been used for decades all over the world by every type of business. There is a standard approach to implementation of lean thinking.

o Step 1: Specify Value

Define value from the perspective of the final customer. What does your customer actually want, what will they pay for and when do they want it.

o Step 2: Map

Identify the value stream, all the actions required to bring a specific product through the physical flow of the company. This includes all the information flow and management flow steps to make things happen. Create a map of how it is today and how you want it to look like. Identify and categorize waste in the Current State, and eliminate it!

o Step 3: Flow

Make the remaining steps in the value stream flow. Eliminate functional barriers and develop a product-focussed organization that dramatically improves lead-time.

o Step 4: Pull

Let the customer pull products as needed, eliminating the need for a sales forecast.

o Step 5: Perfection

There is no end to the process of reducing effort, time, space, cost, and mistakes. Return to the first step and begin the next lean transformation, offering a product which is ever more nearly what the customer wants.

If you have a top management team who understand the concepts and a workforce who embrace the culture then Lean will transform your business.

So what is Lean Six Sigma?

As stated above Lean and Six Sigma when used together will provide a business improvement methodology which combines tools from both Lean Enterprise (Manufacturing) and Six Sigma. Lean eliminates the waste in your processes, while Six Sigma ensures quality through the elimination of variation in your processes and also provides a structured data driven structure to solve problems and implement sustainable change into your business.

Why is there even a debate about which one you should use?

For some reason two camps have emerged one supporting Lean and the other Six Sigma. Lots of it is childish my way is better than yours and some of is lack of knowledge. Either way what you find is that both approaches use each others tools any way. So the whole thing is stupid. As with any business improvement you should use the best tool for the job no matter what it is or where it has come from. You should be constantly seeking out new tools, methods, applications and methodologies to satisfy your customer and business needs by eliminating waste and improving quality. That is why we always train, consult and coach in Lean Six Sigma but bring in anything else we know. That is why we don’t mind you calling your improvement initiate what ever you like and that is why we get results.