In part one of this blog series I went over the case for integrating two common and two not as common methodologies for business systems improvement: Lean, Ergonomics, Six Sigma and Systems Thinking. Although most are probably familiar with all four of them I think it’s worthwhile to spend a blog on each one in order to highlight their definition and purpose, common tools and uses.
The term "lean" was coined to describe Toyota's business during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle Program. The core premise is to maximize customer value while minimizing waste. At its heart, Lean simply means creating more value for customers with fewer resources. The two pillars of Lean are: 1) The organizations management team’s commitment to continuously invest in and respect its people and 2) Promote a culture of relentless continuous improvement. The essence of Lean is that each individual employee is given the opportunity to find problems in his own way of working, to solve them and to make improvements. Lean is typically “owned” by the “shop floor” operations.
5 Lean Principles
There are five primary principles or thought processes behind Lean.
- Value: what service or work is being provided, specifically looking from the standpoint of the end customer
- Value Stream: all the steps needed to accomplish this work; eliminating whenever possible the step that do not create value
- Flow: how we put these steps one after the other in a tight sequence so the product will flow smoothly to the customer
- Pull: how we react to real customer demand
- Perfection: how we improve this forever (continuous improvement); perfection is reached when perfect value is created with no waste
Organizations have turned to Lean to help them improve many processes and achieve certain outcomes. Below is a list of some of the expected benefits of Lean:
- Improved Customer Satisfaction
- Less Waste
- Increase Efficiency/Reduced Cycle Times
- Greater Productivity
- Smoother Operations
- “Just in Time”
- Makes Things Simpler & Easier
- Reduced Operating Costs
- Profit Center—Increased Company Health
There are many tools that are used within Lean. The most common ones are 5S, visual management, standard work, value stream (and value stream mapping) and PDCA cycle.
5S: The term 5S is derived from five Japanese words that describe a process to organize a workplace. It is typically summarized to mean “a place for everything and everything in its place.” 5S stands for:
- Sort - Eliminate what is not needed
- Set - A place for everything and everything in its place
- Shine - Cleaning and looking for ways to keep it clean
- Standardize - Systemize the maintenance of the first three S’s
- Sustain - Stick to the rules; maintain over time
Visual Management: A simple definition of visual management is when anyone can walk into a workplace and visually understand the current situation. Visual management can consist of display boards, Gemba walks (Go See) and 5S. Visual management can be used for goal setting and performance tracking, scheduling and production control, idea sharing and team communications.
Standardized work is by far one of most powerful tools in Lean; however, it is also one of the least used and difficult to achieve buy-in tools. Standard work is the essentially the best method as we know today to complete a task or process.
Value Stream and Value Stream Mapping: Remember the 5 principles of Lean? Value Stream was one of them. A value stream is all of the steps needed to accomplish the work. Another way to look at it is tracking the flow of information and materials needed bring products and services to the customer. Value stream is where the focus on waste, identification and elimination, is found within Lean, i.e. the 8 Wastes of Lean.
PDCA Cycle: Lean has its own continuous improvement methodology called the PDCA Cycle which stands for Plan, Do, Check and Act. There are many cases where the PDCA Cycle can be used such as when starting a new improvement project, when developing a new or improved design of a process, product or service, and when implementing any change.
- Plan: recognize an opportunity and plan a change
- Do: test the change. Carry it out on a small scale
- Check: review the test, analyze the results and identify what you’ve learned
- Act: take action based on what you learned. If the changed didn’t work, go through the cycle again with a different plan. If it was successful, incorporate what you learned from the test into wider changes…and then begin the cycle again.
Lean done successfully can be summarized as follows:
- Shortest “end to end” Value Stream
- Providing customers (internal and external) with exactly what they want when they want it
Lean is most common in manufacturing operations but has been making inroads in other industries and organizational departments.