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| Lean OverviewAugust 29, 2003 The definition of lean is multifaceted. It
generally relates to those best processes and practices, which optimize
resources and yield the best products in the fastest manner and at the lowest
cost. It is an umbrella for total quality management, continuous improvement,
zero defects, and all the other terms we’ve used and heard to describe doing
things right the first time, and doing it right every time. It is not an instant
transition nor is it an extension of traditional thinking or techniques. In
fact, it is a revolutionary thought process that requires abandonment of some
old paradigms. To think lean is to switch from internally focused thinking to
externally focused thinking. Lean Manufacturing, often called Just In Time (JIT)
or Agile Manufacturing, is an operating strategy that seeks to maximize
operational effectiveness by creating value in the eyes of the end customer. The
focus is not on a department, area or process, but on the optimization of the
entire value stream -- the series of processes between receipt of customer order
and delivery of finished product. Lean manufacturing improves operating performance by
focusing on the quick and uninterrupted flow of products and materials through
the value stream. To achieve this, the various
forms of manufacturing waste must be identified and eliminated. Waste can
include any activity, step or process that does not add value for the customer. Under
such a system, the plant is highly customer-focused, providing the highest
quality, lowest cost products in the least amount of time. In the latest edition
of their book Lean Thinking, authors James P. Womack and Daniel Jones
state that lean thinking can be summarized
in five principles: 1. Precisely specify value by specific
product. 2. Identify the value
stream for each product. 3. Make the value flow without
interruptions. 4. Let the customer pull value from the
producer. 5. Pursue perfection. Womack and Jones suggest that, if managers apply
these concepts collectively, they can reap full benefit of lean techniques and
significantly improve their product’s competitive edge. Each principle is
discussed below. VALUE:
Value is defined by the
customer and is only meaningful when expressed in terms of a specific product,
which meets the customers’ needs at a specific price and at a specific time.
The error many producers have made is internally defining value: if customers
don’t respond, they add more bells and whistles or adjust the price. Then, if
that doesn’t work, they try a different marketing strategy to market a product
that customers really don’t want. They are internally focused and value is
lost! What they should be doing is
rethinking value from the perspective of the customer. Lean thinking must ignore
existing assets and technologies and rethink the business on a product-line
basis with strong, dedicated product teams. VALUE STREAM:
The value
stream is all the steps and processes required to bring a specific product from
raw materials to finished product in the hands of the customer. Analyzing the
entire flow of a product will almost always reveal enormous amounts of waste and
non value-added sequences. This is frequently referred to as process
reengineering. Value stream analysis will almost always show that three types of
actions are occurring along the value stream: steps that create value; steps
that create no value but are unavoidable due to current technologies or
production methods or assets; and steps which create no value and are
avoidable—the immediate target of opportunity, often referred to as low
hanging fruit. To become truly lean, the entire enterprise must analyze and
improve the value stream as a whole. FLOW:
Once value has been
precisely specified, the value stream for a specific product fully mapped by the
enterprise, and wasteful steps eliminated, it’s time to make the remaining
steps flow. This entails probably the greatest departure from traditional
thinking. We relate to a world of functions and departments, a conviction that
activities ought to be grouped by type so they can be performed more efficiently
and managed more easily. Also, it is common sense to perform like activities in
batches where products flow through different sequences and operations in
batches. This creates wait times (bottlenecks) while the product waits for the
next operation or sequence, or departments change over to the type of activity
the product needs next. Traditional firms believe that, since this keeps
everyone busy, it’s efficient. Things
work better when you focus on the product and its needs, rather than the
organization or the equipment, so that all the activities needed to design,
order, and produce a product occur in continuous flow. Womack and Jones’ research shows that plants in
North America and Europe where production activities were rearranged from
departments and batches to continuous flow (process flow), productivity doubled
and dramatic reductions were realized in errors and scrap. The reengineering
movement in the United States has recognized that departmentalized thinking is
not best and has tried to shift the focus from organizational categories
(departments) to value-added processes. The problem is that the engineers
haven’t gone far enough. Conceptually, they are still dealing with
disconnected and collective processes rather than looking at the whole value
stream for major breakthroughs and managing the entire flow of value-added
activities for specific products. Also, the reengineering frequently results in
a collapse of employee morale and a regression of the organization to the norm
as soon as the “reengineers” are gone. The lean alternative is: ·
Redefine the work of
functions, departments and firms so they can make a positive contribution to
value creation and · Address the real needs
of employees at every point along the stream so it is actually in their
interest to make value flow. PULL:
The results of converting
from departments and batches to product teams and flow is that the times
required to go from concept to launch, sale to delivery, and raw material to the
customer fall dramatically. When flow is introduced, products requiring years to
design are done in months; orders taking days to process are completed in hours;
and the weeks or months of throughput time for conventional physical production
are reduced to minutes or days. Truly lean systems can make any product
currently in production in any combination such that shifting demand can be
easily accommodated immediately. You can let the customer pull the
product from you as needed rather than pushing them the product, often unwanted.
Customer demand becomes much more stable when customers know they can get what
they want when they need it and when producers stop periodic price discounting
campaigns designed to sell goods already made that no one wants. PERFECTION:
As the
organization begins to accurately specify value, identify the entire value
stream, make the value-added steps for specific products to flow
continuously, and let customers pull value from the enterprise, something
remarkable surfaces. People begin to realize there is no end to the process of
reducing effort, time, space, cost, and mistakes while offering a product. Perfection,
the fifth and final principle of lean thinking, seems achievable. The other
principles interact with each other; getting value to flow faster always exposes
hidden waste in the value stream. The harder you pull, the more the obstacles to
flow are revealed so they can be removed. Dedicated product teams in direct
dialogue with customers always find ways to specify value more accurately and
often learn of ways to enhance flow and pull as well. In a truly lean system,
everyone—subcontractors, first-tier suppliers, systems integrators or
assemblers, distributors, customers, employees can see everything so it’s easy
to discover better ways to create value. Also, there is instant and positive
feedback for employees making improvements, a key feature of lean work and a
powerful element to continuous improvement. Plant personnel are a vital element in successful
implementation of Lean Manufacturing. Plant-wide participation in continuous
improvement and kaizen events is a critical difference between high-performance
plants and the rest. Employee involvement in and accountability process
improvement helps improve both product reliability and employee morale. Some organizations have begun the movement toward
lean from the bottom: the lower level managers became lean thinkers and had to
convince the executive level that it was the right thing for the organization.
This is truly a challenge for these organizations, but when the business begins
to show an increased customer satisfaction and greater profits, the executive
managers realize that the message is true: lean thinking drives the
competitive edge for any business. We recommend the book Lean Thinking for any serious lean practitioner. To purchase the book, click here. Click here to subscribe to our free e-newsletter Learning to Lean and receive three articles like this one each month. About
the Author David McBride is co-founder of EMS Consulting Group (http://www.emsstrategies.com), a Carlsbad, CA based engineering and management consulting firm. David has a BS in Mechanical Engineering from Ohio State University. He has a successful track record in the development and implementation of FMEA and Design for Manufacturability programs at several organizations and has greatly reduced Manufacturing costs through the utilization of Lean Manufacturing, Kaizen Events, and Manufacturing System Analysis. He has also been highly successful at developing and executing New Product Introduction processes, and Staffing and Capital Equipment Plans. | |||||||||||||||||
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