The term “lean” was used to describe the Toyota Production System in the late 1980s by a research team from the Massachusetts Institute of Technology (MIT), explained in the book called “The Machine That Changed the World.” Here is an important quote from the book…
Lean production, a term coined by IMVP research John Krafcik, is lean because it uses less of everything, compared with mass production. Half the human effort in the factory, half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects, and produces a greater and ever-growing variety of products.
Learn more about the history of Lean at the Lean.org website.
Essentially, lean is a continuous improvement and employee engagement program, combined into one. The goal is to maximize customer value while minimizing waste for the products and services that an organization provides to their customers and stakeholders. Instead of laying off workers to save money, lean companies use the freed up resources to provide more value to customers, which will improve the business in the long term.
From a technical standpoint, there are 5 principles to transform a process.
1. Identify Value: Start with the customer. They are the ones who define what product or service you offer is valuable to them. Once we know what is valuable, we can work on eliminating or reducing the activities that are non-value added.
2. Map the Value Stream: Understand and map the entire process, from the very beginning of your process all the way to when your customer uses your products and services. This is the value stream. This map will help you see how long it takes from the time your customer requests your product or service, and when you deliver it. What you will find out is that most of the total time is waiting and delays. The percentage of the time where people were actually working on the product or service is often a small percentage of that time. These delays and waits are opportunities to streamline the process. The goal is to optimize the whole system, not individual processes or tasks that can actually make the overall system inefficient. Your customer only experiences the overall value stream, and they don’t care how efficient each individual process operates.
3. Create Flow: Once you can remove the waiting and delays, you can shorten the time from request to delivery of your product or service. We accomplish this through the elimination of the 8 forms of waste, or TIM WOODS or DOWNTIME.
- Transportation – Moving parts, products and people unnecessary. Moving does not add value, and takes time and resources to complete.
- Inventory – Having more than the minimum amount of work needed to pull the work through the system. Inventory is not ideal because it is waiting to be worked on, you have already spent money or effort but it’s not needed yet, and it can become outdated or have to be updated. When it is physical inventory, it can take up floor space and may require packaging, transportation and someone to manage it. These all lead to excessive costs.
- Motion – Movements that are straining or unnecessary, such as looking for items, having commonly used items further away from you.
- Waiting – When your customer, or the next process is waiting for information, parts, or help to arrive.
- Overproduction – Working on a task before it’s actually needed by the next process or customer.
- Overprocessing – Performing unnecessary, redundant or incorrect tasks.
- Defects – Errors, mistakes, and variation, that will require rework and could lead to extra time and costs to fix the issue.
- Skills – Putting people into roles in which they are overqualified, or not aligned with their passions and skills. Often times, organizations do not fully utilize the brains of their employees and volunteers, they only use their hands. You may need to separate out certain products and services into their own value stream, as the type of work may vary significantly. Move towards a one piece flow mindset, where only one product or service is being worked on at a time (not batching or putting multiple items through the process at once). You may also need to increase inventory in certain areas, in order to keep things moving. Although inventory is a form of waste, having the right inventory in the right areas is a good short term plan to get to flow. Later on, we will work to eliminate the inventory. In many organizations today, there is inventory, but it’s not planned, it just shows up where there are constraints and bottlenecks in the process. One thing to keep in mind: The goal is to move the product or service through the process, not make people productive. Therefore, you will have times where people are waiting and non-productive.
4. Establish Pull: Once you have consistent flow in the process, then you have a good idea how long the process actually takes (when the waiting and delays are reduced). Instead of pushing the work through the process, we now transition to a pull system, where each step in the process only pulls the work when it is ready. This prevents inventory from stacking up in the process, especially when there are problems. To control the work, you will need ways to limit the workload, and signal when the next step is ready for the work. If you can’t complete the task soon enough (before the next step runs out of work), you may need to have some inventory in place to reduce delays
5. Seek Perfection: Lean tools and concepts are setup to make problems visible. If your organization is not open to dealing with and talking about problems, then you will struggle with this approach. As the lean system exposes problems every day, and your organization works to solve these problems, you will continually improve. Over time, your organization will be striving towards perfection (which cannot ever be achieved), but you will be increasing value and shortening response times with your customers, which will make your organization more successful and sustainable. The 5 lean principles model is a circle. Values can change over time, so we need to always go back to step 1 (value), to see if the customer still feels we are providing the right value, or if we need to transition to something different.
Companies that fully embrace lean concepts and principles can experience the following benefits through rapid improvement events:
- Inventory reduction (why is inventory and batching bad?)
- Floor space reduction and increase in capacity
- Improved product and service flow and speed through your organization
- Increased customer satisfaction
- Quality/defect reduction
- Cost avoidance (fewer capital purchases, fewer new hires, smaller problems to resolve)
- Reduced labor costs
- Reduced overtime costs
- Better employee engagement
- Improved visual management in each area (cleaner and more organized work spaces)
- Less stress and heroics (“firefighting”)
- Better environmental performance
How to implement Lean in my company?
I’ll give you some high level steps you can follow:
- Pick a product or service that has customer complaints or seems to constantly struggle to meet goals
- Get feedback from customers and employees on these problems
- Go and see the entire process of steps that create the product or service
- Document the 8 forms of waste when the process doesn’t provide value to the customer, wastes time, isn’t done right the first time, or are frustrating to complete
- Teach employees about lean tools and principles (see videos below) and engage them in improving the process
- Test out the new ideas and determine what works, or make adjustments
- When the process flows better with higher quality, document what is working, and move to the next problem
Why do we talk about Toyota so much? They are one of the most profitable and highest cash reserve companies in Japan decade after decade, even during recessions when their competitors lost money. They have bounced back from negative publicity. They have risen from a small manufacturer to surpass the Big 3 American automakers. They have achieved numerous quality and customer satisfaction awards. All of this while focusing on their workers and the processes, not by using creative financing or shorting their customers. To prove that it wasn’t some secret recipe applicable only in Japan, they partnered with GM to create the NUMMI facility and become one of GM’s most successful facilities, and now they have numerous locations spread across North America.
To learn more about Lean, we highly recommend watching these videos below, the best we have found on the internet. It will be well worth the time invested!
Applying Lean to nonprofits – Toyota and the NY Food Bank
8 forms of waste
Lean System Simplified
3P process at Boulder Associates for validating a new workspace area
2-bin system at St Clair hospital to better manage inventory
5S workplace organization event at MSICU to clean up the workspace
5S at Irving (TX) Water Utilities to better organize service trucks
5S event at Cuyahoga Community College to better organize graphic and repro office area
Boeing 737 Manufacturing video using lean principles
Envelope stuffing video – why one piece flow is better than batching
Personal kanban boards to control your work in progress (WIP)
2 Second Lean with Paul Akers (download free book) to make simple daily improvements
Point kaizen improvements at FastCap with Paul Akers to show rapid process improvements cutting dramatic time from a process
Kaizen events at Japanese companies
Daily management system
Office Flow Layout
Training Within Industry (TWI) – Historic Video
- Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.
- Create a continuous process flow to bring problems to the surface.
- Use ‘pull’ systems to avoid overproduction.
- Level out the workload (work like the tortoise, not the hare).
- Build a culture of stopping to fix problems, to get quality right the first time.
- Standardized tasks and processes are the foundation for continuous improvement and employee empowerment.
- Use visual controls so no problems are hidden.
- Use only reliable, thoroughly tested technology that serves your people and process.
- Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.
- Develop exceptional people and teams who follow your company’s philosophy.
- Respect your extended network of partners and suppliers by challenging them and helping them improve.
- Go and see for yourself to thoroughly understand the situation.
- Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly.
- Become a learning organization through relentless reflection and continuous improvement.
Want to learn more and participate in a fun simulation? Sign up for our FREE Lean Primer workshop in Portland, Oregon >>>
Don’t live near Portland? Consider taking the FREE Lean Six Sigma for the Environment online course >>>
Here are some book suggestions for digging deeper into Lean:
- Toyota Way – explains the management principles and business philosophy behind Toyota
- Toyota Kata – explains Toyota’s organizational routines (kata) that help move from current to future state
- Toyota Way Fieldbook – How to implement Toyota Way book
- Toyota Talent – How to train and develop people
- Learning to See – How to perform value stream maps (VSM)
- Kaizen Express – How to implement standardized work forms and templates
- Lean CEO – Case studies on how top executives implemented lean within their organization
- Gemba Walks – A summary of key lessons and observations from Jim Womack’s many tours of facilities implementing lean
- The Lean Handbook – Comprehensive reference book for those wanting to learn everything they can about Lean and Six Sigma tools
- Lean Six Sigma for Good (FREE) – How to use your Lean Six Sigma skills to improve the environment and your community
Unlike Six Sigma certifications, lean does not have a strong focus on certification. It is expected that people learn how to use the tools to improve their work, and not to achieve a level of proficiency. That being said, many organizations have combined lean into their existing Six Sigma certifications (calling it a Lean Six Sigma certification). There are a few organizations that offer some lean specific certification.
- Lean Competency System (LCS) – 7 different levels of certification
- SME Lean Certification – Achieve 3 different levels (Bronze, Silver, and Gold)
- 6sigma.US Lean Agent – Complete training classes, and submit a project where lean tools are applied to solve a problem
- Which lean event type should I do first, Value Stream Mapping or Kaizen Burst?
- Employee engagement that will make you jealous!
- 8 ways why batching is bad for your business
- Myths about Toyota and why this is the improvement book you must read!
- Which lean book is better? Toyota Way or Toyota Kata
- List of supplies for Lean Six Sigma Event Facilitators
- Ideas for airlines on how to make lines and wait time shorter for passengers
- How to calculate time savings after reducing distance traveled
- Reducing your time might seem like lean, but you can easily anger your customers
- We don’t need any help, we are already lean!
Be sure to check out Six Sigma references, articles and books…
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