Lean Principles

1. Lean Principles Being Fast, Flexible, Economic Author: Dr Rhys Rowland-Jones

2. Session Plan: • What is lean? • How does lean work? • Who is lean applicable to? • 5 principles of lean • The Toyota Production System • Taiichi Ohno’s 7 Wastes • 7 service wastes • 5 S’s

3. What is lean? • Lean manufacturing was developed by the Japanese automotive industry, with a lead from Toyota and utilising the Toyota Production System (TPS), following the challenge to re-build the Japanese economy after World War II. • The concept of lean thinking was introduced to the Western world in 1991 by the book “The Machine That Changed the World” written by Womack, Jones, and Roos. • Lean is a philosophy that seeks to eliminate waste in all aspects of a firm’s production activities: human relations, vendor relations, technology, and the management of materials and inventory.

4. How does Lean work? • Considers an ‘end to end’ value stream that delivers competitive advantage. • Seeks fast flexible flow. • Eliminates/prevents waste (Muda). • Extends the Toyota Production System (TPS).

5. Who is Lean applicable to? • Lean is principally associated with manufacturing industries but can be equally applicable to both service and administration processes. • Currently it is also being adopted by the food manufacturing and meat processing sectors. • It’s not a new phenomenon, Japanese auto manufacturers have been developing Lean for over 50 years.

6. 5 principles of Lean • Value - specify what creates value from the customer’s perspective. • Thevalue stream – identify all the steps along the process chain. • Flow - make the value process flow. • Pull - make only what is needed by the customer (short term response to the customer’s rate of demand). • Perfection - strive for perfection by continually attempting to produce exactly what the customer wants.

7. Value • Any process that the customer would be prepared to pay for that adds value to the product. • The customer defines the value of product in a lean supply chain. • Value-adding activities transform the product closer to what the customer actually wants. • An activity that does not add value is considered to be waste.

8. The value stream • The value stream is the sequence of processes from raw material to the customer that create value. • The value stream can include the complete supply chain. • Value stream mapping is an integral aspect of Lean.

9. The Value Stream “The Value Stream is those set of tasks and activities required to design and make a family of products or services that are undertaken with a group of linked functions or companies from the point of customer specification right back to the raw material source.” (Hines et al, 2000)

10. Flow • Using one piece flow by linking of all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste. • The waiting time of work in progress between processes is eliminated, hence adding value more quickly.

11. Pull • Pull = response to the customer’s rate of demand i.e. the actual customer demand that drives the supply chain. • Based on a supply chain view from downstream to upstream activities where nothing is produced by the upstream supplier until the downstream customer signals a need.

12. Perfection • The journey of continuous improvement. • Producing exactly what the customer wants, exactly when, economically. • Perfection is an aspiration, anything and everything is able to be improved.

13. The Cornerstone of Lean – The Toyota Production System • Based on two philosophies: • 1. Elimination of waste • 2. Respect for people

14. Toyota Production System’s Four Rules • All work shall be highly specified as to content, sequence, timing, and outcome. • Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses. • The pathway for every product and service must be simple and direct. • Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization.

15. Taiichi Ohno’s 7 Wastes (muda) • types of waste: • overproduction • waiting time • transport • process • inventory • motion • defective goods

16. 7 Service WastesSource – John Bicheno, Lean Toolbox (2003) • Delay – customers waiting for service. • Duplication – having to re-enter data, repeat details etc. • Unnecessary movement - poor ergonomics in the service encounter. • Unclear communication – having to seek clarification, confusion over use of product/service. • Incorrect inventory – out of stock. • Opportunity lost – to retain or win customers. • Errors – in the transaction, lost/damaged goods.

17. The 5S’s • The 5S‘sare simple but effective methods to organise the workplace. • The methodology does however, go beyond this simple concept, and is concerned with making orderly and standardized operations the norm, rather than the exception. • Posters bearing the 5S terms can be found on the walls of Japanese plants, and are a visual aid to organisational management.

18. The Japanese Origins • Seiri Sort • This requires the classifying of items into two categories, necessary and unnecessary, and disregarding or removing the latter. • Seiton Straighten • Once Seiri has been carried out Seiton is implemented to classify by use, and arrange items to minimise search time and effort. The items left should have a designated area, with specified maximum levels of inventory for that area. • Seison Shine • Seison means cleaning the working environment. It can help in the spotting of potential problems as well as reducing the risk of fire/injury by cleaning away the potential causes of accidents.

19. The Japanese Origins • Seiketsu Systematise • Seiketsu means keeping one's person clean, by such means as wearing proper working clothes, safety glasses, gloves and shoes, as well as maintaining a clean healthy working environment. It can also be viewed as the continuation of the work carried out in Seiri, Seiton, and Seison. • Shitsuke Sustain • Shitsuke means self-discipline. • The 5 S‘s may be viewed as a philosophy, with employees following established and agreed upon rules at each step. By the time they arrive at Shitsuke they will have developed the discipline to follow the 5 S‘s in their daily work.

20. Summary • Lean manufacturing was developed by the Japanese. • Lean is a philosophy that seeks to eliminate waste in all aspects of a firm’s production activities. • Lean is principally associated with manufacturing industries but can be also equally applicable to both service and administration processes. • Works on 5 basic principles. • Cornerstone of Lean is the Toyota Production System. • Considers 7 Wastes (muda). • Utilises 5 S methodology.