Lean manufacturing

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Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS) but also from other sources. It is renowned for its focus on reduction of the original Toyota 'seven wastes' to improve overall customer value. It has become a widespread term for a style of process improvement and is often linked with Six Sigma.

For many, Lean is the set of TPS of tools that assist in the identification and then steady elimination of waste (muda), quality is improved, production time and costs are reduced. To solve the problem of waste, Lean Manufacturing has several "tools" at its disposal. These include continuous improvement process (kaizen), "pull" production (by means of kanban) and mistake-proofing (poka-yoke). In this way it can be seen as taking a very similar approach to other improvement methodologies.

There is a second approach to Lean Manufacturing which is promoted by Toyota in which the focus is upon implementing the 'flow' of work through the system and not upon 'waste reduction'. The difference between these two approaches is not the goal but the approach to achieveing it. The implementation of flow eliminates work and thus waste reduction naturally happens as a consequence. The advantage claimed for this approach is that it naturally takes a system-wide perspective whereas a 'waste' focus has this perspective assumed. Some Toyota staff have expressed some surprise at the 'tool' based approach as they see the tools as work-arounds made necessary where flow could not be fully implemented and not as aims in themselves.

Contents

[edit] Overview

Both Lean and TPS can be seen as a loosely connected set of potentially competing principles whose goal is cost reduction by the elimination of waste[1]. This principles include:

  • Pull processing: products are pulled from the consumer end (demand) just-in-time to be used, not pushed from the production end (Supply)
  • Perfect first-time quality - quest for zero defects, revealing & solving problems at the source
  • Waste minimization – eliminating all activities that do not add value & or are safety nets, maximize use of scarce resources (capital, people and land)
  • Continuous improvement – reducing costs, improving quality, increasing productivity and information sharing
  • Flexibility – producing different mixes or greater diversity of products quickly, without sacrificing efficiency at lower volumes of production
  • Building and maintaining a long term relationship with suppliers through collaborative risk sharing, cost sharing and information sharing arrangements
  • Autonomation - if an abnormal situation arises then a machine or person must stop production in order to avoid defective products and other waste
  • Load levelling and Production flow - fluctuations in product flow increase waste because process capacity must always be prepared for peak production
  • Visual control - where the actual progress of work in comparison to daily production plans is clearly visible.

The disconnected nature of some of these principles perhaps springs from the fact that the TPS has grown pragmatically as it responded to the problems it saw within its own production facilities. The TPS has been under development since about 1948 and continues to develop today. Thus what one sees today is the result of a 'need' driven learning to improve where each step has built on previous ideas and not something based upon a theoretical framework.

Lean production is aimed at the elimination of waste in every area of work including customer relations, product design, supplier networks and factory management. Its goal is to incorporate less low-value human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.'

Adherents of the Toyota approach would say that 'flow' delivery of 'value' does all these things as a side-effect. If production 'flows' perfectly then there is no inventory, if customer valued features are the only ones produced then product design is simplified and effort is only expended on features the customer values. The other of the two TPS pillars[2] is the very human aspect of 'autonomation' whereby automation is achieved with a human touch[3]. This aims to give the machines enough 'intelligence' to recognise when they are working abnormally and flag this for human attention. Thus humans do not have to monitor normal production and only have to focus on abnormal, or fault, conditions. A reduction in human workload that is probably much desired by all involved.

Lean is 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 being flexible and able to change. These concepts of flexibility and change are principally required to allow production levelling, using tools like SMED, but have their analogues in other processes such as R&D. The flexibility and ability tochange are not open-ended, and therefore often expensive, capability requirements. More importantly, all of these concepts have to be understood, appreciated, and embraced by the actual employees who build the products and therefore own the processes. The cultural and managerial aspects of lean are just as important as the actual tools or methodologies of production 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. Lean aims to make the work simple enough to understand, to do and to manage.To achieve these three at once there is a belief held by some that Toyota's mentoring process (loosely called Senpai and Kohai relationship), so strongly supported in Japan, is one of the best ways to foster Lean Thinking up and down the organizational structure. The closest equivalent to Toyota's mentoring process is the concept of Lean Sensei, which encourages companies, organizations, and teams to seek out outside, third-party "Sensei" that can provide unbiased advice and coaching, (see Womack et al, Lean Thinking, 1998).

[edit] History of the Goal

[edit] Pre-20th Century

Most of the basic goals of lean manufacturing are common sense and documented examples can be seen back to at least Benjamin Franklin. Poor Richard's Almanack says of wasted time, "He that idly loses 5s. [shillings] worth of time, loses 5s., and might as prudently throw 5s. into the river." He added that avoiding unnecessary costs could be more profitable than increasing sales: "A penny saved is two pence clear. A pin a-day is a groat a-year. Save and have."

Again Franklin's The Way to Wealth says the following about carrying unnecessary inventory. "You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you. Remember what Poor Richard says, 'Buy what thou hast no need of, and ere long thou shalt sell thy necessaries.' In another place he says, 'Many have been ruined by buying good penny worths'." Henry Ford cited Franklin as a major influence on his own business practices, which included Just-in-time manufacturing.

The concept of waste being built into jobs and then taken for granted was noticed by motion efficiency expert Frank Gilbreth, who saw that masons bent over to pick up bricks from the ground. The bricklayer was therefore lowering and raising his entire upper body to get a 5 pound (2.3 kg) brick but this inefficiency had been built into the job through long practice. Introduction of a non-stooping scaffold, which delivered the bricks at waist level, allowed masons to work about three times as quickly, and with less effort.

[edit] 20th Century

Frederick Winslow Taylor, the father of scientific management, introduced what are now called standardization and best practice deployment: "And whenever a workman proposes an improvement, it should be the policy of the management to make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to the old, it should be adopted as the standard for the whole establishment" (Principles of Scientific Management, 1911).

Taylor also warned explicitly against cutting piece rates (or, by implication, cutting wages or discharging workers) when efficiency improvements reduce the need for raw labor: "…after a workman has had the price per piece of the work he is doing lowered two or three times as a result of his having worked harder and increased his output, he is likely entirely to lose sight of his employer's side of the case and become imbued with a grim determination to have no more cuts if soldiering [marking time, just doing what he is told] can prevent it." This is now a foundation of lean manufacturing, because it is obvious that workers will not drive improvements they think will put them out of work. Shigeo Shingo, the best-known exponent of single-minute exchange of die (SMED) and error-proofing or poka-yoke, cites Principles of Scientific Management as his inspiration (Andrew Dillon, translator, 1987. The Sayings of Shigeo Shingo: Key Strategies for Plant Improvement).

American industrialists recognized the threat of cheap offshore labor to American workers during the 1910s, and explicitly stated the goal of what is now called lean manufacturing as a countermeasure. Henry Towne, past President of the American Society of Mechanical Engineers, wrote in the Foreword to Frederick Winslow Taylor's Shop Management (1911), "We are justly proud of the high wage rates which prevail throughout our country, and jealous of any interference with them by the products of the cheaper labor of other countries. To maintain this condition, to strengthen our control of home markets, and, above all, to broaden our opportunities in foreign markets where we must compete with the products of other industrial nations, we should welcome and encourage every influence tending to increase the efficiency of our productive processes."

Henry Ford continued this focus on waste while developing his mass assembly manufacturing system. "Ford's success has startled the country, almost the world, financially, industrially, mechanically. It exhibits in higher degree than most persons would have thought possible the seemingly contradictory requirements of true efficiency, which are: constant increase of quality, great increase of pay to the workers, repeated reduction in cost to the consumer. And with these appears, as at once cause and effect, an absolutely incredible enlargement of output reaching something like one hundred fold in less than ten years, and an enormous profit to the manufacturer" (Charles Buxton Going, preface to Arnold and Faurote, Ford Methods and the Ford Shops (1915)).

Ford (1922, My Life and Work) provided a single-paragraph description that encompasses the entire concept of waste. "I believe that the average farmer puts to a really useful purpose only about 5%. of the energy he expends. … Not only is everything done by hand, but seldom is a thought given to a logical arrangement. A farmer doing his chores will walk up and down a rickety ladder a dozen times. He will carry water for years instead of putting in a few lengths of pipe. His whole idea, when there is extra work to do, is to hire extra men. He thinks of putting money into improvements as an expense. … It is waste motion— waste effort— that makes farm prices high and profits low." Poor arrangement of the workplace-- a major focus of the modern kaizen-- and doing a job inefficiently out of habit-- are major forms of waste even in modern workplaces.

Ford also pointed out how easy it was to overlook material waste. As described by Harry Bennett (1951, Ford: We Never Called Him Henry), "One day when Mr. Ford and I were together he spotted some rust in the slag that ballasted the right of way of the D. T. & I [railroad]. This slag had been dumped there from our own furnaces. 'You know,' Mr. Ford said to me, 'there's iron in that slag. You make the crane crews who put it out there sort it over, and take it back to the plant.'" In other words, Ford saw the rust and realized that the steel plant was not recovering all of the iron.

Design for Manufacture (DFM) also is a Ford concept. Per My Life and Work, "Start with an article that suits and then study to find some way of eliminating the entirely useless parts. This applies to everything— a shoe, a dress, a house, a piece of machinery, a railroad, a steamship, an airplane. As we cut out useless parts and simplify necessary ones, we also cut down the cost of making. ...But also it is to be remembered that all the parts are designed so that they can be most easily made." The same reference describes Just in time manufacturing very explicitly.

However Ford's mass production system failed to incorporate the notion of Pull and thus often suffered from over production.

[edit] Toyota

It was with Taiichi Ohno at Toyota that all these themes came together and the Toyota Production System (TPS) took form. It is principally from the TPS, but now including many other sources, that Lean production is developing. It is the scale, rigour and continuous learning aspects of the TPS which have made it an core of Lean.

Levels of demand in the Post War economy of Japan were low and the focus of mass production on lowest cost per item via economies of scale had little relevance. Having visited and seen supermarkets in the US Taiichi Ohno recognised the scheduling of work should not be driven by sales, or production, targets but by actual sales. Given the financial situation during this period over-production was not an option and thus the notion of Pull (rather than target driven Push) came to underpin production scheduling. Norman Bodek wrote the following in his foreword to a reprint of Ford's (1926) Today and Tomorrow: "I was first introduced to the concepts of just-in-time (JIT) and the Toyota production system in 1980. Subsequently I had the opportunity to witness its actual application at Toyota on one of our numerous Japanese study missions. There I met Mr. Taiichi Ohno, the system's creator. When bombarded with questions from our group on what inspired his thinking, he just laughed and said he learned it all from Henry Ford's book."

[edit] ... and finally Lean

Finally, the seminal book "The Machine That Changed the World : The Story of Lean Production" by Womack and Jones, which reviewed many TPS influenced improvement implementations, introduced the word Lean and proposed that implementations of it had at their core these five concepts:

  1. Specify value in the eyes of the customer
  2. Identify the value stream and eliminate waste
  3. Make value flow at the pull of the customer
  4. Involve and empower employees
  5. Continuously improve in the pursuit of perfection.

[edit] Types of waste

Elimination of waste is the goal of Lean, Toyota defined seven categories or types of waste, or muda, and defined waste as any activity that does not add value. Shigeo Shingo observed that it's only the last turn of a bolt that tightens it - the rest is just movement. This clarification of waste is key to establishing distinctions between value-adding activity, waste and non-value adding work[4]. Non-value adding work is waste that must be done under the present work conditions. It is key to measure, or estimate, the size of these wastes in order to demonstrate effect of the changes achieved and therefore the movement towards the goal. The 'tool' based approach attempts to reduce these by direct action on them, the 'flow' based approach aims to achieve JIT and thereby provide a driver, rationale or target and priorities for implementation, using the tools where appropriate. Observers who have toured Toyota plants have described their aim as 'learning to see' these wastes in order to carry back a new vision of 'ideal' to their parent companies.

The original seven 'deadly wastes':

  • Overproduction (production ahead of demand)
  • Transportation (moving products that is not actually required to perform the processing)
  • Waiting (waiting for the next production step)
  • Inventory (all components, work-in-progress and finished product not being processed)
  • Motion (people or equipment moving or walking more than is required to perform the processing)
  • Over Processing (due to poor tool or product design creating activity)
  • Defects (the effort involved in inspecting for and fixing defects)[5]
for other candidate wastes see muda

Some of these definitions may seem rather 'idealist' but this tough definition is seen as important. The clear identification of 'non-value adding work', as distinct from waste or work, is critical to identifying the assumptions behind the current work process and to challenging them in due course. Breakthroughs in SMED and other process changing techniques rely upon clear identification of where untapped opportunities may lie if the processing assumptions are challenged.

[edit] Lean implementation

[edit] System engineering

Lean is about more than just cutting costs in the factory. One crucial insight is that most costs are assigned when a product is designed, (see Genichi Taguchi). Often an engineer will specify familiar, safe materials and processes rather than inexpensive, efficient ones. This reduces project risk, that is, the cost to the engineer, while increasing financial risks, and decreasing profits. Good organizations develop and review checklists to review product designs.
Companies must often look beyond the shop-floor to find opportunities for improving overall company cost and performance. At the system engineering level, requirements are reviewed with marketing and customer representatives to eliminate costly requirements. Shared modules may be developed, such as multipurpose power-supplies or shared mechanical components or fasteners. Requirements are assigned to the cheapest discipline. For example, adjustments may be moved into software, and measurements away from a mechanical solution to an electronic solution. Another approach is to choose connection or power-transport methods that are cheap or that used standardized components that become available in a competitive market.

[edit] An example program

In summary, an example of a lean implementation program could be:-
  • Senior management to agree and discuss their lean vision
  • Management brainstorm to identify project leader and set objectives
  • Communicate plan and vision to the workforce
  • Ask for volunteers to form the Lean Implementation team (5-7 works best, all from different departments)
  • Appoint members of the Lean Manufacturing Implementation Team
  • Train the Implementation Team in the various lean tools - make a point of trying to visit other non competing businesses which have implemented lean
  • Select a Pilot Project – 5S is a good place to start
  • Run the pilot for 2-3 months - evaluate, review and learn from your mistakes
  • Roll out pilot to other factory areas
  • Evaluate results, encourage feedback
  • Stabilize the positive results by teaching supervisors how to train the new standards you've developed with TWI methodology (Training Within Industry)
  • Once you are satisfied that you have a habitual program, consider introducing the next lean tool. Select the one which will give you the biggest return for your business.

[edit] Lean Leadership

The role of the leaders within the organisation is the fundamental element of sustaining the progress of lean thinking. Experienced kaizen members at Toyota, for example, often bring up the concept of "Senpai, Kohai," and "Sensei," because they strongly feel that transferring of Toyota culture down and across the Toyota can only happen when more experienced Toyota Sensei continuously coaches and guides the less experienced lean champions. Unfortunately, most lean practitioners in North America focuses on the tools and methodologies of lean, versus the philosophy and culture of lean. Some exceptions include Shingijitsu Consulting out of Japan, which is made up of ex-Toyota managers, and Lean Sensei International based in North America, which coaches lean through Toyota-style cultural experience.
One of the dislocative effects of Lean is in the area of KPIs. The KPIs by which a plant/facility are judged will often be driving behaviour by leadership within it, e.g. Production against forecast, because the KPIs themselves assume a particular approach to the work being done. This can be an issue where for example a truly Lean, FRS and JIT approach is planned to be adopted because these KPIs will no longer reflect performance since the assumptions on which they are based become invalid. It is a key leadership challenge to manage the impact of this KPI chaos within the organisation.
Key focus areas for leaders are
  • PDCA thinking
  • 'go and see' philosophy (or "Genchi Genbutsu")
  • Process confirmation

[edit] References

  1. ^ Toyota Production System, Taichi Ohno, Productivity Press, 1988, p 8, ISBN 0-915299-14-3
  2. ^ Ibid, p 4
  3. ^ ibid, p 6
  4. ^ Ibid, p 58
  5. ^ Lean Thinking, Womack, James P. and Jones, Daniel T., Free Press, 2003, p 352

[edit] See also

Lean, as a concept or brand, has captured the imagination of many in lots of different spheres of activity. It is after all responding to a long held desire. How much these areas are actually implementing Lean is in some cases debatable but all these areas below are linked to this subject:

Lean Software Engineering

Terminology

Closely related methodologies

Areas of implementation outside Production

Other

[edit] Books on lean production

[edit] External links

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