Data driven approach while using Lean principles

The core idea of Lean is to maximize customer value while minimizing waste, creating more value for customers with optimum resources. A lean enterprise needs to understand customer value and focuses its key processes to continuously improve it. This requires thorough data validation of critical customer requirements as perceived by customers through well-defined customer engagement process, guided by process experts

The goal is to provide perfect value to the customer through a perfect value creation process that has minimum waste. To accomplish this, lean thinking is practiced in changing the focus of management, from optimizing standalone technologies, assets and vertical silos to optimizing the flow of products and services. This is done through entire value streams that flow horizontally across functional areas, assets, and departments to customers. Process thinking plays a big role in breaking the vertical silos and convert them into horizontal flows, with the engagement of process owners

Eliminating waste along entire value streams, instead of at isolated silos, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business processes. Companies can respond to changing customer desires with high variety, high quality, low cost, and with very fast turnaround times. Also, information management becomes much simpler and more accurate.

Let us investigate the details of how data driven approach strengthens the lean principles listed here.

1.   Specify Value and establish CTQs that represent customer value

Define value from the perspective of the final customer. Express value in terms of a specific product, which meets the customer’s needs at a specific price and at a specific time. Thus, one needs the critical starting point. Define value from the customer’s perspective and express value in terms of a specific product. This is what most of the lean books propagate, we can go one step further in defining the customer CTQs (Critical to Quality) and evaluate whether we have process in place in collecting the data related to CTQs that enhance customer value. The data sources can be either from traditional sources or from big data.

This approach can reveal more opportunities not just from Lean thinking in defining the current customer value, but the additional knowledge from CTQ data analysis leads to identifying new values unexplored by the competition.

2: Map the cross functional processes and associated metrics that represent inputs and outputs

Identify the value stream, the set of all specific actions required to produce a specific product.

Create a map of the Current State and the Future State of the value stream.

Identify and categorize waste in the Current State and eliminate it! Map all the steps that bring a product or service to the customer. Including Value-added, Value enabling, and Non-value added.

While mapping the process steps, wherever possible capture the input/process/output measurable metrics. The analysis of these metrics can provide additional insights/information about the process which can be effectively used to validate the value streams and can be used to expose the gaps/opportunities that can be addressed in future state value stream map/process map.

The critical process outputs metrics or product related metrics can be further tracked through proper SPC (Statistical Process Control) which can monitor and control the process performance with sustainable results.

 3: Make Flow at the pull of Customers

Map value stream to create a flow. Eliminate functional barriers and develop a product-focused organization that dramatically improves lead-time with the continuum of product movement, services, and information from beginning to end.

Identify inventory buildup and track the process cycle time & inventory related metrics, that can provide additional knowledge on FLOW redesign as part of future state. Let the customer pull products as needed, eliminating the need for additional inventory handling infrastructure

4: Perfection with Built in Quality

There is no end to the process of reducing effort, time, space, cost, and defects. Also, return to the first step and begin the next lean transformation, offering a product which is ever more nearly what the customer wants.

Perfection is complete elimination of defects so that all activities create value for the customer with high Quality products

We need to recognize the importance of Quality from this Lean principle of having perfection in the entire value streams.

If the Quality is not built into the lean value streams, it generates more defects, then the entire value stream needs to be revisited from BIQ (Built In Quality) point of view to look for process rework hidden factories and remove them with appropriate in-process CTQs SPC, including in process yield, throughput yield and associated causal elements.

I thought of highlighting the above lean principles usage, not just from waste elimination point of view but guided through data driven decision making with the emerging data analytics technology platforms. This can take the lean efforts to more sustainable and long-lasting benefits to organization as well as to customers.

Ravi Loganathan

Global Lean-Sixsigma MBB, Pall Corporation, Microelectronics, Danaher group

Ex-Executive Director, Standard Chartered Bank

Ex- Regional Director, APAC, Lean Sigma/Quality, Honeywell Aerospace/Shared services