Intro to Lean
Introduction to Lean Manufacturing…
Chapter I
It is likely that you have heard people talk about the lean enterprise or lean processes or lean manufacturing or lean something or other! So what is Lean?
According to the dictionary, lean is defined as “containing no fat”! Business and industry converted “fat” to mean “waste”. So, lean manufacturing in business is manufacturing that has minimized the amount of waste necessary to produce products for customers.
There are generally five recognized Principals of Lean Manufacturing. They are:
- Specify value in the eyes of the customer.
- Identify the value stream and eliminate waste.
- Make value flow at the pull of the customer.
- Involve and empower employees.
- Continuously improve in pursuit of perfection.
The first Principal focuses on understanding who your customers are and ensuring that all activity in the organization creates value for the customer. In the lean world there are two types of activities, Value Added Activity and Non-Value Added Activity:
Value Added Activity – A work activity that changes the size, shape, fit, form or function of material or information (for the first time) to meet customer requirements. Generally, customers care about value added activity.
Nov-Value Added Activity – those activities, both required and not required by the customer that do not change the size, shape, fit, form or function of material or information. Generally, customers are not concerned with non value added activity.
Principal #2 focuses on removal of waste from all processes. In manufacturing operations “waste” is inherent in every process and is generally categorized in to seven types:
1) Defective Products (Quality)
2) Over Production (Producing more than demand)
3) Excessive Inventories (Producing finished goods and putting them in a warehouse)
4) Motion (Reaching, twisting, have to walk to get materials.)
5) Excessive Processing (Unnecessary approvals)
6) Transportation (Carrying parts from one operation to the other)
7) Waiting (Idle time)
In its simplest form, Principal #3 – Make value flow at the pull of the customer, mandates that no product be produced until the customer downstream in the process is ready for it. A large percentage of companies produce most of their products prior to being requested by the customer---batch/push. The end result is “inventory” and “queue”- forms of waste!
Principal #4 requires organizations to establish a high-involvement workforce where the majority of daily decisions are made as close to the floor as possible. An environment where there is a highly flexible, cross-trained workforce capable of building any product, any time with very short notice!
Finally, Principal #5 suggests that the best companies in the world have found a way to internalize the lean manufacturing process and have made it a part of everyday operations…continuously improving all the time.
To help us understand how all of these Principals work together it might be beneficial to create a lean manufacturing vision! That Vision might read something like this:
”Create agility, speed and flexibility in our processes to provide our customers with high quality products on demand…
…delivered precisely where and when they need them, while utilizing minimum amounts of materials, people, equipment, and space.”
This initial article on lean manufacturing has been primarily written to help understand the Principals of Lean Manufacturing and how they interact. .
Chapter II
In the first chapter on Lean Manufacturing we explored the 5 Lean Principals, what lean manufacturing is, and how it related to our business. In this chapter we will begin to get a deeper understanding of what lean is and break the concepts of lean manufacturing down into a language that we can all understand.
A natural question might be, “How would I know lean manufacturing if I saw it?” Here are some things that research tells us good lean companies do:
Lean companies create continuous product flow based on customer demand, resulting in improved efficiencies, lower inventory, lower cost and improved cost flow.
Lean companies have Six Sigma programs to continuously improve quality and reduce variation in all processes.
Lean companies create linkage and synchronization across the entire supply chain. What this means is that everyone involved (customer, manufacturer, supplier) knows exactly what is expected.
Lean companies eliminate hierarchical and functional barriers and empower teams to make decisions.
Lean companies have the cleanest, brightest and safest work environments.
Lean companies have a passion for continuous improvement.
There are also some basic philosophies that you would find with lean companies. They are:
No product is made until the next customer “downstream” requires it.
Quality is designed into the product and process, not inspected in.
Employees are an integral part of the business enterprise, not extensions of machines; employee empowerment is good.
Inventory hides problems and must be eliminated.
There is a relentless commitment to banishing waste and striving for perfection.
So, if it is so good, why don’t all companies have strong lean programs? That’s a very good question. Here are some possible responses:
· Lean does require that we change our culture.
· There is significant resistance because people believe that the primary objective of lean is to eliminate jobs.
· People are unwilling to take risks.
· Often times, teams and entire organizations do not understand lean production concepts.
· Lack of training and knowledge and/or experience.
· Computer systems.
· Lack of control of the entire supply chain.
· “We like things the way they are” syndrome.
· “Why fix it if it isn’t broke” syndrome.
· Paradigms…
· Availability of resources and/or money for investment.
· Lack of leadership.
Just about every major manufacturer in the United State (and around the world) has attempted to implement some form of lean manufacturing program over the past four or five decades. Some companies have been very successful, some moderately successful, and some not so successful at all.
While companies have many improvements, “Lean improvements”, we have come to learn, are all improvement activity that is for continuous improvement initiatives. Like all continuous improvement activity, regardless of what it is called, Lean Manufacturing is a set of values, principals, disciplines and tools to help us improve our performance.
Companies may not have called it “lean” but have implemented many lean concepts in including:
ü Standard Work
ü Pull Systems
ü Turning the Corner on Quality
ü 5S and Visual Workplace
ü Preventive Maintenance
ü Value Streams
ü One piece and small batch flow
ü High Involvement through Teaming
ü And much more,
So then, what does it take to be successful with the implementation of a lean manufacturing imitative? Here are the keys:
Vision
If we all understand where we are going, we will arrive there together!
Leadership
People and wisdom will take us to excellence!
Awareness
If we all know what to do and how to do it, it will get done!
A Plan
Most significant accomplishments begin with a well thought out plan and small steps!
Resources
Nothing is free!
A Lean Tool Box
Hitting nails with a screw driver simply does not work!
Teamwork
The power of diversity and harmony is unequaled.
Commitment
No success is greater than one that follows failure!
Discipline
Unwavering commitment to execution.
Patience
And then…5 years later, lean was!
In the next chapter we will look at how important creating value is and how lean helps us achieve exceptional value in the eyes of our customers.
Creating Value…
Chapter III
In the previous chapters on Lean Manufacturing, we explored the Principals of Lean Manufacturing and Key Elements of a successful lean manufacturing transition. This chapter will focus on creating value through the implementation of a comprehensive lean manufacturing program. The three areas to be discussed are:
· Understanding the “Value Stream”
· Value Stream Mapping.
· Process Management & Improvement
Most lean practitioners will agree that the focus of any continuous improvement effort should be on creating value. To do this it is critical that we understand how value is created. Webster defines “value” as a “fair price or return or “the worth of a thing at a certain time”.
Value can be perceived by anyone but will only be realized through consensus, i.e. if I have a house to sell and believe it is worth $50,000 so I list it. If the highest offer I get for the house is $40,000, what is the value of the house? It is $40,000.
A business produces products because customer’s value them. Customers are willing to pay money for the products and services that a business manufactures or provide because those products and/or services meet their needs and they perceive the cost is appropriate for the value of the products and/or services provided.
What do customer’s value? Different things but generally you will find that customers value on time delivery, superior quality, practical cost, and superior service. Recently, customers have become more insistent that providers are continuously improving as well! Customers are willing to pay for what they perceive as valuable. The trick is making certain you understand what your customers perceive as value and then building your capabilities around those perceptions. This is “The Voice of The Customer”.
The lean tool used to help understand where value is created and where waste is generated is called a Value Stream Map. Value stream mapping is a must for lean deployment.
A value stream is all the activity, both value added and non-value added, currently required to bring a product to life. Generally a value stream is focused on following the flow of information and products. The value stream always starts with the customer requirements (The Voice of The Customer), and ends with the delivery of the product or service to the customer. Between these two points is where value is created.
Both information and product or materials flow through all of these processes to create value. The way we think about it is, “to make this job we need all these processes and they cost this much?”…if the customer is willing to pay what you believe the value is then you are on the right track!
We will make our business a manufacturing operation and concentrate our focus on the production value stream. Taking a value stream perspective means working on the big picture, (not just individual processes), and improving the whole, not just optimizing the parts.
Value stream mapping is a pencil and paper tool that helps you to see and understand the flow of material and information as a product makes its way through the value stream. What we mean by value stream mapping is simple: Follow a product’s production path from customer to supplier, and carefully draw a visual representation of every process in the material and information flow. This is what a value stream map might look like:
Why value stream mapping is an essential tool:
· It helps you visualize more than just the single-process level, i.e. assembly, welding, etc. in production. You can see the flow.
· It helps you see more than waste. Mapping helps you see the sources of waste in your value stream.
· It provides a common language for talking about manufacturing processes.
· It makes decisions about the flow apparent, so you can discuss them. Otherwise, many details and decisions on your shop floor just happen by default.
· It ties together lean concepts and techniques which help you avoid “cherry picking”.
· It forms the basis of an implementation plan. By helping you design how the whole door-to-door flow should operate (a missing piece in so many lean efforts) value stream maps become a blueprint for lean implementation. Imagine trying to build a house without a blueprint.
· It shows the linkage between the information flow and the material flow. No other tool does this.
· It is much more useful than quantitative tools and layout diagrams that produce a tally of non-value-added steps, lead time, distance traveled, the amount of inventory, and so on. Value stream mapping is a qualitative tool by which you describe in detail how your facility should operate in order to create flow (value). Numbers are good for creating a sense of urgency or as before/after measures. Value stream mapping is good for describing what you are actually going to do to affect those changes.
Since value stream mapping is probably a foreign term to most, let’s take a shot at breaking value stream mapping down into perhaps a simpler, easy-to-follow model.
Outside sales generates leads and interest in our products.
The Quote Team generates a quote showing the customer what the product would look like and how much it would cost.
Customers place an order.
The product is designed and sent to the customer for approval.
Materials are purchased to make the product.
The product is manufactured.
The product is distributed to the customer.
The customer is invoiced and payment is received.
In each of these key business processes there are many work activities (sub-processes) that need to take place to produce the agreed upon output. For example, the design process would produce product prints and specifications as output; the manufacturing process would produce a finished product as output. Every process must have at least one input and at least one output.
Understanding Process Improvement…
Defining and understanding processes and how activity or work flows through them is critical to the effective implementation of any lean program. As was indicated in a previous article, all processes have waste, some more than others, but it is there!
Flow is a key characteristic of lean processes. In a manufacturing process flow is characterized by:
· Product does not stop moving once it begins the production process.
· Within-cell product is never interrupted for other work.
· There is a vigorous response to flow stoppages with dedicated cell support.
Processes are made up of inputs and outputs, work steps and decisions. Flowcharting or Process Mapping is one of the primary lean tools used in process management. A well done process map provides an invaluable visual tool to help understand and improve the process.
A good approach to process improvement would include:
- Process Mapping the “AS IS” State – on a piece of paper identify the inputs and outputs of the process, process steps and decisions made through the process. Put the inputs, process steps and decisions in logical order. Develop a Procedure Sheet identifying specific work activity that is performed in each of the steps.
- Identifying Critical Process Characteristics – often time’s critical characteristics are connected to decisions in the process, i.e. if we are measuring something to determine if it is within specification you can assume that the specification is a critical characteristic. Identify all critical characteristics in the process and write them down on the process map below the step in which they are related.
- Clearly Understand Customer Requirements – meet with your customer to be sure you understand requirements. Almost always, customer requirements can be quantified and/or qualified…make certain they are and then write them down on your process map near the output symbol from your process.
- Create a “DESIRED or FUTURE STATE” – this is the fun part! Once you are comfortable that you understand the “AS IS” state, apply the concepts of lean waste removal and create a “DESIRED STATE”. This is your blueprint for improvement.
Now use your Lean Tool Box to achieve the desired state.
As a final thought, it seems then with what we have learned that lean manufacturing might be better defined as the process of creating value by eliminating or minimizing waste in all of the activities (work processes) that are required to provide products and services to our customers.
Next we will discuss The Lean House…a good foundation for any lean program.
Lean Manufacturing: The Lean House
Chapter IV
In the first three chapters on Lean Manufacturing we have explored the philosophies of lean and why they are important to our future success. From this point forward we will begin outlining our continuing lean transformation. This chapter will acquaint you with the Lean House which will become the icon for organization-wide lean implementation.
The Lean House
The Lean House provides us a fantastic visual to help guide us on our lean journey. The House is comprised of five main elements, Customers, People, Stability, Material Systems, and Quality Systems. Building our lean model around these five elements is essential to ensure that we create a “total lean environment”. By focusing our efforts in these five key areas we can gauge our effort and effectively measure our progress. Let’s take a very quick look at each of these key elements.
Customers - The very first Lean Principal that we learned about in Article I is “Create Value in the Eyes of the Customer”. Every business needs to understand who their customers are and what they want. In lean environments customers and suppliers work closely together to synchronize the total value stream to create win-win worlds for all stakeholders.
People - This element entails all the things we need to think about and do to create a highly involved workforce (Lean Principle #4). The list is long but at a minimum needs to include robust systems and processes for safety, Associate development & training, communications, teaming, recognition, etc. Lean environments are environments where all employees are highly involved and engaged in the business, teams run day to day operations, and reward is tied directly to performance of the entire business unit.
Stability - Having highly capable and disciplined processes and robust systems are fundamental to achieving lean manufacturing excellence. Stability manifests itself in such systems as 5S, Design for Manufacturability (DFM), Visual Workplace, Metrics, Process Control, and others. Maximum customer value comes from well designed and managed processes and systems.
Quality Systems - We have talked much in the past about improving our quality by defining and implementing quality systems that ultimately prevent defects from occurring. A lean factory is characterized by quality systems that prevent defects and where quality is “owned” by all associates. Systematic problem solving (PDCA & Six Sigma) and Mistake Proofing are two of the lean tools used to create this environment. The Quality Management System (QMS) provides overall vision and direction for the organization’s quality initiatives.
Material Systems - You want material systems that accomplish numerous things. First, you want material systems that maintain minimal amounts of inventory. You want materials when you need them to build the product that the customer has ordered. To achieve minimal amounts of inventory the organization must fully understand how to manage every SKU. This is accomplished through the use of what is known as a Plan for Every Part (PFEP). This document will help you manage inventory to that what you need arrives exactly when you need it in the quantity needed.
Second, you want is pull. Nothing is built and sent downstream until the customer has demanded it! Only materials that are used to satisfy customer demand are replenished. No batching! Pull forces you to develop and align your capacity with demand (takt).
Finally, to eliminate as much waste as possible from your process, you want product to continuously flow through the process. Never set the product down if possible---once you start it, finish it! Value is only added when fit, form or function are enhanced as the product travels through the process. Lean teaches us about the 7 types of waste---most are either eliminated or greatly reduced if you can continuously flow the product through the process.
While focusing in any of these key element areas will improve results, companies which have been successful in integrating all of the key elements into their vision have seen the most dramatic lean manufacturing improvements.
The Lean House with its key elements of Customer, People, Quality, Materials and Stability provide us with a vision of the composition of lean manufacturing. Not until you fill the Lean House up with lean tools, programs and methods does it begin to provide us with a roadmap for lean manufacturing strategy development and implementation. It now becomes a powerful tool to help guide us to excellence.
The first thing you will notice when you begin to fill your Lean House with tools, programs and methods is that very few of the tools are unique or revelational, in fact, most are things that companies have been doing for many years in the United States.
A good carpenter has a specific set of tools that allows them to be successful, same for a good machinist, or a good auto mechanic! The same is true for a good lean practitioner or a good lean company. Understanding what tools are available and then learning how to use them well is critical to a progressive lean manufacturing initiative.
The Lean House with Tool Box
Companies that have successful lean manufacturing implementations are those companies that can create the vision and passion around lean concepts, and those companies that are able to internalize the use of a myriad of dynamic lean tools, programs and methods.
Lean is not an initiative or a program---it is a cultural transformation to a different way of thinking! Many companies are very excellent at utilizing many of the lean tools, programs and methods identified in the Lean House but they are not lean because they have not internalized what lean is about:
· Creating value in the eyes of the customer.
· Identifying and continuously removing waste across the entire value stream.
· Making value flow at the pull of the customer.
· High involvement teamwork, and
· Continuous improvement.
I hope this introduction to the Lean House has been helpful and meaningful? Use it as one of your key tools to help your organization’s culture move through the necessary painful change to lean excellence.
Next, we will be exploring some of the lean tools as identified in the Lean House. The next chapter will focus on the Customer and ways in which we “create value in the eyes of the customer”.