Lean is one of the most common and effective process improvement methodologies in use by businesses today. The core fundamentals of Lean focus on reducing the amount of waste that your company produces and adding value to the customer.
This kind of thinking has been responsible for the continuous improvement of countless manufacturing companies across the years. So what is it and can it help your business? In this article, the Fluere team explain:
What Lean is,
What Lean’s core principles are, and
How to identify waste in your own business to become truly efficient.
Where does Lean come from?
Lean thinking has been around for a very long time. From the Arsenal in Venice in 1450 to Henry Ford’s first production line in the early 1900s, manufacturers have been looking for ways to increase their output by reducing the amount of waste that they produce.
Lean, as we know it now, was first put into words by James P. Womack and Daniel T. Jones in their book, “The Machine That Changed The World”. The book detailed how Toyota was dedicated to continuously improving their lead times and output volume in the most efficient ways possible.
As a result of the application of Lean, Toyota now stands on the cusp of becoming the world’s leading automobile manufacturer as measured by overall sales. Womack and Jones’ book and the methodology therein have contributed greatly to what is known as “CI Culture”, which stands for Continuous Improvement Culture.
The Five Fundamentals of Lean
There are five core principles of Lean that can be used to drive a continuous improvement loop.
Here is an overview of each:
Specify value as viewed by the customer
By precisely specifying the value you are delivering from the perspective of a customer, each process in your business can be broken down into three categories. Essential activities that add value to your customer, essential business activities that may not offer value to the customer but are often legally required; and activities that add no value whatsoever and are essentially wasteful tasks.
Identifying which category your processes fall into is the first step in addressing your problems.
From our experience, companies with no prior Lean improvement drives have between 4-12% value adding time.
Identify where the value added and wasteful activities are in your processes
It’s important to clearly identify and differentiate value adding activities from the waste within the process. Waste is not the root cause of your problems - rather, they are the symptoms of an inefficient system to begin with.
Below are some examples of waste:
Products that have been shipped to the wrong address,
Ordering parts from distant suppliers when there are closer options available,
Meals that are too large in restaurants,
Commuter trains that have too many carriages,
Inconveniently located printers.
Waste can come in 8 different forms, which creates the easily memorable acronym TIM WOODS used commonly throughout industry. These 8 wastes are:
Transportation – This is how far your parts and components have to travel during their processing. Suppliers may be too far away, or machines required to process the same product located on opposite sides of the factory. Reducing these distances can help to reduce this type of waste.
Inventory – The purchasing and storage of excessive amounts of raw material, finished goods, tool supplies, work in progress and other resources, which offers no value to the customer.
Motion – This is the practical distance that operators have to move throughout the production process. If your workers are moving, then they cannot be adding value. Locating all tools and parts for an operator to use close by can make a huge impact on reducing this type of waste.
Waiting – When a worker or a piece of equipment is not able to process what's required, they aren’t adding value to a customer – resulting in added waste. The more they can work (without burning out) the more can be produced.
Overproduction – If you are producing in quantities that are larger than customers wants, or if you are providing goods to customers before they are needed, the storage of these additional products can be considered wasteful.
Over Processing – This is the additional effort and work that has gone into the product or service that the customer does not require. Processing goods past a certain point may not be adding any more value from the customers perspective and can be classed as a form of waste.
Defects – When there is an issue with one of your products that a customer deems unacceptable, then you are producing waste that can be reduced.
Skills – Your employees might not be working to their full potential because of a lack of training. For those who are capable, allowing them to be trained and later specialize will add value to your business as well as your customers.
Make value flow and reduce failure
After specifying value and identifying the value stream, the next task is to make value flow smoothly and without interruption throughout the process. All essential steps in a process must be aligned closely together so that progress is both steady and continuous. This is where an added emphasis on “getting everything done properly the first time round” is placed.
Customer pull value from the producer
Instead of scheduling production based on a forecast and pushing the product through the production process, a system should be created in which nothing is produced by the upstream supplier until the downstream customer signals a need. This means that nothing is created before you need it – which can entirely eliminate overproduction and make your supply chain extremely responsive and flexible. Also, there is no need to keep an unnecessarily large inventory of completed products.
Perfection cannot always be achieved entirely. This is why it is called Continuous Improvement – you have to always strive to eliminate waste to become closer to perfection. The closer you are to achieving this, the more value your organisation will bring to your customers.
Value Demand and Failure Demand
Another important factor to consider within Lean methodology is the difference in impact between value and failure demand, which are:
Value demand – This demand is a request that adds additional value to your business. For example, new customers, renewing your policies, etc.
Failure demand – This demand is placed on an organisation as a result of their failures to complete their duties in full and on-time. For example, time spent on dealing with complaints and refunds.
Professional Process Improvement Consulting with Fluere
If your business isn’t running at full capacity, contact Fluere. Our process improvement consultants can come into your business and complete a high-level Health Check to show you where you can save time and eliminate waste by streamlining your processes.
Call us on: 0113 250 6768 to find out more about how we can help you.