Lean Principles Standards in Action Lean Principles Being Fast, Flexible, Economic Author: Dr Rhys Rowland-Jones

Lean Principles Standards in Action 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

Lean Principles Standards in Action 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.

Lean Principles Standards in Action 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).

Lean Principles Standards in Action 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.

Lean Principles Standards in Action 5 principles of Lean Value - specify what creates value from the customer’s perspective. The value 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.

Lean Principles Standards in Action 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.

Lean Principles Standards in Action 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.

Lean Principles Standards in Action “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) The Value Stream

Lean Principles Standards in Action 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.

Lean Principles Standards in Action 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.

Lean Principles Standards in Action 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.

Lean Principles Standards in Action The Cornerstone of Lean – The Toyota Production System Based on two philosophies: 1. Elimination of waste 2. Respect for people

Lean Principles Standards in Action Toyota Production System’s Four Rules 1.All work shall be highly specified as to content, sequence, timing, and outcome. 2.Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses. 3.The pathway for every product and service must be simple and direct. 4.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.

Lean Principles Standards in Action Taiichi Ohno’s 7 Wastes (muda) types of waste: l overproduction l waiting time l transport l process l inventory l motion l defective goods

Lean Principles Standards in Action 7 Service Wastes Source – 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.

Lean Principles Standards in Action The 5S’s The 5S‘s are 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.

Lean Principles Standards in Action The Japanese Origins SeiriSort This requires the classifying of items into two categories, necessary and unnecessary, and disregarding or removing the latter. SeitonStraighten 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. SeisonShine 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.

Lean Principles Standards in Action The Japanese Origins SeiketsuSystematise 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. ShitsukeSustain –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.

Lean Principles Standards in Action 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.