Cut waste, increase quality and add value.
How much waste does your organization produce?
For example, do you ever have to wait for someone else to finish a task before you can get on with your own work? Do you have a large inventory of unsold stock? Do you have more workstations that you need? Or do you order materials months in advance of when they are needed?
How about flexibility? If consumers want a modification to your product, can you quickly change your processes to meet their needs?
Waste costs you and your customers money. And if your customers have to pay more because of it, they might go elsewhere. Being competitive also requires a lot of flexibility. You must be able to meet the changing demands of your customers quickly and effectively, and adapt to a rapidly changing business environment.
So, how can you reduce waste and do things more efficiently? And how can you keep up with the changing demands of consumers?
First mentioned in James Womack's 1990 book, "The Machine That Changed the World," Lean Manufacturing is a theory that can help you to simplify and organize your working environment so that you can reduce waste, and keep your people, equipment, and workspace responsive to what's needed right now.
The Lean concept is just as applicable to offices and other work environments as it is to manufacturing plants. It's helpful to relate words like "inventory," "customers," and "production" to whatever you're processing – data, documents, knowledge, services, and so on.
Henry Ford was one of the first people to develop the ideas behind Lean Manufacturing. He used the idea of "continuous flow" on the assembly line for his Model T automobile, where he kept production standards extremely tight, so each stage of the process fitted together with each other stage, perfectly. This resulted in little waste.
But Ford's process wasn't flexible. His assembly lines produced the same thing, again and again, and the process didn't easily allow for any modifications or changes to the end product – a Model T assembly line produced only the Model T. It was also a "push" process, where Ford set the level of production, instead of a "pull" process led by consumer demand. This led to large inventories of unsold automobiles, ultimately resulting in lots of wasted money.
Other manufacturers began to use Ford's ideas, but many realized that the inflexibility of his system was a problem. Taiichi Ohno of Toyota then developed the Toyota Production System (TPS), which used Just In Time manufacturing methods to increase efficiency. As Womack reported in his book, Toyota used this process successfully and, as a result, eventually emerged as one the most profitable manufacturing companies in the world.
The Lean approach is based on finding efficiencies and removing wasteful steps that don't add value to the end product. There's no need to reduce quality with lean manufacturing – the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.
To find the efficiencies, lean manufacturing adopts a customer-value focus, asking "What is the customer willing to pay for?" Customers want value, and they'll pay only if you can meet their needs. They shouldn't pay for defects, or for the extra cost of having large inventories. In other words, they shouldn't pay for your waste.
Waste is anything that doesn't add value to the end product. There are eight categories* of waste that you should monitor:
The first seven sources of waste were originally outlined in the Toyota production system, and were called "muda." Lean Manufacturing often adds the eighth "workforce" category.
Lean gives priority to simple, small, and continuous improvement such as changing the placement of a tool, or putting two workstations closer together. As these small improvements are added together, they can lead to a higher level of efficiency throughout the whole system. (Note that this emphasis on small improvements doesn't mean that you cannot make larger improvements if they are required!)
Although the aim is to remove as much waste as possible by continuously refining your processes, you probably won't eliminate waste completely.
The process has three key stages:
According to the Lean philosophy, waste always exists, and no matter how good your process is right now, it can always be better. This commitment to continuous improvement is known as Kaizen .
One of the key tools used to find this waste is a Value Stream Map (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you'll see the processes that add value and those that don't. You can then create a "future state" VSM that includes as few non-value-adding activities as possible.
For each waste you identified in the first stage, figure out what's causing it by using Root Cause Analysis . If a machine is constantly breaking down, you might think the problem is mechanical and decide to purchase a new machine. But Root Cause Analysis could show that the real problem is poorly trained operators who don't use the machine properly. Other effective tools for finding a root cause include Brainstorming and Cause and Effect Diagrams .
Using an appropriate problem-solving process, decide what you must do to fix the issue to create more efficiency.
Once you have identified wastes using the three key stages above, you can then apply this next set of tools to help you reduce waste further:
Just in Time – This is the core idea of Lean and is based on the "pull" model. To minimize stock and resources, you only purchase materials, and produce and distribute products when required. You also produce small, continuous batches of products to help production run smoothly and efficiently. By reducing batch size, you can also monitor quality and correct any defects as you go. This reduces the likelihood of quality being poor in future batches.
(In manufacturing, a key way of doing this is to use Kanban, below.)
These techniques offer proven solutions for fixing waste within your organization. However, remember first to apply the three-stage Lean process, and to deal with any issues that this raises.
Lean Manufacturing focuses on optimizing your processes and eliminating waste. This helps you cut costs and deliver what the customer wants and is willing to pay for.
With a lean philosophy, you enjoy the benefit of continuous improvement. So, rather than making rapid, irregular changes that are disruptive to the workplace, you make small and sustainable changes that the people who actually work with the processes, equipment, and materials will take forward.
This systematic and simple approach is very effective across all types of industries. What's more, ultimately, a process without waste is much more sustainable.
* Original source unknown. Please contact firstname.lastname@example.org if you know what the source is.
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