Lean Manufacturing

Lean manufacturing or lean production, often simply “lean”, is a systematic method for the elimination of waste (“Muda”) within a manufacturing process. Lean also takes into account waste created through overburden (“Muri”) and waste created through unevenness in work loads (“Mura”). Working from the perspective of the client who consumes a product or service, “value” is any action or process that a customer would be willing to pay for.

Essentially, lean is centered on making obvious what adds value by reducing everything else. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as “lean” only in the 1990s.[1][2] TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world’s largest automaker,[3] has focused attention on how it has achieved this success.

Lean principles are derived from the Japanese manufacturing industry. The term was first coined by John Krafcik in his 1988 article, “Triumph of the Lean Production System,” based on his master’s thesis at the MIT Sloan School of Management.[4] Krafcik had been a quality engineer in the Toyota-GM NUMMI joint venture in California before coming to MIT for MBA studies. Krafcik’s research was continued by the International Motor Vehicle Program (IMVP) at MIT, which produced the international best-selling book co-authored by Jim Womack, Daniel Jones, and Daniel Roos called The Machine That Changed the World.[1] A complete historical account of the IMVP and how the term “lean” was coined is given by Holweg (2007).[2]

For many, lean is the set of “tools” that assist in the identification and steady elimination of waste (muda). As waste is eliminated quality improves while production time and cost are reduced. A non exhaustive list of such tools would include: SMED, value stream mapping, Five S, Kanban (pull systems), poka-yoke (error-proofing), total productive maintenance, elimination of time batching, mixed model processing, rank order clustering, single point scheduling, redesigning working cells, multi-process handling and control charts (for checking mura).

There is a second approach to lean manufacturing, which is promoted by Toyota, called The Toyota Way, in which the focus is upon improving the “flow” or smoothness of work, thereby steadily eliminating mura (“unevenness”) through the system and not upon ‘waste reduction’ per se. Techniques to improve flow include production leveling, “pull” production (by means of kanban) and the Heijunka box. This is a fundamentally different approach from most improvement methodologies, and requires considerably more persistence than basic application of the tools, which may partially account for its lack of popularity.[5]

The difference between these two approaches is not the goal itself, but rather the prime approach to achieving it. The implementation of smooth flow exposes quality problems that already existed, and thus waste reduction naturally happens as a consequence. The advantage claimed for this approach is that it naturally takes a system-wide perspective, whereas a waste focus sometimes wrongly assumes this perspective.

Both lean and TPS can be seen as a loosely connected set of potentially competing principles whose goal is cost reduction by the elimination of waste.[6] These principles include: pull processing, perfect first-time quality, waste minimization, continuous improvement, flexibility, building and maintaining a long term relationship with suppliers, autonomation, load leveling and production flow and visual control. The disconnected nature of some of these principles perhaps springs from the fact that the TPS has grown pragmatically since 1948 as it responded to the problems it saw within its own production facilities. Thus what one sees today is the result of a ‘need’ driven learning to improve where each step has built on previous ideas and not something based upon a theoretical framework.

Toyota’s view is that the main method of lean is not the tools, but the reduction of three types of waste: muda (“non-value-adding work”), muri (“overburden”), and mura (“unevenness”), to expose problems systematically and to use the tools where the ideal cannot be achieved. From this perspective, the tools are workarounds adapted to different situations, which explains any apparent incoherence of the principles above.

Origins

Also known as the flexible mass production, the TPS has two pillar concepts: Just-in-time (JIT) or “flow”, and “autonomation” (smart automation).[7] Adherents of the Toyota approach would say that the smooth flowing delivery of value achieves all the other improvements as side-effects. If production flows perfectly (meaning it is both “pull” and with no interruptions) then there is no inventory; if customer valued features are the only ones produced, then product design is simplified and effort is only expended on features the customer values. The other of the two TPS pillars is the very human aspect of autonomation, whereby automation is achieved with a human touch.[8] In this instance, the “human touch” means to automate so that the machines/systems are designed to aid humans in focusing on what the humans do best.

Lean implementation is therefore focused on getting the right things to the right place at the right time in the right quantity to achieve perfect work flow, while minimizing waste and being flexible and able to change. These concepts of flexibility and change are principally required to allow production leveling (Heijunka), using tools like SMED, but have their analogues in other processes such as research and development (R&D). The flexibility and ability to change are within bounds and not open-ended, and therefore often not expensive capability requirements. More importantly, all of these concepts have to be understood, appreciated, and embraced by the actual employees who build the products and therefore own the processes that deliver the value. The cultural and managerial aspects of lean are possibly more important than the actual tools or methodologies of production itself. There are many examples of lean tool implementation without sustained benefit, and these are often blamed on weak understanding of lean throughout the whole organization.

Lean aims to make the work simple enough to understand, do and manage. To achieve these three goals at once there is a belief held by some that Toyota’s mentoring process,(loosely called Senpai and Kohai, which is Japanese for senior and junior), is one of the best ways to foster lean thinking up and down the organizational structure. This is the process undertaken by Toyota as it helps its suppliers improve their own production. The closest equivalent to Toyota’s mentoring process is the concept of “Lean Sensei,” which encourages companies, organizations, and teams to seek outside, third-party experts, who can provide unbiased advice and coaching, (see Womack et al., Lean Thinking, 1998).

In 1999, Spear and Bowen[9] identified four rules which characterize the “Toyota DNA”:

Rule 1: All work shall be highly specified as to content, sequence, timing, and outcome.

Rule 2: Every customer-supplier connection must be direct, and there must be an unambiguous yes or no way to send requests and receive responses.

Rule 3: The pathway for every product and service must be simple and direct.

Rule 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.

There have been recent attempts to link lean to service management, perhaps one of the most recent and spectacular of which was London Heathrow Airport’s Terminal 5. This particular case provides a graphic example of how care should be taken in translating successful practices from one context (production) to another (services), expecting the same results. In this case the public perception is more of a spectacular failure, than a spectacular success, resulting in potentially an unfair tainting of the lean manufacturing philosophies.[10][not in citation given]

Types of waste

Although the elimination of waste may seem like a simple and clear subject it is noticeable that waste is often very conservatively identified. This then hugely reduces the potential of such an aim. The elimination of waste is the goal of lean, and Toyota defined three broad types of waste: muda, muri and mura; it should be noted that for many lean implementations this list shrinks to the first waste type only with reduced corresponding benefits. To illustrate the state of this thinking Shigeo Shingo observed that only the last turn of a bolt tightens it—the rest is just movement. This ever finer clarification of waste is key to establishing distinctions between value-adding activity, waste and non-value-adding work.[18] Non-value adding work is waste that must be done under the present work conditions. One key is to measure, or estimate, the size of these wastes, to demonstrate the effect of the changes achieved and therefore the movement toward the goal.

The “flow” (or smoothness) based approach aims to achieve JIT, by removing the variation caused by work scheduling and thereby provide a driver, rationale or target and priorities for implementation, using a variety of techniques. The effort to achieve JIT exposes many quality problems that are hidden by buffer stocks; by forcing smooth flow of only value-adding steps, these problems become visible and must be dealt with explicitly.

Muri is all the unreasonable work that management imposes on workers and machines because of poor organization, such as carrying heavy weights, moving things around, dangerous tasks, even working significantly faster than usual. It is pushing a person or a machine beyond its natural limits. This may simply be asking a greater level of performance from a process than it can handle without taking shortcuts and informally modifying decision criteria. Unreasonable work is almost always a cause of multiple variations.

To link these three concepts is simple in TPS and thus lean. Firstly, muri focuses on the preparation and planning of the process, or what work can be avoided proactively by design. Next, mura then focuses on how the work design is implemented and the elimination of fluctuation at the scheduling or operations level, such as quality and volume. Muda is then discovered after the process is in place and is dealt with reactively. It is seen through variation in output. It is the role of management to examine the muda, in the processes and eliminate the deeper causes by considering the connections to the muri and mura of the system. The muda and mura inconsistencies must be fed back to the muri, or planning, stage for the next project.

A typical example of the interplay of these wastes is the corporate behaviour of “making the numbers” as the end of a reporting period approaches. Demand is raised to ‘make plan,’ increasing (mura), when the “numbers” are low, which causes production to try to squeeze extra capacity from the process, which causes routines and standards to be modified or stretched. This stretch and improvisation leads to muri-style waste, which leads to downtime, mistakes and back flows, and waiting, thus the muda of waiting, correction and movement.

The original seven muda are:

Transport (moving products that are not actually required to perform the processing)
Inventory (all components, work in process, and finished product not being processed)
Motion (people or equipment moving or walking more than is required to perform the processing)
Waiting (waiting for the next production step, interruptions of production during shift change)
Overproduction (production ahead of demand)
Over Processing (resulting from poor tool or product design creating activity)
Defects (the effort involved in inspecting for and fixing defects)[19]
Taking the first letter of each waste, the acronym “TIMWOOD” is formed. This is a common way to remember the 7 “muda”.

Later an eighth waste was defined by Womack et al. (2003); it was described as manufacturing goods or services that do not meet customer demand or specifications. Many others have added the “waste of unused human talent” to the original seven wastes. For example, six sigma includes the waste of Skills, referred to as “under-utilizing capabilities and delegating tasks with inadequate training”. Other additional wastes added were for example “space”. These wastes were not originally a part of the seven deadly wastes defined by Taiichi Ohno in TPS, but were found to be useful additions in practice. In 1999 Geoffrey Mika in his book, “Kaizen Event Implementation Manual” added three more forms of waste that are now universally accepted; The waste associated with working to the wrong metrics or no metrics, the waste associated with not utilizing a complete worker by not allowing them to contribute ideas and suggestions and be part of Participative Management, and lastly the waste attributable to improper use of computers; not having the proper software, training on use and time spent surfing, playing games or just wasting time. For a complete listing of the “old” and “new” wastes see Bicheno and Holweg (2009)[20]

Some of these definitions may seem rather idealistic, but this tough definition is seen as important and they drove the success of TPS. The clear identification of non-value-adding work, as distinct from wasted work, is critical to identifying the assumptions behind the current work process and to challenging them in due course.[21] Breakthroughs in SMED and other process changing techniques rely upon clear identification of where untapped opportunities may lie if the processing assumptions are challenged.

Lean goals and strategy

The espoused goals of lean manufacturing systems differ between various authors. While some maintain an internal focus, e.g. to increase profit for the organization,[32] others claim that improvements should be done for the sake of the customer[33]

Some commonly mentioned goals are:

Improve quality: To stay competitive in today’s marketplace, a company must understand its customers’ wants and needs and design processes to meet their expectations and requirements.
Eliminate waste: Waste is any activity that consumes time, resources, or space but does not add any value to the product or service. See Types of waste, above.
Reduce time: Reducing the time it takes to finish an activity from start to finish is one of the most effective ways to eliminate waste and lower costs.
Reduce total costs: To minimize cost, a company must produce only to customer demand. Overproduction increases a company’s inventory costs because of storage needs.
The strategic elements of lean can be quite complex, and comprise multiple elements. Four different notions of lean have been identified:[34]

Lean as a fixed state or goal (being lean)
Lean as a continuous change process (becoming lean)
Lean as a set of tools or methods (doing lean/toolbox lean)
Lean as a philosophy (lean thinking)

Steps to achieve lean systems

The following steps should be implemented to create the ideal lean manufacturing system:[37]

Design a simple manufacturing system
A fundamental principle of lean manufacturing is demand-based flow manufacturing. In this type of production setting, inventory is only pulled through each production center when it is needed to meet a customer’s order. The benefits of this goal include:[37] decreased cycle time, less inventory, increased productivity, increased capital equipment utilization

There is always room for improvement
The core of lean is founded on the concept of continuous product and process improvement and the elimination of non-value added activities. “The Value adding activities are simply only those things the customer is willing to pay for, everything else is waste, and should be eliminated, simplified, reduced, or integrated” (Rizzardo, 2003). Improving the flow of material through new ideal system layouts at the customer’s required rate would reduce waste in material movement and inventory.[37]

Continuously improve
A continuous improvement mindset is essential to reach the company’s goals. The term “continuous improvement” means incremental improvement of products, processes, or services over time, with the goal of reducing waste to improve workplace functionality, customer service, or product performance (Suzaki, 1987).

Stephen Shortell (Professor of Health Services Management and Organizational Behaviour – Berkeley University, California) states:-

“For improvement to flourish it must be carefully cultivated in a rich soil bed (a receptive organization), given constant attention (sustained leadership), assured the right amounts of light (training and support) and water (measurement and data) and protected from damaging.”

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