What is Lean?
Lean, Lean thinking, Lean Enterprise or Lean Manufacturing are all terms which have been used to represent the methodology for continual improvement championed by the Toyota company over 50 years ago. In reality it is not really there term it was one coined by James Womack when he tried to name the principles and approach he had observed in that company. Lean is in fact the name of a series of principles or values that if followed will provide customer focused effective improvement to any company.
Lean is about transforming your company into one where every person is engaged in thinking about the customer, improving the processes and removing any waste. To achieve this will take time and effort starting with the way the business is lead. The cultural change needed to adopt the Lean way of thinking means that managers must lead in new ways. They must be supportive, promote team work, remove functional silos, focus on process improvement and motivate staff to these ends. It also means that every member of staff must understand and be encouraged to identify and remove waste.
Removal of waste is the principle at the heart of Lean. Waste is identified as anything that does not add value to the customer. So Lean is about increasing customer value with the least resource (people, equipment, time, management, materials, costs etc) possible. The ultimate goal of any business would be to provide the perfect value to the customer with zero waste. To aid the understanding of waste we classify this waste into the 8 wastes (traditionally this was known as the 7 wastes)
- Waiting (Employee or equipment idle time)
- Transportation (Any movement that does not add value)
- Processing Itself (Doing more work than necessary)
- Motion (Wasted walking or movement)
- Poor Quality (Errors or rework)
- Inventory (Storing excess inventory or materials)
- Overproduction (Servicing more, sooner, faster than required by the next step in the process)
- Talent (skills not being used or used for the wrong task)
To achieve zero waste businesses must focus on the processes in them and how they flow through the business. This means no longer organising and measuring by function but by flow or process. Once an organisation can understand this principle and that the smoother, faster and easier their flows of information and materials is through their company then they can start to remove waste and provide value to the customer and the business.
These flows are known as Value streams the route to providing value to the customer. In most companies when these value streams are first identified and documented there are numerous problems including – no real ownership, wrong measures of performance, duplication of effort, lack of customer focus, blame, over the wall syndrome, poor quality and lack of care. The secret is therefore to understand the value streams and then remove any waste from each value stream in the business. By doing so you will create processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business processes. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.
As you improve your processes and remove waste you will use a series of tools which are designed to help improve the flow through the value stream and provide value to the customer. You will try to remove the waste of movement or transport by brining parts of the process together. You will control your inventory with simple systems driven by the customer. You will ensure that everything can be found and is clean and orderly. You will ensure that machines never breakdown so you can keep inventory to a minimum and make small batches of product. You will ensure that information of what to do when is simple and visual so nobody has to waste time looking or asking. You will design your products and services so they can be made or delivered wrongly making mistakes impossible. You will reduce the time it takes to change from doing one activity to another. These improvement will simplify your flow, move it closer to the customer while removing waste. We simplify everything, standardise it and start doing it all again.
The results for companies of all types have been dramatic. Costs are way down, customer satisfaction way up, quality through the roof with happier employees and stakeholders.
Lean today is being used in all kinds of industries from Healthcare to government, from manufacturing to charities. They have all recognised that improving their value streams to be more customer focused and to reduce costs the principles developed by Toyota and now being honed by numerous other companies and individuals is without exception a sensible course of action. Lean is not a tactic or a methodology which can be implemented into a company in a few months. Lean is about a new way of behaving a cultural change for most companies. Many companies choose not to call it Lean but to give it their own name which is great as it means they are adapting the ethos of Lean to suit the culture of their organisation. However the back bone of what they develop has Lean at its heart.
We guarantee that the use of Lean will transform you business. If you would like to know more then please talk to us about training, consultancy or coaching.