OVERVIEW OF LEAN

Nomenclature

Lean Manufacturing/Lean Enterprise/Lean Production/Lean

Definition

Lean is an approach to improving organizations that focuses on the needs of customers

– and considers everything that is neither delivering value to customers nor ensuring

the safety and security of the organization and its staff as waste and therefore a target

for elimination.

Evolution

Lean evolved from Toyota Production System (TPS)

Toyota Production System

The Toyota Production System (TPS) evolved over many years as part of the strategy

within the Toyota Motor Company to reform and improve their operations in the post-

war years. The TPS initially drew on existing concepts such as standardized working,

interchangeable parts and flow-based production processes. However, through the

initial work done by Toyota’s founder, Sakichi Toyoda, and the subsequent work by the

engineer Taiichi Ohno and his colleagues Shigeo Shingo (a consultant to Toyota) and

Eiji Toyoda, these initial concepts were developed into what is today the TPS. The main
objective of the TPS is to eliminate waste (termed muda in Japanese) from the process

whilst designing out overburden (muri) and inconsistency or unevenness (mura). The

focus is on developing processes that are capable of delivering the required outputs as

smoothly, flexibly and free of stress as possible, utilizing the minimum amount of

resource. It can be represented through TPS House.

The roof of the house shows that the overall objective of the TPS is to enable Toyota to

be the best provider of value to their customers (both internal and external) in the five

areas of: quality, cost, delivery, safety and morale. To enable the roof to stay in place it

is supported by two main pillars, these being:

the amount needed. Jidoka – the concept that quality should be built into the process.

Below the two pillars are four ‘levels’ or steps. The top ‘step’ is concerned with

eliminating unevenness from all activities through the use of heijunka. The second and

third steps are concerned with two of the fundamental tools of the TPS (and Lean),

namely standard work and 5S. Underpinning the whole house is the Toyota philosophy,

or the ‘Toyota Way’ that consists of a set of operating principles and practices.

Muda, mura, muri

The team that developed the Toyota Production System identified three types of activity

that were contributing to poor performance and gave them the names muda, mura and

muri. A brief definition of each is given below:

●● Muda: any activity that does not ‘add value’ to your customers is considered

muda. Muda is alternatively called waste or non-value-adding (NVA) activity.

●● Mura: variations in processes due to some form of imbalance are considered

to be mura, also referred to as ‘unevenness’. [It is eliminated through kanban

and heijunka]

●● Muri: putting unreasonable stress on people, material or equipment is

considered to be muri, another term for which would be ‘overburden’.

[Eliminated through standard work and takt time etc]

1. Define Value

To better understand the first principle of defining customer value, it is important to

understand what value is. Value is what the customer is willing to pay for. It is

paramount to discover the actual or latent needs of the customer. Sometimes

customers may not know what they want or are unable to articulate it. This is especially
common when it comes to novel products or technologies. There are many techniques

such as interviews, surveys, demographic information, and web analytics that can help

you decipher and discover what customers find valuable. By using these qualitative and

quantitative techniques you can uncover what customers want, how they want the

product or service to be delivered, and the price that they afford.

2. Map the Value Stream

The second Lean principle is identifying and mapping the value stream. In this step, the

goal is to use the customer’s value as a reference point and identify all the activities

that contribute to these values. Activities that do not add value to the end customer are

considered waste. The waste can be broken into two categories: non-valued added but

necessary and non-value & unnecessary. The later is pure waste and should be

eliminated while the former should be reduced as much as possible. By reducing and

eliminating unnecessary processes or steps, you can ensure that customers are getting

exactly what they want while at the same time reducing the cost of producing that

product or service.

3. Create Flow

After removing the wastes from the value stream, the following action is to ensure that

the flow of the remaining steps run smoothly without interruptions or delays. Some

strategies for ensuring that value-adding activities flow smoothly include: breaking
down steps, reconfiguring the production steps, leveling out the workload, creating

cross-functional departments, and training employees to be multi-skilled and adaptive.

4. Establish Pull

The fourth principle is concerned with doing things only when the customer ‘pulls’ (or

demands) them to be done. The opposite to pull is a push system in which you try to

predict what customers will want at some future point. Inventory is considered one of

the biggest wastes in any production system. The goal of a pull-based system is to limit

inventory and work in process (WIP) items while ensuring that the requisite materials

and information are available for a smooth flow of work. In other words, a pull-based

system allows for Just-in-time delivery and manufacturing where products are created

at the time that they are needed and in just the quantities needed. Pull-based systems

are always created from the needs of the end customers. By following the value stream

and working backwards through the production system, you can ensure that the

products produced will be able to satisfy the needs of customers.

5. Pursue Perfection

Wastes are prevented through the achievement of the first four steps: 1) identifying

value, 2) mapping value stream, 3) creating flow, and 4) adopting a pull system.

However, the fifth step of pursuing perfection is the most important among them all. It

makes Lean thinking and continuous process improvement a part of the organizational

culture. Every employee should strive towards perfection while delivering products
based on the customer needs. The company should be a learning organization and

always find ways to get a little better each and every day.

Lean Tools

A summary of lean tools from Lean Management Beyond Manufacturing: A Holistic

Approach by Sanjay Bhasin will be provided separately with these handouts.

Lean and Sig Sigma

Lean Tools can be incorporated in Sigma Methodology at various steps. We mostly use

lean tools in analyze, improve and control phases of DMAIC. Such a combination of

Lean and Sigma is called Lean Six Sigma (LSS).

Source:

Material for these notes has primarily been taken from The Lean Practioner’s Handbook

by Mark Eton.