With new constraints being placed on businesses daily, many companies are looking for new methods of doing business to remain successful or, even better, move ahead. Various approaches or tactics may be employed, but to see lasting results a system of continuing improvement and waste reduction needs to be built. In manufacturing, these types of systems are generally classified as “lean.” Although reference to lean processes might seem to be another popular trend, the key principles have been around for ages.
What is lean? And how do you do it? Although I have well-practiced short answers, to truly discuss lean is rather involved. Having practiced lean for about a decade and spoken nationally about it for years, I thought it might be time for more than the short answer to these two seemingly simple questions.
Most companies like ours that are entrenched have their own variations of lean philosophies and practice methods. In the interest of describing in reasonable detail, I will share concepts and tools based on lean in three installments. The first installment will discuss what is lean and how to build a lean culture within a business. The second installment will focus on developing standards that guide your business and the practical tool of 5s, a workplace organization and management method. The final installment will detail quality driven process change. I will do my best to convey what we are successfully doing in our facility and hopefully spark an ember in you and your practice.
What is lean?
Lean is a set of management practices based on the Toyota Production System (TPS). TPS was heavily influenced by the teachings of W. Edwards Deming and Toyota’s own study of the early practices of Henry Ford and the Ford Motor Company. Some of the earliest written examples of lean thought can be noted in Ben Franklin’s writings in Poor Richard’s Almanac. Specifically, he said wasting time was as prudent as throwing money into the river and avoiding unnecessary costs could be more profitable than increasing sales.
Although Toyota developed the lean process common today, the concept is not solely a Japanese invention, and is used in many places other than Japan.
The principles of lean apply in every business and every process. Every industry or organization, including health care and governments, can apply lean principles and gain their benefits.
We host numerous tours a year as part of our company’s lean initiative. Some of the companies that come through are delegations from large multinational corporations well entrenched in lean. Other companies that tour our facility may have no experience in lean and have fewer than five employees. Everyone always comments on its commonsense philosophy and wonders why everyone isn’t doing it.
The truth is, most of us use lean principles regularly to make life easier and more organized and pleasing.
Before starting any journey you first need to decide where you want to go. Building a lean company is no different. You should have clearly determined what the company mission and goals are and write them down. I like to keep the company mission as visible as possible; it helps with decision making.
Once your mission is determined you need a plan of action to achieve it. Although there are benefits of practicing any of the lean tools, a lean management and company culture will keep your efforts from fading and promote drive within all levels of the business. To truly implement lean, management must build the culture. This culture is one of change and involves everyone. It took me some time to understand what lean management is and develop a routine practice of it.
Reduce waste, maximize value
The core idea of lean comprises two parts: systematically reduce waste while continually maximizing value to the customer.
Although some types of waste may be tangible, others are more conceptual. Waste in Japanese is called “muda” and Taiichi Ohno of Toyota first identified the seven wastes that are targeted within lean business practice:
- Overproduction: Making more parts than you can sell.
- Delay: Waiting for processing, parts sitting in storage, etc.
- Transporting: Moving parts/materials to various storage locations, from process to process.
- Processing: Doing more work to a part than is required.
- Inventory: Committing storage space and money to parts not sold.
- Motion: Wasting motion within the manufacturing process
- Defects: Creating parts that cannot be sold “as is” or that must be reworked, etc.
An understanding of the seven wastes leads to an understanding of how entwined these types of waste can be. For instance, if you over produced something, inventory waste has been created, transporting waste may be necessary and defect waste becomes more probable every day the overproduced parts sit awaiting sale. These types of waste may seem small and if it was an isolated instance it would be inconsequential. The truth is, these types of waste occur everywhere. A pessimist might say that it is just the cost of doing business, but a lean thinker sees more. The most dangerous kind of waste is one that goes unrecognized.
Before we can start eliminating waste we have to determine what waste is and that is determined by the second part of our core idea, maximizing value to the customer. The opposite of waste is value-added. This “value-added” must always be evaluated because if it is not truly value-added, then it is waste and can be eliminated. This determination gets made frequently enough that three criteria have been established to determine what separates value-added work from waste. All three conditions must be met:
- The customer must be willing to pay for the activity.
- The activity must change the “form, fit, or function” of the product, bringing it closer to the end product that the customer wants and will pay for (in health care, this can mean moving the care process forward.)
- The activity must be done right the first time.
The easiest way to determine the customer’s values is no more complicated than asking them for feedback. This feedback lets you see the wastes that can be removed in a process. If you start the simple process of asking people what is of value to them you will find where your efforts are best spent. This consistent contact and feedback from your customers will create bonded relationships, greater outcomes and awareness of new opportunities. As the waste is removed, every job becomes easier and employees enjoy their jobs more. By focusing on value and eliminating waste throughout all of your processes, you will increasingly be able to do more with less effort, less space, less money and less time. This capacity for new work properly focused creates a flywheel of new energy to push forward. As an added benefit, your information management will become much simpler and more accurate.
Management and standard work
A lean manager is like a sailor that works in the engine room of a ship. He follows the direction of the captain and maintains the performance of the ship’s boilers. The boilers power the ship and if not maintained, the ship may lose power or maybe even explode. The sailor walks every day through the tight corridors of the ship to keep the engines running. He walks from gauge to gauge monitoring and making adjustments. While many of the monitoring points on his watch never need any adjustment, he still monitors them every single pass. The most important monitoring points (ones that could cause explosion) have a log attached that is initialed at each inspection and noted of all needed adjustment. These logs are reviewed by the captain as part of his routine. When everyone does their routine or “standard work,” the ship’s voyage continues as planned and ensures the safety of everyone on board.
Lean management and lean manufacturing are founded on standard work. Your routine design needs to be written down and visible. As simple as this sounds, it takes discipline and a commitment. This commitment is the continual routine daily monitoring of the business.
Like the sailor, you have to build a routine of the things you will monitor. If management stops the routine so will everyone else.
In more traditional businesses, leadership sets goals for the employees, returns to their offices and then comes out and yells at them when they don’t hit those targets. Lean managers spend time coaching people, continually working with them to build their skills. They spend little time in their offices, preferring to lead people and see what is actually happening rather than judging secondhand from reports only.
Here is an example of our standard work boards. The information is housed in a multipage Excel document and can be updated very swiftly at almost no expense.
Once the manager starts the routine standard work in a trickledown fashion, the standard work of direct reports is developed. The immediate result of developing standard work is the visibility it suddenly brings to operations.
When we first established standard work we discovered several problem areas. Certain tasks were being done excessively by multiple people and other tasks where only done after the system ground to a halt because of failure. A few key employees had functions that had to be done in their absence. Some jobs hadn’t been monitored and had developed problems we never even knew about.
When standard work becomes visible you can see the status of the daily activities, ensure everything that must be done is done, see where help may be given, and see where cross training is essential.
As you build the standard work keep it as simple as possible so it may be updated and changed by the person responsible for it. The main premise of lean is continual change, so make the ability to change as easy and affordable as possible. When starting something new, most of the signs, labels and charts we make are very simple because we are sure change will occur most rapidly at the beginning. After several months and after the new process has stabilized, we can decide if it needs to be improved.
This has been an introduction to lean, its principles and the management process to start a lean culture. The next installment of the series will detail practical and effective tools for continuous change and waste removal.