Primilis Ltd

‘Lean’ means fat-free or thin or containing little waste, doesn’t it? (Appropriate for the first Quality insights after Christmas…)

The answer is yes, and it’s one of the most recent trends in quality and management that started on the factory floor with Lean Manufacturing and has spread to other areas such as Lean Six Sigma and Lean Software Development. In fact, Lean can be applied to all business activities – the Lean Enterprise.

Companies that have successfully implemented Lean claim huge improvements in productivity and costs – often several tens of percent – so I thought it was worth talking about.

The Lean concept comes from the famous Toyota Production System (TPS) in the late 1980s. It works on the principle that any activity which does not add value to the product (or service) that goes to the end customer is wasteful and should be eliminated.

Lean takes the customer perspective. The objective is to create more customer value, i.e. things the customer is willing to pay for, using fewer resources. It aims to reduce waste throughout the entire ‘value stream’ (all the business processes and operations used to deliver value to the customer, including the supply chain from raw materials to finished goods) – whether this is waste in materials, energy, time or effort – so is a very ‘Green’ initiative.

To be successful, Lean needs a long-term change in the way a company operates – ‘Lean Transformation’ – and is a process of continuous improvement; Lean is a journey not a destination. It needs to involve everyone from top management to the factory (or office) floor, with a special emphasis on the latter as that’s where the responsibility and authority is delegated to and where the real benefits come from.

Within Lean Manufacturing, seven different types of waste have been defined:

1. Over-production (production greater than demand)
2. Over-processing (activities necessary only because of poor design or tooling)
3. Transportation (moving products that are not actually required for the next process or production step)
4. Motion (people or equipment moving more than the minimum required to perform the processes)
5. Waiting (delay before the next process step)
6. Inventory (components and Work In Progress)
7. Defects (time, effort and material used in identifying and fixing faults).

The aim of Lean is to eliminate these wastes and, in fact, to eliminate all non-value-adding work by changing the company’s processes, procedures and systems.

Non-manufacturing processes have their own types of waste that are different to manufacturing but to which many of the same principles apply, which is why you now see Lean thinking applied to Six Sigma, Product Development, Logistics, Healthcare, the Enterprise, and so on.

For instance, take the office process of Customer Sales Order processing: Where do customer orders get delayed and how can these delays be eliminated? How much time is wasted correcting errors in the orders and how can errors be prevented? Is any paperwork (or e-forms or emails) unnecessary? Are there any unnecessary stages of approval to go through (but all the necessary ones)? Does information flow erratically (e.g. the same form is handled several times by the same person) and how can this be made smoother? …and so on.

Wasted time can be difficult to identify, so many companies specifically focus on reducing time as a key driver of Lean Implementation; agility and Lean go hand in hand. There is a also lot of work done on the planning of processes to avoid overloads or unreasonable demands, on eliminating work via improved design, and on improving the ‘smoothness’ of flow of information, processes and materials.

Being customer-focused, the emphasis is on agile ‘pull’ processes that provide goods and services only when the customer needs them, not when the supplier would like to provide them.

Lean isn’t a quick fix. I would love to be able to write a 500 word ‘just do this’ explanation and see you turn your company into a Lean one overnight, but I can’t; it’s a big subject and there’s no simple workbook solution.

This is not to say that individual tools and techniques, including quick fix ones, can’t be used within Lean. There is a key role for many different tools and techniques such as Six Sigma, Kaizen, Kanban, 5S, 5 Whys, Poka-Yoke, Just-In-Time (JIT), Statistical Process Control (SPC), Zero Defects (Right First Time), and so on. However, their use does not automatically result in a Lean organisation, they are merely tools to be used where appropriate.

Lean is a way of thinking. It involves cultural change that can be difficult and time-consuming and demands a rigorous approach; it certainly isn't suitable for every organisation. But Lean Transformation, with its emphasis on reducing waste and improving efficiency from the customer’s perspective, can bring huge commercial benefit to organisations that implement it well and, at the same time, offers Green credentials that benefit society as a whole.

That’s worthy of further investigation, don’t you think?

7 January 2010

Tom Gaskell offers business quality, product quality and reliability, manufacturing management and trouble-shooting services through the consultancy Primilis Ltd.  Contact him at http://www.primilis.com/contact_us.html, visit the Primilis website at http://www.primilis.com, or read his blog at http://www.qualityandproducts.com.