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LEAN thinking

What is LEAN?

The term LEAN was first defined in the 80's to describe the philosophy and systems of working developed by Toyota to continuously improve the efficiency, effectiveness, quality and delivery of customer value in its manufacturing operations - essentially to be Operationally Excellent.

 

The Toyota Production System (TPS) and the core of LEAN became so successful that the model was embraced in manufacturing around the world and successfully adapted for service industries and increasingly used in other sectors.  

 

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero 'waste'. Lean thinking is key to operational excellence.  Operational Excellence incorporates the five principles of LEAN

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RESPECT EVERYONE

Supporting the 5 principles is one of the most important aspects, to RESPECT EVERYONE.  Without respect there can be no engagement, no common culture of improvement and will lead to under performance and negativity.  

Define Value

Identify the Value Stream

Create Flow

Establish Pull

Pursue Perfection

Principles of OpEx

Comparing the principles stated for Operational Excellence within the SHINGO model with those of LEAN and the 'Toyota Way' shows that they are fully aligned. The skill is to apply these principles to an organisation in the most appropriate way to achieve success.

Where does LEAN fit into ISO9001 and Operational Excellence?

LEAN is a key part of OpEx and is ideal to take the next step beyond implementing basic management systems

What LEAN is NOT ! 

Lean programmes can (and have) run into problems when implemented partially or for the wrong reasons. three examples of incorrect drivers and thinking are given below;

a 'cost cutting' exercise

LEAN describes 'creating more value with less human effort, less equipment, less time, and less space'.  The correct way to interpret this is that processes are improved to the point where fewer resources are needed to deliver and maintain these and those resources (human, capital and space) can be redirected to further improvement, growth and new products & services. 

 

A focus purely cost-cutting is inherently 'short-term' thinking, and will drive incorrect behaviours, as opposed to longer-term value creation focused outward the customer.  Whilst overall reduced cost is an anticipated benefit of a lean program it is an outcome of improved quality, better flow, easier and better processes and a culture of learning and improvement.  It should not be the driving force.

'eliminating all inventory'

A reduced level of inventory is often a major benefit of LEAN and Operational excellence programs, however reducing inventory to zero as a primary goal is a serious mistake.  Inventory levels are normally there for a reason, they help the organisation avoid running into serious issues such as stock-outs.  Inventory should be slowly reduced ONLY once the value stream is truly understood and flow and pull is introduced wherever possible into the supply chain.  Doing this will uncover 'rocks' one by one that can be dealt with.  Exposing too many rocks at once will lead to a wreck.

reducing headcount

 

Utilising human resource in a far more effective way and developing skills, capabilities, knowledge, experience and genuine motivation are what drives a LEAN culture.  One of the quickest ways of 'killing' any LEAN or Continuous Improvement culture is to cut headcount after initial improvements are made. No-one really wants to improve themselves out of their job, except where they feel safe knowing that their skills will be redirected to add further value to the organisation. 

INCIGHT's services

We can help develop your LEAN transformation roadmap and support you in taking your business on this exciting journey

     

      INCIGHT ltd

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