Toyota invented "lean production" according to Jeffrey Liker,
author of The Toyota Way. It's also known as the Toyota Production System
or TPS for short. And it seems to work well: Toyota's profits in March
2003 were larger than GM, Ford, and Chrysler combined!
Six Sigma and Lean are clearly on a collision course. So are all of the
quality disciplines whether it's ISO 9000 or software's CMMI. Each is
a slightly different view through a different facet of the same diamond.
Lean
At it's heart, lean is about speed and the relationship between steps
in a process. It's about eliminating non-value added elements from the
process. It's about shrinking batch sizes down to create a "one-piece
flow."
And where did Toyota get this silly idea called "lean?" From
U.S. supermarkets, that's where. On an early visit to the U.S. they saw
how supermarket shelves held minimal inventory and were replenished only
as quickly as customers "pulled" the products off the shelf.
In a pull system, the preceding process must always do what the subsequent
process tells it. The visual ability to see low stock and replenish it
became known as the kanban (a.k.a. "card") system.
Here's Toyota's critical discovery: When you make lead times short and
focus on keeping production lines flexible, you actually get better quality,
responsiveness, productivity, and utilization of equipment and space.
Some core beliefs include:
One-piece flow increases productivity, profitability, and quality.
Products don't like to wait in line. Material, parts, and products
are impatient.
The only thing that adds value is the physical or informational transformation
of raw material into something the customer wants.
Errors are opportunities for learning.
Problem solving is 20% tools and 80% thinking.
The Seven Speed Bumps of Lean
Purpose: To accelerate flow, you will want to eliminate the seven speed bumps which are considered "Muda"—non-value added waste. Muda is any activity which absorbs money, time, and people but creates no value. Acronym: DOWNTIME.
Delay. Don't you hate standing in line? So do your products or services. So do employees. Are they always waiting for something?
Overproduction (the most common type of waste) which creates inventories that take up space and capital.
Waste and rework caused by defects and deviation.
Non-value added processing. Why have people watch a machine that can be taught to monitor itself? Why do unnecessary actions?
Transportation. Unnecessary movement of materials and work products. When you break the silos into cells, the products don't have to travel so far between processes.
Inventory. Excess caused by overproduction.
Movement. Unnecessary movement of employees. Are parts and tools too far from where they're needed? Walking is waste.
Employee creativity. Unused wisdom When you rearrange your production or service floor into production cells with right-sized machines and quick change-over, you can quickly reduce most of these common kinds of waste by 50-90 percent.
Counterintuitive Insights
Mass production focused on economies of scale; TPS focuses on economies
of flexibility. Mass production focuses on results, TPS focuses on process.
Push systems focus on a schedule; pull systems focus on consumption.
Stop making product: Overproduction is the main non-valued added activity.
Stop the production line whenever there's a defect. Fix the process,
then continue.
Only build up enough inventory to level out your response to customer
demand, because inventory hides problems.
Most business processes are 90% waste and 10% value added. When you
eliminate waste and speed up the process, you also improve quality.
Toyota does not have a Six Sigma program, but they have one of the
highest levels of quality in the industry. "Most problems do not
call for complex statistical analysis, but instead require painstaking,
detailed problem solving. We have a very sophisticated technique for
solving problems: We ask "why?" five times."
"There is an obvious case for the harmonious marriage between
Six Sigma, which fixes individual processes, and lean, which fixes the
connections among processes."
The ideal batch size is always the same: one.
Use technology to support, not replace people. Focus on process and
people first, then add information technology to support them. Use low-cost
reliable alternatives to expensive new technology.
Make decisions slowly, implement decisions rapidly.
Learn by doing first and training second. "You cannot Powerpoint
your way to lean. The Toyota way is about learning by doing. In the
early stages of lean there should be at least 80% doing and 20% training.
The best training is training followed by immediate doing, or doing
followed by immediate training."
Use experts for getting quick results. The word "sensei"
is used in Japan with some reverence to refer to a teacher who has mastered
the subject. An expert can quick-start the process by educating through
action.
The Five "S" Lean Tools
Sort keep only what is needed. Pitch everything else. The workplace often becomes cluttered with products, tools, and waste materials that don't really belong there. Get rid of them.
Straighten - a place for everything
and everything in it's place. Establish standardized places for incoming raw materials, tools, etc.
Shine - clean machines and work area to expose problems.
Standardize -develop systems and procedures to monitor conformance to the first three rules. (This includes the define and measure aspects of Six Sigma's DMAIC.)
Sustain maintain a stable workflow. (This includes the Analyze, Improve, and Control phases of Six Sigma.)
Design for One-Piece Flow
Purpose: Stop producing big batches of product. Start producing one piece at a time.
Focus on the part, product or service itself. Follow the product through its entire production cycle looking for opportunities to reduce delay, inventory, waste and rework.
Realign the work flow into production "cells" to eliminate delay, rework, and scrap.
"Right size" the machines and technology to support smaller batches, quick changeover, and one-piece flow.
Focus on mission-critical and profit-critical processes and issues first!
Benefits
(Source: Competing against Time)
The 25-20 Rule: Every 25% reduction
in elapsed time will double productivity and reduce costs 20%.
The 3X2 Rule: Companies that routinely
reduce cycle time enjoy growth rates three times the industry average
with twice the profit margins.
Definitions
Andon: Line stop system
Genchi genbutsu: Personal involvement: Go to the place to see what's
going on
Hansei: Reflection (thinking)
Heijunka: leveling the workload
Hoshin Kanri: Quality planning
Jidoka: built in qualitiy
Kaizen: Continuous improvement
Kanban: Card system for visually monitoring flow
Muda: Waste
Muri: overburdening people
Mura: unevenness
Nemawashi: Decide slowly, implement rapidly
Takt Time: Time required to complete one job at the pace of customer
demand
Six Sigma and Lean
Six Sigma can help you improve the value-added steps and Lean can help
you eliminate the non-value added activities. I cover both aspects in
the Six Sigma Simplified book
and Lean Simplified Book .
Both Six Sigma and Lean are about achieving long life and long-term profitability
for your company. As Toyota's leaders would say: "You can't get anywhere
by jumping willy-nilly from fad to fad."
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