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Principles of Lean

Lean Six Sigma Lesson 6

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 (aka "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:

1. The right process will produce the right results.
2. Developing your people and partners adds value.
3. Continuously solving root problems drives organizational learning.
4. One-piece flow increases productivity, profitability, and quality.
5. Products don't like to wait in line. Material, parts, and products are impatient.
6. The only thing that adds value is the physical or informational transformation of raw material into something the customer wants.
7. Errors are opportunities for learning.
8. 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.

1. Delay. Don't you hate standing in line? So do your products or services. So do employees. Are they always waiting for something?
2. Overproduction (the most common type of waste) which creates inventories that take up space and capital.
3. Waste and rework caused by defects and deviation.
4. Non-value added processing. Why have people watch a machine that can be taught to monitor itself? Why do unnecessary actions?
5. 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.
6. Inventory. Excess caused by overproduction.
7. Movement. Unnecessary movement of employees. Are parts and tools too far from where they're needed? Walking is waste.
8. 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.

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.

Counter intuitive Insights

1. 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.
2. Stop making product: Overproduction is the main non-valued added activity.
3. Stop the production line whenever there's a defect. Fix the process, then continue.
4. Only build up enough inventory to level out your response to customer demand, because inventory hides problems.
5. Most business processes are 90% waste and 10% value added. When you eliminate waste and speed up the process, you also improve quality.
6. 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."
7. "There is an obvious case for the harmonious marriage between Six Sigma, which fixes individual processes, and lean, which fixes the connections among processes."
8. The ideal batch size is always the same: one.
9. 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.
10. Make decisions slowly, implement decisions rapidly.
11. Learn by doing first and training second. "You cannot Power Point 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."
12. 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

1. 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.
2. Straighten - a place for everything and everything in it's place. Establish standardized places for incoming raw materials, tools, etc.
3. Shine - clean machines and work area to expose problems.
4. 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.)
5. 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.

1. 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.
2. Realign the work flow into production "cells" to eliminate delay, rework, and scrap.
3. "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 quality
• 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."

Special Bonus: Download our Lean Simplified Quick Reference Card. See past articles about applications of Lean in various industries on in our Lean Six Sigma Articles archive.

We can help you get started on Lean with our One Day Lean Six Sigma Workshop.

Take our FREE Lean Six Sigma Yellow Belt training online.

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