Lean philosophy

Description:

When businesses embark on a lean journey they do it to improve their performance in the eyes of their customer and to increase their profitability. It is sometimes a surprise to realise how quickly some results can come but paradoxically, how long the whole journey takes.

Going Lean requires a change of mindset. It will challenge your resolve as Executives, Operators, Operational Managers and Finance Managers and there needs to be total alignment across all factions to succeed. Lean is a transformation which must involve all skills, from all departments and all elements of a value chain and will need strong facilitation using tools contained in this booklet.

Although the transformation can be painful, the rewards make it worthwhile, with radical changes to throughput time, stock levels, morale, and consequential step changes in cost reduction.

The journey starts by understanding the difference between value adding tasks and non value adding tasks. Value is added when you perform a task that your customer is willing to pay for. All other tasks are non value added. A simple principle which starts a long journey. Let the journey begin today.

A product may take a few hours to produce but is in the facility for months. An invoice takes 10 minutes to process but is in the Accounts Dept. for weeks. This is expensive because it is wasteful. Applying lean will address the wasted resource in the value stream using proven tools and techniques, whatever the business application. Performance will be improved by understanding where the waste is using mapping tools and driving the following lean requirements through your people:

Once the cells are in place and running, they need to sustain this new performance by measuring it, and continuously improving it (CI) being prompted for action by visual management (VM) highlighting issues that impede adding value continuously.

Lean will give you more [performance] for less [cost] Lean is the systematic and relentless elimination and prevention of WASTE activities using established tools and techniques.

WASTE is any activity which does not add value to the product or service but consumes resource. Typically, over 90% of peoples time is not adding value directly to that which the customer values. This is a massive opportunity.

For example:

A 2 hour flight to Europe takes 6 hours 2 minutes to pay a cheque into a bank can take 15 mins Supermarket shopping is 20 mins transferring your goods, but you are in there for 1 1/4 hrs

Typical businesses are MUCH worse

6S is a good housekeeping tool which is the basis for what follows. The value is made to flow by judicious cell design, ideally one part at a time Work standards are agreed to enable best performance continually. The value is pulled by the next user to avoid overproduction 95% of a product's time in a business is waiting. Only 5% of it is actually being worked on.

5 Principles of Lean

Apply the principles as follows:

Principle 1 - value

Understand who the customer is and what the customer perceivesas value.

Principle 2 - value stream

Identify how the end to end process delivers the value using value stream mapping (see page 60). Example "As-is" value stream map Process map (a) represents a typical DLO value stream. It has been built by process owners across the support chain. The process map shows that there is a high degree of complexity and repetition and little evidence of flow.

Principle 3 - flow

Eliminate waste and the associated inefficiencies. Process map (b) shows how the process has been simplified by the removal of non-value added activities. The product now flows with less interruptions and delays.

Principle 4 - pull

Process map (c) shows an attempt to move to 'pull based' production, again focusing on flow, and removal of waste. Further waste has been removed by the adoption of a kanban system (see page 28) to trigger replenishment. Customer demand pulls the repairable through the process, and act as a record of work done, eliminating the need for the issue of tech cards. Pull links value stream.

Principle 5 - perfection

The final principle is the strive for perfection.