Lean Manufacturing
Lean manufacturing, or the Toyota philosophy, focuses on the removal of muda (waste and inefficiencies), which is defined as anything that is not necessary to produce the product of service. Lean is a Japanese management philosophy developed by Taiichi Ohno for the Toyota manufacturing plants. Lean thinking forces any firm to continuously identify and remove sources of waste according to the seven zeros:
1. Zero defects (see Six sigma section)
2. Zero (excess) lot sizes
3. Zero setups
4. Zero breakdowns
5. Zero (excess) handling
6. Zero lead-time
7. Zero surging
According to Assen, Berg, and Pietersma in Key Management Models there are five steps in driving lean:
Identify the drivers to create value
Identify value and explore customer requirements. The evaluation of value drivers must be made from the perspective of internal and external customers. Value is expressed in terms of how well a product or service meets the customers needs, at a specific price, at a specific time (see section about Customer value under price strategy).
Identify the value stream
Identify the sequence of activities that add value to a product or service. Activities that contribute to value are identified with the aid of value stream mapping, in which all activities are evaluated according to weather they add value to the product of service. Finally, non-value-added activities are eliminated where possible.
Make the activities flow
Additional improvement efforts are directed towards making the activities in the value stream flow. Flow is the uninterrupted movement of a product of service through the system to the customer. Major inhibitors of flow are work in queue, batch processing and transportation.
Let the customer pull products or services through the process
Synchronize production with actual customer demand. Product must be pulled out of system based on actual customer demand. The value stream must be made responsive to providing the products or service only when the customer needs it- not before and not after.
Optimize the system continuously
Search for perfection by continuously improving process with the help of Kaizen-events (see Kaizen section), the elimination of waste, and good housekeeping
The principle objective of lean is to reduce waste. Nevertheless, inventories cannot be eliminated altogether, as all supply systems requires a work in process inventory to realize any output at all. The more variability (e.g. different types of order, different types of technologies) in the system, the more buffers are required to hedge for variability. Hence, for lean production system to operate successfully, it is important not only to have a pull-controlled production system, small batch sizes and reduced setup times, but also to have stable and reliable demand such as the theory of constraints* or quick response manufacturing** are more appropriate.
*The theory of constraint (TOC)
The essence of the theory of constraint is that the output of any given production system is determined by its weakest link. Every system ha constraints that prevent a firm from fulfilling its ultimate goal; making money. The theory of constraints states that by removing the largest constraints (the bottleneck), the output of the entire system will increase. By removing he ne bottleneck resulting from the previous action, the output of the system may be further improved. The TOC searches for the bottleneck in the system and tries to eliminate it. This is achieved because a production line cannot work faster than its slowest workstation.
**Quick response manufacturing (QRM)
QRM was developed by Rayan Suri (1998). QRM means responding to customer needs by rapidly designing and manufacturing products tailored to those needs. QRM focuses on continuously reducing the lead-times of all activities in a company, resulting in improved quality, lower cost and quick response.
1. Zero defects (see Six sigma section)
2. Zero (excess) lot sizes
3. Zero setups
4. Zero breakdowns
5. Zero (excess) handling
6. Zero lead-time
7. Zero surging
According to Assen, Berg, and Pietersma in Key Management Models there are five steps in driving lean:
Identify the drivers to create value
Identify value and explore customer requirements. The evaluation of value drivers must be made from the perspective of internal and external customers. Value is expressed in terms of how well a product or service meets the customers needs, at a specific price, at a specific time (see section about Customer value under price strategy).
Identify the value stream
Identify the sequence of activities that add value to a product or service. Activities that contribute to value are identified with the aid of value stream mapping, in which all activities are evaluated according to weather they add value to the product of service. Finally, non-value-added activities are eliminated where possible.
Make the activities flow
Additional improvement efforts are directed towards making the activities in the value stream flow. Flow is the uninterrupted movement of a product of service through the system to the customer. Major inhibitors of flow are work in queue, batch processing and transportation.
Let the customer pull products or services through the process
Synchronize production with actual customer demand. Product must be pulled out of system based on actual customer demand. The value stream must be made responsive to providing the products or service only when the customer needs it- not before and not after.
Optimize the system continuously
Search for perfection by continuously improving process with the help of Kaizen-events (see Kaizen section), the elimination of waste, and good housekeeping
The principle objective of lean is to reduce waste. Nevertheless, inventories cannot be eliminated altogether, as all supply systems requires a work in process inventory to realize any output at all. The more variability (e.g. different types of order, different types of technologies) in the system, the more buffers are required to hedge for variability. Hence, for lean production system to operate successfully, it is important not only to have a pull-controlled production system, small batch sizes and reduced setup times, but also to have stable and reliable demand such as the theory of constraints* or quick response manufacturing** are more appropriate.
*The theory of constraint (TOC)
The essence of the theory of constraint is that the output of any given production system is determined by its weakest link. Every system ha constraints that prevent a firm from fulfilling its ultimate goal; making money. The theory of constraints states that by removing the largest constraints (the bottleneck), the output of the entire system will increase. By removing he ne bottleneck resulting from the previous action, the output of the system may be further improved. The TOC searches for the bottleneck in the system and tries to eliminate it. This is achieved because a production line cannot work faster than its slowest workstation.
**Quick response manufacturing (QRM)
QRM was developed by Rayan Suri (1998). QRM means responding to customer needs by rapidly designing and manufacturing products tailored to those needs. QRM focuses on continuously reducing the lead-times of all activities in a company, resulting in improved quality, lower cost and quick response.
Source: Marcel van Assen, Gerben van den Berg, Paul Pietersma, Key Management Models 2nd Edition, 2009, Harlow (link to latest edition)
