Lean Thinking

*Under Construction*

Definitions

  • Lean
  • Lean thinking
  • Lean manufacturing
  • Agile
  • Muda
  • Waste
  • TPS
  • Value – the product, feature or service that the customer is willing to pay for, that differentiates from the competition on something other than price.
  • Surprise value -
  • Kaizen
  • Commodity – something that is differentiated from the products of other suppliers purely on cost. It is possible to be a lean commodity supplier – you can add value in the distribution, and increase your margins by applying lean thinking to your own processes.

Lean

  • Continuous improvement
  • Improvements made by practitioners

Waste

  • Examples
    • Delivering something the customer doesn’t want
    • Rework
    • Adding value only to take it away later
    • Taking measurements and then not using them to improve
    • Trying to fix symptoms of problems, rather than the root cause

Lean behaviour of commercial organisations

  • Spends to save money
  • Knows the cost of its activities and its supplies, and how much profit it makes
  • Competes with perfection rather than its competitors
  • Recognises where its value is, what its key assets are, what business it is in, and understands the value chain and its place in it
  • Employs mainly people committed to its main business, e.g. an engineering firm will employ mainly engineers
  • Innovates, and invests a large proportion of its income in R&D
  • Has a long term plan, and shorter term detailed plans that are aligned with that
  • Knows what the risks to its business are, and turns them into opportunities
  • Collaborates, partners and cross-licenses. Knows what non-cash currencies it has to trade with in negotiation
  • Understands its impact on the environment and does it’s best to avoid long term problems, and more generally invests in the local community and in education
  • Is clever in the way it does purchasing – recognises that sales guys get more training than purchasing people, understands Make or Buy to avoid hollowing itself out
  • Re-uses designs and builds in flexibility
  • Makes everyone responsible for quality
  • Manages the needs of all it’s stakeholders – but never places anyone above the customer followed by the employees of the company
  • Works out the root cause of problems before tackling them
  • Let’s the customer pull what they want
  • Encourages multi-skilling, especially amongst junior staff
  • Considers if 24-7 working is practical, trying to keep facilities in use as much as possible
  • Avoids bottlenecks, running tools at 80% capacity instead of 99%
  • Invests in new tools as soon as they are available and working reliably (For quote)
  • Deals mainly with lean aware suppliers, and coaches those that aren’t if there are no alternatives
  • Trains everybody in understanding of lean and in the knowledge of the company they will need in order to apply it, not just quality auditors, change managers or senior managers
  • Shares information with all its employees, especially about the cost of things. Also shares with suppliers and customers anything that will be useful to them in improving.
  • Realises that it's much cheaper to retain existing customers than get new ones

 

  • DOESN’T assume randomly reducing headcount is a good long term strategy
  • DOESN’T reserve purchase of better tools, equipment and facilities for senior management, at the expense of the productivity of the employees
  • DOESN’T hire armies of generic, inexperienced, highly priced consultants
  • DOESN’T try to measure un-measurable data, or collect data and then not use it for anything
  • DOESN’T issue performance related pay or bonuses to anyone especially not senior management
  • DOESN’T have a Quality department, or at least, doesn’t call it that
  • DOESN’T make more stock than there is demand for
  • DOESN’T keep WIP lying around, taking up space
  • DOESN’T rely on marketing, lobbying and legal protection as the primary means of protecting its market share and revenue
  • DOESN’T simply copy the tools and practices from Toyota or another lean thinking leader, and apply them “as is” to their own processes
  • DOESN’T allow personal politics and empire building to occur
  • DOESN’T assume that lean manufacturing can be applied to non-manufacturing disciplines (although lean thinking can be)
  • DOESN’T have to call what they do “Lean”, or even know that “Lean” is the name for what they’re doing
  • DOESN’T use vague or trendy mission statements, slogans, and doesn’t rely on new logos and extravagant corporate headquarters to boost declining share prices
  • DOESN'T make small problems more complicated than they need to be, and also doesn't over-simplify and trivialise difficult problems

Company models

Lean company

    • Low staff turnover (<8%)
    • Pulling further ahead of competitors

Waste company

  • High staff turnover (>14%)
  • 70% + of revenue coming from less than 10% of their products, and those products are in decline or at risk from disruptive technologies/services

Case Studies

Simple

  • Toyota
  • Google
  • Wetherspoons
  • Amazon
  • Detailed
  • Apple
  • Microsoft
  • Dell
  • Nokia
  • SonyEricsson
  • Games Workshop
  • Hasbro
  • Karrimor
  • eBay

Do they encourage lean?

  • Six Sigma
  • CMM

Links

http://www.iee.org/OnComms/pn/manufacturing/leanvillage/index.cfm

http://www.lean.org/ or

Also a good example of what one can learn from a trip to Toyota, nicely distilled

http://www.alexhosp.com.sg/News_and_Events/AH_News/19_Mar_04_toyota.htm

Lean IT

http://216.239.41.104/search?q=cache:sQTGRNC3H5gJ:www.giac.org/practical/GSEC/Stuart_Berman_GSEC.pdf+lean+thinking&hl=en

Mass production versus lean

 

Is your company lean?

Lawyers

Lean Accountancy

  • Spend to save - Ford quote

Training vs consultants

 

Lean Software

 

Apple like Games Workshop, need different brand for cheap products.

 

 

Lean R&D

 

Agile

 

Lean IT departments

 

Lean contracts

 

Lean Government

Run for benefit of patients not doctors

 

Taxes

 

Police, NHS - value/waste in those cases?

 

Local politics, campaigning