Learn Lean Manufacturing

Kanban – Push to Pull Processing

noreply@blogger.com (Aza Badurdeen) — Sun, 19 Jul 2009 05:43:52 PDT

Just in time manufacturing (JIT) is the practice of maintaining and manufacturing just enough inventory to fulfill the orders that have been placed, and not a single piece more. With the advent of next day shipping, modern tracking systems, and worldwide interconnectivity through the internet and satellites, JIT is not only possible, but some businesses could not run without it. Their margins are so razor thin that they would go out of business if they had to allocate any more money toward inventory than they already do.

If JIT is the entire system that defines the pull version of production and manufacturing, then Kanban is the signal that triggers the production. Kanban is the path toward JIT achievement, and consists of cards, balls, or other devices like markers or trolleys. It can also be an electronic signal, and many companies are using RFID’s as the signal in Kanban.

Developed by Toyota, Kanban is an integral part of Lean manufacturing and is best used alongside Kaizen and JIT. Unless the company that wants to use the Kanban tool is fully versed in lean manufacturing and all of the tools associated with it, it should not be used. To fully and properly implement the process, they have to coincide with each other and require a complete analysis of the manufacturing plant and all of the processes associated with it.

When the Kanban tool is properly used, the JIT manufacturing plan can effectively work. This means that a company can use all of its inventory to send to the end user, instead of stacking it on their shelves, freeing up capital for the company so they are able to expand and improve their bottom line.

The effective use of Kanban can be demonstrated with a simple example. An auto parts manufacturer wants to expand their product line to include brake pads, but they do not have the cash necessary to purchase the equipment needed to start manufacturing the quality brake pads they want to start building. Management then got together and decided they would try to slim down costs by implementing lean manufacturing processes.

After accomplishing a few other things, they turn toward JIT manufacturing to start producing some of their larger parts, one of them being pistons. They have accurate sales data for the previous year on their piston line of products. They decide to cut back on the manufacturing so they can get rid of their backlog and inventory and shift to the JIT system.

One of the company’s major customers has decided to help the company in employing their JIT system. They have agreed to help them use the Kanban system by keeping track of their inventory and using the company’s standardized Kanban cards. These cards contain all of the information about the pistons… their model number, their dimensions, weight, color, etc. There is one card for every 50 pistons.

When the customer runs out of pistons, they send the company one of their Kanban cards This triggers the manufacturing of more pistons and subsequently more pistons are made… 50 to be exact. The Kanban card represents a signal from the customer that more inventory is necessary in order to keep up with demand. The 50 pistons are not manufactured until the company that needs them is in need of them, and this is the epitome of JIT manufacturing.

It should be pointed out that a true JIT manufacturing system is an incredibly complex system that can quickly force complex issues that may turn out to show significant costs or losses to the company that they may not be able to handle.

A perfect example of this is the creation of a bar code, internet processing, and assembly line manufacturing system. When introducing the internet processing system, there is an entire system that is now being utilized by the company that requires upkeep, maintenance, and quality assurance. Without these, the system will quickly render itself ineffective. Of course, because of these requirements, additional costs are incurred and the costs saved by switching to a JIT system may not be realized. The bar code is represented by the yellow lightening in Figure (1), which portrays the signal that is generated anytime a customer requires an order. That signal, or The Kanban, goes straight to the supplier to order more material, as well as the fabricator to begin assembling additional product.

Additionally, the timeliness and quality of the product may be effected when switching to a JIT system. Because they are waiting for an item to become depleted without ordering more of the inventory, the order will always be rushed and with that comes the hurried atmosphere that is the backdrop for errors and waste. The company may also lose its unique selling position if they are to fall behind their competitors in speed of delivery of a product, and they may lose the market share associated with those types of customers.

While it is not the answer to every problem a company faces with their supply chain, JIT manufacturing is a great tool that some businesses may find very useful to integrate into some, if not all, of their processes. It is strongly recommended that upper level management be the ones who decide the implementation strategy of this effective tool, and a complete redesign of the supply system be rethought.

JIT, if done properly, has the potential to save companies a substantial amount of money, particularly if they are involved with manufacturing and distribution. By reducing the inventory necessary to meet the demand of the customer, the company is investing in their own business through cost reduction.

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Kaizen – The Wheel Keeping Lean Running

noreply@blogger.com (Aza Badurdeen) — Sun, 19 Jul 2009 05:53:41 PDT

When Tiger Woods won his first Master’s championship, what did he do the next day? Did he rest on his hands and take a few days off, congratulating himself because he officially was the best in the world at that very moment? No, instead, he was on the golf course, fixing the very few things that he noticed wrong with his swing during the 72 holes of golf he had just finished playing. Businesses can learn something from Tiger, and it probably isn’t what you think.

Instead of resting on his laurels, Tiger decided that he would constantly be improving his game. As you can probably guess, this is one of Tiger’s few secrets to becoming the absolute best at his sport. While businesses can learn from Tiger’s skill, perseverance, concentration, and focus, more importantly, businesses should learn to focus on Tiger’s example of constant improvement. Luckily, there is a process that already exists that systemizes the ability to constantly be improving one’s business. Enter the Kiazen business practices.

Kaizen, as you can imagine, got its first start in Japan, and can be directly traced back to account for a large portion of Japan’s success as a country in the days following World War II. It is now accepted as common culture within most places of business and is adopted by the most successful people and business without fail. It is also used in the self improvement area of development, but the main focus of this article is in the business management application.

Kaizen is the process of constant improvement in all processes, procedures, and methods that drive a business by focusing on small, continuous improvements in everything every single employee does in that company. While it is easy to chalk this up as a very helpful production tool and lean manufacturing tool, the reality is that Kaizen starts to truly come alive when it is incorporated into daily business practiced by every single member of the company, from the CEO all the way down to the most untrained, new line worker. As can be see

When taken on board, Kaizen teaches people to think about every single aspect of their business at all times. In this day of automation and consistent, repetitive tasks, this usually poses the biggest hurdle for the process to take effect. When the workers finally do decide to internalize the efficiency process, they are taught to keep an open mind about every single thing they do, and then use the scientific method to identify, deduce, troubleshoot, and improve any inefficiencies that they may see.

As demonstrated in Figure (1), Kaizen is a constant business process, with each stage in the cycle feeding and merging in with each other for a constant state of improvement, leading to the leanest company and processes possible with the most self propelled improvement culture allowed.

The end result of using this business practice is a more streamlined business that has employees that continue with the process of improvement almost automatically, whether you tell them to or not. In the following example, you’ll see how the Kaizen business practices can be incorporated into the everyday life of any business.

Frank works in an office cubicle in which he processes a 2 page claimant form for returns of a company’s product. This claim form is a document that is filled out by the customer, Frank himself, or the customer service representative that talks to the customer over the phone. Frank’s job is to review the claimant’s form, decide whether the claim is a valid claim for reimbursement, refund, or denial. A few forms even end up going to the legal department because either the customer is threatening legal action or there is a vulnerability in the legal policies of the company that may someday lead to a lawsuit.

Unfortunately, Frank’s job is very tedious and after reading over 100 claims per day, he quickly becomes tired, bored, and unhappy with the monotony. He then was ordered by his manager to attend Kaizen business training. When Frank came back, he realized there were quite a few problems with the way they were going about processing claims.

First, Frank noticed that he was finding that there was a lot of unnecessary information requested on the claim form. By restructuring the form, Frank got the size of the form down to one page, saving the company money on paper costs, as well as time needed to process the claim.

He also found that the decision to send a claim to legal was one that anybody could make, with a certain amount of training and guidance. He suggested to his manager that the customer services representatives, which accounted for over 80% of the forms, should be trained to decide whether a form goes to legal or him, and cut him out of the loop of reviewing the forms. This saved the company tens of thousands of dollars as well as cut about 2 days of processing time off of those applications.

As you can see, the process can be practiced by anyone in the workplace, not just CEO’s or lean managers. In fact, when Kaizen is internalized by a company, it will only become effective if every single member of the company jumps on board with the changes. Because of the small change nature of the practice, if this is not internalized by all, the company may only see small changes in their bottom line.

If practiced correctly, a business that employs Kaizen thinking will always have an improving bottom line. They will be constantly thinking of ways on the worker level to improve their own jobs, even if it is slightly and borderline immeasurable. After a short period of time, however, many small changes turn into big changes (for the better) to the bottom line.

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JIT – The Backbone of Lean Manufacturing

noreply@blogger.com (Aza Badurdeen) — Sun, 19 Jul 2009 05:54:24 PDT

For many businesses, the biggest expense they face is inventory cost. The never ending struggle of having enough inventory to fulfill orders and leave room for growth while keeping enough cash on hand to meet any need they may meet is the number one cause for business failures, according to the Small Business Association. There are many ways around the skyrocketing costs of carrying a large amount of inventory, and a just in time, or JIT inventory management is one that can increase the business’s bottom line and return on investment.

The JIT inventory management strategy is one that is based on the idea that a business can order exactly the right amount of inventory necessary to fulfill their upcoming orders and not a single piece more. This reduces the cost of warehouse space, transportation costs, and other costs that can be reduced by this form of lean manufacturing.

The philosophy associated with this theory is that inventory is considered to be waste, and the lean process of JIT will eliminate that waste. By exposing the hidden causes of inventory, a set or series of signals can be developed that define what the company can use to measure and regulate the inventory necessary to meet the demand needs.

Identifying the signals that guide the inventory demand and calculating, harnessing, and predicting the same signals is at the core of the JIT system. Couple this with today’s modern day next day shipping capabilities, and you have a very capable JIT system. The signals necessary to make a JIT system successful are able to be generated with the modern UPC and online tracking systems. By tracking sales and the patterns that follow a business can plot the demand necessary, manufacture the products, and send them out next-day shipping. This model made famous by quite a few companies, but mostly by Dell computers, can greatly increase the quality as well as efficiency of a business.

A second aspect of JIT manufacturing is in the setup of the manufacturing plant. The workers, as well as the machines in the plant are oftentimes multifunctional, allowing flexibility in the plant’s ability to manufacture parts as necessary, independent of equipment or personnel status. With small lot sizes, this is the perfect setup for a dynamic, demand-driven supply chain.

As can be seen in Figure (1), in a JIT system, customer orders are generated in a variety of ways. But each one of those ways generates a signal that is processed by the sales department, represented by the lightening bolts in the diagram. Many times, the sales department is nothing more than a remote server that is capable of taking and distributing orders in a JIT system. The necessary components and raw materials are calculated, and the signal is sent to the suppliers and the fabrication assembly to start manufacturing the product. As you can see, because each order generates a new signal, no inventory is incurred.

Dell computers is a perfect example of JIT manufacturing. By getting started in the business by manufacturing computers out of his dorm room, Michael Dell quickly learned that he could not spend all of his money on stockpiled parts and equipment. He decided that his computers would be designed exactly to the specifications to the customer, and his selling point would be along the same lines.

Without realizing it, his business was the perfect example of JIT manufacturing. His company was founded on the idea that any average person can log on to the internet, and with a little bit of assistance, can identify the parts necessary to build a computer from scratch. When the customer ordered the computer, Michael, in trying to come up with a solution for his dilemma of hot having any money or location to house all of the pieces needed to assemble a computer, stored a few few parts he would need to get the job done, then buy and manufacture new parts, jus as soon as the customer orders them. The raw materials are re-odered, sometimes automatically, and the end user gets a computer that they build online within 15 minutes!

Sometimes the end result effects are not always as perfect as planned. When Toytoa decided to shift to a JIT manufacturing process, they hit quite a few bumps in their process capability. The problem that Toyota found is one that will plague all JIT systems that do not make contingency plans for a quickly generated, unannounced increase in demand.

Since the entire supply chain system is built around the flexibility and speed of a company to respond to a demand, they do not have the ability to meet large quantity orders quickly. Normally, this is fine, since the large quantities can be forecasted by the signals generated and production increased to meet the demand.

However, sometimes demand rapidly increases without any significant explanation. Sometimes it is due to unplanned media coverage, and sometimes it is just due to the viral success of the product. Whatever the reason, the entire supply chain has to be redesigned and pushed to its capacity when one of these unexpected increases in demand shows.

JIT manufacturing was the wave of the future a few years ago, and while it has actually worked for some companies, most have unsuccessfully tried to implement it into their systems. In order to success, JIT manufacturing requires the perfect combination of speed, management, and product… something not many companies have. However, those that do find themselves on the receiving end of severe quality increases and cost decreases.

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Use Poka-Yoke to Rest Easy

noreply@blogger.com (Aza Badurdeen) — Sun, 19 Jul 2009 05:55:18 PDT

The purpose of Six Sigma is to reduce defects to an acceptable level more consistently. This can be accomplished with a focused attention and everlasting drive toward improving the quality of the processes that are used during manufacturing and other aspects of the business. Ufortunately, even the most lean and highest quality processes have one unavoidable, detrimental flaw. We are only human, and mistakes will always be made. But there is hope, as there is a certain lean tool that may actually assist in removing the human error factor from the equation.

While it is impossible to completely eliminate the possibility of removing mistakes from the workplace, it can be possible to make the probability of them occurring so low, that they are virtually impossible. The technique of mistake proofing a process or workstation is called Poka-yoke, and is one of the most effective ways of reducing the number of defects over the course of time. The basic premise of the practice is that the process or conditions involved are designed in such a way that it is virtually impossible for a human, no matter what amount or training or background, to make a mistake when attempting to perform the task.

If the quality manager, or any manager for that manner, of a plant or process starts noticing an unexplained increase in the number of defects in a part of a process, the answer may lie in Poka-yoke. The best way to decide whether this tool may be the right answer for your team is to decide whether the flaws that are happening are due to a “careless error”, or tend to happen at times that are prone to lapses in judgment, such as Mondy mornings, the end of shifts, or Friday afternoons. While this isn’t a steadfast rule, experience shows that human errors occur at these times more frequently than others.

Another way to approach the decision to use Poka-yoke is by interviewing the workers themselves. Frequently they have anecdotes that outline how easy it is to make mistakes that can only be classified as mistakes. Additionally, you can audit your processes and identify certain elements that are critical to quality (CTQ), or have CTQ characteristics associated with them. These are perfect candidates for mistake proofing because a flaw in a CTQ can be detrimental to the entire product’s performance.

The key attribute behind mistake proofing is to keep the processes simple, and anticipate the locations in the process where the mistakes are most likely to happen. Then you can use methods like shaping tools and putting tools on lanyards so that the mistakes cannot happen without the blatant change of the tool’s function or scope.

Let’s use an example of a manufacturing plant that is piecing together a piece of electronic equipment to place onboard locomotives, as can be seen in the “before” section of Figure (1). The electronic piece of equipment has a cover that must be installed using a grounded screwdriver, in order to prevent the discharge of static electricity into the card.

A manager started realizing an increasing trend in the breakdown of quality of the results that the electronic equipment was putting out. The voltages that were being produced were going out of specification much more frequently than before, and the manager decided to investigate.

She found that the erroneous output was a function of a card that is installed by a workstation on the other side of the line from where the covers are installed. At first, it appeared that there was a severe manufacturing defect in the cards and the workstation that was producing the card. The manager decided to take a closer look, or a “deep dive” and find out through a “fishbone diagram” and root cause analysis what all of the possible causes of a faulty card could have been. After this was done, she realized that there was a possibility the cover was not being installed properly.

It was this time that she monitored the worker installing the covers. 1 out of every 5 times, the worker used a screwdriver that was not properly grounded. This is shown in Figure (1) in the “before” section, where the worker becomes confused with which tool to use. Her immediate reaction was that this worker was being careless, or was not properly trained in the process that he was conducting. Because she was a good manager, she asked the worker why he didn’t use the properly grounded screwdriver. The worker had explained to her that he thought he was using the correct screwdriver, since the both the grounded screwdriver and ungrounded one were on a lanyard and looked exactly the same in every other respect.

Employing Poka-yoke, the manager shortened the lanyard for the ungrounded screwdriver such that it could not be brought to the workstation that installed the cover on the equipment without cutting the lanyard, as can be seen in the “after” section of Figure (1). By doing this, she made it virtually impossible to use an ungrounded screwdriver to install the cover in question, and in doing so dramatically increased the quality of the product.

As stated before, Poka-yoke is not just for managers and business executives. If instilled properly, every worker and employee of the company should be properly trained in the best methods of mistake proofing, and should provide input on how to eliminate the factor of human error.

Mistake proofing is the most effective, and usually the most cost effective, way of increasing quality. The human element is always a variable in every quality equation, but with Poka-yoke, the impact of that variable can be reduced to a mere fraction of a percent of occurrences than if it were never employed.

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Start Cleaning House with 5S – A simple yet powerful lean tool

noreply@blogger.com (Aza Badurdeen) — Sun, 19 Jul 2009 05:55:51 PDT

There are many parts to lean manufacturing. When you, or any of your colleagues, start thinking about lean, you probably begin with the aspect of paperwork reduction. Of course, we all feel the pain of excessive and tedious red tape, but lean processes, in fact, touch on every single part of manufacturing, and non-manufacturing, business practices.

5S is a perfect example of a bottoms-up approach to the lean methodology. There are many businesses, particularly in manufacturing, that are incredibly disorganized, leading to massively inefficient business practices, lost time, and sometimes even workplace injuries. 5S refers to the practice of workplace organization, and the methodical process of optimizing the layout of a manufacturing plant or workstation to become the most efficient, upbeat, and productive workplace it can become.

Appropriately named, 5S is the name given to the process because each step starts with the letter ‘S’. Started by Toyota in the 1960’s, it has framed the success of many manufacturing plants. The fundamental basis behind 5S is that a person or workstation will never waste time looking for tools and equipment because everything has its own place, is appropriately labeled, and flows to the point where the tool is within reach of where the worker will find themselves when working. If 5S is implemented properly, it is common to see efficiencies increase by a solid 20-30%.

One of the more common missteps when a company implements 5S is to have the focus come from the top-down, with management recognizing the need for process improvement, but never consulting with the worker that will be practicing and implementing the 5S on a daily basis. Without buy-in from every person on the shop floor, a company will never truly achieve the goals outlined by a 5S method.

The 5 S’s, while seemingly complex, are actually relatively straightforward and simple. They are best viewed as pieces and independent of each other instead of holistically. If broken down into its fundamental parts, the 5 steps, you will find that they are nothing more than a standardized approach to optimization. As you can see in the Figure (1), the 5S concept is one in which every step should be intertwined within each other. If an organization is truly on board with the 5S process, the sustainment of the process should maintain a constant cycle of improvement, and each ‘S’ should merge with the other steps, making it near impossible to determine when one starts and the other begins.

The first ‘S’ is “Sort”, or “Seiri”. Management, or possibly the workers themselves, should go about the workplace and take note of which tools, equipment, and supplies are not needed for the everyday operation of the plant. If one is not needed, it is discarded, or at the very least, removed from the shop floor. Some tools and equipment will not be able to be discarded or removed because they are used, but only infrequently. If this is the case, then these tools should be noted as infrequently used, to be dealt with later.

The next phase is oftentimes considered the most important phase of the five. This is where items are arranged, or 'Straightened' (or 'Seiton') systematically and methodically. All of the tools that were identified as unnecessary in the ‘Sort’, phase have been discarded, so this phase should be easy. You just simply place the tools such that workflow is maximized, and no tool is any more than 30 seconds away from even the least experienced worker. This step is best accomplished either by the worker that will be conducting the work or with their direct input.

It may help to include a diagram of all tools and their locations that is readily accessible for reference for the worker during this step.

The next, and least popular stage is ‘Sweep’, or Seisō. This step is where the shop is cleaned, and a new policy of periodic cleaning is implemented. Most manufacturing facilities find that performing this step at the end of every shift is the ideal time for this action. The most important aspect here is to maintain the shop in the order in which step 2 has identified as being ideal.

As discussed earlier, all of the processes described here are not worth anything unless complete buy-in by the average worker on the floor is achieved and practiced. This is where step 4 comes in, ‘Standardize’, or ‘Seiketsu’. This is the step in which all personnel who will be practicing the 5 steps on a daily basis are brought completely onboard and the practices are standardized by forms, procedures, personnel assignments, and workstation ownership.

The final step is that of ‘Sustain’, or ‘Shitsuke’. This step focuses on the requirement to maintain a constant expectation of good lean practices through feedback systems, evaluation and mentoring, training, and auditing. The company has come a long way in improving the workplace, and maintaining it in that improved state is a necessity.

It may not always be apparent as to when a company should use the 5S methodology to improve the workplace. Before any improvement is attempted, management should commission a study to improve their chances of finding the processes that should lead to a leaning of the workplace through 5S. The following is a good example of how the entire process can be conducted.

A new manager was hired to help improve the processes conducted on the shop floor of a generator manufacturing plant. The second day on the job, he notices something that triggered his experienced eye: a worker was walking all the way across the floor, passing by two working cranes, to go to a toolbox and retrieve a specialized tool in order to perform one of the steps he had to perform in order to output a certain component characteristic to his workstation.

The manager requested approval from his management to conduct a 5S study in order to identify places in which improvement could be achieved.

For one full shift, he plotted out the path of the worker he took note of earlier. He found that not only did the worker go to the toolbox while walking under the crane, he also made a couple of stops to the grinding workstation to polish a part, which was on the other side of the shop as well.

The next day, the manager talked in depth to the worker, and helped go through his workstation. He found that there was about 11 tools that were old, outdated, and never used anymore. Thos tools were immediately discarded. After this, the manager helped the worker get a new set of tools that included the one he was going to the toolbox for. He also subtracted the polishing of the part from the process and instead added it to the procedures for the workstation that actually had the grinder at the station. This way, a separate trip was not necessary for the tool nor the grinder.

After they went through and rearranged the tools such that they were always within arm’s reach for the worker, they came up with a schedule for the entire shift to clean the last 15 minutes of their shift. These were all written down and signed by every worker in every shift.

This is a simple example, but most 5S implementations are this simple. If you have any interest in making your manufacturing plant more efficient, you have to start looking at each workstation as a conduit in which work should flow with no restriction. Do this, and your profits will skyrocket.

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Lean Manufacturing Tools Series

noreply@blogger.com (Aza Badurdeen) — Sun, 12 Jul 2009 21:01:04 PDT

It is true to say base of lean manufacturing is its concepts. But lean tools are very important too. They help in implementing, monitoring, and evaluating lean efforts and its results. On the other hand if used without proper understanding this can spoil your lean efforts. So it is very important to understand the tools before thinking about using them.

So I thought of publishing a series of posts on these tools. I got the assistance of an experience contributor in making this series.

Some of the tools we are going to discuss in this series of posts are listed below. I have no doubts you have been waiting for this kind of information.

1. 5S
2. Error proofing (Pokayoke)
3. JIT
4. Kaizen
5. Kanban
6. Pull system
7. Work leveling – Heijunka
8. Work cells
9. Quick Changeover or SMED
10. TAKT Time
11. TOC – Theory of Constraints
12. VSM – Value Stream Mapping
13. Workflow Diagram
14. TPM – Total Productive Maintenance
15. Visual workplace
16. Cause and Effect Diagram
17. 5 Why technique
18. Six Sigma

Bookmark this page and visit frequently for updates. If you have any tools want to add to this series please let me know by dropping an email to azabadurdeen@yahoo.com

Always remember, lean should start from its concepts. Tools are only to help you.

Lean Manufacturing to Lean Enterprise

noreply@blogger.com (Aza Badurdeen) — Wed, 27 May 2009 02:30:56 PDT

Can you truly say that only investing in lean manufacturing principles on the production floor will result in an effective system? Of course not—in order for the system to be effective, you must implement lean principles throughout the organization. Lean enterprise focuses on the whole operation by changing how the business is run, eliminating waste in all areas of the business, both operations and manufacturing.

The lean enterprise system is a proven methodology, otherwise known as the Toyota Production Method to eliminate waste and continually improve all operations within an organization. The concept is built on the foundation of employee empowerment, mutual respect and customer satisfaction.

Some people may scoff at the concept since this is a shift in traditional management’s way of thinking or operating—however, this is necessary if you want to improve quality and functions through improvements in operations, sales, administration and production. By eliminating waste, you will shift the focus onto processes that add customer value. Eliminating waste also frees up valuable resources, such as capital, human, building and machine resources.

By implementing lean enterprise principles, you are able to incorporate:

A Continual improvement processes company-wide

A Production schedules that are customer driven, not forecasted

A Pricing based on the market rather than cost, giving the organization a higher competitive advantage

A Lowered operating costs company-wide

A Higher employee morale

When lean principles are implemented enterprise-wide using the value stream maps that have been developed, waste is eliminated across all departments within an organization. It is important to remember that to be truly “lean” and eliminate waste these principles must be implemented throughout the organization in order to experience lasting change. This requires focus on lean principles from the product and service area, suppliers, distributors, customers and the various departments in the organization.

Effectively implementing lean principles enterprise-wide requires your organization to combine leadership, change-management practices, and the computer systems/tools that all affect the transformation to lean principles throughout the organization.

To accomplish the strategic business goals and objectives, every person throughout your organization needs the tools that do the following:

A Make it possible to establish lean principles and practices that are predictable and repeatable throughout the organization;

A Work together to not only integrate the value stream mapping and the components associated, such as analysis, implementation, etc., but also to enhance all facets of the value stream maps;

A To create a system that will make communicating easier and more efficient across your organization to make continuous improvements and aid in the changing of the culture due to implementation of lean principles; and

A Everyone to grow within the new systems of operation.

To truly experience the great benefits of a lean organization and greater profits, your organization must be completely committed to the full implementation and execution of lean principles throughout the organization, eliminating waste and improving quality—regardless of the department.

This article was submitted by one of our contributors

What is Lean Management?

noreply@blogger.com (Aza Badurdeen) — Fri, 22 May 2009 23:06:53 PDT

Last week when I said “it can be tricky to answer the question, what is lean management?” This is an explanation I got some time back to the same question from one of our contributors. I thought of sharing it with you now since it might make more sense with my last week’s post.

Lean manufacturing has been a business “household” name for quite some time, but what exactly does it mean? Lean manufacturing is really a way of managing, so lean management is really probably what you would want to refer to it as. It simply means a system for organizing and managing all aspects of a business’ function by creating a principles, practices and tools in order to develop goods and services with higher quality and fewer defects. The general outcome is to do this by using less effort, space, capital and time than the mass production system of yesteryear.

I’ll be you didn’t know that it was actually Henry Ford that developed the first production system? He coined it “flow production”. The Japanese took Ford’s ideas and further developed the principles due to their constraints on limited human, financial and material resources—this was largely due to the effects that WWII had on the country. However, through their persistence and determination, the Japanese developed the Toyota Production System (TPS).
So how do people actually manage their resources in a lean manufacturing environment? Of course this will depend on what your thoughts are for what resources consist of. In a lean manufacturing environment, the focus will be the products and the resources needed to make the products.

One such resource is the inventory. Controlling inventory will determine the overall efficiency within your organization. High inventories results in low inventory turns—this means that efficiency is low or the process is not working. For instance, if there is a lot of inventory in raw materials not being used for making the customer-ordered product, then there is an issue with the supplier, which needs to be dealt with in order for lean manufacturing to work in by eliminating waste and reducing costs.

Production is not the only place that management of the resources must occur. It also needs to occur within the other departments, as they all affect the production of the product in some way, whether it is managing the human resources, or managing the materials, it all goes together. For instance, if there is a lot of inventory sitting around, then there is a problem within the marketing and/or sales team’s efficiency.

When you have a consistent focus on all aspects of the supply chain, then there is more focus on the areas where inefficiencies occur within the process. The true way to manage resources with a lean management focus is to lower your margins by having higher inventory turns—knowing how each area affects the other will help you to move to managing the resources effectively and efficiently.

Lean Management – The End of Management By Exception

noreply@blogger.com (Aza Badurdeen) — Thu, 14 May 2009 08:55:47 PDT

As I have always emphasized on this blog lean is not just a set of tools. It is a process based on lean thinking. Management in a lean environment is not an exception. Lean management is the force behind any successful lean manufacturing implementation.

What is Lean Management?

Question above can be a tricky one to answer. But simply put lean management can be defined as using lean concepts in managing the organization. For an example managers will be looking at the value stream of the organization and question the none value adding activities continuously. They will define the value in the eyes of customers in the process, unhiding huge amount of waste in the system. A lean manager will not misuse lean to reduce their head count.

What is Management By Exception?

If put simply management by exception says “if everything is going OK, managers do not have to interfere. They will act if the system faces an exception”. This is an old management technique followed mainly by managers of larger organizations. This will reduce workload for the managers and will build a sustainable system.

Lean Management Vs Management by Exception

When it comes to management by exception, processes will run without any hindrance if they are bringing in the expected results. They will be questioned if they are not performing up to the expectations. But lean management is about continuously removing waste from the system. So even the best processes will be questioned. They will be changed and reengineered to remove waste from the system and to realize value to the customers. But in the case of failure, processes will stop immediately and problems will be solved.

In lean management, involvement of a manager is very high. A lean manager will not stop just at developing a strategies and policies, he will have to come to the work floor and make it happen. This thinking is eminent with the lean tools like “Go and See for Your Self”.

So in a lean environment management by exception is not applicable. Management by involvement or lean management is the way to go.

Why I like recession – A lean manufacturing perspective

noreply@blogger.com (Aza Badurdeen) — Tue, 05 May 2009 04:50:03 PDT

Have you heard all the horror stories of recession? Do you think it is bad? This is a lean manufacturing perspective to recession. As usual you can leave your ideas on this post as a comment to this post.

Today the economy has slowed down globally. People are losing jobs and big companies are collapsing. These are obviously not good signs. But if we analyze the situation carefully, especially with a lean perspective, you will find it might not be all that bad in the bigger picture in long run. Below are few thoughts on positives recession can bring to any (lean) organization.

1. People will have to be satisfied only with what they want. So the market will actually be in control. Just advertising will not sell. So manufacturers have to “react to the actual demand” of the market. They cannot just produce something in bulk and create demand for themselves with huge advertising campaigns and similar means. So they will have to be demand driven. This is what lean concept of pull manufacturing is. This will reduce the unnecessary inventory, working capital. Obviously good for the world isn’t it.

2. Organizations can not waste time and energy on experimenting with new things. They cannot buy time and do nothing in the name of experimenting with new technology, machinery and processes. They have to use their existing resources and do better just to be in the game. This is great news for the organizations since most of their problems can be sorted internally. It is good time to start step by step improvement by getting the views of all the employees without looking for high cost, high tech solutions to solve your problems. Continuous improvement or Kaizen is a tool used by all the successful lean manufacturers all over the world.

3. Organizations have to change; there is no other option in recession times. So if you were facing heavy resistance in implementing something new, time could not have been better for you. Especially if you wanted to implement lean, time is ideal for you. You can easily bring the cultural shift lean brings to the organization without much of resistance, because otherwise you will be not in the business anyway. Toyota might not have created its famous Toyota Production System or TPS if it had a huge market willing to buy anything for any price. Those pressures from the market created a crisis and lead the way for lean. It is a similar situation for all of us all over the world. So capitalize on these times, even if your organization is not in the verge of collapsing you can certainly do better with lean techniques.

4. Bigger players and monopolies might tumble creating new windows of opportunity for the new comers to the businesses. This is great news for all the small business owners to become big in your industry. You cannot become big in the same industry doing all the wrong things those big companies did like having huge overhead structures, inefficient manufacturing and distribution techniques and so on. So you have to be better. You have to be lean even if you do not want to use that word.

5. When organizations start to lose nice profits they were enjoying earlier and may be start incurring losses, they have to have a relook at each and everything they do. This opens up large number of ways for improvement by eliminating wastes involved. Management by exception will not work anymore. Managers will have to be in the floor and know what is going out their exactly. They will see the way they waste up to 95% of their resources. This can be the starting point of your lean journey.

So in simple terms, recession times will get read of all the money wasting unfit organizations from the system and will open the ways for more efficient operators. Only the fittest of fit will survive the game. Just like natural evolution I believe this is for the betterment of the world itself. To survive these tough times you have to be lean, whether you use those words or not.

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A lean thought on green car

noreply@blogger.com (Aza Badurdeen) — Thu, 30 Apr 2009 21:49:32 PDT

After I studied lean manufacturing concepts I couldn’t help of thinking common issues in lean lines. When I heard about the “Green Car” or the “Electric Car” I evaluated it using lean concepts. As you know lean concepts can be applied virtually anywhere. This is why lean gurus say “Lean thinking is universal”.

The hype of electric car comes with its green label. It promises a clean drive. With the move towards green technology worldwide electric car catching the imagination of the world. These vehicles do not generate any smoke and produces very minimal sound and heat compared with a traditional machine. So seems to be clean isn’t it?

But the question is from where they get required power from. Generally this will be from the grid. You will be charging your vehicle just like you charge your mobile phone at your place. Where do you get this energy from? Mostly from power plants across the country. How do they manufacture electricity? Mostly by burning fossil fuel like coal and other heavy petrochemicals. So in fact when you charge your vehicle, you are burning possible fuels and emitting pollutants to the environment.

Secondly how do you store the energy, using batteries right? (According to my knowledge this is the most popular way of storing the energy). They are heavy making the vehicle heavy. So vehicle becomes less energy efficient. When it comes to disposal they can be toxic to the environment. There will be losses in electricity transmission from power station to your home where you charge your vehicle. Again wasting more.

When you think in lean ways, you will just moving your waste (pollutants like CO2) from your eye sight to another central location. This is exactly opposite what lean proposes. Lean wants to unhide the waste so that it can be treated. On the other hand lean wants to treat the root cause of the problem not just the symptoms. Here the symptom is the pollution, and the cause is the usage of fossil fuels.

So unless you produce your electricity without fossil fuels, you will not be reducing the actual pollution. So you have to treat the cause by using renewable energy sources. I would like you to use a lean technique like “5 Why” to get deep in to this. If you have some time you can share your findings with us by leaving a comment on this post. I can guarantee you; you will find some amazing root causes to this problem.

Mistake Proofing – A Toyota Example?

noreply@blogger.com (Aza Badurdeen) — Wed, 22 Apr 2009 05:15:04 PDT

Mistake proofing or the Pokayoke is one of the very important concepts of lean manufacturing. When it comes to Toyota they follow Pokayoke in their manufacturing facilities to reduce the errors and improve the quality and productivity. But how about the finished product, that is the car of course. I noticed something interesting in some of Toyota cars. Before I get there, I would like you to contribute your experiences by adding your comments to this article. I really value them.

Now back to the observation. Some of the new Toyota cars with auto transmission have their “Hand Break” in the position where the “Clutch” would be in a vehicle with manual transmission. In simple English terms this seems to be little confusing. You cannot have a “Hand” break controlled by “Foot” can you? But that is not something I am deeply worried about this point of time.

I feel there is a high chance of person pressing this pedal on the move. Needles to say the consequences of applying “Hand Break” on the move. I never want to experiment this by myself. But I am ready to learn from others experiences. If you have accidently done this you can share your experiences with the world. This problem is more pronounced when a person experienced in a vehicle with manual transmission is switch to driving this kind of a vehicle. His feet will be looking for the clutch position naturally at least for the first few days. For me there is a high risk of one accidently pressing the “hand break” pedal in this scenario.

When I did a search for similar experiences with other users, I found another very important problem some has faced with the switch of the positions. Some have claimed them driving the vehicle while the hand break is active. If you travel like this for longer distances there is a good chance of facing a malfunctioning in your break system (Again I am not an expert in this area. You can correct me if you know more in this area). For me from this point of view, this is a violation of simplification and standardization. Both of these concepts are in the core of lean manufacturing and TPS.

Share your thoughts with the world. please leave a comment below.

Why you should not become a lean manufacturer

noreply@blogger.com (Aza Badurdeen) — Tue, 14 Apr 2009 21:20:55 PDT

Here on this blog we have discussed lean manufacturing, and why you should go for it. As per the post last week, vast majority of people go for lean to get cost effective systems followed by the pressure for shorter lead time. All of them can be valid reasons to go for lean manufacturing. But there are certain set of end results you should not have in your mind when you start your lean initiative. I thought it will be beneficial to list some of them.

1. To reduce number of heads from your organization
This is probably is the most misunderstood motive in lean. The logic behind this is that, if you increase your productivity with the lean initiative, you need lesser people to do the same amount of work carried out early. So you can operate with lesser number of workers. Seems to be right isn’t it. No it is wrong. If a lean manufacturer thinks like this they are missing one important piece to complete their lean house. That is the “respect for people”.

This shows you have not understood the concepts of lean. So starting point would be understanding these important concepts before even thinking about implementing lean. Lean talks about eliminating waste not people :)

2. To reduce costs and achieve efficiencies and profits over night
In today’s world people want instant results. If you want to implement lean today and if you are looking to get better efficiencies and higher profits the next day or even next month, I am sorry lean will not help you. As I highlighted in the last blog, most organizations will take at least 5 years in their lean journey to achieve world class stratus.

Lean is a journey not a jump. It needs time and continuous improvement. It is not a magic pill which will make all your dreams come true in the next day.

3. Because others are following and lean is the talk of the manufacturing world
It is good to learn from others. But if you copy them you will not go anywhere. Even if you copy from Toyota’s famous Toyota Production System (also known as TPS) and even if you are a car manufacturer you will not succeed. While concepts of lean can be applied in any context, whether it is manufacturing, service, office or even military, application is unique to the particular organization.

There is no single fit which will suite everyone. This is not an exception with lean. Unfortunately if you copy a lean implementation from anywhere else and fail you will go back few steps even from where you started. So please do not blame lean for creating chaos in your organization.

4. To use tools like SMED, Kaizen and Pokayoke
If you have heard about kanban, pokayoke, Kaizen and SMED and the increase in the results they bring to the others you might want to use them too. Yes these are great tools. They are simple yet mighty effective. They have re produced these results in different conditions in different implementations over and over again. But I can guarantee you will not achieve any of your intended results, just by using these tools.

To get the results you must understand the concepts behind using these tools. You have to use them in a way it will suit your organization. Otherwise using these tools will just be a burden on your organization.

If you ask me what is the single most important thing when it comes to lean, I would say without any doubt it is the understanding the concepts on which lean manufacturing is built upon. All the listed misuses of lean are due to the lack of understanding in these base concepts. Please take your time and understands the concepts before you try implementing lean.

If you have any addition to do to this list please leave your comments.

Why do you want to be lean?

noreply@blogger.com (Aza Badurdeen) — Tue, 07 Apr 2009 22:10:24 PDT

I was reading an interesting white paper titled “Extending the lean enterprise” by Aberdeen group some time back (you can download this for free by visiting this link). Some information on this whitepaper caught my attention, especially regarding what pressures drive lean manufacturing requirement.

According this research, most of the organizations (79%) are going for lean manufacturing to reduce overall operating cost of the organization. The distant second was pressure to achieve shorter lead times. This shows how much people believe in the ability of lean to reduce costs and improve their bottom lines. But interestingly this study also shows there is no single unique path followed by all these organizations to achieve these results. Most of these world class organizations have used their own ways in achieving these results although most of them are aligned with their common goal of reducing the cost. This is something important to note. As I always said throughout this blog there is no one single unique way to solve your problem, in other words a solution delivered perfect results to another organization will not be effective in your context.

Another important thing to note in this white paper is the time it has taken for lean followers to achieve world class results. Generally it has taken in excess of 5 years for lean followers to achieve truly world class performance. This means lean is no quick fix to your problem, but a shift over a period of time. You will climb the ladder with small steps over a period of time. Longer you go down your lean path, better you will get.

Most of the best performers of lean have extended their lean efforts away from manufacturing to other areas like procurement, sales and supply chain. Moving from lean manufacturing to lean enterprise is essential to achieve the best from lean. Manufacturing is only a tiny part of your value creation process. Lots of waste occurs outside manufacturing. Without solving these there is no way an organization can achieve world class performance.

Lean organizations according to this report are managed by people who understand the concepts of lean. In the days of TQM (Total Quality Management) quality is identified as a responsibility of management not entirely of the worker. Similarly it is very important for a lean organization to have a leadership who understand lean concepts and follow them. Managers will be working to achieve these lean objectives which will result in lower costs, lower lead times and higher quality. Workers will support the system by adding their suggestions in continuous improvement processes.

I really enjoyed reading this report. It was very informative. In fact I have sent the link for you to download this before. You can download this report for free by following this link.

Please leave your comment by clicking the comments link below

Lean manufacturing and Automation

noreply@blogger.com (Aza Badurdeen) — Wed, 01 Apr 2009 01:08:20 PDT

Automation is a word used with lean manufacturing constantly. Many lean followers seem to think automation is essential for the success in their lean journey. Yes, they are right. In the process of continuous improvement organizations can simplify their processes using automation. This can save extra effort and improve accuracy of work done.

A traditional organization can go for automation for several reasons. Among those reasons maximizing their capacities, reduction of errors in the process, stay in the cutting edge of technology and to replace some of the work force are few. Although automation can bring result in any of these instances in short term, in long term this can work against you if it is done without a clear objective.

Automation should be aligned to your organizational objectives. Automation for the sake of automation will not be of any use. For an example if you can complete a task with a worker for $10 a day with a satisfactory quality, is there a point of buying a $10,000 machine to carry out that task. I cannot answer that question, since it depends on your requirement. If you want a better control over your product quality, or if you want to smoothen the production flow perhaps it will make sense to automate that task. But if you are looking to save some cost or to be with the latest technology this might not help since it will not only require larger capital expenditure, it also requires trained people to use this machine, it requires maintenance and power.

In the lean context automation will be aligned to drive out waste from the process. Kaizen, or the continuous improvement might be the best way to automate tasks in a lean organization. This will not require huge amount of capital nor will it require experts to use the machinery. Simple step by automation is the way of making your system work. Toyota is well known for this type of automation. Generally in lean context automation is never done to get read of people. One of the main pillars of house of lean is the “respect for human”.

Automation can increase the efficiency of your process and increase the quality but if you do not build a good mistake proof mechanism into it, automation can become very dangerous. Mistakes will take place “automatically”. For an example you may automate purchasing process by sending purchase orders to your vendors automatically when you trigger the requirement for raw material. But you will end up with large inventory if existing raw material stocks are not properly maintained in the system due to some data maintenance error. It is important to understand while tightly automated system can make your system much more efficient, it can make your system venerable if all the exceptions are not taken care of and if pokayoke (mistake proofing techniques) is not followed.

One of my earlier post called “go for the simpler not for the perfect solution” caught attention of many. This suggested to me most of the organization think complex automation and software can solve their problems and they get into more trouble since they do not question their own processes and correct the problems. Remember automation will mean nothing if your process is not designed nor it requires this.

The 8th Waste – Lean and You

noreply@blogger.com (Aza Badurdeen) — Tue, 24 Mar 2009 04:26:15 PDT

Let your organization be a follower of lean manufacturing or not, what is the most important resource you have in your organization. Is it the market value, machinery, brand name? Yes all these can be very important for your organization. But how important the human element behind all these. Will you be able to build a valuable brand name without him, or can you operate and get the expected out come with a machine without him.

Human resource is the most important of all resources. It is the only resource which can lead all the other resources like money, machinery and market to the expected outcome. In every successful organization there will be a large team of people making it happen.

But even in those well known organizations, are they exploring the full capability of the resources they have? It is a question always bothered me. Most of the people do routine jobs day after day. They will not exactly know the neither value addition they do nor new ways to create value to the system. Traditional organizations will think about maximizing use of their machinery while a lean organization would look at optimizing the use of its machinery, yet most of the organizations do not even realize they are wasting their most valuable asset of all, the human resource. This is the eighth (8th) waste of lean, for me the most important of all.

If you think thinking is the job of management and workers need to follow them you are wrong. If you are thinking of following lean manufacturing, then you are violating one of its basics, the respect for people. People should be respected for the jobs they are doing and they should be respected for the ability and knowledge they have to change to your organization.

People actually carrying out the job would know how to do that job better. So they can come up with simple yet effective solutions if given the correct guidance. Leaders of the organization must communicate the way of lean thinking to the entire organization. This will be a long term and never ending activity. Managers must provide the opportunity to the workers to come up with their ideas freely. They have to build the performance driven culture. Ideas should be valued with positive rewards. This is a good starting point for Kaizen or the continuous improvement.

A “lean human resource management team” can contribute towards the tangible benefits of the organization apart from the obvious functions they carryout day to day. They will not be doing a passive job in a lean context, but will be actually taking part in the value creation process for their customers. So the benefits will be directly linked to the outcome of the organization. Employee performance enhancement, value saved through innovations, employee retention rates can be some of the indicators you can measure. But for me the most important indicator would be the smiling faces of the work force :)

Please leave your comments on this article by clicking the comments link below.

Lean Vs MRP

noreply@blogger.com (Aza Badurdeen) — Tue, 05 May 2009 04:53:45 PDT

Any organization would like to save costs and earn more profits. Organizations chose methodologies like Lean manufacturing and Material Requirement Planning to achieve their goals. Lean and Material Requirement Planning or MRP are both looking at optimizing the resources we have in order to produce certain results so that the cost involved in will be less and value addition will be higher. This will mean more profit for the organization.

We have discussed about the origins of lean in our earlier posts. Lean revolves around certain simple set of concepts. Similarly, MRP is very simple in concept. As its name suggests MRP is meant for Material Requirement Planning so that organizations can plan both in-house and external requirements according to the demand an organizations have to fulfill. If you need to produce 100 bicycles within next week MRP will tell you that you need to have 200 rims, 200 tyres in-house before the start of next week and 80 handles apart from the 20 which are already in stock by the 2nd day of next week for an example.

Although seems simple enough in theory, it is not easy to calculate all these requirements for an organization which will produce 100s of items with 1000 or tens of thousands sub assembly parts. And specially there are number of variables to take into considerations. Among them are Minimum Stock Levels, MOQ or the Minimum Order Quantities of the suppliers, lead times and through put time of the internal assemblies and forecasted demands are few. This means you will not be able to use a simple spread sheet or a calculator to do all these complex calculations. So you would need computing power especially for the organizations operates in multiple locations.

MRP concept is pioneered by “Joseph Orlicky” in early 1960s in US. It spread around the world in breeze and helped many entrepreneurs and managers to make their decisions with much more accuracy. Stock levels went down and resources were managed much more efficiently making organizations much more profitable and successful. It is widely used even today and for many of the organizations MRP is a must have and they cannot live without it.

As mentioned earlier MRP is a predictive system. Its demand is mainly from a forecast which can change day to day. Its lead times are fixed. There will be some safety stocks to cover up any deviations of the predictions with the actual. In other words MRP is about building a system where we work in the existing scenario efficiently. For an Example MRP driven companies will purchase their raw materials even long before they are actually required for manufacturing if the lead times are longer for those raw material. They will not question the longer lead times nor will they look for the ways of reducing those lead times.

On the other hand lean manufacturing techniques are more reactive to the actual demand. This takes the requirement for long term forecasts and planning based on that forecast out of the equation since you will mainly deal with the actual demand. Generally people will not have to wait till good are produced after placing their order even in lean context. So there will be certain levels of stocks with retailers to satisfy the demand instantly. But this stock will not be a buffer to hide behind for the manufacturer.

With the reactive nature of lean, it needs to act quickly in order to satisfy the demand. This requires greater deal of flexibility both in-house and with the external vendors. This cannot be achieved with traditional means. You will have to build a system where you can respond to your customer demand on time. Unlike MRP it is not enough to organize what you have in an efficient manner, it is required to question existing systems and continuously improve. Below video explains this.

Although MRP is mainly about forecasts and demands as explained above, MRP can be used even in lean context to manage its resources effectively. MRP in a MTO or Make To Order system will be much closer to lean. Unlike MTS or a Make To Stock system where demand is not real but a prediction, MTO work with actual demand. This will help manufacturers to plan their real demands accurately and efficiently. So lean while removing wastes from the system can be greatly benefited by MRP in achieving the final goal of satisfying your customer and making healthy profits.

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Supply Chain and Value Chain – in the eyes of lean manufacturing

noreply@blogger.com (Aza Badurdeen) — Wed, 04 Mar 2009 21:45:08 PST

Lean manufacturing and supply chain management are terms go hand in hand. Although lean is built on a wider base I feel the backbone of lean, JIT (Just In Time) is about building a better supply chain within the organization. Tools like Kanban are parts of this exercise. Value will flow from one work station to the other within the supply chain. This is sometimes called the value chain (at least that is how I call it). If this flow of value is hindered, it is called a waste.

Nowadays lean is not just about manufacturing. Even within a manufacturing organization lean concepts are applied in offices, service departments and so on. With the emergence of concepts like lean enterprise these concepts have extended beyond the boundaries of the organization and reached the suppliers and customers, in short the entire supply chain. This makes much sense since most of the waste is generated within the supply chain than within your premises. Sony in 2006/2007 lost 2% of its share value due to delays in releasing play station III (PS 3) due to a problem in getting the blue laser used in manufacturing PS3 and recall of problematic batteries which can catch fire on some notebook computers. Both the problems did not take place entirely within Sony, but due to the problems they faced in their supply chain. In another example CISCO is said to had a $2.2 billion write-off mainly due to the problems in their order fulfill system. In simple this suggests even you do your job 100% within your organization, your supply chain can kill your organization.

To be truly lean you need to have a tightly integrated supply chain or a lean supply chain. This would mean having less number of suppliers with long term relationship. This also means having a tight integration with the customers. So you would know what your customer needs quickly. And you would also have means of conveying your requirements to your suppliers quicker and accurately. Although it seems simple enough to read practice is a completely a different game altogether. Tight integration can mean you depend on each other so much even a failure outside your control can bring your organization down. For an example failure of your supplier to deliver goods on time will mean you cannot meet your customer’s requirements.

In the ideal world, your supply chain should not have any wastes involved so your supply chain and value chain would fall in the same line. So value will be identified in every point of supply chain. In this ideal situation you will enjoy the fullest benefits of lean. Your customer will pay only for the true value of the product or the service not for the waste involved in the process.

Lean is not about change without a plan

noreply@blogger.com (Aza Badurdeen) — Tue, 24 Feb 2009 00:40:24 PST

Any organization will change with time due to many reasons. This is why managers call “Change is the only constant”. But should we chase the change or should we allow it to come to us. In either case how do we manage it? These are series of questions we have to ask ourselves when we try changing something. Especially in the context of lean manufacturing when it demands us to change continuously.

The term change is misused by many organizations especially in the name of lean. Any change should add value to the customer. If not that change is just a waste adding cost and confusion than doing any good to the organization.

In the context of lean, continuous improvement or Kaizan can demand continuous change. But kaizen events will be inline with the requirements of the organization for it to achieve the best. It is not random set of events happening in uncoordinated manner. It is well organized and planned.

In most of the organizations they misuse the words like Kaizen and continuous change in order to hide the inefficiencies of the organization. People will do certain things without planning and without analyzing the decisions in deep. When those decisions go wrong they will change the changes they made earlier and will call it lean manufacturing. Some lean consultants call this LAME not lean.

So if you are lean, think about the plan and what you are going to achieve before making the decision to change. Changing the change continuously is not lean.

Is your organization too Fat - Try the lean pill

noreply@blogger.com (Aza Badurdeen) — Tue, 10 Feb 2009 03:37:35 PST

Most of the organizations are too fat to withstand the time of recession. They had plenty of food earlier in the form of large orders and predictable and stable demand. But it is no more. Now organizations are starving for orders. Naturally it might be the best time to swallow the lean pill. It will make you “lean” and will make it possible to withstand the testing times of recession. In a normal time your organization might not want to swallow this bitter pill even most of the people used it talks about it positively.

One of the factors stopping organizations from turning to lean manufacturing is the change it will bring to the organizational thinking. Traditional organizations are built with large hierarchies (which I call fat structures). They operate smoothly by having larger warehouses and large amount of safety stocks. Lean which encourages totally the opposite, naturally will have to go through huge amount of resistance and most of the times will never be materialized even when there are proven examples all over the globe.

But this economic crisis provides less food for these over weighed organizations hence they have to loose fat whether they like it or not. You can not have huge hierarchies. Organizations will not be able to have large amount of money to be tied down in the form of inventory. They will not be able to predict the demand for the years to come and be prepared since the demand will change quicker. So they will have to produce only for the orders they have in their hands not for the predicted demand. Importantly, competition will get tougher since most of the traditional competitors will be ready to slash their operational costs and reduce margins just to keep the business rolling. You have to do much better operationally with a fraction of cost for your organization to just be in the game.

If the above sounds familiar and if you feel this is your organization, then I am sure you will not be feeling comfortable with the situation. But I have good news for you. All what you want to achieve, higher manufacturing flexibility, lower levels of inventory, quick response to the changes in the market and higher quality for lower costs are among the benefits lean manufacturing techniques have to offer. There are good amount of examples for the organizations who have achieved these goals by practicing lean in their organizations. But there are some failed too.

Was something stopping you from practicing lean in your organization up to this point? It might be the fear for change, fear of not getting it right or resistance from the others. Now recession has made your choice simpler. Either you become lean or you are out of the business. So what would you choose?

Although I can not guarantee your particular implementation of lean is going to succeed (Although I believe if it is done correct, should not be the case) it is better to give a try since you have no other choice, isn’t it?

Lean manufacturing – Being Proactive To Be Reactive

noreply@blogger.com (Aza Badurdeen) — Sun, 01 Feb 2009 21:06:51 PST

We have different definitions for lean manufacturing from different people. We have discussed some of them in our past blog posts. I believe simplicity of its concepts is one of lean’s key success factors. So we should understand lean in the simplest possible way. When I answered (once again) the question of “what is lean manufacturing?” I thought it can be simply answered as “lean is being proactive to be reactive”. Let’s discuss this answer in some detail. But before we go into details do not forget to leave your ideas as a comment to this post. You can do this by clicking on the comments link at the bottom of this post. I really value them.

Lean is about developing a system where we can deliver what customer wants, where they want in quantities they want. In the process lean thinks how to remove any waste from this system making the product or the service higher in quality, lower in cost and higher in reliability. But if you take any business regardless of they being lean or not they want to achieve the same things. They want to satisfy their customers by satisfying their needs.

In delivering the value to their customers any business owner will tell you that they need to be proactive. These business will be proactive in purchasing raw materials, proactive in planning their capacities and proactive in scheduling their deliveries and so on. They will use advance tools like ERP and use the functionalities of MRP to plan their demands and supplies. As a result they would not run out of raw materials and they will not have any capacity issues when it comes to producing what their customer wants.

Lean is very proactive in its approach too. But they do not order raw material in advance nor are they going to block capacities for possible future orders. So how lean is proactive? Lean is proactive in developing a system which will allow them to change with the changing needs of their customers. So they would not need to order RM before they actually see a real demand from their customers for an example. For me this is being reactive to the changing situations of the markets and customer needs. Lean system is very flexible so it can run with virtually no buffers, no large chunks of stocks and can change from one product to another in a matter of minutes. So this system can produce exactly what customer wants in the way they want in the quantities they want.

Reactive approach of lean will save the manufacturer (or the service provider) a huge amount of capital since there is no requirement for them to maintain higher level of inventory. This system will not produce something the market do not need making write downs a lesser problem. Low inventory levels and coupled with other simple lean techniques will make sure on time delivery and superior quality.

At the end of the day lean manufacturer will make a better product (or a service) than its traditional competitors. All these will be achieved with lesser cost making them much more profitable.

It is very good to be proactive. But proactive for what is the question. If you try to absorb the costs of changing market demands and associated risks in the name of being proactive, you will not be successful as you can be. Worst you can fail in your business. Instead if you create a system which can quickly to adjust to the changing market conditions you will be much more successful. All the popular lean manufacturing tools like JIT, SMED, Kanban(Pull system) are aligned for this purpose.

Interesting News: State Department needs to be Lean with emails

noreply@blogger.com (Aza Badurdeen) — Fri, 23 Jan 2009 01:49:05 PST

Last week a news item caught my attention. I went on to read it and found to be very interesting. This news was about employees hitting the reply to all button of their emails and eventually sending that to thousands of people on the list. According to the news this has created very high system loads and plenty of embarrassment. I have given the link at the bottom of this page so that you can refer to the exact news item after complete reading this article.

Suddenly I remembered the series of posts I published describing the possibility of using lean manufacturing concepts in the context of communication. I think you will have to go through this series again and refresh yourselves so that you will never do these kinds of communication mistakes. We do live in an overly communicated world. In simple words it is too much of communication to add little or no value. If something doesn’t add value to the customer it is a waste. So it is very important for us to be lean in our communication.

Incidentally I found another interesting article on Mark’s leanblog on with the title 5S for email. I think this might give you some interesting ideas as well.

BTW I think this article is interesting, so you can hit the Forward button and send to your friends.

Original News Article
http://news.yahoo.com/s/ap/20090110/ap_on_go_ca_st_pe/state_department_e_mail

Toyota, Lean and TAKT Time in recession

noreply@blogger.com (Aza Badurdeen) — Wed, 14 Jan 2009 08:14:40 PST

There are many media reports on Toyota’s temporary closure of their manufacturing facilities in Japan. Toyota December Sales has reduced by 36.7%. Reducing demand is causing the manufacturing giant to close down some of its manufacturing facilities across Japan for 11 Days. And Toyota is predicting an operational loss for the first time in the financial year ending from March 2009. This goes to show even the best lean manufacturers might suffer the effects of global recession.

From a lean manufacturing point of view what the closure means? Is it violating the key lean concept of respect for people? No of course not. They are temporally closing their plants so jobs will not get affected (according to my knowledge). For me, Toyota is simply sticking with lean concepts.

One of the most important concepts of lean is the pull manufacturing. Supply is pulled by the demand, not the other way around. So if there is less demand they have to produce less. It is as simple as that. But how do they produce less. They can work full time and manufacture the vehicles needed slowly, in other words with higher TAKT time. But how slow one can get? One can not produce one vehicle a day for an example. So they have to workout a method to even out their load so that they can get the optimal result out of it. Looking at the bigger picture and balancing of resources (heijunka) are among important lean concepts.

Although I am unaware of the actual figures, I am sure this temporary closure for 11 days is well within the lean concepts. I am happy to see an organization sticking to their basics even in tough times. What are your thoughts on this?

News Article

Lean in government office environment

noreply@blogger.com (Aza Badurdeen) — Mon, 29 Dec 2008 20:32:26 PST

Below is an article written by Jenny Eliuk for the “Lean for your organization” contest. This article is special for me. I know how difficult it is to get something done from government institutions. This article is about implementing some simple concepts of lean in the government office environment. Some of the things done in this implementation were exiting. Educating the customer to make him prepared, using simple color codes to improve productivity and looking at the bigger picture when evaluating the results (taking the reduction of carbon emissions into consideration for an example) and emphasis given to make things simpler to make it efficient(I myself have written an article on this topic) are really impressive. This implementation is a great example of how some simple changes can make huge difference to the results. Below is the original article:

How I would use Lean to add value to my organization

As the new Development Review Coordinator for the Town of Vail, Colorado, I see many opportunities to apply Lean tools, strategies and values to reduce waste and increase effectiveness of our development review process. I am particularly excited about applying Lean to government, which has had very little exposure as an industry, yet will reap so many benefits I can hardly stand the anticipation. I aspire for the Town of Vail to become an industry leader and to set precedents applying Lean to government.

Our development review process is typical of most jurisdictions: land use applications precede building permit applications, and so on. Since I started in this position in May, some processes have stood out to me as areas for improvement. For example, we issue separate building, mechanical and plumbing permits for construction of a new house, even though we do the entire plan review for all systems when the building permit is applied for. This is a system developed many moons ago when unions were more heavily involved and each sub-contractor required their own permit. Nowadays, the general is responsible for the overall project, so there is no benefit to separate permits (note: separate electrical permits are required because they must be issued to a licensed electrician). It just adds a lot more paperwork, confusion, and trips by separate sub-contractors to our office. By issuing a combination building permit, we will be able to significantly reduce waste and increase ease and effectiveness of inspections on site (since the inspectors will have one comprehensive list on one permit). By reducing trips to our office by the subs, we actually will be reducing carbon emissions too.

As we know, small, continuous improvements over time can greatly impact an organization. One of the first things I did as Development Review Coordinator is organize all of our forms and handouts in a file cabinet at the front service counter, categorized, labeled and colour-coded. The previous system was some clear wall files randomly stocked, with only about one third of all handouts. Since nothing was labeled, if one became empty, it was anybody’s guess as to which form we should re-stock in that file. I also created brightly coloured kanban for each handout, so when we get to the last few, whoever comes upon the kanban takes it to our secretary who re-stocks the right item in the right quantity. This means we never run out of a handout, only to discover it as a customer is standing in front of us.

Standardized work is something we think of as internal, however providing checklists and informative guides to customers is just as important and effective. Our current building permit application packet has an incomplete and incorrect checklist that I find difficult to read, and provides no additional information an applicant really needs to know. Since it’s incorrect, it becomes difficult even for staff to know what the real requirements are, and to enforce them properly. Once I discovered the inaccuracies I began creating new submittal packets that are clear, correct, and informative. Both staff and customers will all be able to work from the same documents without confusion, and we’ll be better prepared to enforce requirements that we’re educating customers about up-front. No more surprises! I also expect to see a dramatic increase in the number of complete applications with quality plans that we can accept the first time they attempt to apply because we’ve explained everything in writing.

My exposure to Lean has been very limited and autodidactic. As part of a start-up modular housing manufacturer in Washington State, Lean and TPS were introduced to us, even if not actually demonstrated by leadership. The day I was laid off with half the office staff, “respect for people” didn’t seem to be at the top of the list as it was purported to us when hired. Regardless, my year in manufacturing and studying Toyota has been invaluable to my reintroduction to the public sector. I am enthusiastic to educate my co-workers while eliminating waste and frustration for us and our customers. My belief is that when you make things easier, you also make them more likely to be done correctly as you can concentrate on the real work versus the processing.

Jenny Eliuk
8/28/08

US auto industry, bailout, Toyota and lean manufacturing

noreply@blogger.com (Aza Badurdeen) — Fri, 19 Dec 2008 05:50:20 PST

US auto industry is going thru very tough times, especially with the rejection of $14 billion bailout package. Ford, GM and Chrysler, US auto manufacturing giants are among tremendous pressure. But the hit on Toyota is comparatively smaller, probably due to their lean manufacturing practices.

As usual tough times bring the best out of anything. There were some interesting topics coming up in the bailout negotiations. Lawmakers want the assurance this will not take place again in future and they want big three to consider building vehicles with higher fuel economy and environmentally friendly. This is ultimately good news for consumers and entire world. I think we are little too late even today.

If these giants fail and stop production, ripple effect will be massive. Job losses are among the most important effects. But how will Toyota respond to this? They have cleaner cars, less manufacturing wastes and they produce cars with higher fuel economy. Ideally they should be able to increase their market share further and become more and more profitable. Isn’t that simple economics. But some have other ideas.

Remember Toyota is mainly an automobile assembler. That is their main business. Parts for their vehicles are manufactured by various vendors all over the globe. Some of these vendors are suppliers for the big three US auto manufacturers as well. So if the big three fail, these vendors will have less orders and they will have to either downsize or probably closedown their operations. Meaning, Toyota will loose their reliable vendors (or partners in lean environment). Toyota need these vendors to operate in their just in time model. Supply chain is the main strength when it comes to operate in a JIT model. Any new comer will have to be adapted in to the lean culture over the time. This might directly impact their production.

It is interesting to see how Toyota, the legendary manufacturer is going to respond to this scenario. Their philosophy of working with few, reliable vendors are under a threat now. Will they change their concepts or will they look at this as learning and prepare for the future. Toyota and their lean manufacturing system (Toyota Production System) love challenges. We have to wait and see.