Lean Towards Process Improvement

In the business world, seizing a competitive edge can mean the difference between survival and extinction, growth or stagnation. Organizations seek innovative practices and standards that will create the quality initiatives necessary for further growth and improvement. This has paved the way for programs and processes like Six Sigma, Lean, Total Quality Management, etc. For those looking to ultimately increase customer value through process improvement principles, Lean has offered an effective philosophy. Through the utilization of this business process or set of principles, many organizations have been able to minimize waste and maximize efficient production.

Background & History

Much of the origins of Lean can be traced back to the early stages in the auto industry. In the early 1900's, it was Henry Ford who first began applying some of the common Lean principles used today. His integration of the entire production process, what he deemed flow production, would set the stage for production practices in the future (lean.org). The process improvements would serve as the beginnings of the Lean principle, but it was also one Ford's biggest deficiencies that would further this concept. The downside to Ford's process was the inability to vary the process or production easily. The flow itself proved revolutionary, but the rigidity opened the door to new ideas from other auto makers.

Following this revolutionary process improvement in the 1930's, Taiichi Toyoda of Japan, along with many others, began to look into improvements that would create more flexibility in product development. It was here that the Toyota Production System was pioneered (Becker, 2001). The system emulated the core principles of Lean by combining low cost, high variety, high quality and rapid throughput to maximize customer value. Today, Toyota stands as the largest car manufacturer in the world (http://www.toyota.co.jp/en).

The Principles of Lean

So how is a lean organization classified? What does it mean to subscribe to this business process? The Lean system is based on the process evaluation and improvement geared towards maximizing customer value (Jones, 2007). In 1996, authors James P. Womack and Daniel T. Jones wrote the book, Lean Thinking, which identified the primary philosophy of Lean. The starting point is stated best by the authors, "The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. And it's only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which meets the customer's needs at a specific price at a specific time." (Jones & Womack, 1996) The concept is broken down into five principles. Understanding and applying these principles constitutes a lean enterprise.

• Specify Value

As identified in the above quote, defining value should be done strictly in terms of the customer and their needs. Getting caught up in the desires of management, shareholders and other non-customers only leads to losing focus on what is important. It is the customer that is the backbone and livelihood of all organizations. Only by starting here can an organization arrive at the correct destination.

• Identify the Value Stream

Determine the entire set of critical steps that takes a product from start to finish. This means understanding every aspect, from conceptualization to creation of the physical product to scheduling and delivery. It means recognizing each important action that goes into the product. By truly being able to identify the entire stream, organizations may begin to identify waste and deficient processes.

• Value-creating Steps, Flow

Remove all of the obstacles that prevent the free flow of the product through its value stream. Sometimes this means an entire shift in organizational philosophy. Departments and employees must give way to new value added processes that will create and maintain this flow.

• Customer Pull

With the previous three principles established, the organization can now produce only what the customer wants, as needed. This means no more pushing products onto customers; rather, the product is produced only when initiated from customer pull. This shift represents one more leap away from waste and into a Lean enterprise.

• Continuous Improvement, Pursue Perfection

As these principles are implemented, the organization begins to understand the open, never-ending nature of process improvement. By striving to continuously eliminate waste, an organization never stops improving. (lean.org, 2007)

A Real World Application, Toyota Production System (TPS)

When leaders at Toyota began applying the principles of Lean production, the aim was to eliminate wastes other organizations were tolerating. In order to accomplish this, Toyota focused on two basic concepts that aligned with Lean thinking - "Jidoka" and "Just-in-time". Jidoka translates into "automation with a human touch" and refers to the process by which malfunctioning equipment is stopped immediately to avoid producing defects. The result is less product waste and more quality production. The just-in-time concept refers to the flows of processes where one process does not begin until another demands it. The result is a continuous flow that also avoids unnecessary action (http://www.toyota.co.jp/en).

On the next page is an illustrated example of the TPS. Figure 1 depicts the efficiency of Lean production through four steps. Each step is geared towards the elimination of waste while maintaining quality. In addition the TPS strives to maintain flexibility for providing a variety of products. This system is not specific to one product. See Figure 1 below.

(http://www.toyota.co.jp/en/vision/production_system/illustration.html)

Figure 1 - Illustrated here are the 4 steps in the Toyota Production System

Conclusion

As organizations continue to seek practices that will improve efficiency and productivity, more process improvement strategies will be created. The implementation of a business process like Lean manufacturing or production serves to maximize customer value and minimize waste. As the implementation of the principles has been shown in both large and small organizations, the lean way of thinking can pave the way to successful, efficient operation.

References

Becker, R. (2001). Lean Manufacturing and the Toyota Production System. Retrieved November 26, 2007 from http://findarticles.com/p/articles/mi_m0FWH/is_6_113/ai_76445159 Becker, R. (2001). Lean Manufacturing and the Toyota Production System. Retrieved November 26, 2007 from http://findarticles.com/p/articles/mi_m0FWH/is_6_113/ai_76445159
Society of Manufacturing Engineers.

Jones, D. 2007. The Beginner's Guide to Lean. Retrieved November 28, 2007 from

http://www.lean.org/Community/Registered/Article.cfm?ArticleId=379

Jones, D. & Womack J. (1996). Lean Thinking. New York, NY: Simon & Schuster.

Website(s)

http://www.lean.org

http://www.toyota.co.jp/en