Lean Six Sigma For Dummies
Lean Six Sigma For Dummies
Morgan John
Brenig-Jones Martin
John Morgan
Lean Six Sigma For Dummies
Lean Six Sigma For Dummies
, 3rd Edition
Published by: John Wiley & Sons, Ltd., The Atrium, Southern Gate, Chichester, www.wiley.com (http://www.wiley.com/)
This edition first published 2016
© 2016 John Wiley & Sons, Ltd, Chichester, West Sussex.
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom
For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com (http://www.wiley.com/).
The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com (http://booksupport.wiley.com/). For more information about Wiley products, visit www.wiley.com (http://www.wiley.com/).
Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book.
LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: WHILE THE PUBLISHER AND AUTHOR HAVE USED THEIR BEST EFFORTS IN PREPARING THIS BOOK, THEY MAKE NO REPRESENTATIONS OR WARRANTIES WITH THE RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS BOOK AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IT IS SOLD ON THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING PROFESSIONAL SERVICES AND NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. IF PROFESSIONAL ADVICE OR OTHER EXPERT ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL SHOULD BE SOUGHT.
For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at (001) 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport (http://www.wiley.com/techsupport).
For technical support, please visit www.wiley.com/techsupport (http://www.wiley.com/techsupport).
A catalogue record for this book is available from the British Library.
ISBN 978-1-119-06735-1 (hardback/paperback) ISBN 978-1-119-07380-2 (ebk) ISBN 978-1-119-07381-9 (ebk)
Introduction
Lean Six Sigma provides a rigorous and structured approach to help manage and improve quality and performance, and to solve potentially complex problems. It helps you use the right tools, in the right place and in the right way, not just in improvement but also in your day-to-day management of activities. Lean Six Sigma really is about getting key principles and concepts into the DNA and lifeblood of your organisation so that it becomes a natural part of how you do things.
This book seeks to help managers and team leaders better understand their role and improve organisational efficiency and effectiveness.
If you want to change outcomes, you need to realise that outcomes are the result of systems. Not the computer systems, but the way people work together and interact. And these systems are the product of how people think and behave. So, if you want to change outcomes, you have to change your systems, and to do that, you have to change your thinking. Albert Einstein summed up the need for different thinking very well:
The significant problems we face cannot be solved by the same level of thinking which caused them.
Lean Six Sigma thinking is not about asset stripping and ‘making do’. Instead, this approach focuses on doing the right things right, so that you really do add value for the customer and make your organisation effective and efficient.
The main focus of the book relates to DMAIC (Define, Measure, Analyse, Improve and Control). This is the Lean Six Sigma method for improving existing processes that form a part of the organisation’s systems, and it provides an ideal way to help you in your quest for continuous improvement.
When you need to develop a new process, the Design for Six Sigma method comes into play. Known as DMADV (Define, Measure, Analyse, Design and Verify), we provide an introduction to this method in Chapter 12 (#litres_trial_promo).
About This Book
This book makes Lean Six Sigma easy to understand and apply. We wrote it because we feel that Lean Six Sigma can help organisations of all shapes and sizes, both private and public, improve their performance in meeting their customers’ requirements.
In particular, we wanted to draw out the role of the manager and provide a collection of concepts, tools and techniques to help him or her carry out the job more effectively. We also wanted to demonstrate the genuine synergy achieved through the combination of Lean and Six Sigma. For some reason unknown to the authors, a few people feel they can use only Lean or Six Sigma, but not both. How wrong they are!
In this book you can discover how to create genuine synergy by applying the principles of Lean and Six Sigma together in your day-to-day operations and activities.
Foolish Assumptions
In Lean Six Sigma, avoiding the tendency to jump to conclusions and make assumptions about things is crucial. Lean Six Sigma really is about managing by fact. Despite that, we’ve made some assumptions about why you may have bought this book:
✔ You’re contemplating applying Lean Six Sigma in your business or organisation, and you need to understand what you’re getting yourself into.
✔ Your business is implementing Lean Six Sigma and you need to get up to speed. Perhaps you’ve been lined up to participate in the programme in some way.
✔ Your business has already implemented either Lean or Six Sigma and you’re intrigued by what you might be missing.
✔ You’re considering a career or job change and feel that your CV or resume will look much better if you can somehow incorporate Lean or Six Sigma into it.
✔ You’re a student in business, operations or industrial engineering, for example, and you realise that Lean Six Sigma could help shape your future.
We also assume that you realise that Lean Six Sigma demands a rigorous and structured approach to understanding how your work gets done and how well it gets done, and how to go about the improvement of your processes.
Icons Used In This Book
Throughout the book, you’ll see small symbols called icons in the margins; these highlight special types of information. We use these to help you better understand and apply the material. Look out for the following icons:
This icon highlights an essential component of Lean Six Sigma.
Bear these important points in mind as you get to grips with Lean Six Sigma.
Keep your eyes on the target to find tips and tricks we share to help you make the most of Lean Six Sigma.
Throughout this book we share true stories of how different companies have implemented Lean Six Sigma to improve their processes. We also share true stories of when things go wrong so you learn from others’ mistakes.
This icon highlights potential pitfalls to avoid.
Beyond This Book
In addition to the material in the print or e-book you’re reading right now, this book also comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet at http://www.dummies.com/cheatsheet/leansixsigma (http://www.dummies.com/cheatsheet/leansixsigma) for helpful information that you can access on a regular basis.
You can find some free articles online that expand on some of the concepts in the book. You can find links to the articles on the parts pages and on the Extras page at http://www.dummies.com/extras/leansixsigma (http://www.dummies.com/extras/leansixsigma).
Where to Go From Here
In theory, when you read you begin with ABC, and when you sing you begin with doh-ray-me (apologies to Julie Andrews). But with a For Dummies book you can begin where you like. Each part and, indeed, each chapter is self-contained, which means you can start with whichever parts or chapters interest you the most.
That said, if you’re new to the topic, starting at the beginning makes sense. Either way, lots of cross-referencing throughout the book helps you to see how things fit together and put them in the right context.
Part I
Getting Started with Lean Six Sigma
Go to www.dummies.com (http://www.dummies.com/) for more information about topics that interest you – everything from using Lean Six Sigma in your organization to holding effective meetings and from building teamwork to understanding quality control.
In this part …
✔ Grasp the basics of Lean Thinking and Six Sigma so you can understand what they mean and what they don’t mean.
✔ Get a clearer picture of what the synergy created by merging the two disciplines into Lean Six Sigma looks like and understand the key principles underpinning the approach.
✔ Comprehend exactly what ‘sigma’ means and why the term is important in Lean Six Sigma.
✔ Examine in depth what the commonly used process improvement method known as DMAIC – Define, Measure, Analyse, Improve and Control – means in Lean Six Sigma.
Chapter 1
Defining Lean Six Sigma
In This Chapter
▶ Turning up trumps for the Toyota Production System
▶ Finding out the fundamentals of ‘Lean’ and ‘Six Sigma’
▶ Applying Lean Six Sigma in your organisation
Throughout this book we cover the tools and techniques available to help you achieve real improvement in your organisation. In this chapter we aim to move you down a path of different thinking that gets your improvement taste buds tingling. We look at the main concepts behind Lean thinking and Six Sigma and introduce some of the terminology to help you on your way.
Introducing Lean Thinking
Lean thinking focuses on enhancing value for the customer by improving and smoothing the process flow (see Chapter 11 (#litres_trial_promo)) and eliminating waste (covered in Chapter 9 (#litres_trial_promo)). Since Henry Ford’s first production line, Lean thinking has evolved through a number of sources, and over many years, but much of the development has been led by Toyota through the Toyota Production System (TPS). Toyota built on Ford’s production ideas, moving from high volume, low variety, to high variety, low volume.
Although Lean thinking is usually seen as being a manufacturing concept and application, many of the tools and techniques were originally developed in service organisations. These include, for example, spaghetti diagrams, part of the organisation and methods toolkit, and the visual system used by supermarkets to replenish shelves. Indeed, it was a supermarket that helped shape the thinking behind the Toyota Production System. During a tour to General Motors and Ford, Kiichiro Toyoda and Taiichi Ohno visited Piggly Wiggly, an American supermarket, and noticed Just in Time and kanban being applied. This innovation enabled Piggly Wiggly customers to ‘buy what they need at any time’ and avoided the store holding excess stock. Kanban is simply a card providing the signal to order more stock. Incidentally, Piggly Wiggly was founded in 1916 in Memphis, Tennessee by the innovative Clarence Saunders, who was also the first to introduce the concept of a self-service grocery shop.
Lean is called ‘Lean’ not because things are stripped to the bone. Lean isn’t a recipe for your organisation to slash its costs, although it will likely lead to reduced costs and better value for the customer. We trace the concept of the word ‘Lean’ back to 1987, when John Krafcik (who is joining Google to provide advice on the driverless car) was working as a researcher for MIT as part of the International Motor Vehicle Program. Krafcik needed a label for the TPS phenomenon that described what the system did. On a white board he wrote the performance attributes of the Toyota system compared with traditional mass production. TPS:
✔ Needed less human effort to design products and services.
✔ Required less investment for a given amount of production capacity.
✔ Created products with fewer delivered defects.
✔ Used fewer suppliers.
✔ Went from concept to launch, order to delivery and problem to repair in less time and with less human effort.
✔ Needed less inventory at every process step.
✔ Caused fewer employee injuries.
Krafcik commented:
It needs less of everything to create a given amount of value, so let’s call it Lean.
The Lean enterprise was born.
Bringing on the basics of Lean
Figure 1-1 (#x6_c01_fig_0001) shows the Toyota Production System, highlighting various tools and Japanese Lean thinking terms that we use throughout this book. In this chapter we provide some brief descriptions to introduce the Lean basics and the TPS.
© John Morgan and Martin Brenig-Jones
Figure 1-1: (#x6_x_6_i22) The TPS house.
Toyota’s Taiichi Ohno describes the TPS approach very effectively:
All we are doing is looking at a timeline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that timeline by removing the non-value-added wastes.
The TPS approach really is about understanding how the work gets done, finding ways of doing it better, smoother and faster, and closing the time gap between the start and end points of our processes. And it applies to any process. Whether you’re working in the public or private sector, in service, transactional or manufacturing processes really doesn’t matter.
Think about your own processes for a moment. Do you feel that some unnecessary steps or activities seem to waste time and effort?
We must point out, however, that simply adopting the tools and techniques of the TPS isn’t enough to sustain improvement and embed the principles and thinking into your organisation. Toyota chairperson Fujio Cho provides a clue as to what’s also needed:
The key to the Toyota way is not any of the individual elements but all the elements together as a system. It must be practised every day in a very consistent manner – not in spurts. We place the highest value on taking action and implementation. By improvement based on action, one can rise to the higher level of practice and knowledge.
Picking on people power
Figure 1-1 (#x6_c01_fig_0001) shows that people are at the heart of TPS. The system focuses on training to develop exceptional people and teams that follow the company’s philosophy to gain exceptional results. Consider the following:
✔ Toyota creates a strong and stable culture wherein values and beliefs are widely shared and lived out over many years.
✔ Toyota works constantly to reinforce that culture.
✔ Toyota involves cross-functional teams to solve problems.
✔ Toyota keeps teaching individuals how to work together.
Being Lean means involving people in the process, equipping them to be able, and feel able, to challenge and improve their processes and the way they work. Never waste the creative potential of people!
Looking at the lingo
You can see from Figure 1-1 (#x6_c01_fig_0001) that Lean thinking involves a certain amount of jargon – some of it Japanese. This section defines the various terms to help you get Lean thinking as soon as possible:
✔ Heijunka provides the foundation. It encompasses the idea of smoothing processing and production by considering levelling, sequencing and standardising:
● Levelling involves smoothing the volume of production in order to reduce variation, that is, the ups and downs and peaks and troughs that can make planning difficult. Amongst other things, levelling seeks to prevent ‘end-of-period’ peaks, where production is initially slow at the beginning of the month, but then quickens in the last days of a sale or accounting period, for example.
● Sequencing may well involve mixing the types of work processed. So, for example, when setting up new loans in a bank, the type of loan being processed is mixed to better match customer demand, and help ensure applications are actioned in date order. So often, people are driven by internal efficiency targets, whereby they process the ‘simple tasks’ first to get them out of the way and ‘hit their numbers’, leaving the more difficult cases to be processed later on. This means tasks are not processed in date order, and people are reluctant to get down and tackle a pile of difficult cases at the end of the week, making things even worse for the customer and the business.
● Standardising is the third strand of Heijunka. It seeks to reduce variation in the way the work is carried out, highlighting the importance of ‘standard work’, of following a standard process and procedure. It links well to the concept of process management, where the process owner continuously seeks to find and consistently deploy best practice. Remember, however, that you need to standardise your processes before you can improve them. Once they’re standardised, you can work on stabilising them, and now that you fully understand how the processes work, you can improve them, creating a ‘one best way’ of doing them.
Morgan John
Brenig-Jones Martin
John Morgan
Lean Six Sigma For Dummies
Lean Six Sigma For Dummies
, 3rd Edition
Published by: John Wiley & Sons, Ltd., The Atrium, Southern Gate, Chichester, www.wiley.com (http://www.wiley.com/)
This edition first published 2016
© 2016 John Wiley & Sons, Ltd, Chichester, West Sussex.
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom
For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com (http://www.wiley.com/).
The right of the author to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com (http://booksupport.wiley.com/). For more information about Wiley products, visit www.wiley.com (http://www.wiley.com/).
Designations used by companies to distinguish their products are often claimed as trademarks. All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners. The publisher is not associated with any product or vendor mentioned in this book.
LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: WHILE THE PUBLISHER AND AUTHOR HAVE USED THEIR BEST EFFORTS IN PREPARING THIS BOOK, THEY MAKE NO REPRESENTATIONS OR WARRANTIES WITH THE RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS BOOK AND SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IT IS SOLD ON THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING PROFESSIONAL SERVICES AND NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HEREFROM. IF PROFESSIONAL ADVICE OR OTHER EXPERT ASSISTANCE IS REQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL SHOULD BE SOUGHT.
For general information on our other products and services, please contact our Customer Care Department within the U.S. at 877-762-2974, outside the U.S. at (001) 317-572-3993, or fax 317-572-4002. For technical support, please visit www.wiley.com/techsupport (http://www.wiley.com/techsupport).
For technical support, please visit www.wiley.com/techsupport (http://www.wiley.com/techsupport).
A catalogue record for this book is available from the British Library.
ISBN 978-1-119-06735-1 (hardback/paperback) ISBN 978-1-119-07380-2 (ebk) ISBN 978-1-119-07381-9 (ebk)
Introduction
Lean Six Sigma provides a rigorous and structured approach to help manage and improve quality and performance, and to solve potentially complex problems. It helps you use the right tools, in the right place and in the right way, not just in improvement but also in your day-to-day management of activities. Lean Six Sigma really is about getting key principles and concepts into the DNA and lifeblood of your organisation so that it becomes a natural part of how you do things.
This book seeks to help managers and team leaders better understand their role and improve organisational efficiency and effectiveness.
If you want to change outcomes, you need to realise that outcomes are the result of systems. Not the computer systems, but the way people work together and interact. And these systems are the product of how people think and behave. So, if you want to change outcomes, you have to change your systems, and to do that, you have to change your thinking. Albert Einstein summed up the need for different thinking very well:
The significant problems we face cannot be solved by the same level of thinking which caused them.
Lean Six Sigma thinking is not about asset stripping and ‘making do’. Instead, this approach focuses on doing the right things right, so that you really do add value for the customer and make your organisation effective and efficient.
The main focus of the book relates to DMAIC (Define, Measure, Analyse, Improve and Control). This is the Lean Six Sigma method for improving existing processes that form a part of the organisation’s systems, and it provides an ideal way to help you in your quest for continuous improvement.
When you need to develop a new process, the Design for Six Sigma method comes into play. Known as DMADV (Define, Measure, Analyse, Design and Verify), we provide an introduction to this method in Chapter 12 (#litres_trial_promo).
About This Book
This book makes Lean Six Sigma easy to understand and apply. We wrote it because we feel that Lean Six Sigma can help organisations of all shapes and sizes, both private and public, improve their performance in meeting their customers’ requirements.
In particular, we wanted to draw out the role of the manager and provide a collection of concepts, tools and techniques to help him or her carry out the job more effectively. We also wanted to demonstrate the genuine synergy achieved through the combination of Lean and Six Sigma. For some reason unknown to the authors, a few people feel they can use only Lean or Six Sigma, but not both. How wrong they are!
In this book you can discover how to create genuine synergy by applying the principles of Lean and Six Sigma together in your day-to-day operations and activities.
Foolish Assumptions
In Lean Six Sigma, avoiding the tendency to jump to conclusions and make assumptions about things is crucial. Lean Six Sigma really is about managing by fact. Despite that, we’ve made some assumptions about why you may have bought this book:
✔ You’re contemplating applying Lean Six Sigma in your business or organisation, and you need to understand what you’re getting yourself into.
✔ Your business is implementing Lean Six Sigma and you need to get up to speed. Perhaps you’ve been lined up to participate in the programme in some way.
✔ Your business has already implemented either Lean or Six Sigma and you’re intrigued by what you might be missing.
✔ You’re considering a career or job change and feel that your CV or resume will look much better if you can somehow incorporate Lean or Six Sigma into it.
✔ You’re a student in business, operations or industrial engineering, for example, and you realise that Lean Six Sigma could help shape your future.
We also assume that you realise that Lean Six Sigma demands a rigorous and structured approach to understanding how your work gets done and how well it gets done, and how to go about the improvement of your processes.
Icons Used In This Book
Throughout the book, you’ll see small symbols called icons in the margins; these highlight special types of information. We use these to help you better understand and apply the material. Look out for the following icons:
This icon highlights an essential component of Lean Six Sigma.
Bear these important points in mind as you get to grips with Lean Six Sigma.
Keep your eyes on the target to find tips and tricks we share to help you make the most of Lean Six Sigma.
Throughout this book we share true stories of how different companies have implemented Lean Six Sigma to improve their processes. We also share true stories of when things go wrong so you learn from others’ mistakes.
This icon highlights potential pitfalls to avoid.
Beyond This Book
In addition to the material in the print or e-book you’re reading right now, this book also comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet at http://www.dummies.com/cheatsheet/leansixsigma (http://www.dummies.com/cheatsheet/leansixsigma) for helpful information that you can access on a regular basis.
You can find some free articles online that expand on some of the concepts in the book. You can find links to the articles on the parts pages and on the Extras page at http://www.dummies.com/extras/leansixsigma (http://www.dummies.com/extras/leansixsigma).
Where to Go From Here
In theory, when you read you begin with ABC, and when you sing you begin with doh-ray-me (apologies to Julie Andrews). But with a For Dummies book you can begin where you like. Each part and, indeed, each chapter is self-contained, which means you can start with whichever parts or chapters interest you the most.
That said, if you’re new to the topic, starting at the beginning makes sense. Either way, lots of cross-referencing throughout the book helps you to see how things fit together and put them in the right context.
Part I
Getting Started with Lean Six Sigma
Go to www.dummies.com (http://www.dummies.com/) for more information about topics that interest you – everything from using Lean Six Sigma in your organization to holding effective meetings and from building teamwork to understanding quality control.
In this part …
✔ Grasp the basics of Lean Thinking and Six Sigma so you can understand what they mean and what they don’t mean.
✔ Get a clearer picture of what the synergy created by merging the two disciplines into Lean Six Sigma looks like and understand the key principles underpinning the approach.
✔ Comprehend exactly what ‘sigma’ means and why the term is important in Lean Six Sigma.
✔ Examine in depth what the commonly used process improvement method known as DMAIC – Define, Measure, Analyse, Improve and Control – means in Lean Six Sigma.
Chapter 1
Defining Lean Six Sigma
In This Chapter
▶ Turning up trumps for the Toyota Production System
▶ Finding out the fundamentals of ‘Lean’ and ‘Six Sigma’
▶ Applying Lean Six Sigma in your organisation
Throughout this book we cover the tools and techniques available to help you achieve real improvement in your organisation. In this chapter we aim to move you down a path of different thinking that gets your improvement taste buds tingling. We look at the main concepts behind Lean thinking and Six Sigma and introduce some of the terminology to help you on your way.
Introducing Lean Thinking
Lean thinking focuses on enhancing value for the customer by improving and smoothing the process flow (see Chapter 11 (#litres_trial_promo)) and eliminating waste (covered in Chapter 9 (#litres_trial_promo)). Since Henry Ford’s first production line, Lean thinking has evolved through a number of sources, and over many years, but much of the development has been led by Toyota through the Toyota Production System (TPS). Toyota built on Ford’s production ideas, moving from high volume, low variety, to high variety, low volume.
Although Lean thinking is usually seen as being a manufacturing concept and application, many of the tools and techniques were originally developed in service organisations. These include, for example, spaghetti diagrams, part of the organisation and methods toolkit, and the visual system used by supermarkets to replenish shelves. Indeed, it was a supermarket that helped shape the thinking behind the Toyota Production System. During a tour to General Motors and Ford, Kiichiro Toyoda and Taiichi Ohno visited Piggly Wiggly, an American supermarket, and noticed Just in Time and kanban being applied. This innovation enabled Piggly Wiggly customers to ‘buy what they need at any time’ and avoided the store holding excess stock. Kanban is simply a card providing the signal to order more stock. Incidentally, Piggly Wiggly was founded in 1916 in Memphis, Tennessee by the innovative Clarence Saunders, who was also the first to introduce the concept of a self-service grocery shop.
Lean is called ‘Lean’ not because things are stripped to the bone. Lean isn’t a recipe for your organisation to slash its costs, although it will likely lead to reduced costs and better value for the customer. We trace the concept of the word ‘Lean’ back to 1987, when John Krafcik (who is joining Google to provide advice on the driverless car) was working as a researcher for MIT as part of the International Motor Vehicle Program. Krafcik needed a label for the TPS phenomenon that described what the system did. On a white board he wrote the performance attributes of the Toyota system compared with traditional mass production. TPS:
✔ Needed less human effort to design products and services.
✔ Required less investment for a given amount of production capacity.
✔ Created products with fewer delivered defects.
✔ Used fewer suppliers.
✔ Went from concept to launch, order to delivery and problem to repair in less time and with less human effort.
✔ Needed less inventory at every process step.
✔ Caused fewer employee injuries.
Krafcik commented:
It needs less of everything to create a given amount of value, so let’s call it Lean.
The Lean enterprise was born.
Bringing on the basics of Lean
Figure 1-1 (#x6_c01_fig_0001) shows the Toyota Production System, highlighting various tools and Japanese Lean thinking terms that we use throughout this book. In this chapter we provide some brief descriptions to introduce the Lean basics and the TPS.
© John Morgan and Martin Brenig-Jones
Figure 1-1: (#x6_x_6_i22) The TPS house.
Toyota’s Taiichi Ohno describes the TPS approach very effectively:
All we are doing is looking at a timeline from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that timeline by removing the non-value-added wastes.
The TPS approach really is about understanding how the work gets done, finding ways of doing it better, smoother and faster, and closing the time gap between the start and end points of our processes. And it applies to any process. Whether you’re working in the public or private sector, in service, transactional or manufacturing processes really doesn’t matter.
Think about your own processes for a moment. Do you feel that some unnecessary steps or activities seem to waste time and effort?
We must point out, however, that simply adopting the tools and techniques of the TPS isn’t enough to sustain improvement and embed the principles and thinking into your organisation. Toyota chairperson Fujio Cho provides a clue as to what’s also needed:
The key to the Toyota way is not any of the individual elements but all the elements together as a system. It must be practised every day in a very consistent manner – not in spurts. We place the highest value on taking action and implementation. By improvement based on action, one can rise to the higher level of practice and knowledge.
Picking on people power
Figure 1-1 (#x6_c01_fig_0001) shows that people are at the heart of TPS. The system focuses on training to develop exceptional people and teams that follow the company’s philosophy to gain exceptional results. Consider the following:
✔ Toyota creates a strong and stable culture wherein values and beliefs are widely shared and lived out over many years.
✔ Toyota works constantly to reinforce that culture.
✔ Toyota involves cross-functional teams to solve problems.
✔ Toyota keeps teaching individuals how to work together.
Being Lean means involving people in the process, equipping them to be able, and feel able, to challenge and improve their processes and the way they work. Never waste the creative potential of people!
Looking at the lingo
You can see from Figure 1-1 (#x6_c01_fig_0001) that Lean thinking involves a certain amount of jargon – some of it Japanese. This section defines the various terms to help you get Lean thinking as soon as possible:
✔ Heijunka provides the foundation. It encompasses the idea of smoothing processing and production by considering levelling, sequencing and standardising:
● Levelling involves smoothing the volume of production in order to reduce variation, that is, the ups and downs and peaks and troughs that can make planning difficult. Amongst other things, levelling seeks to prevent ‘end-of-period’ peaks, where production is initially slow at the beginning of the month, but then quickens in the last days of a sale or accounting period, for example.
● Sequencing may well involve mixing the types of work processed. So, for example, when setting up new loans in a bank, the type of loan being processed is mixed to better match customer demand, and help ensure applications are actioned in date order. So often, people are driven by internal efficiency targets, whereby they process the ‘simple tasks’ first to get them out of the way and ‘hit their numbers’, leaving the more difficult cases to be processed later on. This means tasks are not processed in date order, and people are reluctant to get down and tackle a pile of difficult cases at the end of the week, making things even worse for the customer and the business.
● Standardising is the third strand of Heijunka. It seeks to reduce variation in the way the work is carried out, highlighting the importance of ‘standard work’, of following a standard process and procedure. It links well to the concept of process management, where the process owner continuously seeks to find and consistently deploy best practice. Remember, however, that you need to standardise your processes before you can improve them. Once they’re standardised, you can work on stabilising them, and now that you fully understand how the processes work, you can improve them, creating a ‘one best way’ of doing them.