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Lean Thinking for Process Improvement












 
 
 
 



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Part 2 of aThree-Part Series


This month we are examining different process improvement programs on the market. Last week we discussed Six Sigma and its application in high technology, high transaction, or expensive error environments. But if you are in a mature industry, a service business, or an organization that handles few transactions, then perhaps Lean Thinking (waste reduction) or the Theory of Constraints (throughput improvement) would work better.


Lean Thinking


First, what is Lean Thinking anyway? As the name implies, it is really a mindset — a way of viewing the world. Lean is about focus, removing waste, and increasing customer value. Lean is about smooth process flows, doing only those activities that add customer value and eliminating all other activities that don’t.


Adding value is another way of saying generating revenue. If it doesn’t generate revenue then it must add cost, not value. Sounds easy doesn’t it, I mean after all, this is what we do every day; or is it? Let’s see.


Process Flow


There are five basic steps in assessing lean operations:



  1. Identify the activities that create value

  2. Determine the sequence of activities (also called the value stream)

  3. Eliminate activities that do not add value

  4. Allow the customer to “pull” products/services

  5. Improve the process (start over)


For example, let’s take a look at the most fundamental cycle within a lean operation, the order-to-delivery cycle. The top level activities, in sequence, are taking an order, building the order, and delivering the order. The activities that do not add value are such things as: order entry, backlog, inventory, and shipping delays.


In a lean operation we could have the customer enter their own orders; products made on demand, so we would have no backlog or inventory, and then product could be shipped overnight for minimal shipping delay (or downloaded in the case of software).


Companies with very short order-to-delivery cycles (and not using inventory as a buffer) are lean operations. Lean operations have a strong cash cycle. In general, the shorter the cycle the leaner the operation. Do you know any companies like this?


Here at Bizmanualz we carry very little inventory, customers enter their own orders via the web, we make product on demand, and ship within 24 hours. Our order-to-delivery cycle is very short (within 24 hours or the same day if the order is in before 2pm).


5S System


Another important tool used in lean thinking is the 5S system of organization. The idea is that a messy workplace, desk, or manufacturing cell makes it hard to find things, easier to get distracted, and can introduce accidents or mistakes. The 5S’s stand for:



  1. Sort – Sort needed and unneeded items

  2. Set in Order – Arrange things in their proper place

  3. Shine – Clean up the workplace

  4. Standardize – Standardize the first three S’s

  5. Sustain – Make 5S a part of the job


Note the visual nature of lean. Lean Thinking is very visual, picturesque, even Zen like. It is definitely a state of mind. Clean, clear, and focused at the task at hand and nothing else. It does not require a lot of mathematical analysis, unlike Six Sigma.


Six sigma vs Lean Thinking


Six Sigma is problem focused with a view that process variation is waste. Lean Thinking, on the other hand, is focused on process flow and views any activity that does not add value as waste. Six sigma uses statistics to understand variation. Lean uses visuals: process mapping, flowcharting, and value stream mapping, to understand the process flow.































Program


Six Sigma


Lean Thinking


View of Waste


Variation is waste


Non-value add is waste


Application



  1. Define

  2. Measure

  3. Analyze

  4. Improve

  5. Control




  1. Identify Value

  2. Define Value Stream

  3. Determine Flow

  4. Define Pull

  5. Improve Process



Tools


Math-Statistics


Visualization


Focus


Problem focused


Process flow focused


Taiichi Ohno is credited with creating the Toyota Production System (TPS), which is one of the better known implementations of Lean Thinking anywhere in the world. The concepts of lean were born out of the severe resource constraints in postwar Japan, which leads us to next week’s process improvement program - Theory of Constraints.


Lean Thinking is ideal for mature (energy), slow growth (automotive), low transaction industries (small business) or an organization where mathematical tools are not common. Lean begins to use systems thinking and considers all of the process interactions.


But lean is still a reductionist approach focused on eliminating waste (cutting costs). What is needed is to balance the resources released through Lean or Six Sigma improvement programs with an increase in throughput and need for resources. Otherwise you enter a cost cutting, job losing cycle and your process improvement program will grind to a halt.


If you are in a mature, slow growth, low transaction, or non-math business then Lean Thinking will work real well for your organization. So what’s left? Six Sigma and Lean use two different approaches to get the same end result – process improvement. The Theory of Constraints (throughput improvement) takes the concepts of Lean Thinking to another level of systems thinking.


Next week we will discuss throughput improvement and see how it ties the capacity or resources released through Lean or Six Sigma waste reduction programs to an increase in throughput without costing jobs while motivating people to keep improving.


To learn more about using process improvement programs for your organization, attend the next How to Align a System of People and Processes for Results class. If you are eager to learn more about creating more order out of the chaos you are feeling at work then the How to Create Well-Defined Processes class is right for you. ISO 9000 Quality Auditor classes are forming now for Internal Auditor or Lead Auditor.


Call for information on having your own private in-house classes today.


Part 1: Process Improvement Programs - Six Sigma?

Part 2: Lean Thinking for Process Improvement

Part 3: Theory of Constraints for Process Improvement







Related Articles:

  1. Lean Thinking
  2. How to Implement Lean Thinking
  3. Making the Impossible, Possible
  4. Theory of Constraints (TOC) For Process Improvement
  5. What’s the Difference Between Process Improvement Programs?







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Posted on Thursday, July 14th, 2005 under Business Process Improvement, Strategic Process Improvement


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7 Responses to “Lean Thinking for Process Improvement”







  1. Mohey Hegazy Mansour Says:



    August 14th, 2007 at 1:41 am

    Dear Sirs,


    Thank you so much for your valuable key words and introductions. Really it adds to me great value.


    I had just finished a Managment course in the American University In Cairo and i foud that there is many good extra points and ideas in your free introductions.


    For me it will be so expensive to buy your products via DHL so i hope if you have an Egyptian Agent where i van get it with reasonable price.


    Wait for more :)

    Thank you so much








  2. KRISHNA Says:



    October 14th, 2007 at 8:39 pm

    can we implement lean and 6-sigma simultaneously in a organisation???

    what is the analogy of value stream mapping in 6sigma ??








  3. Scott Cornell Says:



    February 17th, 2008 at 12:47 am

    Certainly. Although, it makes the most sense to implement lean first, with some small projects focused on six sigma. Lean focuses on the Non value added activites in an organization. Six sigma seeks to improve the value added activities. In all organizations, there is more opportunity to reduce waste (i,e, “more bang for your buck” focusing on lean). After some success has been documented with lean activities, then some of the actual physical processes could be improved with six sigma.

    Scott Cornell - http://www.argoconsulting.com s.cornell@argoconsulting.com








  4. Ten Golden Rules of Continuous Improvement Says:



    February 5th, 2009 at 5:53 pm

    [...] solutions can also mean expensive.   In Lean Thinking we like to use our mind more than your money.  It is amazing how simple and inexpensive many [...]








  5. Jumana Yaseen Says:



    June 18th, 2009 at 5:29 am

    Dear Sirs,


    I would like to thank you for this great website, and I appreciate your effort in supporting businesses and industrial firms around the world.


    I’m a Q.A Engineer with Industrial Engineering background, working at the Palestinian Cellular Communications; Jawwal. Frankly, I need more clarifications in (mature, slow growth and low transaction businesses), because till now I can’t differentiate between all of these categories and also unable to sort the cellular communications- the firm where I’m working at- in any of these categories!! Can you help me in that?!!


    Best Regards,

    Jumana Yaseen

    Q.A Engineer,

    Jawwal








  6. chris Says:



    July 23rd, 2009 at 10:12 pm

    Low transaction environments are the same as job shops where each order could be a custom product. What’s required is a highly flexible workforce trained in multiple areas. It is the same as a small business where a single individual must perform multiple functions. Job specialization will not work very well until you get enough order volume to support the specialization. Bottom line: train each worker with multiple skills. Increase your skill flexibility and think like a small business.








  7. Hoda M. Says:



    October 16th, 2009 at 12:15 am

    Dear Sir,

    Thank you very much for your instructions and classes. I am doing a university essay and the information found on your website are exactly what I was looking for.

    They make a great reference for me and I appreciate all the time and effort you give.


    Thanks again,












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