LEAN IMPROVEMENT TOOLS
“Improvement usually means doing something that we have never done before.”
– Shigeo Shingo, Toyota Production System Expert
I’ve been fortunate to visit dozens of factories both in China and the US. When walking around a factory and observing the production lines and workers, there is always a stark contrast in the overall flow, orderliness, cleanliness, and productivity of those factories that have embraced lean versus those that haven’t. And, the difference always inevitably shows up in a pronounced difference in product quality, performance, and pricing. While lean emerged from optimizing factories, lean improvement tools can and should be applied to improve any process.
If you want to get serious about wringing out significant waste and supercharging your processes, then you should get serious about lean improvement tools. In my experience, organizations that have embraced lean as one of their operational cornerstones are not only more efficient but also able to change their strategic course quicker than those that don’t embrace lean.
Lean is a simple and profound philosophy with the underlying principle being the use of resources for any purpose other than to achieve an organization’s goals and to create value is waste.
It is hard not to embrace lean, which is one of the primary tools that drove Toyota’s growth from a small and somewhat unknown company in 1950 with a production of fewer than 10,000 vehicles to one of the global leaders of industry with production of almost 9 million vehicles in 2017.
Think about your organization. Are there processes laden with waste, bureaucracy, and inefficiency? What is the potential of your organization if everything everyone did was driving value? A lean transformation can free up so much in wasted time, resources, costs, and capital that can either go to the bottom line or be re-purposed to create more value. If you are serious about lean, you’ll reap the rewards, but realize it is a significant undertaking that necessitates expertise, discipline, and perseverance.
What are the lean improvement tools?
Lean improvement tools work together to attack and reduce the eight forms of waste in a process, which include inventory, over-processing, over-production, motion, defects, intellect, transportation, and waiting. In the ’80s and ’90s, the success of Toyota popularized lean.
Below is a diagram of the seven main lean improvement tools.
The first important lean improvement tool is demand-pull, which involves only producing that which is demanded by the customer. Typical western thinking and accounting views finished goods inventory as an asset, while lean thinking views it as a liability and waste since it is inventory the customer hasn’t purchased and didn’t need at the time. By only producing what the customer demands, the entire process and system can minimize the amount of work-in-progress inventory and waste.
2. One-piece flow
The next lean foundational tool is one-piece flow, which necessitates the continuous, uninterrupted flow of a product through all the value-added steps in a process. Batch processing is the antithesis of one-piece flow. If you ever observe a lean assembly factory, you’ll typically see each product moving very slowly through a line of workers and machines assembling each product through various steps. There isn’t work-in-progress inventory piling up, much idle time, waiting, transportation, or wasted motion. In an effective and efficient one-piece flow process, there is little waste, as the product never stops from start to finish. While the line may look like it is moving slowly, it is moving, which you can’t say for a typical batch process where work-in-progress inventory can often sit for hours, days, weeks, or even months.
3. Load balanced capacity
One-piece flow enables the capacity of each step in a process to be load balanced. If a product is constantly moving through the various steps of a process, then it is easy to identify bottlenecks or steps with overcapacity, by observing either the accumulation of work-in-progress inventory before a step (bottleneck) or through idle time (overcapacity). Once you initiate one-piece flow in a system, it takes time to load balance the capacity of each step, but once you do, you minimize the waste of over-production and waiting.
4. Eliminate, combine, reduce, simplify (ECRS)
As you think about leaning out each step in a process, there are four options, including eliminating, combining, reducing, and simplifying each step. You eliminate those steps that aren’t necessary or add no value to the ultimate purpose of the process. Next, you can potentially combine steps that are conducted by different people or machines but are somewhat similar or have synergies if combined. Third, you can reduce waste by rearranging the time and location steps. And, last, you can potentially simplify the process steps.
Thinking through the options of eliminate, combine, rearrange and simplify should be done in conjunction with the 5Ws and 1H questions (Why, What, Who, Where, When, and How). Asking the questions in the chart below can help guide you through ECRS.
One thing to note, the same thought process of eliminate, combine, rearrange, and simplify can and should be used beyond process optimization. You can use ECRS organizational design, headcount reduction, IT infrastructure and systems rationalization, job accountabilities, and product and service portfolio strategy.
5. 5S workplace
To reduce waste in the workplace, one of the key tools is 5 S, which stands for Sort, Set in Order, Shine, Standardize, and Sustain.
• Sort involves removing all unnecessary tools, supplies, equipment, paperwork, and other elements within a workspace, and organizing the tools and elements in a way that they can be efficiently accessed and used. “When in doubt, throw it out.”
• Set in order entails properly ordering and positioning the steps of a process for efficient flow and waste minimization. It can involve properly positioning people, tools, inventory, and equipment to minimize Transportation, Motion, and Waiting. “A place for everything, and everything in its place.”
• Shine is consistently and systematically cleaning and organizing the workplace. Typically, team members will clean after every shift, minimize the creation of messes during shifts, and have a schedule for thorough cleanings. “Inspection through cleaning.”
• Standardize involves standardizing practices, steps, and processes to minimize variability, motion, defects, and over-processing. You document standardization in standard operating procedures.
• Sustain necessitates vigilance in sorting, setting in order, shining, and standardizing a workplace to ensure the consistent efficiency and minimization of waste. Sustain can also involve visual management techniques, which involve displaying productivity, work and production schedules, tool and workplace organization, and standard operating procedures within the workspace. “The process never ends. It becomes the way we do work here.”
6. Just-in-time inventory
To ensure minimal inventory, suppliers can provide just-in-time inventory, which involves a consistent and minimal flow of inventory to each step in a process that meets the demand needed at each step. For just-in-time inventory, many companies use a kanban system, which involves visual or electronic cues to trigger replenishment from upstream suppliers, and bins with typically small pre-determined amounts of inventory that are pulled into a specific step or process just in time to continue production and minimize inventory. Another practice to enable just-in-time inventory and minimize transportation and waiting waste is to locate supply and suppliers close to the supplied-to step. Suppliers often locate themselves close to large manufacturers to provide just-in-time inventory and minimize waste.
7. Continuous improvement / kaizen
The last, but most impactful lean improvement tool is continuous improvement otherwise known as the Japanese term kaizen, which is simply a philosophy within the culture and team members of an organization always to pursue emergent and collaborative improvement in processes. We’ll go over kaizen as the next tool.
How do you apply lean improvement tools?
You can apply lean improvement tools to any part of an organization. At the highest level, are there products, channels, or projects that add little to no value and distract from the organization’s core goals? At the next level, are their departments, roles, or processes that add little to no value? Are there things you or your team do, which add little to no value?
If so, you and your organization should embrace lean improvement tools to align action with value. If the process is large enough, you should get some outside help to initiate a lean transformation.
If you are going to do it yourself, here are some of the best practices for utilizing lean improvement tools.
• Perform a value stream map (VSM). You don’t comprehensively understand a process until you map how you create value.
• Establish TAKT time. TAKT is the average time between the start of production of one item to the next. TAKT represents the pace of the process.
• Use the VSM to identify a future state which equates to a better way of creating value for the customer.
• 5S the workplace. Organize the workplace to make it easier to perform and make 5S part of everyday work.
• Standardize work. Create the one best way to do each task, have the workers own the standards, and own the process improvement process (kaizen).
• Identify the barriers to flow and eliminate them.
• Use JIT to reduce late or poor deliveries. Use JIT as a supplier development tool, not as a tool to beat up suppliers.
• Minimize the distance between process steps. Create a work cell for one piece flow or set up kanban of FIFO lane systems (self-regulating WIP and inventory control) to assure the right amount of work is delivered to the right place, at the right time, in the right quantity.
Exercise – LEAN Redesign
Map out a current and important process. Download the process maps and icons here. Then use the 8 Forms of Waste Worksheet to write down the observations you have of waste. Then begin optimizing the process using the 7 Lean Improvement Tools.
1. First, you have to determine the demand for the product or service. How much is needed and when? Is there seasonality? What is the peak versus average capacity you need to fulfill demand?
2. If you can, produce a process flow that incorporates a one-piece flow. You can always experiment and set up a test process with the one-piece flow. The great benefit of experimenting is you’ll quickly identify bottlenecks and steps where you may need more capacity.
3. In the redesign of the process, think through the steps you can Eliminate, Combine, Reduce or Simplify (ECRS). Focus on how each step creates value or adds to the inputs, and which steps are complementary, regarding resources used or synergistic steps. Redesigning a process is a bit of a puzzle.,
4. Observe where the process is actually done… is it well organized?, are things labeled?, is it clean from any excess materials?, how can it be better organized using the 5S workplace principles: Sort, Set in Order, Shine, Standardize, and Sustain?
5. Once you’ve optimized the redesigned process going through ECRS, and the 5S workplace, then you have to load balance capacity to meet demand. This takes time, with significant measurement and data to understand temporal and season considerations.
6. If there is inventory, then think through how you can reduce inventory levels and move closer to a just-in-time inventory model. It is always difficult to go all the way to just-in-time in processes with large demand variance.
7. To continuously improve a process, you may want to think about creating a Kaizen culture to ensure the right mindsets, behaviors, and culture are in place. Think through how you can embed a Kaizen culture into the organization.