Lean is often known as Lean Manufacturing however it is better to call it Lean as the principles are equally applicable to service industries.
The guiding principles are:
- Start with the customer. Establish what features of the products or services add particular value.
- Focus on the products or services and create delivery processes that ensure these value-adding features are maximised.
- Reduce waste and non-value adding services.
Brief History of Lean
- Lean originates from the Toyota car company’s efforts to transform their business after the Second World War. Toyota succeeded brilliantly, changing from a small domestic manufacturer to the World’s largest car maker and becoming a by-word for reliability.
- They were very short of large machine tools and equally short of capital to buy them. As these tools were their major production constraints and were needed for different components of different models they worked around them by maximising the time they were available, and especially by shortening tool changeover times.
- The shortage of capital meant they needed to minimise their stocks of everything at all times. Stock is required to meet orders promptly. Higher stocks are required when cars (or sub-assemblies) take long to make, or when defects may occur which have to be remedied. Unnecessary stocks could be avoided if Toyota create linked chains of manufacture, through from basic components to assemblies, to finished cars. This led to several fundamental production innovations:
- Identifying the production bottlenecks and focusing improvement on the bottlenecks.
- Improving communications so that lines only produced what was required and would stop when they had made enough.
- Only producing items or cars that were free of defects. They could not afford to mass-produce defects! Therefore production would be stopped the instant that a fault was identified and only re-started once the cause had been identified and corrected.
- Designing quality into components so that they would meet their duties. Often this would mean working in partnership with their suppliers over long periods so that bought-in components would be defect-free and would enhance Toyota’s own offerings.
- Identifying waste in all its forms and minimising it.
- Insisting that the managers spend time in the work place, talking with their staff and helping solve problems.
- Creating a partnership with customers so the customers return to Toyota, and Toyota learn from the customers.
- These techniques may seem like simple common sense. However they were diametrically opposed to the techniques of mass production established in the first half of the 20th Century. Those focussed on economies of scale, minimising the costs of each component, yet not thinking through the impact on the total system.
- Conceptualising these techniques has enabled the recognition and development of Lean tools which are now used around the world by advanced companies.
Director, Look to Improve Ltd (L2i)