9.2 Lean Thinking

9.2 Lean Thinking

Lean thinking is another way to improve processes. Lean thinking helps to increase value and minimizes waste. Although, Lean Thinking is usually applied to the production process to improve efficiency, it can be applied to all the facets in the organization. The advantages of applying the lean methodology are that it leads to shorter cycle times, cost savings and better quality.

Lean thinking embodies five basic principles

1. Specifies Value

Value is determined by the customers. It is about customer demands and what the customers are able and willing to pay for. To find out the preferences of the customers regarding the existing products and services, methods like, focus groups, surveys and other methods are used. However, to determine the customer preferences regarding new products, the DFSS method (Chapter-10) is used. The voice of the customer (VOC) is very important to determine the value of a product. The opposite of value is waste or muda.

Consider a company, ABC, which manufactures mobile handsets. According to the sales manager, the sales are getting affected due to the high price of the handset. However, according to the customer feedback the customers are shifting to other manufacturers due to absence of facilities like radio and MMS in the handsets of ABC Company. So, ABC Company should be able to determine the value of the product according to customer feedback and install radio and other facilities in the handsets which the customers are looking for.

The product will have value only if it fulfills customer demands. Value plays a major role in helping to focus on the organization’s goals and in the designing of the products. It helps in fixing the cost of a particular product and service. An organization’s job should be to minimize wastage and save costs from various business processes so that the cost demanded by the customers lead to maximum profits for the organization.

2. Identifies Value Stream

Value stream is the stream or flow of all the processes which include steps from the development of the design to the launch and order to the delivery of a specific product or service. It includes both value added and non-value added activities. Waste is a non-value added activity. Although it is impossible to achieve 100% value added processes, yet Lean methodologies help make considerable improvements.

According to the Lean Thinking, there should be a partnership between the buyer and the seller and the supply chain management to reduce wastage. The supplier or the seller can be categorized according to the need. He can be classified as non-significant or significant supplier or a potential partner. The classification can help to solidify and improve relations between the supplier and the customers or supplier and the organization.

Value Stream Mapping

After the key suppliers are categorized and the role they play for the organization is determined, the next thing is to take steps to eliminate wastage. Tools such as process activity mapping and quality filter mapping are used to identify and reduce waste within the organization and also between the customer and the supplier. There are two ways to observe the flow of work-logical and physical.

Role of Value Stream Mapping in Lean Thinking

1. It defines value from the customer’s view point.

2. It plots the present state of the value stream.

3. It applies the Lean methodology to spot muda in a process.

4. It helps predict the condition of the process in the future.

5. It develops a conversion plan.

6. It executes the plan.

7. It legalizes the new process.

3. Makes Value-Creating Steps Flow

Flow is the step-by-step flow of tasks which move along the value streams with no wastage or defects. Flow is a key factor in eliminating waste. Waste is a hindrance which stops the value chain to move forward. A perfect value-stream should be one which does not hamper the manufacturing process. All the steps from the design to the launch of the product should be coordinated. The synchronization would help to reduce wastage and improve efficiency.

Customer satisfaction is the utmost to make the value flow. It is important to consider the customer demands and the time of the demands. This theory is known as the Takt Time. The formula to compute Takt Time is

Takt Time = Available work time / Customer required volume

Work time does not include lunch or tea breaks or any other process downtime. Takt Time is used to create short-time work schedules.

Spaghetti Charts

The current state of the physical work flow is plotted on spaghetti charts. A spaghetti chart is a map of the path that a particular product takes while it travels down the value stream. The product’s path can be matched to that of a spaghetti and hence the name. There is a great difference between the distance in the current set-up and the Lean set-up. The difference in the two distances is known as muda.

4. Pulls Customers towards Products or Services from the Value Stream

Traditional systems were ‘push’ systems. The conventional manufacturers believed in mass production. Mass production means that a product is produced cheaply in bulk. The product is then stored and the manufacturers hope that the produced products would find a market. The Lean Thinking advocates the ‘pull’ system. The manufacturers who adopt this principle do not produce a product unless it is demanded by the customer.

According to this principle, the value stream pulls the customer towards products or services. Therefore, the manufacturer would manufacture nothing unless a need is expressed by the customer. The production gets underway according to the forecasts or according to a pre-determined schedule. In short, nothing is manufactured unless ordered for by the customer.

If a company is applying a Lean methodology and the principle of pull, it means that it would require quickness of action and a lot of flexibility. As a result, the cycle time required to plan, design, manufacture and deliver the products and services also becomes very short. The communication network for the value chain should also be very strong in the value chain so that there is no wastage and only those goods are produced which are required by the customers. The biggest advantage of the pull system is that non-value added tasks such as research, selection, designing and experimentation can be minimized.

5. Perfection

Perfection is one of the most important principles of Lean Thinking. This is because continuous improvement is required to sustain a process. The reason behind sustaining a process is to eliminate the root causes of poor quality from the manufacturing process. There are various methods to improve perfection and Lean Masters work towards improving it.

Lean Masters

Lean masters are individuals from various disciplines with a common goal. They are individual contributors who focus on the process to improve quality and performance. Their work is to achieve efficient results. The results either may be for their own organization or for their suppliers. The best way to achieve perfection with the suppliers is through collaborative value engineering, supplier councils, supplier associations, and value stream mapping between customers and suppliers.

It is significant that the above mentioned principles be followed diligently in order to reduce wastage and deliver quality products and services to the customers. The customers and the suppliers must work in collaboration to achieve good results. The effort of Lean Thinking should be to minimize wastage from the value stream and improve efficiency. The Lean Thinking can be applied with the help of committed leadership, a persuasive change agent and well-informed employees and suppliers.