LEAN is the Toyota Production System (TPS), which is a manufacturing approach used by Toyota over the past 70 years.
LEAN makes an organization focus on value as defined by what the customer wants. It provides a way for a producer to do more using less effort, equipment, time and space while providing the customer exactly what they want.
LEAN thinking follows these steps for implementation:
- Define Value
- Identify the Value Stream
LEAN Thinking – Define Value First
Value is the starting point for LEAN thinking.
LEAN thinking states that Value can only be defined by the customer and its only meaningful if it meets a customer’s needs at a particular time and price.
Value is not what the company thinks the customer’s needs are.( i.e. , lower cost, increased product variety, instant delivery.) The producer must interface with the customer without the constraints of an existing product for a clear picture of value.
Before we can start a LEAN implementation, we must define Value.
LEAN Thinking – Identify the Value Stream
Value stream is a set of all the specific actions needed to bring a product through the three critical management tasks of all businesses:
- Problem-solving task
- Information management task
- Transformation task
This is done for each product that the company offers. This activity helps identify steps that create value. The three value identities are:
- Task directly creates value
- Task doesn’t directly create value but it does indirectly because it is required by another task that directly creates value.
- Task doesn’t create any value and can be eliminated from the process
LEAN Thinking – Create Flow
Once the Value stream is a set, the next step is to create flow. This removes the batch and queue mindset and allows the product to proceed from start to finish with the least amount of delay.
This differs from the batch and queue process were all similar activities (or products) are batched and run together until finished. Once this batch is completed, the process is reset or retooled to run a new batch of different activities (or products). This causes a queue where there might be significant delays waiting for the all the activities to complete before a piece of value is delivered to the customer.
LEAN Flow removes this and allows one product to be completed (and value realized when delivered to the customer) before moving to the next product.
LEAN Thinking – Pull
Once the Value Stream is identified and Flow is established, then the producer lets the customer pull the product from them as needed rather than pushing products on the customer regardless of their need. This reduces the cost to the producer because they can keep their inventories low and only create products that are sold. This helps the customer because they can often get their product quicker because they don’t have to wait for the mass production of all the components for the one product they’re purchasing.
LEAN Thinking – Perfection
Once the Value Stream is identified, Flow is established, and the can customer pull the product as needed, the entire system can be optimized to get the exact Value that the customer wants.
Perfection is a learning process that is cyclical in nature. The more demand created on the system exposes all the defects in the system. Once these defects are addressed the system improves until the next cycle which will identify more defects within the system.