Originally posted on the ProjExc Project Excellence Blog on 20-Mar-08
Following on from the popular Six Sigma post our manufacturing and supply chain specialist Clifford Hobbs, delves into the world of Lean Methodologies. The whole article can be found on the ProjExc PM Portal.
Most of the tools and techniques that underpin Lean thinking originated in Japan in the 60’s and 70’s in companies such as Toyota. In the 80’s and 90’s they combined into what is now called Lean, and this broader concept of manufacturing has progressively been introduced to western manufacturers, and more recently to the service sector.
Lean is often described as an approach where waste is systematically eliminated from an organisation’s processes. At its most basic level, it involves a systematic focus on rework, inventory, poor reliability, poor quality, and poor throughput throughout the organisation, and its supply chain.
A ‘… philosophy that shortens the time line between the customer order and the shipment by eliminating waste’.
Lean is the term that was introduced to describe the philosophy and practices under-pinning the Toyota Production System (TPS). TPS (developed in the 1970’s) was a vastly superior system of manufacturing than that found in most western automotive manufacturers.
Fundamentally TPS was challenging the foundations of mass production, by creating systems and an operating culture that enabled the company to manufacture a considerable variety of products, with high levels of efficiency and quality.
‘To be a lean manufacturer requires a way of thinking that focuses on making the product flow through production without interruption, a pull system that cascades back from customer demand by replenishing what the next operation takes away at short intervals, and a culture in which everyone is striving continuously to improve.’
A key ingredient of the Lean approach is its emphasis on the creation of customer focused ‘value chains’ to help focus its improvement efforts.
Lean Manufacturing has helped companies to overcome some of the difficulties they experienced with introducing Just In Time. In some instances, JIT was seen as a blunt instrument for reducing working capital requirements. This objective was often very dangerous in practice as forced reductions of stock levels often caused major problems in businesses that lacked basic process dependability. This meant that companies de-stocked faster than they could improve, as a result serious customer service problems ensued. JIT placed great pressure on supply chains. It is one thing to determine the capability of your own company but not so easy to ensure integrity of supply from a large and diverse supplier base. It soon became apparent that JIT required a partnership between supplier and customer. Both of the examples above resulted in “pseudo” improvement programmes, as no attempt was made to approach the introduction of JIT in an organisation wide sense.
To be effective JIT needed waste reduction in all areas of an organisation, and in the supply chain. Lean Manufacturing approaches the issue of waste from a total process/total organisation perspective, and therefore addresses the need for capable processes, effective supply chains etc.