Lean, Mean Business Machine - Article On Lean Part 1

Lean manufacturing's main keys are the following:

• Perfect first-time quality - quest for zero defects, revealing and solving problems at the source
  
  
• Waste minimization - eliminating all non value-adding activities and safety nets, maximization of scarce resources (capital, people and space)
  
  
• Continuous improvement - reducing costs, improving quality, increasing productivity and information sharing, pull processing: products are pulled from the consumer end, not pushed from the production end
  
  
• Flexibility - producing different mixes or greater diversity of products quickly, without sacrificing efficiency at lower volumes of production, building and maintaining a long term relationship with suppliers through collaborative risk sharing, cost sharing and information sharing arrangements.

The world’s economy today is always changing and more competitive than ever. There are new companies created everyday and old ones tightening their grip on their thrifty empires. For any of these companies to remain successful or become successful, they must find a way to stay on top of their game and please the customer better than ever before. Increasingly, successful companies are turning to lean business practices (lean manufacturing, lean customer service, lean office, lean distribution, lean public sector) as the answer to staying on top of their industry. Lean 5S is not necessarily a particular way of producing a product. It is instead a philosophical way of thinking.

McDonald's can be said to have recently implemented a lean technique. McDonald's no longer makes an abundance of food to wait in holding bins in anticipation of a meal time rush. If a rush does not happen, then there is an obvious waste of food as well as labor. Instead, McDonald's has focused on making the food when the customer orders to provide a fresher and hotter meal. A focus on consistent labor training and improvement is the key to keeping this service speedy and reliable. By implementing this new "leaner" way of thinking, waste of food and labor has been minimized, which is the main goal of the lean process.

Lean manufacturing was actually born in 1914 with Henry Ford and the mass production moving assembly line. Lean relies on keeping a steady flow of product out the door to the customer. Ford's system did exactly that, though it was missing some of the most important and common factors in today's lean philosophy. The original Ford assembly line was putting out thousands of Model T cars at a vast rate. The problem was that it did not matter what the customer demand or requests were; there was a base black Model T available. They didn't worry about customer satisfaction or demand whatsoever. The Ford motor company stuck with mass production and had a large stock of inventory (waste) just sitting around. Although Toyota is credited with beginning Lean Production with their Toyota Production System, the roots of "lean" date back as far as the 16th century. In 1570, King Henry III of France watched in amazement as the Venice Arsenal built galley ships in less than an hour using the continuous flow process.

Later in the 1940's The Toyoda Loom Company had problems of its own. After World War II when Japanese industry was decimated, the Toyoda family decided to extend Toyoda Automatic Loom Company to start an automotive company. They had some cash but did not have the infrastructure. They certainly could not compete directly with the established companies like Ford. Therefore, their sole demand was in Japan, which meant supplying small quantities with high variety, while Ford was selling any color Model T you wanted as long as it was black. Toyota also had to rely on outside supplier partners to make the capital investment needed to get in business. Taiichi Ohno, leader of the Toyota manufacturing enterprise, came up with a system now called the Toyota Production System (TPS). He did not do this alone though. Ohno diligently studied Henry Ford and his company’s philosophies on manufacturing. Toyota and Japan had the problems of not enough space, resources, or demand to compete with the larger automobile manufacturers of America. By assessing and solving these problems, Ohno began the TPS and the manufacturing revolution known today as Lean Manufacturing.

After WWII, Ford was ten times more productive than Toyota, but between 1945 and 1970, Ohno's Toyota Production System was revolutionizing the Japanese automobile industry. It was during this time the rest of the world and particularly the United States started realizing the overwhelming benefits of lean manufacturing. The U.S. auto industry paid particular notice when The Machine that Changed the World was published highlighting the great accomplishments of Toyota and the huge gap between Japanese quality and productivity and auto companies in the West. The book coined the term "lean manufacturing" because Toyota was doing more with less of everything - less space, less people, less capital and less inventory.

As said before, Lean’s main goal is to eliminate or at least minimize waste. Lean 5S also seeks to streamline the workflow throughout the production process. By eliminating waste, a lean system eliminates variability in the process itself and in the cycle time of materials. The cycle time is the length of time production materials spend in process, while processing time is the length of time required to process any particular item at any given workstation. By eliminating variability within these two lean concepts, companies become more efficient, and are able to reduce the final costs of producing a customer-demanded quality product. Reducing variability is a core objective of Lean. In fact, variability reduction could be defined as Lean in action. Some of the benefits of reducing variability or practicing lean principles are shorter cycle times, shorter lead times, faster response times to customer demands, lower costs, greater flexibility, higher quality, better customer service, and higher revenue. Certainly, these are all elements of creating a successful company, capable of meeting the changing demands of a highly-competitive marketplace.

End of Part 1 - Click here for part 2 (needed to break it up do to size for online posting)