Prof Peter Hines - Lean Enterprise Research Centre · Redefining the Lean Principles 4 Womack & Jones’ 5 Lean Principles “Lean Thinking can be summarized in five principles: precisely

Prof Peter Hines

2009 Annual Conference

© S A Partners 1993 - 2009

Redefining the Lean Principles

Professor Peter Hines

© S A Partners 1993 - 2009Redefining the Lean Principles 3

Overview

Womack & Jones’ 5 Lean Principles Some Concerns A Redefined Principle Set: the 7Ps Conclusions


Womack & Jones’ 5 Lean Principles

“Lean Thinking can be summarized in five principles: precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let the customer pull value from the producer, and pursue perfection”

J. Womack & D. Jones, Lean Thinking, 1st Edition, Page 10

© S A Partners 1993 - 2009

Some Concerns


Questions about the Current 5 Lean Principles

What is working well? What is working less well?

What is missing? Any other comments?

Name:………………………………… Firm:…………………………Email………………………


Focus on the Patient ValueUnderstand our processes Value streamSocial & Technical Flows WasteResponsive Teams PullLearn and Spread Perfection

Many Have Customised: e.g. Flinders Medical

Flinders Principles Lean Principles


Sustainable Lean Management

Source: P. Hines, P. Found, G. Griffiths & R. Harrison, Staying Lean, 2008


Lean Thinking

“Fortunately, there is a powerful antidote to muda: lean thinking….in short, lean thinking is lean because it provides a way to do more and more with less and less – less human effort, less equipment, less time, and less space – while coming closer and closer to providing customers with exactly what they want”



Getting off on The Wrong Foot

“Muda. It’s the one word of Japanese you really must know….muda means “waste””


“Eliminate muda, mura, muri…completely”

Taiichi Ohno,http://www.toyota.co.jp/en/vision/traditions/jul_aug_04.html

http://www.toyota.co.jp/en/vision/traditions/jul_aug_04.html


Muda, Mura & Muri

Muda (Waste) Mura (Unevenness) Muri (Burden)

© S A Partners 1993 - 2009

The Redefined Principle Set

The 7Ps


The New Lean Principles: #1 Purpose

The ‘Missing’ Principle Value, Cost & Waste Creating a Balanced Purpose

© S A Partners 1993 - 200919

Value, Cost & Waste

PerceivedValue

Waste/Cost

xCreating Lean Solutions:

1. Reduce Internal Waste2. Develop Customer Value

Cost-Value Equilibrium

1

2


Creating a Purpose

Effective andsustainable

purpose

Voice of the Customer

Voice of the Owner

Voice of Society

Voice of the Employee


Understanding the Voice of the Owner

Align your Key Business ProcessesTo the Value Criteria of your Owners

Financial PerformanceVersion:Date:Name:Currency:

Notes Year -2 Year -1Current

Year Budget

Current Year

Expected£k £k £k £k

Total Revenue

Gross MarginGross Margin (%)

Overhead costProfit before Interest and Tax

Return on Sales (%)

Operating Cash Flow

Memo: Prior YearNet Trading Assets at Period End Return on Assets (%)

Memo: Prior YearInventory at period endDebtor DaysCreditor DaysInventory turn ratioAsset turn ratio

Notes 1) Use exisitng accounting definitions with consistency throughout

Group:Business:

Sheet1

Workshop Process.ppt - 1

Financial Performance

Group:Version:

Business:Date:

Name:

Currency:

NotesYear -2Year -1Current Year BudgetCurrent Year Expected

£k£k£k£k

Total Revenue

Gross Margin

Gross Margin (%)

Overhead cost

Profit before Interest and Tax

Return on Sales (%)

Operating Cash Flow

Memo:Prior Year

Net Trading Assets at Period End

Return on Assets (%)

Memo:Prior Year

Inventory at period end

Debtor Days

Creditor Days

Inventory turn ratio

Asset turn ratio

Notes1) Use exisitng accounting definitions with consistency throughout

Workshop Process.ppt - 1


Understanding the Voice of the Customer

“Value Criteria” Rank Product XX Performance VsYour Expectations Our Competitors Your best Other Supplier

Better than

Same as

Worse than

Better than

Same as

Worse than

Better than

Same as

Worse than

Responsiveness 4

Price 5

Quality of people 1

Innovation 2

Expertise in subject areas

3

Align your Key Business ProcessesTo the Value Criteria of your Customers


Understanding the Voice of the Employee

Align your Key Business ProcessesTo the Value Criteria of your Employees


Understanding the Voice of the Society

Align your Key Business ProcessesTo the Value Criteria of Society


The New Lean Principles: #2 Process

Not just Value Streams within Order Fulfilment Realising X and 2X Profit Potential


Typical Business Processes

Strategic ManagementDirectional Process

Con

tinuo

us Im

prov

emen

tEn

ablin

g pr

oces

s People ProcessEnabling process

Environmental Systems Management

Enabling Process

Innovation Process

Order Creation

Order Fulfilment

Core Processes

Core Processes


Realising X and 2X Profit Potential

ProfitPotential

£

Time

Classic Lean Capacity CreationIn Order Fulfilment

= Cost Saving

Lean EnterpriseFill Capacity

In e.g. Order Creation= Wider Margins

= Increased Turnover

X

2X


Value and Cost: Example

© S A Partners 1993-2005


The New Lean Principles: #3 People

Respect for People Communication Leadership Engagement Reward & recognition Training


Fake Lean and Real Lean: Learning from The Toyota Way

Continuous Improvement

Fake Lean

Respect for People

Real Lean

90% of problems in business are caused by management, 10% by the workman. F. W. Taylor, 1912


Top 10 Reasons for Failure

1. Lack of a clear executive vision.2. Lack of an effective communication strategy.

3. Failure to create and communicate a real sense of urgency.

4. Poor consultation with stakeholders.

5. Lack of structured methodology and project management.

6. Failure to monitor and evaluate the outcome.

7. Failure to mobilise change champions.

8. Failure to engage employees.

9. Absence of a dedicated and fully resourced implementation team.

10. Lack of sympathetic and supportive Human Resources policies.

Source: Lucey, Bateman & Hines, 2005


The New Lean Principles: #4 Pull

Product, Parts & Information Runners Repeaters, Strangers CI/DI Training & development Push to Pull lean


The CI Learning System

Continuous Improvement

Redesign process

Strategic ChoicesTargets

DeployedTargets

Organisational Learning

Feedback tostrategy

Greater rate of improvement

Faster, better change

Discontinuous Improvement

Seamlessly integrate


Ad-hoc FormalGoal

orientedManaged

Autonomy Way of Life

Achi

evem

ent

KnowingOrganisation

UnderstandingOrganisation

ThinkingOrganisation

LearningOrganisation

Lean Maturity and Organisational Learning

Single looplearning

Double looplearning

Step change in learning occurswhere the organisation can achieve higher results than previously imagined due to lack of knowledge of what was possible

Bessant & Caffyn

McGill & Slocum

Senge

PushLean

PullLean


The New Lean Principles: #5 Prevention

Quality Designing it right Quality at source Jidoka

Risk Zero Defect Thinking (ZD) using PFMEA


The Quality Pillar in the Classic Toyota Model

Clear strategic foundations

Manage by fact using appropriate toolsWorkplace organisation and visual management

Standardised and stable process

• Flow• Pull• Quick

changeover• Workload

balancing• Capacity

Planning

Delivery

• Authority to stop

• Error proofing• Root cause

solutions• Six Sigma• Zero Defects

Quality

Sustainable continuous improvementPeople and teamwork

Lean Maturity Best quality, cost, lead time, safety


The New Lean Principles: #6 Population

Looking after the Wider Population Environment Management Corporate Social Responsibility


Lean Green Framework

Waste(Muda)

Non value adding to the product or service in the

eyes of the customer

Over Production

Lost People Potential

Waiting

Transporting

Inappropriate Processing

Unnecessary Inventory

Unnecessary Motion

Defects

Waste(Muda)

Non value adding to the product or service in the

eyes of the customer

Over Production

Lost People Potential

Waiting

Transporting

Inappropriate Processing

Unnecessary Inventory

Unnecessary Motion

Defects

Lean

Green Waste(Muda)

Destruction of our environment in the eyes

of society

GreenhouseGases

Poor Health & Safety

Rubbish

Pollution

Excessive Power Usage

Excessive Water Usage

ExcessiveResource

Usage

Eutrophication

Waste(Muda)

Destruction of our environment in the eyes

of society

GreenhouseGases

Poor Health & Safety

Rubbish

Pollution

Excessive Power Usage

Excessive Water Usage

ExcessiveResource

Usage

Eutrophication


The Revised Lean Model of Excellence

Clear strategic foundations

Manage by fact using appropriate toolsWorkplace organisation and visual management

Standardised and stable process

• Flow• Pull• Takt time• Quick

changeover• Workload

balancing• ……

Delivery• Authority to

stop• Error

proofing• In-station

quality control

• Root cause solutions

• ……

Quality

Sustainable continuous improvementPeople and teamwork

High Engagement Best quality, cost, lead time, safety

• 3Rs: Reduce, Reuse, Recycle

• Stress Point Management

• CO2 budgets• Technology

solutions• ……

Environmental


The New Lean Principles: #7 Perfection

Managing towards a realistic Future State Sustaining the Change


CurrentState

PerformanceLevel

Time

IdealState

FeasibleFuture State

2) Back off to what is currently possible

TargetedFuture State

3) Back off to chosen target

ImplementationProjects

AchieveTarget 4) Establish new target

New TargetedFuture State

Managing Improvement Cycles to Future State

From mapping to management


The 5S ‘S’ Curve

Improvement

Time

80%

60%

40%

WIIFU

WIIFM

Target


Sustaining the Change

Lean Iceberg Model

Processmanagement

Technology, tools and techniques

Strategy and alignment

Leadership

Behaviour and engagement

ABOVE WATERLINE - VISIBLEUNDERWATER - ENABLING


Supply chain integration

3

21

4 5

Lean Iceberg Model

Processmanagement

Technology, tools and techniques

Strategy and alignment

Leadership

Behaviour and engagement



Supply chain integration

43

21Per

form

ance

and

Mat

urity

Engagement and Time

Roadmap 1Jan 2004

Roadmap 2July 2005

Specify Value by Offering


Make the Offering Flow


Integrate the Value Stream

At the Pull of the Customer

In Pursuit of Perfection





Integrate the Value Stream

At the Pull of the Customer

In Pursuit of Perfection


Conclusions

There is some question about the existing 5 Lean Principles

They appear to need to be contextualised The new 7Ps may be helpful I would like your help in perfecting them!!!


Further Information

For further information, please contact:

Professor Peter HinesM: +44 (0)7778 840979

E: [email protected]

Or join me at my LinkedIn Lean

Enterprise groups:

mailto:[email protected]

Prof Peter Hines� Redefining the Lean Principles��Professor Peter HinesOverviewWomack & Jones’ 5 Lean PrinciplesSome ConcernsQuestions about the Current 5 Lean Principles Many Have Customised: e.g. Flinders MedicalSustainable Lean ManagementLean ThinkingGetting off on The Wrong FootMuda, Mura & MuriThe Redefined Principle SetThe New Lean Principles: #1 Purpose Value, Cost & Waste� Creating a PurposeUnderstanding the Voice of the OwnerUnderstanding the Voice of the CustomerUnderstanding the Voice of the EmployeeUnderstanding the Voice of the SocietyThe New Lean Principles: #2 Process Typical Business ProcessesRealising X and 2X Profit PotentialValue and Cost: Example The New Lean Principles: #3 People Fake Lean and Real Lean: Learning from The Toyota WayTop 10 Reasons for Failure The New Lean Principles: #4 Pull The CI Learning SystemLean Maturity and Organisational LearningThe New Lean Principles: #5 Prevention The Quality Pillar in the Classic Toyota ModelThe New Lean Principles: #6 PopulationLean Green FrameworkThe Revised Lean Model of ExcellenceThe New Lean Principles: #7 Perfection Managing Improvement Cycles to Future StateThe 5S ‘S’ CurveSlide Number 43ConclusionsFurther Information

Documents

Prof Peter Hines - Lean Enterprise Research Centre · Redefining the Lean Principles 4 Womack & Jones’ 5 Lean Principles “Lean Thinking can be summarized in five principles: precisely