LEAN MEANS ELIMINATING WASTING

MANUFACTURA ESBELTA SIGNIFICA REDUCCION DE REPROCESOS

Getting “lean” has become a corporate buzzword. A corporate executive hearing about the

success of his competitors with a lean program might say to a sub¬ordinate, “We must get lean to

survive in this competitive market. Go take a course and get certified on this lean stuff and come

back and do it.” If only it were so easy. The subordinate, often a middle manager or engineer, goes

through the certification course, starts to sort out the bewildering array of terms like “kanban,”

“andon,” “jidoka,” “heijunka,” “takt time,” and on and on, and comes back charged up and

overwhelmed. “Where do I start?” he asks. “Our processes don’t look like the case examples they

used in class.”

We often tour plants that have put in place beautifully laid out cells, without a deep understanding of the purpose. In one exhaust system plant a cell assembled a complete muffler out of an assortment of parts. It was a “one piece flow.” Unfortunately, when we happened to tour the plant certain operations had gotten ahead of others, and they did not have space for the subassemblies they were building. So they began to pile them up on the floor. Rather than stop producing, they continued to overproduce and pile parts on the floor. The plant manager smiled nervously and said, “We try to train them but they do not understand the concept of one piece flow.” He went over and yelled at the offending worker, and then we continued walking. This indicated a lack of clearly defined procedures (standards), an unwillingness to deal with uncomfortable situations, and a lack of “stop and fix problems immediately” mentality. The plant manager did not truly understand or embrace the philosophies of the Toyota Way. He had gotten the form but not the substance of flow.

Toyota has identified seven major types of non-value-adding activities in business or

manufacturing processes, which we describe below. You can apply these to product development,

order taking, and the office, not just a produc-tion line. There is also an eighth waste, which we

have included in our list.

1. Overproduction. Producing items earlier or in greater quantities than needed by the

customer. Producing earlier or more than is needed gener-ates other wastes, such as overstaffing,

storage, and transportation costs because of excess inventory. Inventory can be physical inventory

or a queue of information.

2. Waiting (time on hand). Workers merely serving as watch persons for an automated

machine, or having to stand around waiting for the next

processing step, tool, supply, part, etc., or just plain having no work because of no stock, lot

processing delays, equipment downtime, and capacity bottlenecks.

3. Transportation or conveyance. Moving work in process (WIP) from place to place in a

process, even if it is only a short distance. Or having to move materials, parts, or finished goods

into or out of storage or between processes.

4. Overprocessing or incorrect processing. Taking unneeded steps to process the parts.

Inefficiently processing due to poor tool and product design, causing unnecessary motion and

producing defects. Waste is generated when providing higher quality products than is necessary.

At times extra “work” is done to fill excess time rather than spend it waiting.

5. Excess inventory. Excess raw material, WIP, or finished goods causing longer lead times,

obsolescence, damaged goods, transportation and storage costs, and delay. Also, extra inventory

hides problems such as production imbalances, late deliveries from suppliers, defects, equipment

downtime, and long setup times.

6. Unnecessary movement. Any motion employees have to perform during the course of

their work other than adding value to the part, such as reach¬ing for, looking for, or stacking parts,

tools, etc. Also, walking is waste.

7. Defects. Production of defective parts or correction. Repairing of rework, scrap,

replacement production, and inspection means wasteful handling, time, and effort.

8. Unused employee creativity. Losing time, ideas, skills, improvements, and learning

opportunities by not engaging or listening to your employees.

Developing a Long-Term Philosophy of Waste Reduction

In recent years there seems to be an almost maniacal rush to “get lean,” as if there is a finish line

in the process. Rapid results and large gains are, of course, part of the allure of the Toyota Way,

and there is nothing wrong with the expectation of large benefits. The problem occurs when the

short-term push for results crosses paths with some of the philosophical elements, which require a

long-term view.

For example, we have led many focused improvement activities, sometimes called the “kaizen

blitz” or rapid improvement event. It is exhilarating to see the waste, come up with innovative

ideas for waste reduction, and actually make the changes right then and there. The results are

almost always astounding to the participants. The new process takes a fraction of the space, there

is a clearer understanding of flow, often fewer people are needed, and equipment that had been

overproducing is often surplused. The team disbands after a big celebration. But two weeks later

the process keeps stopping, some operations are overpro¬ducing, the visual management board is

not kept up, and it’s business as usual, fighting one fire after another.

The typical problem is that none of the support systems were put in place to sustain what was

accomplished in the one-week event. Skilled leadership is absent, for example. Standardized plans

for reacting to breakdowns are lacking. There is no good process for daily equipment

maintenance. Standardized work may be posted, but it is not understood or followed. The

unseasoned manager who does not understand will start to revert to the old process, allowing

inven¬tory to build up and trying to drive production through brute force methods to chase the

schedule.

The Toyota Way is to build a lasting learning organization in which prob-lems are constantly

surfaced and team associates are equipped with the tools to eliminate waste. When this occurs,

you are developing a long-term capability for improvement and adaptation to the environment. A

well-executed kaizen workshop can be a step in teaching people what is possible. But it should be

part of a longer term strategy for developing lean value streams and ultimately a lean enterprise.

One useful tool for guiding improvements based on a care¬fully thought-through plan is value

stream mapping.

Value Stream Mapping Approach

Improving isolated processes seems to come more naturally than improving flow across value

streams. You can see this in the way most plant tours are conducted. The tour usually starts at the

raw material receiving dock, and we might see

trucks being unloaded and then walk to the first process that adds value. The tour guide gives a

detailed explanation of that manufacturing process, mar-veling at any new technology like

machine vision inspection or laser welding. We walk past piles of inventory, hardly noticing, then

take a detailed look at the next value-added process.

Often, a lean expert will ask to conduct the tour in reverse, starting with the shipping dock. This is

not just a gimmick or a clever trick. Beginning at the end of the flow allows the lean expert to

understand material flow from the cus-tomer’s perspective. They do not want to know where

material is going next, they want to know where it comes from. Is it being pulled from this process

or is an earlier process pushing it whether it is needed or not? This will be the basis for the

development of the “future state.”

Lean experts will ask questions about the rate of customer demand [takt in the Toyota Production

System (TPS)] and how many days of finished goods inventory is being held. They go to the final

operation that adds value, often an assembly operation, and ask how the operator knows what to

make, in what quantity, and when to make it. They quickly lose interest in the tour guide’s detailed

discussion of the nifty automated process that is continuously monitored by computer.

The lean experts are looking at the operation from a value stream perspective. Individual

processes need to be stabilized, but the reason for that is to support the flow needed to give the

customers what they want, in the amount they want, when they want it. Toyota’s Operation

Management Consulting Division (OMCD) was created by Taiichi Ohno to lead major TPS projects

and teach TPS by doing. He wanted a tool to visually represent the flow of material and

information and pull people back from dwelling on individual processes. Ultimately, that led to

what we now call “value stream mapping,” and what Toyota calls the “Material and Information

Flow Diagram.”

Originally, this methodology was passed on within Toyota through the learning by doing process—

mentors trained mentees by assigning them to work on projects. There was no documentation on

how to develop the Material and Information Flow Diagram, and in fact the name didn’t come

until long after the method was being used. Mike Rother and John Shook changed that by writing

Learning to See (Lean Enterprise Institute, version 1.3, 2004), in which they teach the methodology

by walking the reader through a case study on Acme Stamping. You learn how to develop a current

state map on one piece of paper that shows your material flow and the information flow that

triggers the material flow, and you can see the waste in your value stream. You calculate the

value-added ratio—the ratio of value-added time to total lead time—then learn how to develop a

future state map: material and information flow based on flow and pull and building to the

customer rate of demand, or the takt time. From there you develop a detailed action plan and do

it.

There have been a number of books building on Learning to See. Kevin Duggan, in Mixed Model

Value Streams (Productivity Press, 2002), presents in a similar for¬mat how to map a process in

which there is a great deal of variety in your prod¬ucts and they have different cycle times—for

instance, variation in the amount of time needed to machine parts for different products. And for

improving repetitive business-office processes, Beau Keyte and Drew Locher, in The Complete

Lean Enterprise (Productivity Press, 2004), work through a case in a sim¬ilar way to Learning to

See, except the case is a business process instead of a manufacturing process.