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Prepared by: Catherine Clothier

Prepared by: Catherine Clothier

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Published by: api-26244572 on Jan 18, 2010
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01/17/2010

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The Seven Levels and „Lean‟ 
 
During the last 50 years, Toyota has developed from small beginnings into acompany that is able to successfully challenge the top 3 car manufacturers inthe world. They have achieved this not by mergers and acquisitions but byorganic growth through the successful development and application of theToyota Production System use of lean tools and techniques. As others havetried to copy this new way of working, it has in recent years received somebad press on the back of process re-engineering and down-sizing, where ithas become synonymous with cost cutting. Lean done well, however,
 “.
..involves a far deeper and more pervasive cultural transformation than most
companies can begin to imagine.” 
¹
What is “
Lean
”?
 
Lean thinking drives organisations to focus on adding value for the customer
by the elimination of “waste” and the pursuit of “standard work” (one best
way).
The five core principles of Lean are:
1.
 
Specify “Value” as defined by the customer
- What is the customerprepared to pay for?2.
 
Understand the end to end process of your product/service
- Whereis the value added in the process and where are the costs, hand offs,duplication, waste?3.
 
Make the work Flow
- make the work flow from one added valueelement to another by eliminating waste such as errors & waiting ordowntime hence shortening the time from raw material to finishedproduct.4.
 
Drive the operation using “Pull” not “Push”
- Process work whenit is required by the customer.5.
 
Aim for Perfection using continuous improvement
 It is not, however, something that can just be used in manufacturingindustries.Prepared by:Catherine Clothier
 
Th
e Seven Levels and „Lean‟ 
 
www.valuescentre.com2
Lean thinking has been an enormous influence on my business thinking.It is not just about improving efficiency, it shows how you can fundamentally transform your business.
 
Sir Terry Leahy Chairman and Chief Exec, TescoThis paper shows how Lean, when done well, fits the model of the SevenLevels of Corporate Consciousness, and how it can make a significantcontribution
towards an organisation becoming „full spectrum
.
‟ 
 
Level 1- Survival
(Pursuit of Profit and Shareholder Value)
*5s:
a simple and effective process for improving the workplace.Sort- removing the unnecessary from the necessarySet in order- a place for everything and everything in its placeShine- cleaning is also inspecting and therefore preventingStandardise-
creating an “obvious office” 
Sustain- maintaining and improving the standards set
TOYOTA
TPS (Toyota Production System), then, is the result of efforts to direct all activities to support the goal of firm survival 
It is this focus that enableToyota to behave as a natural organism, enabling it to evolve as a truly emergent system
This is vastly different from the n
arrow goal of ‘makingmoney.’ 
 
 John Shook Toyota Manager The New York Times
, July 4, 2006, reports:
ValuesExhibitedBenefits Pitfalls
Cost reductionCost reduction is often the trigger for many businesses starting ontheir lean journey. However, in a true lean operation cost reduction isa bi-p
roduct of what is in fact a focus on „value‟ 
- from a customerrather than a shareholder point of view.Cost reduction can be taken toofar- cutting jobs/ compromisingsafety. This, not unexpectedly,has the impact of reducing anyfurther benefits to be gainedfrom lean, as the workforce willnaturally fight against this inorder to protect their jobs.Job securityJob security is shown here because as a result of implementing leantools and techniques the business should become more competitiveand provide greater job stability.SafetyStandardising processes and implementing regimes such as 5S* willimprove health & safety for employees.
 
Th
e Seven Levels and „Lean‟ 
 
www.valuescentre.com3
Sales data for June, released Monday, showed that General Motors and Ford Motor hit new lows for market share in the first six months of the year, while Toyota and Honda posted record sales for the period.
G.M.’s sales fell nearly 26 percent from last June when it was
the only automaker offering employee discounts to all customersand posted a 19-year high.
Ford’s sales last month declined 7 
 percent and Daiml 
erChrysler’s sales were down more than 15 
 percent.
 At the same time, Toyota’s sales in June rose 14.4 percent from
a year ago, and the company outsold DaimlerChrysler for thethird consecutive month.

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