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FIVE STEPS

IMPLEMENTING LEAN PRINCIPLES
IN YOUR ORGANISATION.

responsiveness and strength. The Japanese didn’t have the resources. businesses can create high quality products and services using less money. 01 5 Steps Implementing Lean in your Business . time and effort. Womack came up with ‘Lean’ to reflect its athletic qualities of speed. Although the purpose and principles of Lean are relatively simple. with less costs and inventory. so they devel- oped a philosophy of “just in time” – make only what is needed. when it is needed. we strove to produce as much as we could on a given machine. Lean Production is a method of removing waste from a process to create value for the customer. When the western world moved from craft production – where everything was one-off and hand-made – to industries built on mass production and economies of scale. who were used to moving assembly lines and mass production. space or suppliers for mass production. implementing and sustaining Lean requires discipline and commitment from the whole business. By implementing a set of principles and practices. The purpose of this guide is to introduce you to the five steps needed to implement Lean Princi- ples and experience all of these benefits in your business. created by Leaders Taiichi Ohno and Eiji Toyoda between 1948 and 1975. in the amount needed. Womack in the book ‘The Machine That Changed the World’ to describe Toyota’s manufacturing business. It wasn’t by a small amount. and allow materials to flow to the customer as fast as possible so they are paid as soon as possible. Unsure what to call this radical new system. Toyota represented an entirely new paradigm to the westerners. and was deliver- ing a higher quality compared to the American and European automakers. All of his research showed that Toyota was faster. even if it means producing more than the customer wants and building up inventory. The ideas behind Lean Production as a business methodology come from The Toyota Produc- tion System. agility. Toyota used a small fraction of the inventory but was almost twice as fast in product development.Introduction The term Lean Production was first used in 1990 by Massachusetts Institute of Technology (MIT) Research Director James P.

Take time to listen to your customers to develop an in-depth understanding of what exactly it is that they value. After identifying your customers’ problems. and therefore doesn’t have any value. What causes a lack of customers? In most cases it is because the product or service wasn’t positioned to solve your customers’ problems. you have created value. Value is therefore defined by your customers. The Leadership Network® STEP 1 UNDERSTAND YOUR WASTE “The most dangerous kind of waste is the waste we do not recognize” Shigeo Shingo What is waste? Waste is defined in Lean as anything that does not add value to the customer. and nobody else. 02 5 Steps Implementing Lean in your Business . The first step to becoming a Lean business is therefore to identify your customers’ problems. When you have proven that your products and services can provide a solution at the right cost for your customer. design and position your products and services to solve them. What is value? The usual reason why any product or service fails is a lack of customers.

When eliminating wasteful practices in your organisation. 1. You can then remove the variations that cause inconsistencies (Mura) in your processes. The Leadership Network® Why do so many enterprises attempt to employ a Lean transformation and then fall at the first hurdle? According to Professor Peter Hines. Read: How to eliminate wasteful practices in your enterprise Summary Waste is defined in Lean as anything that does not add value to the customer. you should first focus on removing the unreasonable stress (Muri) placed on your staff and equipment. the Director of the Lean Enterprise and Research Centre (LERC). You create value by providing the right solution at the right cost for your customer. Lean innovators must first grasp Mura and Muri before tackling Muda. An example might be a manager rushing to meet monthly targets and in the process using resources or producing parts which are not required. Finally. eliminate all wasteful activities (Muda) from your business. Mura refers to any variation in a process that causes inconsistency. Mura and Muri. The three wastes are interlinked. Value is defined by the customer. Such as over producing. Muri (Japanese for Overburden) In Lean terms. it’s usually because they didn’t pay close attention to the three types of waste – Muda. 2. This could be anything from lack of proper equipment. Muda refers to the non-value adding activities in a process. Muda (Japanese for Futility) 無駄 In Lean terms. Mura (Japanese for Unevenness) ムラ In Lean terms. 3. so eliminating one type of waste will fail to solve a waste issue. untrained staff to poorly laid-out work places. The first step towards becoming a Lean business is developing an in-depth understanding of your customers’ problems. Muri and Mura. The Toyota Production System identifies three types of waste: Muda. 03 5 Steps Implementing Lean in your Business . Muri refers to the unreasonable stress that is placed upon people 無理 and equipment to achieve the correct standard of work. unnecessary transportation or waiting for suppliers.

material. and creates a more efficient Future State Map. The key to creating an excellent Current State Map is to document exactly what you see with your own eyes. value stream mapping allows them to identify waste. people and information that must come together to deliver products or services that create customer value. materials. and involving everyone in the process in its creation. or how it used to work a few months ago. We are interested in the here and now. It’s a visual representation of the entire process from your suppliers through to your customers. Nobody needs to know how the process was supposed to work. Edwards Deming A value stream includes all of the activities. The Leadership Network® STEP 2 IDENTIFY YOUR VALUE STREAM “A bad system will beat a good person every time” W. A Value Stream Map visually maps the flow of actions. this is also called a “Current State Map”. people. What is value stream Value stream mapping then analyses. documents and improves mapping? the flow of your value stream. delay and information required to deliver a product or service. 04 5 Steps Implementing Lean in your Business . For most large enterprises undergoing a Lean transformation. reduce cycle times and implement process improvement. The objective of value stream mapping is to understand how your current state works and design a future state that will remove the root causes of waste.

Problem Identification You need to first discover and then validate the current problems that your customers and your business face in your current state. 3. the movement of products or services and the information that regulates their flow need to be added to complete your current value stream map. The problem with value stream mapping is that finding improvement in one area does not necessarily mean you have eliminated waste everywhere else. Value stream mapping is a Lean management tool used to analyse. people. Value stream mapping isn’t for every company. and the application of VSM tools need to focus on longer-term mana-gement. Summary A value stream includes all of the activities. The objective of VSM is to understand how your current state works and design a future state that will remove the root causes of waste. document and improve the flow of your value stream. Value stream mapping is based on three tasks: problem identification. 2. which solves the problems and removes wasteful activities that you have identified. using mapping to make tweaks in one part of the business might have an adverse effect somewhere else.Transformation With your current value stream map completed. which identifies each significant action. you need to create a future value stream map. Information Management When you have validated the problems. Secondly. materials and information that must come together to deliver products or services that create customer value. After each action is documented. a designated team need to “walk” your current value stream and draw a map. and not just mapping. 05 5 Steps Implementing Lean in your Business . The key to the successful application of value stream mapping tools is focusing on longer-term management. information management and transformation. The Leadership Network® The tool consists of three tasks: 1.

It's the key to understanding that less is more. What is takt time? Takt Time is a concept used to measure the pace of customer demand. To calculate your Takt Time you can use the following formula: Daily Work Time Daily Customer Demand 06 5 Steps Implementing Lean in your Business . gets managed” Peter Drucker What is flow? Flow is the continuous movement of products and services through the entire value stream towards your customer. The pace of your flow is regulated by a concept called Takt Time which roughly translates as ‘Keeping the beat’ from the German word ‘Takzeit’. Takt Time is the heartbeat of your Lean operation. The Leadership Network® STEP 3 MAKE YOUR VALUE STREAM FLOW “What gets measured.

There are three basic principles to make your value stream flow: 1. as it leads to more waste across the business. your Takt Time. or equal to. Calculate Takt Time Identify for your products and services and ensure that all cycle times are less than. It regulates the speed of your flow. Plan Capacity Ensure your processes. Takt Time is used to measure the pace of customer demand. equipment and people are capable of working to your Takt Time. The Toyota Production System identifies over-production as the worst type of waste. if your business works 8 hours in a day and sells 4 products or services a day on average. reporting lines and layout of your work places support your flow. 07 5 Steps Implementing Lean in your Business . Aligning your value stream flow to your Takt Time is the key to understanding that less is more. The Leadership Network® Using the formula on page 6. Summary The goal of the value stream flow is to move resources through your value stream at a speed which is ultimately determined by customer demand. 8/4 = Takt Time of 2 hours This means that a product or service needs to be completed every two-hours because on average a customer is buying your products or services every two hours. 3. 2. Manage Organisational Structure Ensure that the hierarchy.

is a lean manufacturing strategy used to reduce waste in the production process. The Leadership Network® STEP 4 IMPLEMENT A PULL SYSTEM “Improvement usually means doing something that we have never done before” Shigeo Shingo What is a pull system? A “pull system”. In this type of system. When a resource is used a signal is sent to the following process to replace what was used. Pacing the processes to Takt time (to prevent overproduction) 3. Signaling replenishment via a Kanban signal 4. resources used in the manufacturing process are only replaced once they have been consumed. The system therefore ensures that companies only make enough products to meet customer demand. Flowing product in small batches (approaching one piece flow where possible) 2. Leveling of product mix and quantity over time 08 5 Steps Implementing Lean in your Business . more commonly known as a Kanban system. The important technical elements for the pull system to succeed are: 1.

Visualize Workflow Create a visual model of your work and workflow so you canobserve the flow moving through your Kanban system. It is the cornerstone of a culture of continuous improvement. 3. The Leadership Network® There are three principles of a Kanban system: 1. resources used in the manufacturing process are only replaced when they have been consumed. 2. Summary In a “pull” or “Kanban” system. 09 5 Steps Implementing Lean in your Business . Limit Work in Progress Place strict limits on how much unfinished work is in process toreduce the time it takes a product to travel through the Kanban system. The goal of a Kanban system is to maximize the delivery of value to your customer by steadily and simultaneously increasing the speed and quality of your output until the system reaches its optimal level. Focus on Flow Develop team-driven policies and manage the metrics to analyse and improve the continuous flow of work through your Kanban system. Implementing a pull system is a powerful method for managing your workflow process and gradually improving your performance.

it is a total strategy” Taiichi Ohno There is no end to the process of reducing effort. offering a product. techniques and philosophy takes years of dedication and study. cost. 10 5 Steps Implementing Lean in your Business . space. or service. which is ever closer to delivering perfect customer value. You must return to the first step and begin your next Lean implementation. time. Many people and businesses around the world dedicate their lives to Lean and to master the skills. and mistakes. The Leadership Network® STEP 5 CONTINUOUSLY IMPROVE “Lean is not a program.

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