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IE 361

Current Quality Culture Mini Paper


Fall 2002

Lean Operations

Prepared by:

Heather Kruse
Kirsten Peters
Jeff Ellsworth
Amity Westphalen
What is Lean?
Lean production originally started as an assembly-line manufacturing methodology developed for
Toyota and the manufacturers of automobiles during the 1980’s. Some people still know it as the
“Toyota Production System.” Engineer Taiichi Ohno is credited with developing the lean
production methods and says that the goal of lean production is, “to get the right things to the
right place at the right time, the first time, while minimizing waste and being open to change.” It
has been discovered that in addition to eliminating waste, his ideas have led to improved product
flow and better quality.2
Today, lean manufacturing is implemented by companies such as Dell Computer, Ford, GM,
Cisco, Honeywell and Rockwell Int’l.5 Reports have been made that these companies have
improved productivity of workers by 25 to 40 percent, reduced required manufacturing space by
50 percent, virtually eliminated defective returns and achieved six sigma quality.1 Lean
production has become a set of guiding principles that encourages a continuously improving
organization and is not limited to assembly line procedures. Lean strategies are now applied to
every department of a company. Lean management requires human resources and quantitative
methods to work together to improve the materials and services supplied to and from an
organization, as well as the processes within the organization and the quality of the consumer
satisfaction.3

The Lean Process


The rules for implementing lean strategies can be summarized in the following ten steps2:
1. Eliminate Waste 6. Do it Right the First Time
2. Minimize Inventory 7. Empower Workers
3. Maximize Flow 8. Design for Rapid Changeover
4. Pull Production from Customer Demand 9. Partner with Suppliers
5. Meet Customer Requirements 10. Continuous Improvement
Eliminate Waste
Waste is defined as any product, process, or service, which does not add value to the ultimate
customer. Waste in business processes/production can be separated into seven types: waiting,
unnecessary motion, processing, inventory, moving items, excessive production, and correction
of defects.4
One very important way waste is eliminated is through a value stream analysis. Value stream
mapping includes mapping a business processes’ material and information flows from beginning
to end using a visual representation of every process. This includes developing a current state
map and a plan for proposed future state. The difference between the two states becomes the
basis for the lean production plan. The team mapping out the process is a cross-functional team
and includes operators, engineers, quality, and often management.
Workplace organization, or 5S, is a way of organizing workspace area to minimize waste. This
is an on-going process of keeping everything in its place. The 5S’s are sorting, simplifying,
sweeping, standardizing and sustaining.4
Minimize Inventory
Using a principle known as “Just-In-Time” can minimize inventory. This is the concept of
scheduling the production so that each good or service required is to be available exactly when
needed and not a moment sooner nor a moment later4. This will not only leave more space for
production by reducing inventory space needed, but could slash the prices of the company’s
products by eliminating the huge investment in all the mass-produced products that yield no
return until a buyer is found.
Maximize Flow
Flow is the progressive perfomance of tasks along the value stream so that a product proceeds
from design to launch or order to delivery with no stops, waste, or backtracking.4 Individual
processes are examined to determine the steps required to increase the smoothness of the flow.
Many times, flow maximization is a result of other completed steps of lean management.
Pull Production from Customer Demand
This concept essentially means that a step in the production process will not be completed until
there is a need for the process, such as a customer desiring the product. The pull system is based
on the communication of real-time needs from downstream operations and results in finished
product that was requested by a consumer or a product that is needed to reach a similar goal.4
The push system schedules upstream operation based on theoretical downstream proceedings and
is not based on need. This is the opposite of the pull system and can result in excessive
production.
Meet Customer Requirements
Value is a term used to decide if the product is precisely what the consumer desires. This is a
product or service provided to the customer at a specific time and a specific price, that has been
defined by the customer.4 Value can be determined by answering the following questions: “Does
the activity change the form, fit, or function of the product of service?” and “Is the activity
something that the customer would be willing to pay for if they were aware of it?”
One popular way that companies are giving their customers exactly what each individual desires,
is by using web pages which facilitate customer orders on the web page with flexibility and
customization. The companies can also receive instant feedback on design, quality, and service
issues.5
Do It Right the First Time
Companies must prevent product failures rather than react to them. To do this they must create
the culture to design quality and reliability into their products. Companies will use product
development teams to ensure that the quality and reliability issues of customers, manufacturing,
service, and suppliers are properly represented. The company must open communication channels
with customers to obtain timely and detailed product failure data and maintain a well-conceived
failure database of product field failure modes supporting failure analysis to root cause and try to
understand in detail the capabilities and limitations of both internal and suppliers manufacturing
operations. The benefits of this include freeing resources that were previously used in monitoring
and correcting quality and reliability mishaps, permitting tasks to be performed faster and on-
time, reducing warranty costs, and making it easier and cheaper for manufacturers and suppliers
to produce quality products.5 Also, it will increase sales because reliable products make happy
customers.
Empower Workers
Giving workers the power to make a difference in a process through value streams and rapid
process improvement will make them more willing to carry out assigned tasks and make changes.
For example, training operators to maintain and clean their equipment not only gives operators a
sense of responsibility, but also allows for an operator to have increased knowledge about the
specific step in the process. This understanding may result in decisions that aid flow
maximization.
Design for Rapid Changeover
One of the most important steps in the lean transformation is Radical Process Improvement (RPI).
RPI is a methodology that accelerates the continuous process improvement philosophy and
generates dramatic results. The RPI takes 4 to 6 weeks to complete and consists of four stages:
scan, plan, workshop, and sustain. Scan: The scan stage involves analyzing the current process.
The team determines the case for change, the team maturity, brainstorms problems and solutions
with the current process, and selects the best process.4 Plan: Planning involves development of
the workshop vision’s objectives, and boundaries, as well as the workshop’s team composition.
The data gathering and process-flow charting are completed in greater detail, base metrics are
gathered, and all affected employees brainstorm issues and solutions with the current process.4
Workshop: The workshop stage is to train the team on lean principles, document and analyze the
current process, design a new process, and perform the necessary actions to achieve the new
process.4 The actual workshop phase focuses a cross-functional team on improving a process for
one week. At the conclusion of the workshop, over half of the new process is implemented and
what remains of the improvement actions are expected to be completed within a month.4 Sustain:
The fourth stage involves completing any remaining steps from the workshop, supporting and
educating others about the new process, measuring the new process against the projected results,
resolving problems that surface, and evaluating the workshop’s impact on the value stream
implementation plan.4
Partner with Suppliers
Lean companies consider suppliers as an extension of their own engineering and manufacturing
activities. They have suppliers provide specialized capabilities while their company focuses on its
competencies. They involve suppliers at the inception of a product development project, and
include suppliers in material and vendor selections, prototypes, and qualification pilot runs. They
ensure that suppliers understand their technology roadmap and that they understand suppliers’
roadmaps and are taking advantage of them. They provide real-time written communications of
important information flowing between their company and its suppliers5.
All these actions speed time-to-market by reducing mistakes and using the resources of the
supplier. They take full advantage of the suppliers’ expertise and gives the supplier ownership
and responsibility in the outcome of the project. Also, it gives the supplier confidence to give
you their best pricing and delivery schedules5.
Continuous Improvement
Finally, it is important to realize that the need for improvement never ends. Each company must
continuously strive for perfection every day in order to be successful. Customers’ needs and
desires constantly change and products need to change along with them. Continuous pursuit of
improvement is the only way to reach the objective of lean: right products and service, at the right
time, with the right quality, at the best value, with the shortest delivery time, and ultimately,
becoming the best place to work.

Benefits of Lean Management


The benefit of a lean strategy is a more focused, smooth flowing and flexible production.
Products can be made to consumer’s individual specifications without hitting any road bumps.
The production staff is more organized, educated in the process and effective. Each step in the
process happens in a timely, cost efficient and reliable manner.
Works Cited

1. Henderson, Bruce A. “Lean Transformation: How to Change Your Business into a Lean
Enterprise.” Oaklea Press, July 1999.

2. “Definitions: Lean Production.” 9/24/02. www.searchCIO.com.

3. “Lean Manufacturing.” 9/24/02. www.cre8tivetraining.com/lean/index.html.

4. Rockwell Collins. “Lean Roadmap: Glossary of Terms.” 8/12/02.


www.rockwellcollins.com/LeanElectronics/glossary. (Internal training site).

5. Lean Strategies Group. “Lean Strategies Group.” Copyright 2001. 9/24/02.


www.leanstrategies.com.