Lean Basics - Tutorial

A C O L L E C TI O N O F TO O L S TO S P E E D U P T H E P R O C E S S BY R E M O V I N G WA S T E S
What is Lean?
Lean is a systematic, continuous improvement
approach that focuses activities on reducing waste
while aligning them to an overall growth strategy.

Leaders of a Lean organization are dedicated to

developing Lean thinkers and a continuous
improvement culture.

A Lean Enterprise essentially eliminates waste

throughout the business. Waste costs you resources,
but adds no value to the customers you serve.

These non-value-added activities typically equal 90

percent of a process; mere 10 percent of your
processes adds value for your clients.
 LEAN BENEFITS
Reduced Cycle Time

Increased Quality

Reduced Costs & Quality

Increased Capacity Potential

Improved Customer Service

Higher Levels of Worker Involvement, Ownership & Commitment

Improved Financial Returns

Success Stories: Lean
Earlier cars were built at one spot
and the workers used to move
from car to car with the required
tools & parts required for the
following stage. This was called
“Gypsy Production System”

Ford introduced the concept of

conveyor belt wherein a big rope and
winch was used to pull the cars and
the workers remained stationary.
This was referred as “Ford
Production System” which
significantly increased their
productivity.
Success Stories: Lean
Sakichi Toyoda, the founder of
Toyota group, invented an
automated loom that stopped
anytime a thread broke. A built in
human intelligence which enables
“Stop At Abnormality” i.e.
Autonomous behavior.

Journey of Lean from Toyota Automatic

Loom Works to Toyota Motor
Corporation that we know today

Toyota Production System (TPS) revolutionized

Lean Concepts in Manufacturing Industries & other
Industries gradually adopted Lean Culture.
Workplace Essential: 5s + 1s

Sort

Safety Set In Order

Sustain Shine

Standardize
7 Types of Wastes
8th Waste: KSA
Knowledge, Skill & Abilities
The waste of not
Not delegating Involving yourself in using people’s
work to the proper someone else’s mental, creative Micromanagement
person responsibility and physical
abilities
Waste Types in IT Industry
Waste in BPOs
 5 Lean Principles
1. Define Value from the
Customers perspective and
express value in terms of a 1. Define 2. Map all of the steps:
specific product or service VA, NVA, ENVA that bring a
the Value
product or service to the customer

5. The complete elimination of

waste ensuring all activities create 5. Work 2. Map the
value for the customer through towards Value
innovation and continuous Perfection Stream
improvement projects.

3. The continuous flow of products,

services and information from end
4. Pull from 3. Make to end, through the process
4. Nothing is done by the upstream
the the Process
process until the downstream
customer signals a need. Actual Customer Flow
demand Pulls the product / service
through the value stream
 Specify Map the
Establish Implement Work to
Value
the Value Flow Pull Perfection
Stream

• Ask how your current product/services and processes

Specify the value from the
standpoint of you’re your
end customer
disappoint your customer’s value expectations
• Price
• Quality
• Reliable Delivery
• Rapid response to changing needs
• Fundamental definition of the product

Wastes Activities that add no value, adds cost and time

Symptoms: Need to find root causes and eliminate them
Identify 7+1 types of wastes

Ask questions Will the product / service output change if the step is removed?

from yourself Do the customer care about the step?

Is the customer willing to pay for the step / activity?

If answer to any of the question is “No” then it’s a non-value add

In a typical operations only up to 10% of activities are value added
 Map the
Specify the Establish Implement Work to
Value
Value Flow Pull Perfection
Stream

• Identify all of the steps currently required to move the

products from order to delivery.
• Challenge every step: Why is this necessary? Would the
customer think the product is worth less if the step could be
Map the Value Stream
left out?
• Many steps are only necessary because of the way firms are
organized and previous decisions about assets and
technologies.

Value Stream
• All activities – Value add, Non-Value Add, Essential Non-Value Add required to bring a product (or provide
a capability from raw material (initialization) into the hands of customer

Common Value Streams

• Raw Material to Customer
• Input to Output e.g. Customer call to resolution, Invoice to Payment, Document to Report
• Concept to Launch
• Order to Cash
“Whenever there is a product or service for a customer, there is a value stream. The
challenge lies in seeing it.” - (Womack, Learning To See)

Mapping the Value Stream – See the whole and improve the system
 Map the
Specify the Establish Implement Work to
Value
Value Stream Flow Pull Perfection

Direct
improvement
efforts in making
the activities flow
continuously.

Continuous flow means

uninterrupted movement of
products, services and information
through the various transactions
from end to end in the process

Avoid
Batch
Processing

Requires every step in the process to be:

1. Capable (right every time – Six Sigma)
2. Available (always able to run)
3. Adequate (capacity to avoid bottlenecks and over capitalization).
 Map the
Specify the Establish Implement Work to
Value
Value Flow Pull Perfection
Stream

Nothing is done by the upstream

process until the downstream
process signals the need

Direct efforts to let the customer

pull product or service through
the process

Make the process responsive to

customer needs only.
 Map the
Specify the Establish Implement Work to
Value
Value Flow Pull Perfection
Stream

Next Future State

Repeat efforts and attempt constantly to

remove non-value adding activities from
Future State the process

Improve flow (from current to future

state) and satisfy customers.

Create value for the customers.

Use root cause analysis to solve problems.

Current State
VA / NVA / EVNA
NVA Activities
Value Stream Map: Current State