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Introduction to Lean

Thinking
A. Objectives
B. Introduction to Lean
Thinking (Learning to
See)
C. Kaizen The Elimination
of Waste Through
Continuous Improvement
D. Identify and Eliminate
Waste
E. Suggested Resource
Material
LEAN
6S

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Course Objectives
Understand the principles of Lean Thinking.
Understand the practice of kaizen, or
continuous improvement.
Understand the distinction between value
added work and non-value added work.
Learn to identify the eight forms of waste.

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Introduction
Waste, or muda, is any activity that absorbs
resources but creates no value.
As we learn to see we will discover waste
is everywhere in our organization.
The antidote to waste is Lean Thinking and
requires us to see and understand the big
picture to know the value stream.
Wherever theres a product or
service for a customer, there is a
value stream. The challenge lies
in seeing it.

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Introduction
Lean thinking provides a way to do more
with less:

Less human effort


Less equipment
Less inventory
Less space
LESS TIME

Its all about creating process


speed and efficiency.
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Introduction
By applying Lean principles to our Six Sigma
strategy, we can expect the following:
Getting faster will improve quality.
Improving quality will make us faster.
Reducing complexity will improve speed
AND quality.

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Introduction
Utilizing Lean principles, we:
Focus on maximizing process velocity.
velocity
Analyze work flow and inevitable delays
across our processes.
Distinguish VA from NVA work.
Quantify and eliminate the cost of
complexity.
complexity

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Principles of Lean
Thinking
Getting Lean means:
Understanding value from the
customers perspective. Value is
defined by the ultimate customer
(internal or external).
Understanding the value stream.
All activities required to bring a product
or service from concept, production
and delivery to the customer.
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Principles of Lean
Thinking

Understanding Work Flow

Historically, organizations are built around


isolated processes within functional and
departmental silos.
This island approach makes it difficult for work
to flow across the organization.
With Lean Thinking, we begin by first
rearranging our mental furniture.
Our focus the needs of our business.
What is required to provide continuous flow for
our products and services?

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Principles of Lean
Thinking
Focusing on Cycle Time and Pull
The effect of converting existing functions, departments
and batched work to FLOW will be significant
reductions in the amount of time it takes to deliver a
product or service to the customer.
PULL means no one upstream is producing a good or
service until the downstream customer is ready for it.
Allows customer demand to pull the product rather
than the producer pushing product onto the customer.

Dont make anything until it is needed, then


make it quickly, efficiently and costeffectively.

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Principles of Lean
Thinking
Striving for Perfection
Continuous improvement reduces time,
effort, space, costs and mistakes perfection
through the elimination of waste.
The organization manages the value stream
by continuously challenging and redesigning
its levels of cost, quality and service as
perceived by the customer.

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Lean Thinking
Kaizen (Continuous Improvement)
Creating Value

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Kaizen
KAI = take apart
ZEN = make good
Developed in post-war Japan based on a belief
in step-by-step continuous improvement every
single day.
Processes are taken apart to make them better.
The focus of kaizen is eliminating waste at its
source, through continuous improvement.

KAIZEN is the opposite of


complacency.
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Kaizen
Active involvement of personnel is critical
to sustaining a successful Lean system.
Awareness and involvement mean more
opportunities to identify and eliminate
waste.
Think improvement every single
day.
day

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Kaizen
Two levels of kaizen:
Process Kaizen focusing on individual
processes. (employee focus)
System Kaizen focusing on the entire value
stream. (management focus)
Remember what kaizen means it is continuous
improvement, NOT isolated improvement.

Focus on system
kaizen.
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A Shift in Mindset
Current
Thinking

Lean
Thinking
OverProcessing

Waste

Inventory
Waiting

(Queue Time)

Transport
Human
Mind

Motion

Waste is not defined leads to


isolated, reactive improvements.

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Defects

OverProducing

Waste is visible identifying many


smaller opportunities leads to larger
overall change and continuous
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improvement.

Value Creation
When we talk about the actions involved in designing and
producing products or delivering services, there are two
categories to consider:
1. Actions that create value as perceived by the
customer (internal/external).
2. Actions that create no value as perceived by the
customer BUT are currently required to support the
needs of the business.

Most of what we do can be found in #2


actions that are required to support our existing
process model.
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Value Creation
The problem is, we cannot eliminate these
NVA actions until we CHANGE our model.
This is why it is critical that employees
across the organization become familiar
with and proficient at distinguishing value
from waste.

OR
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Value Creation
We need to think about waste and work
differently.
Categorize work in three ways:

Tasks that add value (VA)


Tasks that do not add value (NVA)
Tasks that add no value but are necessary (BVA)
Focus on:

Increasing VA work.
Eliminating waste and NVA work.
Controlling BVA work.

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Value Added (VA)


Any activity that the customer is willing to pay
for.
Any activity where inputs are transformed into
outputs and done right the first time.
Does the activity add a desired function, form or
feature to the product or service?

Does the activity create a competitive advantage


(reduced price, faster delivery, fewer defects)?
Would the customer be willing to pay for this
activity or, prefer us over the competition if they
were aware of it?
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Non-Value Added
Work that adds no value in the eyes of the
customer (they would not be willing to pay for
it), and is not required for assignable business
purposes (BNVA).
Does the task include activities such as rework,
expediting, multiple sign-offs, counting, handling,
inspection, set-up, downtime, transportation,
moving, queuing, storing, etc.?
Will faster lead times and lower costs create higher
revenue and consume existing capacity? If not, the
excess capacity is NVA and should be eliminated.
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Business Non-Value Added


(BNVA)
Activities our customers do not want to pay for (does
not add value in their eyes) but are required for some
reason (accounting, legal, regulatory, process
support, etc). Often referred to as required waste.
Is this task required by law or regulation?
Does this task reduce financial risk?
Would the process break down or defects occur if this
task were removed?
Be sure to look at policies. Are they BNVA or NVA?
Can they be changed? Are they relevant, truly
necessary to the business?

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The Lean Enterprise


Be wary of your administrative
functions.
For many organizations, the cost and quality of
back office activities are hidden from the
customer and often have little obvious or direct
impact on service levels.
This perceived distance from the customer can
result in administrative support functions with
little awareness, or measurement of value and
waste.
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The Lean Enterprise


In general, the shop-floor lives and dies by
metrics that highlight and stimulate a response
to operational problems.
The question becomes, what do we measure
in the office?
Typically, its not quality. And no
measurements mean we cant be effective
at monitoring the ongoing condition and
performance of our work.
We know when work starts and when it
ends, but what happens in between?
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The Lean Enterprise


Less visible than on the shop floor, waste in its
many forms can be found everywhere in
administrative processes and leads to longer
customer response times, information backlogs and
quality problems.
All too often, these issues, along with a lack of
standard work methods in the office, are
overlooked.
This creates an environment that tends to operate
with a permanent sense of urgency.
The cost of this behavior is high and difficult to see.
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Lean Thinking
Identify and Eliminate Waste
LEAN

LEAN 6S

6S Synergy

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Eight Forms of Waste

ait
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Human
Mind

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In
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Pro
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Ove tion
uc
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o
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v
Con

Correction

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Correction

(Defect/Rework)
Any aspect of a product or service that does not conform to
customer needs including:
Waste associated with rework (defective parts, not-theres).
Productivity losses associated with disrupting the continuity
in a process to deal with a defect or rework (opportunity
cost).
Order entry errors, design errors (engineering change
orders), invoice errors, employee turnover, retraining.

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Correction

(Defect/Rework)
In a service (administrative) environment, a
defect can be anything from missing or
incorrect information to a missed deadline.
The cost of correcting a defect may be as
simple as a few keystrokes, but the
opportunity cost and impact downstream can
be enormoussuch as losing a customer to a
competitor.

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Correction

(Defect/Rework)
Waste of Correction often leads to more
waste including:
Processing: Do-Overs
Conveyance: Moving things around.
Inventory: Storing the problem somewhere
until there is time to fix it or process it again.
Motion: Takes personnel out of their normal
work path.
Waiting: Correction takes time a person,
process or customer ends up waiting
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Correction

(Defect/Rework)
P ic k e r

<Not There Process>


Picker goes to
location

Item avail to
pick?

yes

Picker picks
product

Picker delivers to
diverts

no

yes

return order to
workflow

Okay to pick

clerk returns order


to picker

W o rk flo w

no
Clerk notifies
supervisor
yes
Supervisor checks
location for product

Check for new


location material
avail?

De/Re order

Clerk fills out log


form

Log turned over to


Inventory Control

no

Return order to picker

In v e n to ry C o n tro l

Product There?
Yes/No Return to
workflow

Order turned over


to Inventory

Research and
Investigation

Make appropriate
inventory
corrections

yes
Product Avail

Return order to workflow

no
yes
Hold order for
intransit inventory

Material arrives /
stock applied to
order

Return order to
workflow

no

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zero ship or partial


ship order back to corp

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Over-Production
Defined as production of a product or service at a
faster rate than is required for immediate use.
More than is required by the next process or
activity.
Sooner than is required by the next process or
activity.
Faster than is required by the next process or
activity.
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Over-Production
Services
Processing non-priority inventory transactions
because it is more convenient than suffering
through the delays of switching between
domains in the system (Legacy/Oracle/STICS).

Manufacturing
Components or finished goods overproduced to
cover problems such as inefficient equipment,
process coordination, defective material or parts
shortages (safety stock).
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Over-Production
Lean practices produce what
is needed, when it is needed,
in the amount that is needed.

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Over-Processing
Adding more value to a product/service than what
your customer wants or is willing to pay for.
This waste is typically the most difficult to identify
and eliminate.
The basic theme of over-processing is doing
more work than is absolutely necessary to satisfy
customer requirements.
Unnecessary or excessive reports/reporting and
transactions, expediting (hot orders, priority
transactions), month-end closing activities.

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Over-Processing
There are two elements to over-processing:
1. Not knowing exactly what your customer wants,
you could be adding more value than the customer is
willing to pay for. Consider two examples:

Wrapping clothing items in layers of tissue paper

may be value added in a boutique, but seen as an


unnecessary delay at a discount store.

24 hour shipping: Traditionally, a key service

measurement for distribution all orders must be


shipped within 24 hrs. of receipt.

2. Allowing NVA work to creep into your processes.

For example, consider approval loops for Returns. Does


the customer care how many approvals are required?

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Conveyance/Transportatio
n
Unnecessary movement of materials, products, paperwork
and information is referred to as conveyance.
Excess transportation is important because movement
means more time and presents opportunities for queuing.
In service processes, paperwork often loops back to an
activity multiple timesand may wait in queue each time.
How about excessive emails?
Results in hand-offs and walking between departments to
collect or deliver information.

Information chasing happens in the


real world AND in cyberspace.
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Conveyance/Transportatio
n
Eliminating excess transportation often involves
combining steps and eliminating the loops cut the
hand-offs in half and you will generally cut queue times in
half.
Another approach rearrange the workplace to match the
flow of the process.
Manufacturing and Distribution examples include:
Moving stock or materials long distances to reach the
next activity is excess transportation focus on the
physical layout of your workspaces.
Multiple touches to complete a single task or activity
multiple hand-offs mean more conveyance.

And remembermore touches = more


time.

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Inventory
Work in Process (WIP) in excess
of the amount actually needed
causes NVA downstream costs in
waiting, quality and failure to
meet customer expectations.
Any form of batch
processing. Filled (overflowing)
inboxes electronic and paper,
office supplies, sales literature,
batching transactions for weekend or month-end processing,
batching information for reports.
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Inventory
In service processes, look for physical
piles/batches of paper (inboxes, baskets), calls
on hold, people waiting in line and pending
requests or approvals.
In manufacturing processes, look for excess
stock in the form of raw material, components,
WIP or finished goods.

Excess WIP is often the


result of over production!
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Motion
Refers to the movement of personnel should
not be confused with transportation, which
is the movement of work.
Harder to see in service processes.
In manufacturing, motion can include back and
forth movement at a workstation, searching for
parts and tools during a set-up, etc.

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Motion
Service Processes
As simple as switching between domains
on the computer (Legacy/Oracle).
Extra clicks or keystrokes to accomplish
a computerized task.
Steps between your desk and a printer
or fax machine.
Walking to other departments to
complete tasks.
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Waiting
Any delay between when one process
step/activity ends and the next step/activity
begins:
In a production environment
idle time between or during
operations due to missing parts,
poor maintenance causing machine
downtime, scheduling mistakes,
missing inventory.
In an office environmenta delay
in connecting to a server, waiting
for meetings to start, delays in
reaching people that have
information needed to complete a
task, waiting for approvals.

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Waiting
Mapping techniques should be used to
highlight where work accumulates in a
process, waiting for someone to do
something with it.
Will clearly identify time traps and the
waste of waiting.

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Human Mind
Involves understanding your employees full potential
and challenging them to maintain that level.
Eliminating waste in this category requires:
Holding people accountable.
Providing a learning environment geared to
personal and professional growth.
Providing employees with training and the tools to
do their job the opportunity to succeed.

Listen to the Voice of the Employee.


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Drilling Down
To further help us identify, define and address process
waste, we can break down each instance of waste into
one of three different levels, organized according to their
ease of elimination:
Level One is low-hanging fruit or gross waste. Waste at
this level is easy to see and deal with. Falls into the just
do it category.
Level Two is process and method waste. These steps can
be quickly identified and eliminated by moving
equipment, rearranging process steps or adding a
needed piece of equipment.
Level Three is micro-waste. The strategy should be to
clear away the lower-level wastes first to expose the
higher-level wastes for elimination. Rely on 6S tools and
training to achieve effective results.

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Drilling Down
Level One

Level Two

Level Three

Gross Waste/LowHanging Fruit

Process & Method


Waste

Micro-waste

Work-in-progress

Long Changeover

- Poor plant layout


- Rejects
- Returns
- Rework
- Damaged product
- Container size
- Batch size
- Poor lighting
- Dirty equipment
- Material not
delivered to point of
use

Poor workplace design


No maintenance
Temporary Storage
Equipment Problems
Unsafe method

Bending &
Reaching
-

Double handling
Excess Walking
Look for Stock
Paperwork
Speed and Feed
No SOP

The better you are at recognizing waste, the more


effective your improvement efforts will be.

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Lean 6S Synergy

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Team Exercise
Break into your teams and develop a list of
examples for each category of waste. Since
you have a diverse team, include examples
from multiple sites and functions.
Be prepared to present your examples.
Allow 30 minutes for this exercise.

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Resource Material
Lean Thinking Banish Waste and Create
Wealth in Your Corporation 2nd Edition by
James Womack and Daniel Jones (Free Press)
Learning to See by Mike Rother and John
Shook (order through Lean Enterprise Institute,
Lean.org)
Creating Continuous Flow by Mike Rother
and Rick Harris (order through Lean Enterprise
Institute, Lean.org)
Making Materials Flow by Rick Harris, et al.
(order through Lean Enterprise Institute,
Lean.org)
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Resource Material
Lean Six Sigma by Michael George (McGraw
Hill)
Transactional Six Sigma and Lean
Servicing by Betsi Harris Ehrlich (St. Lucie
Press)
Total Productive Maintenance an
American Approach by Terry Wireman
(Industrial Press, Inc.)
Kaikaku: The Power and Magic of Lean
by Norman Bodek
Andy & Me Crisis and Transformation
on the
LEAN
6S Lean Journey by Pascal Dennis
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