Lean and the Pipe
I get asked pretty much every week what Lean is, what's its purpose, how can it possibly help my organisation, we don't make cars, or volume or even, we don't make anything – we are a service organisation! From time to time I also get told "we don't want lean here – we don't want to see people losing their jobs". I've even had the whole 6 sigma vs lean discussions about which is better (which we'll talk about in another post).
It's easy in today's crowded and hectic world of information and disinformation (unintentional or not) to create confusion or to jump to conclusions about what something is or isn't and so how it can help you or why it wouldn't be good for you. Let's talk about what lean really is about.
The Purpose of Lean
There are many high and lofty descriptions of what lean is about, and that's perhaps one of the things that can create misunderstandings but its really not complicated. Lean is about only one thing, it's about flow.
Right now, there are a whole bunch of people jumping up and down and saying it's about waste or it's about the customer or driving cash to the bottom line and so on, it's not, it's about flow. When Toyoda and Ohno set out to turn Toyota around they looked to understand what was stopping them transforming an order from a customer into a finished vehicle as fast as possible, they looked for blockages to flow in their organisation. The belief was that if they fixed the flow then the results would be better delivery, better quality, happier customers and more available cash (something that they just didn't have at the time since they were still recovering from going bust!). They knew that fixing and controlling the flow was the answer.
The Blocked Pipe
To understand this let's think about it as a physical pipe with the water flowing through it to fill a bucket or a row of buckets, each bucket representing a customer's order. In traditional manufacturing you would want to fill every bucket as fast as you can and keep filling till you run out of buckets. Since you can't fill buckets as fast as your orders turn up you decide that you will keep a bunch of buckets full and ready to go in a bit to improve the customer service, sounds good right? Until someone turns up with a different sized bucket or doesn't turn up at all. Toyota looked at the problem and said we never want to be in the position of ever having too much finished goods or work in progress again since that's what sent them over the edge. They decided that they would only make what they needed to when they had an order. They couldn't predict when the order would turn up and how big it would be, so the result was that they needed to find a way to go from order to delivery as fast as possible, they needed to flow. To achieve this, they needed to remove the blockages in the supply pipe that stopped the flow, these are the wastes in your system. Think of it as the image below:
The wastes in the system create the blockages:
- Defects hold up the ability to ship a good product and steal time for rework meaning your output goes down.
- If you are transporting product around you aren't working on it and adding value or transforming it to a different state.
- Motion is where your people are moving around too much, over stretching or having to go look for things. Waiting is about exactly that, waiting on anything turning up to let you keep going, it's idle time that could be applied to creating product that is required.
- Non-utilised talent is of course not letting your people think or develop to help you solve your problems.
- Extra processing is what happens when you device that you want to driver a Rolls Royce when the customer wanted a ford, it's the design department asking for a tolerance of 0.01mm when 0.1mm will be perfectly adequate (and in some cases far better!), it steals time and adds costs very quickly without you knowing about it, its one of those ones that's hard to find and embedded in the culture camouflaged under the disguise of 'doing a professional or quality' job.
- Inventory ties up your cash and your raw materials in one state that you may or may not sell, instead of having your resources in the most flexible form (cash) you having it in a fixed form of partly finished product, irrespective of the customer wanting it or not..
- Finally, we have Over production, the king of wastes it's the stuff sitting on a shelf waiting on the customer turning up to take it, or not. Now you need to build a new warehouse to hold this over production and while you are building this extra stuff you aren't building what you need. Unfortunately, your finance department see product on a shelf as an asset but it's not worth anything until someone buys it then it's worth only what they will pay. If it's last years model they may pay less, if no one wants it then you get zero for it and in some cases have to pay someone to take it away! That sounds more like a liability to me.
All these wastes block the pipe and overfill the buckets, all steal your time, your resources and your cash from the bottom line making it really hard to deliver what you need to the customer. They all constrain the flow and remove your ability to deliver what the customer needs (no more or less) when they need it at the quality agreed (no more or less)
All are fixable with varying levels of effort, that's where the tools of lean come in. Think about the tools in the exact same as those in the toolbox of a builder. Building a house is what they do, they don't do a hammer, they use that to bang in nails and they don't use the hammer to insert a screw they use a screwdriver. They have a set of tools for a set of challenges that help build the house.
It's the same with lean, there are a set of tools that you can use to remove every blockage in your flow to allow you to deliver the right level of flow of product to your customer, in lean it's called Takt Time. Takt incidentally isn't Japanese it's German! And is the baton used to control the time or the beat of the orchestra so when we talk Takt time in lean we are talking about the beat rate of customer orders, how many do you need every minute or hour etc.
Your lean Focus
To recap, the focus for any lean journey should be about delivering product to the customer at the rate (Takt) they need it, it's about managing and optimising the flow. Focusing on removing the wastes (Defects, Overproduction, Waiting, non-use of Talent, Transport, Inventory, Motion and Extra processing) by using the right tool for that job, for example: 5s, One Piece Flow, standard work, Load Leveling, Mistake Proofing and so on. As a first step it is critical that you understand what value is to your customer, what are the thing or things they are willing to pay for, once you understand that its easy to see everything they wont pay for, if you just take a bit of a look. Irrespective of what you do next, ensuring that you have a focus on respect for people, your people, your suppliers, your customers will go a long way, respect them enough to share the full story of what you are doing and way, respect them enough to get them involved in finding the problems and developing the solutions, respect them enough to train them and to challenge them to do better. By takign this step every other step and tool becomes both meaningful and useful on your lean journey.
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