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Lean Thinking |
What has waste reduction
in business to do with looking beyond the organization, refocusing production
from batch manufacturing to flow, and ensuring that customers pull products
rather than you push products to customers? According to Lames P. Womack and Daniel
T.Jones these are much more important than muda, the Japanese concept
of waste elimination. In their book Lean Thinking,
they emphasize that Taiichi Ohno’s concept of muda is important, but by itself it is not going to make your
manufacturing lean.
Womack and Jones call
the Toyota executive Taiichi Ohno (1912-1990), the most ferocious foe of
waste human history has produced. Ohno’s description of muda is:
- mistakes which require rectification,
- production items no
one wants so that inventories and remaindered goods pile up,
- processing steps which aren’t actually
needed,
- movement of employees
and transport of goods from one place to another without any purpose,
- groups of people in a
downstream activity standing around waiting because an upstream activity has
not delivered on time, and
- goods and services
which don’t meet the needs of the customer
Lean thinking is not
only eliminating these wastes. To sustain the elimination of these wastes,
today’s business have to transform their operations into meta-organizational
(that is, beyond organizations) processes. The focus on conversion of raw
materials into products (or services) will have to make way for customer pull, and the mental furniture which can only visualize batch
production may have to be dismantled to enable us to focus on uninterrupted flow in production.
But before that there
are two steps. Organizations may be producing a number of products. Most
organizations look at value in general. Lean thinking requires the business to specify value by specific product. Secondly, they have to identify the value stream not for their business as such but for each
product.
Now, if you look at the
whole process you will know why we said business today is meta-organizational.
The value stream stretches all the way to the source of your materials. If you
have to ensure uninterrupted flow, you will have to ensure that all those who
have to supply your business the inputs have to provide them in such a way that
there is no muda. The business cannot be manufacturing and
dispatching product to customers if it wants lean operation. It needs to
produce depending on customer needs. It has to shift from producing for
inventory to producing against customer pull. That way muda in unsaleable inventory also is eliminated.
The final step in the
process is perfection. When value is specified for each product, value stream
is identified, flow is maintained, and production takes place against pull perfection does not remain a distant dream, on the other
hand it becomes a distinct possibility.
Let us now put the
different steps in the sequence:
1. The starting point for lean thinking is value, which can only be defined by the ultimate customer.
2. Value stream, this means (a)identifying the
problem, and to solve it by designing and developing products, (b) managing
information such as order booking, specification development, procurement
management, planning etc, and (c) finally transforming into products.
3. The third step is flow. Here the obstruction is
from compartmentalization of organizations – designing, development, planning,
procurement, inventory, production, marketing, etc. On the one hand within the
organization compartments have to be dismantled; on the other lean thinking
must go beyond the organization to look at the entire gamut of activities.
Womack and Jones call the organizational mechanism for doing this lean enterprise.
4. Flow shrinks lead time from years to months,
because you can let the customer pull the product from you as needed rather
than you pushing products.
The key to making this
happen in the organization is the change agent, who can be any body, not
necessarily the CEO or a specialist, and so why not you?
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