Thursday, 22 May 2014



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?
On 5/22/2014


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