Lean Thinking Simplified (Updated 5/31/2009, Original 1/26/2009 by TQM Doctor)
Many top managers have told me that they are attempting to find the appropriate technological device to excite and delight their customers. When those top managers say device I envision mechanical technology, which might be the ultimate solution. On the other hand, I usually suggest that the appropriate place to start for customer solutions is with human technology. I am thinking specifically of a concept that Womack and Jones (2005) refer to as lean consumption, which the authors base on their previously published principles of lean thinking (2003). Since the following is a simplified version of lean thinking, I encourage anyone interested in the topic to purchase and read Lean Thinking and Lean Solutions. Womack and Jones do a wonderful job conveying the lean concepts in both books.
Value, step one. The first step in lean thinking is firmly defining value from the customer perspective (Womack & Jones, 2003). Defining value for many organizations can actually be very difficult because those companies tend to make value assumptions based on products and services they currently provide. A company may have made a lot of money over the last 10 years by creating and selling walupos, so management may mistakenly take the easy path and assume that more and bigger walupos are exactly what customers value and want. The reality might be that customers are buying walupos from the only supplier that makes them or that customers consider your organization the least worst of all choices. Therefore, the difficulty is stepping completely away from what your organization already defines as valuable to the customer. We must define value completely from the customer perspective without the influence of current organizational paradigms.
Value stream, step two. The second stage in lean thinking is to identify and map the value stream and remove the clearly wasteful steps (Womack & Jones, 2003). We often find that many steps are unnecessary or provide some simplification for the organization but not to the customer. We must identify each step in the current stream of actions, delays, movements, etc. that produces the current product or service. After we have all the pieces of the current process, we must identify which steps provide value, as defined by the customer in step one, and remove, if possible, the wasteful steps. The goal of the current stage is to identify and remove the most obvious waste, which means a future opportunity remains for the continual reduction of waste. Focusing on the continual elimination of waste is the primary means an organization can use to boost the efficiency of their production (Ohno, 1988).
Flow, step three. The third step in lean thinking is to re-arrange the process to make it flow, containing only those steps that add value for the customer or that for some reason cannot be immediately removed (Womack & Jones, 2003). Step three can actually be the most difficult because it requires an organization to completely rethink and change core processes. For example, instead of using the traditional concept of a batch-and-queue assembly to create flow, companies must focus on value (step one) and the avoidance of waste to make most process decisions.
Pull, step four. Removing waste (step two) and flowing a process (step three) will usually result in such enormous timesavings that organizations can start thinking about the amount of product they need to produce in anticipation of future sales (Womack & Jones, 2003). Most companies use a push method to plan production based on quantities they believe will be required for a given period. Push systems make predictions about the future using metrics from past production, on-hand inventory, and previous periods of production and sales (Ohno, 1988). However, in faster lean systems, which require fewer resources, companies do not need to maintain large inventories in the supply chain so the batches become smaller. The more efficient and faster lean system is ideal for the implementation of a pull system, where organizations produce no product or service at any stage of the process until the succeeding stage requires material, beginning with the last stage (Ohno). Therefore, inventories are minimal because organizations can produce supply on demand.
Perfection, step five. The pursuit of perfection means that we should not stop with step four but continually improve by cycling through the four previous steps. Perfection is the pursuit of the complete elimination of waste in all forms (Womack & Jones, 2003).
Lean consumption. Womack and Jones (2005) base the crux of lean consumption on the above principles but focus on applying them to customer-facing processes. Lean Solutions extends lean thinking by identifying some of the basic concepts important to consumers like: (a) completely solving a customer’s problem, (b) not wasting the customer’s time, (c) getting the customer exactly what is desired exactly where it is wanted, and (d) solving the customer’s problem when the customer wants it solved. I encourage you to pick up a copy. :)
References
Ohno, T. (1988). Toyota production system: Beyond large-scale production. New York: Productivity Press.
Womack, J. P., & Jones, D. T. (2003). Lean thinking: Banish waste and create wealth in your corporation (2nd ed.). New York, NY: Free Press.
Womack, J. P., & Jones, D. T. (2005). Lean solutions: How companies and customers can create value and wealth together. New York, NY: Free Press.