Lean is the continuous improvement methodology, adapted from the Toyota Production System. It involves employees at all levels, line workers especially, in identifying and eliminating waste in all its forms. What is left over is value-adding work that satisfies customers. It also frees up excess capacity, allowing for more work and higher profit. Lean is an ongoing methodology, as new forms of waste arise continuously. The organization can always stand improvement.
Define Value Streams
Lean defines value streams, the direct route to satisfying the customer. In a production environment (for example, an automobile manufacturer), the value stream includes the shop floor where the product is manufactured, on the highway as the cars are shipped, the dealership where the cars are displayed, and delivery to the customer. It also includes the sales and service functions.
Involve employees at all levels who work on the value stream, including workers from inbound shipping, production, outbound shipping, logistics and sales, in identifying waste along that value stream. This is known as kaizen, a Japanese term.
Lean recognizes seven general forms of waste: overproduction, waiting, inventory, overprocessing, motion, transportation and defects.
A production worker who waits idly while the “upstream” work station scrambles to finish its tasks can identify the waste of waiting. Another production worker who observes that the “downstream” work station is on another floor of the factory can identify wasted motion. A quality assurance engineer or a customer service representative can identify the waste of defects.
This one-time project is a grand-scale kaizen. A kaizen is usually more focused and targets a few employees in a particular function or department, targeting a particular opportunity for improvement; but, this grand-scale kaizen will familiarize employees with the idea.
Lean Off the Value Stream
Conduct kaizens off the value stream, in areas such as the company cafeteria, security, maintenance and accounting. Doing so treats the organization as a customer and drives down the cost of doing business, and subsequently, the cost of goods sold. This ultimately serves the customer as well.
One goal of lean is to improve order to cash. By reacting quickly to a customer order, and delivering quickly and without defect, a company realizes the profit more quickly. Accounting can improve order-to-cash with such time- and labor-saving improvements as advanced shipping notices and automated invoicing.
A popular lean axiom is “rules, not tools,” meaning that the answer to customer satisfaction is not technology, but human judgment and ingenuity. A second axiom is “drill, baby, drill,” meaning that for a worker to perform any task but in his core competency—welding for a welder, driving for a driver—is likely a waste.
These axioms are somewhat contradictory; a production worker who is filling out paperwork is not producing. This is a waste, when that paperwork can be created automatically.
Companies like Boeing, Ford and Toyota are strong proponents of lean, but are also strong proponents of automated data capture. Boeing uses radio frequency identification at its enormous production plant in Seattle, Washington, to automate data capture and to track parts, freeing its workers to produce.
Implement Social Media
Lean organizations struggle with making improvements systemwide; one department, or one plant in a multinational company, may make an improvement that other departments or plants do not.
Toyota originally used the A3 form (named for the size of paper used in Japan), which is simply a written idea for an improvement. This may trigger a kaizen, or a manager may simply approve the change.
Siemens USA takes quite a different approach, by enabling its employees to blog internally. So, employees who discover an area for improvement share them immediately with Siemens employees in Germany. This is not frivolous; as one Siemens employee observed, management “think it’s great. He’s sharing his specialized knowledge with an employee anywhere in the company who can benefit from it.” Microsoft similarly created its “Academy Mobile,” which provides tools and resources for employees to create podcasts and share ideas companywide. “It’s a far better approach to sharing knowledge than waiting for the next scheduled meeting or spending hours searching the company’s intranet for e-mails, discussion threads, or documents,” wrote the authors of “Tactical Transparency.”