What is Lean methodology and how can it be enhanced is an important question that organizations should ask when undertaking a process improvement initiative.
What is Lean Methodology?
The principles of Lean are:
- Define customer value;
- Focus on the value stream;
- Make value flow;
- Let the customer pull product; and
- Pursue perfection relentlessly.
What is Lean methodology? Lean is an answer to a customer need or desire. The product or service is provided in a timely manner and at an appropriate price. You or I don’t determine value; value is in the eyes of the customer.
Within a Lean methodology, one identifies the value stream. This might be a process or series of process steps from concept to launch to production, order to delivery to disposition, or raw materials to customer receipt to disposal. It consists of steps that add value to a product. Within Lean, we eliminate steps that do not add value, where a product can be tangible or intangible.
When working on the product/service, we start at receipt of customer request and end at delivery to customer. We strive for no interruptions. That is, we strive for no muda; i.e., waste. We work to avoid batch processing and strive for one-piece flow. We want a pattern of processing that accomplishes smooth flow through the process without stacking of material between process steps. We want to minimize WIP (Work in Process) and develop standard work processes.
We strive to have just-in-time workflow, which yields exactly the right product in the exactly the right place at exactly the right time. With this approach, nothing is produced until the downstream customer requests it. An application example is a made-to-order sandwich shop versus a fast-food hamburger shop that makes a batch of hamburgers in anticipation of customer demand.
Waste is anything other than the minimum number of people, the minimum amount of effort, material, information, and equipment necessary to add value to the product. We will now consider the following attributes of waste: value added, required non-value added, manufacturing waste, waste in design, and waste in administration. We will also consider what we might do to hunt for waste.
When there is a value-added activity, the customer recognizes its importance and is willing to pay for it. Value-add actions transform the product in form, fit, or function, where the product could be information or physical product. Work is done right the first time. Required non-value-added activities do not increase customer-defined value. However, the activity may be a required business necessity (e.g., accounting), employee necessity (e.g., payroll), or process necessity (e.g., inspection).
What is Lean Methodology Applications
Manufacturing waste includes:
- Overproduction: Making more than you need
- Waiting: People or product waiting
- Transportation: Moving materials
- Inventory: Having more than you need
- Overprocessing: Taking unnecessary steps
- Motion: People moving
- Defects: Making it wrong, fixing it
Waste in design includes:
- Overproduction: Un-launched designs
- Waiting: Waiting for signatures, approvals, data
- Transportation: Handoffs to other organizations
- Inventory: Backlogs, outdated designs
- Overprocessing: Approval routings, excessive analysis
- Motion: Obtaining forms, paperwork
- Defects: Incorrect drawings, data
Waste in administration and transactional processes include:
- Overproduction: Excessive reporting
- Waiting: Waiting for signatures, approvals, data
- Transportation: Handoffs to other organizations
- Inventory: backlogs
- Overprocessing: Approval routings, signature requirements
- Motion: Obtaining forms, paperwork
- Defects: Incorrect data, missing data
Traditionally within Lean, an organization might form hunting parties to identify waste. With this approach, an individual can use a notepad to identify and record waste in his/her assigned area, sharing the findings with the team.
What is Lean Methodology relative to its metrics?
Lean methodology metrics include:
- Inventory
- Finished Goods (FG)
- Work in Process (WIP)
- Raw Material (RM)
- Scrap
- Headcount
- Product changeover time
- Setup time
- Distance Traveled
- Yield
- Cycle Time (C/T): In Lean, C/T is considered to be how often a part or transaction is completed (time for one piece). Also, duration of operator time for the completion of work before repeating the steps.
- Average Completion Rate (ACR): Number of things completed per unit of time.
- Takt Time: Customer demand rate (your available work time per shift divided by customer demand rate per shift). Metric is expressed in units of time to produce one unit of product.
- Lead Time (L/T): Time for one piece or transaction to move completely through a process or value stream to the customer
- Value-added time (VA): Work that a customer is willing to pay for
- Inventory turns: Annual cost of goods sold/average value of inventories during the year
- Little’s Law: Lead time = WIP (# units)/ACR (# units/time)
- Process cycle efficiency = value-added time divided by lead time
What is Lean Methodology and how can it be enhanced?
Lean improvements are often made from team kaizen events. Lean has a very good tool set; however, Lean is not a business system. Often, Lean improvement projects are executed in organizational silos where no direct assessment was made to determine that this was the best place to execute improvement efforts at a particular point in time. In addition, most Lean deployments do not track how well a Lean kaizen event impacted the performance measurement for the process using statistical tools.
The Integrated Enterprise Excellence (IEE) business management system addresses these issues where the tool set of Lean is structurally integrated into the Lean Six Sigma project execution roadmap and 9-step IEE business management system as well.
In IEE, the above listed Lean metrics, when tracked as a 30,000-foot-level metric, can give insight to where the overall enterprise can best target its improvement efforts and how much improvement was made because of an area kaizen event.
The above Lean description was taken from the Integrated Enterprise Excellence, Volume III – Improvement Project Execution: A Management and Black Belt Guide for Going Beyond Lean Six Sigma and the Balanced Scorecard, Forrest W. Breyfogle III.
IEE addresses the business scorecard and improvement issues that are described in a 1-minute video:
Additional Information about What is Lean and how can it be enhanced
For additional information about Integrated Enterprise Excellence (IEE) to address the question what is lean and how it can be enhanced see:
- What is Lean and how can it be enhanced: IEE Articles, Videos, Books
- Addressing executive challenges with resolution by addressing what is lean and how can it be enhanced
- Creating predictive performance measurements using a what is lean and how can it be enhanced form of thinking
- Using what is lean and how can it be enhanced techniques within an enhanced business management system
- Integration of business process management and what is lean and how can it be enhanced techniques
Contact Us to set up a time to discuss with Forrest Breyfogle how your organization might gain much from an Integrated Enterprise Excellence (IEE) Business Process Management System and its enhanced approach for lean implementation.