Lean Management: How to streamline your production

When MIT’s James Womack came back from Japan he wanted to document how Toyota Motor smashed the competition. The MIT team wrote a book on the company’s production system The Machine That Changed the World (here a review): Toyota’s production was customer-driven, cost-savvy, co-created, and very effective. In Womack words: it was lean.

This entry goes through the principles and tools of lean manufacturing. The five main principles of lean are implied in adopting lean as a method but it’s good to have them in a concise format:

1. Specify value (the Goal!) as is defined by your customer
2. Map the value stream (all the steps adding value from supplier’s supplier to customer’s customer) involving everyone
3. Flow – the idea that products should continuously move through the process, removing waiting time and batches (much like an assembly line)
4. Pull – where the customer order triggers production and the signal moves upstream so that inventory remains manageable and forecast is merely a planning tool
5. Perfection – as zero defects and a single flow through continuous improvements

In its systematic approach, lean systems remove waste and pursue perfection in pull productions. The ultimate goal is (almost always) to create customer value.

Three main contributions add to the idea of lean: the manufacturing techniques developed by the Toyota Motor Corporation; Goldratt’s theory of constraints; and

The Toyota Production System

Toyota Motors balanced cost and quality. The Toyota Way (as the eponymous book from Jeffrey Liker) has then been investigated at length. In essence Toyota focuses on the long-term (adopting proven technology, growing leaders, developing people, and respecting its suppliers), responding to demand (pull, and learning from mistakes), with production working smoothly (through continuous flow, leveling, standardization, and visual controls) by co-opting employees (creating a culture of quality, involving managers ‘go and see’, and reaching consensus).

Do you speak lean?

This is where knowing Japanese comes to fruition (I don’t). There is a number of Japanese terms in lean, that come up at regular intervals and make you look smarter than everybody else in your power point presentations.

• Kaikaku – radical change
• Gemba – the real place where the production happens and where the good manager should be
• Genchi Genbutsu – seeing the problems first hand. It is definitely helped by visual clues, such as andon (lit. paper lantern) – red lights that go off notifying an issue in production
• Heijunka – work leveling to reduce cycle time through shorter production runs (these are more efficient in a lean system)
• Hoshin Kanri – policy deployment to implement the strategy. The idea is to commit employees at every level to develop strategy into objectives into goals so that it is clear how they will contribute to the main goal. Standardization is key because two non-standard executions are not one process, but two.
• Jidoka – autonomation or human-machine interaction (the goal of is to work better not to work cheaper as in many automation examples)
• Muda – waste or uselessness
• Kan ban – signaling in the case of pull systems
• Poka yoke – mistake prevention, at time as baka yoke or idiot prevention (“baka Shinji!” in Evangelion)
• Kaizen – improvement

The Theory of Constraints (ToC)

Goldratt – a business guru – emerged to mythical status with his 1984 novel The Goal. It romanticizes the struggle of production managers, the unsung heroes of the factory floor battling lazy employees and stubborn managers in an eternal struggle against an adverse business environment. The useful idea in the book is about bottlenecks, which fits right in with the lean methodology.

Bottlenecks, or constraints, occur. They are the slowest part of the process, and often come with a long inventory of product – think of queue at the reception of a large event. They can be managed to improve the pace of the production. Pace is crucial so that there is enough buffer (in time) for variation to occur).

Once identified, bottlenecks should be elevated so that the system throughput (i.e. the flow) can increase. Being practical, Goldratt advises exploiting the bottleneck (prioritizing, improving, and evening its load) and subordinating other processes (since they are idle they have spare capacity to help the bottleneck). As any process improvement tool, this is an iterative process.

The toolkit – organize the production line

To act upon these principles of effective production, tools have been developed.

The Five-S is a tool for organizing the workplace:

1. Sort
2. Set in Order
3. Shine
4. Standardize
5. Sustain

Andon is a visual signaling device (it’s Japanese for indoor lantern). Common on machinery is often green-yellow-red to signal eventual issues in production. It is part of visual Management together with Kan ban cards, colored lines, visuals, labels, gauges, dashboards etc.

SMED is the acronym for single minute exchange of dies. It strives for the quick changeover of dies – casts, molds, machinery pieces – in under 10 minutes – single digit -.

Total Productive Maintenance the idea is to plan downtime for maintenance. You want to maintain the machine when it’s most convenient, not when it breaks down in the middle of the production run.

Sticking around – organization in the glue factory

I worked on a plastic extruder and in hindsight the machine could have used more of a lean system. The extruder was a metal cylinder dripping molten glue pellets on a 25-meter long cooling belt on an elevated platform: at the end of the belt, a large hopper funneled the production onto a bag-filling station. For the whole process to work, the belt had to dip into a water tank to lubricate with soapy water, lest the glue would stick to the belt. The operator (me) had about 30s to walk under the belt up the ladder, and [1] check the tank, [2] the air pressure of the tensor, and [3] the belt itself, climb down, and run to the hopper before glue pellets start spilling over – or worse – stick together and clog the machine. Good thing was, the glue boilers needed patches every tenth day of operations, since oil spills were covered with sawdust and a prayer the rotor’s screeching noises would go away soon.

The toolkit – measuring production

A3 is based on PDCA and is used for project status report. Telling a story on a single piece of paper (an A3 format), it splits the page in problem (left side) and solution (right side). It takes many shapes, but in essence is as follows:

Issue	Solution
What is the (customer) issue?	Target condition
Background or business case	Implementation (who? what? when?)
Current status	Follow-up (what then)
Causes (e.g. Fishbone/5Ys)	How to measure results

OEE (overall equipment effectiveness) is the groundbreaking idea of tools to work as expected. It is measured in terms of availability (hours of operations minus planned downtime), performance (hours of operations), and quality (share of good units).

OEE = Availability * Quality * Performance

In other terms it is how well the equipment works per effective hour worked.

Got a screw loose? – equipment in a lamp factory

In a lamp assembly line in a workshop in Northern Italy, management cut costs by buying the cheapest screwdrivers on Alibaba: screws were easily popping off the tip and workers hoarded more to their stations to offset this issue; the few available magnetized screwdrivers were defended as heirloom by the most senior workers.

Standard Work means establishing a standardized time, inventory, and sequence in a job. There is no point in improving a non-standardized job.

Takt Time is an important measure: it shows how much time we can take to produce a unit. Technically, it is available minutes divided by demand. If you have 30 minutes to read 15 pages, your takt time is 2 minutes per page.

Final thoughts

Nothing should stand between the crafty manager and state-of-the-art processes.

This is done both by ways of changing company culture and by ways of changing the process proper. Processes should conform to standards, proceed at a leveled pace, and continue in a flow. Culture, however, is paramount: quality, standardization, and customer-responsiveness are more important than production itself.

In other words, lean is not only a system but a philosophy. It combines collectivism with individualism, and is destined to fail if only understood in narrow terms of process optimization. I don’t agree: in business we can discuss systems, not worldviews. Lean is a system, which means that spotty implementation will not give the expected results. Which is a way of saying that lean is always right even when its individual interventions don’t bring about the expected results.

Nevertheless, its toolkit is powerful, relatable, and helps improving the overall system. Going through it as going through a checklist won’t help, since it requires all parts to work together adopting a system view.

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