The Lean Toolbox, 5th edition. A handbook for lean transformation.

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Edition: 5th
Isbn: 9780956830753
Publisher: PICSIE Books
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An expanded and much revised edition of previous editions.
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ii
THE LEAN TOOLBOX
A HANDBOOK FOR LEAN TRANSFORMATION
Fifth edition
by
John Bicheno
Buckingham Lean Enterprise Unit, University of Buckingham
and
Matthias Holweg
Saïd Business School, University of Oxford
P
RODUCTION AND
I
NVENTORY
C
ONTROL
,
S
YSTEMS AND
I
NDUSTRIAL
E
NGINEERING
(PICSIE)
B
OOKS
B
UCKINGHAM
,
E
NGLAND
2016
iv
Table of Contents
1
THE LEAN JOURNEY ................................................ 1
1.1
W
HAT IS
L
EAN
….? ..............................................1
1.2
L
EAN
E
VOLUTION
...............................................1
1.3
T
HE
D
OUBLE
D
IAMOND
.......................................2
1.4
L
EAN
,
THE
S-
CURVE AND
I
NNOVATION
....................3
1.5
W
HERE TO START
?
L
EAN
T
RANSFORMATION
F
RAMEWORKS
...................................................4
1.6
V
ALUE
S
TREAM
M
APPING
(VSM)..........................4
1.7
T
HE
H
OUSE OF
L
EAN
...........................................4
1.8
T
HE
L
EAN
E
NTERPRISE
H
OUSE
...............................5
1.9
S
HINGO
P
RIZE
F
RAMEWORK
.................................6
1.10
T
HE
H
IERARCHICAL
T
RANSFORMATION
F
RAMEWORK
.8
1.11
O
THER
A
PPROACHES TO
L
EAN
I
MPLEMENTATION
. ..11
2
THE LEAN MINDSET .............................................. 13
2.1
T
HE
‘I
DEAL
W
AY
’,
‘T
RUE
N
ORTH
’,
AND
P
URPOSE
...13
2.2
T
HE
F
IVE
L
EAN
P
RINCIPLES
.................................13
2.3
L
EAN IS NOT TOOLS
O R EVEN A SET OF INTEGRATED
TOOLS
! ..........................................................15
2.4
G
EMBA AND
G
ENCHI
-G
ENBUTSU
.........................15
2.5
P
ULL
..............................................................15
2.6
M
UDA AND THE
S
EVEN
W
ASTES
..........................17
2.7
T
HE
O
RIGINAL
S
EVEN
W
ASTES
............................18
2.8
T
HE
N
EW
W
ASTES
............................................21
2.9
L
EAN IS ALL ABOUT
P
RODUCTIVITY
.......................24
2.10
L
EAN IS
S
YSTEMS
T
HINKING
................................25
2.11
L
EAN IS
C
ONTINUOUS
L
EARNING
.........................29
2.12
L
EAN IS BOTH
R
EVOLUTION AND
E
VOLUTION
..........29
2.13
L
EAN IS
‘D
ISTRIBUTED
D
ECISIONS
’........................30
2.14
L
EAN IS
G
REEN
.................................................30
2.15
L
EAN IS
C
OMPRESSION
......................................31
2.16
T
HE
25
P
RINCIPLES OF
L
EAN
...............................32
2.17
T
HE
T
OYOTA
W
AY
............................................35
2.18
T
HE
DNA
OF
TPS:
F
OUR
R
ULES AND
F
OUR
Q
UESTIONS
....................................................35
3
THE SCIENCE OF LEAN .......................................... 38
3.1
T
HE
K
INGMAN EQUATION
..................................38
3.2
L
ITTLE
S
L
AW
...................................................42
3.3
C
RITICAL
WIP ..................................................43
3.4
B
UFFERS
.........................................................45
3.5
I
NVENTORY
T
RADE
-O
FF
C
URVES
..........................46
4
IMPROVEMENT .................................................... 49
4.1
H
OW TO GET STARTED
.......................................49
4.2
G
EMBA
W
ALKS
,
AND THE
G
EMBA
........................49
4.3
I
MPROVEMENT
C
YCLES
:
PDCA,
DMAIC,
AND
8D ..51
4.4
R
OOT
C
AUSE
P
ROBLEM
S
OLVING
.........................54
4.5
K
ATA
..............................................................57
4.6
K
AIZEN
...........................................................62
4.7
M
ESS
M
ANAGEMENT
........................................68
4.8
A3
P
ROBLEM
S
OLVING AND
R
EPORTS
...................69
4.9
C
OMMUNICATIONS
B
OARD
................................71
4.10
O
RGANIZING FOR
I
MPROVEMENT
........................73
5
MANAGING CHANGE ........................................... 76
5.1
P
EOPLE AND
C
HANGE IN
L
EAN
............................ 76
5.2
S
OCIO
T
ECHNICAL
S
YSTEMS
................................ 76
5.3
R
ESPECT AND
H
UMILITY
.................................... 77
5.4
T
HE
P
EOPLE
T
RILOGY
........................................ 79
5.5
M
ODELS FOR
C
HANGE
M
ANAGEMENT
................. 82
5.6
C
REATING THE
L
EAN
C
ULTURE
............................ 90
5.7
T
HE
A
DOPTION
C
URVE AND
K
EY
P
EOPLE
............... 93
6
SUSTAINABILITY–MAKING CHANGE STICK ............ 97
6.1
B
ACKSLIDING
................................................... 97
6.2
T
HE
F
AILURE
M
ODES OF
L
EAN
I
MPLEMENTATIONS
. 98
6.3
A
WORD OF WARNING ON
L
EAN
I
MPROVEMENT
... 102
6.4
P
ROCESS
(
AND
S
YSTEM
)
S
USTAINABILITY
............ 102
6.5
S
TAFF
S
USTAINABILITY
..................................... 104
7
STRATEGY AND DEPLOYMENT ............................109
7.1
W
HAT IS AN
‘O
PERATIONS
S
TRATEGY
’? .............. 109
7.2
F
ORMULATING AN
O
PERATIONS
S
TRATEGY
.......... 109
7.3
T
RADITIONAL
P
LANNING
.................................. 111
7.4
H
OSHIN
K
ANRI
D
EPLOYING AN
O
PERATIONS
S
TRATEGY
.................................................... 111
7.5
‘N
EMAWASHI
’,
‘H
ANSEI
AND
‘C
ATCHBALL
’......... 113
7.6
C
ONCLUDING REMARKS ON
P
OLICY
D
EPLOYMENT
. 115
7.7
B
USINESS
M
ODEL
G
ENERATION
........................ 116
7.8
V
ALUE
S
TREAM
E
CONOMICS
:
W
HAT TO
M
AKE
W
HERE
.................................................................. 117
7.9
T
HE
E
SSENTIAL
P
ARETOS
................................. 119
7.10
D
ISRUPTIVE
T
ECHNOLOGIES
............................. 122
8
PREPARING FOR FLOW .......................................124
8.1
D
EMAND
M
ANAGEMENT
................................. 124
8.2
D
EMAND
A
NALYSIS
......................................... 125
8.3
V
ALUE
S
TREAM
O
RGANIZATION
........................ 128
8.4
T
OTAL
P
RODUCTIVE
M
AINTENANCE
(TPM) ........ 129
8.5
T
AKT
T
IME
,
P
ITCH
T
IME
,
P
LANNED
C
YCLE
T
IME
,
AND
C
ADENCE
. .................................................... 134
8.6
A
CTIVITY
T
IMING
,
A
CTIVITY
S
AMPLING AND
W
ORK
E
LEMENTS
.................................................... 135
A
N
OTE ON
A
CTIVITY
S
AMPLING
......................................... 136
8.7
5S ............................................................... 136
8.8
V
ISUAL
M
ANAGEMENT
.................................... 140
8.9
S
TANDARD
W
ORK
,
S
TANDARDIZED
W
ORK AND
S
TANDARD
O
PERATING
P
ROCEDURES
................ 142
8.10
T
RAINING WITHIN
I
NDUSTRY
(TWI) ................... 146
8.11
C
HANGEOVER
R
EDUCTION
(SMED) ................... 148
8.12
S
MALL
M
ACHINES
,
A
VOIDING
M
ONUMENTS AND
T
HINKING
S
MALL
........................................... 151
9
MAPPING AND ANALYSIS ....................................153
9.1
W
HAT IS THE
A
IM OF
M
APPING
? ...................... 153
9.2
B
EFORE
Y
OU BEGIN
M
APPING
........................ 153
9.3
I
NTRODUCTION AND
W
ARNINGS
....................... 153
9.4
T
HE
F
IVE
S
TAGES OF
M
APPING
......................... 154
9.5
T
YPES OF
M
APS
............................................. 160
v
9.6
A
N
OTE ON
I
NTERVENTION
T
HEORY AND
C
HANGE
.. 95
10
LAYOUT, CELLS AND LINE BALANCE .................... 175
10.1
L
AYOUT
,
C
ELL AND
L
INE
D
ESIGN
,
L
EAN
P
LANT
L
AYOUT
................................................................. 175
10.2
M
AJOR
T
YPES OF
L
AYOUT
:
T
HE
P
RODUCT
P
ROCESS
M
ATRIX
...................................................... 175
10.3
G
ENERAL
L
AYOUT
:
G
OOD AND
N
OT SO
G
OOD AT THE
F
ACTORY
L
EVEL
............................................. 175
10.4
M
ATERIAL
H
ANDING
:
G
OOD AND
N
OT SO
G
OOD AT
THE
F
ACTORY
L
EVEL
. ...................................... 180
10.5
C
ELLS
.......................................................... 181
10.6
C
HAKU
-C
HAKU
C
ELL OR
L
INE
........................... 187
10.7
V
IRTUAL
C
ELLS
.............................................. 187
10.8
M
OVING
L
INES AND
P
ULSE
L
INES
...................... 188
10.9
E
RGONOMICS
................................................ 190
10.10
3P:
P
RODUCTION
P
REPARATION
P
ROCESS
.......... 191
11
SCHEDULING LINE PROCESSES ............................ 193
11.1
D
IFFERENT PROCESSES REQUIRE DIFFERENT
APPROACHES TO SCHEDULING
.......................... 193
11.2
G
ENERAL COMMENTS ABOUT SCHEDULING
......... 194
11.3
T
HE
L
EVEL
S
CHEDULE
..................................... 195
11.4
M
ASTER
S
CHEDULING AND
F
INAL
A
SSEMBLY
S
CHEDULING
................................................ 196
11.5
T
HE TEN VALUE STREAM SCHEDULING CONCEPTS
.. 196
S
ALES AND
O
PERATIONS
P
LANNING
(&)............................... 206
11.6
K
ANBAN
,
P
ULL AND
CONWIP ......................... 206
11.7
C
ELL OR
L
INE
B
ALANCING
................................ 182
11.8
A
PPLYING
R
EPETITIVE
S
CHEDULING
................... 213
12
SCHEDULING BATCH PROCESSES ........................ 215
12.1
K
ANBAN
,
D
RUM
B
UFFER
R
OPE
,
AND
CONWIP ... 215
12.2
B
UFFERS
:
T
YPES
,
S
IZING
,
L
OCATION
.................. 216
12.3
T
HE
B
UILDING
B
LOCKS
.................................... 217
12.4
S
HARED
R
ESOURCES
....................................... 219
12.5
B
ATCH
S
IZING
............................................... 222
12.6
T
HEORY OF
C
ONSTRAINTS AND
L
EAN
................. 228
12.7
C
ONSTRAINTS
,
B
OTTLENECKS AND
N
ON
-B
OTTLENECK
R
ESOURCES
:
T
HE
S
YNCHRONOUS
R
ULES
............ 228
12.8
T
HEORY OF
C
ONSTRAINTS
I
MPROVEMENT
C
YCLE
. 229
12.9
C
ONFLICTS BETWEEN
L
EAN
T
HINKING
,
TOC
AND
F
ACTORY
P
HYSICS
? ........................................ 230
13
QUALITY ............................................................ 233
13.1
U
NDERSTANDING
C
USTOMER
N
EEDS
:
T
HE
K
ANO
M
ODEL
....................................................... 233
13.2
A
F
RAMEWORK FOR
L
EAN
Q
UALITY
................... 235
13.3
M
ISTAKES AND
E
RRORS
................................... 235
13.4
V
ARIATION AND
S
IX
S
IGMA
.............................. 240
13.5
C
OMPLEXITY
................................................. 245
14
LEAN PRODUCT DEVELOPMENT ......................... 247
14.1
F
OUR
O
BJECTIVES AND
S
IX
T
RADE
-
OFFS
............. 247
14.2
L
EAN IS
D
IFFERENT IN
P
RODUCT
D
EVELOPMENT
.. 249
14.3
W
ASTES IN
N
EW
P
RODUCT
D
EVELOPMENT
......... 249
14.4
S
YSTEMS FOR
NPD ........................................ 251
14.5
D
ESIGN
T
HINKING
.......................................... 254
14.6
M
AIN
L
EAN
D
ESIGN
T
OOLS
.............................. 256
14.7
A
DDITIONAL
T
OOLS FOR
L
EAN
P
RODUCT
D
EVELOPMENT
.............................................. 262
15
CREATING THE LEAN SUPPLY CHAIN .................... 272
15.1
W
HAT IS SUPPLY CHAIN MANAGEMENT
? ............. 272
15.2
T
HE THREE SUPPLY CHAIN
ENEMIES
’ .................. 274
15.3
S
O WHAT MAKES A SUPPLY CHAIN LEAN
? ............. 275
15.4
D
YNAMIC DISTORTIONS
T
HE
B
ULLWHIP
E
FFECT
. 275
15.5
M
ANAGING SUPPLIER RELATIONS
....................... 278
15.6
S
UPPLY
C
HAIN
C
OLLABORATION
........................ 284
15.7
L
EAN
L
OGISTICS
.............................................. 285
15.8
M
ANAGING
S
UPPLY
C
HAIN
R
ISK
........................ 286
15.9
O
RDER
F
ULFILMENT AND
P
RODUCT
C
USTOMISATION
.................................................................. 288
15.10
T
HE
SCOR
MODEL
.......................................... 292
15.11
M
EASURING
S
UPPLY
C
HAIN
P
ERFORMANCE
......... 292
15.12
C
REATING
H
IGH
-
PERFORMANCE SUPPLY CHAINS
... 292
16
ACCOUNTING AND MEASUREMENT .................... 295
16.1
L
EAN
A
CCOUNTING
......................................... 295
16.2
P
ERFORMANCE
M
EASURES
............................... 300
16.3
T
HE
B
ASIC
L
EAN
M
EASURES
............................. 302
16.4
T
ARGET
C
OSTING
,
K
AIZEN
C
OSTING AND
C
OST
D
OWN
.................................................................. 303
17
LEAN BEYOND THE FACTORY FLOOR ................... 307
17.1
T
HE ROLE OF CONTEXT
..................................... 307
17.2
P
RODUCT OR
S
ERVICE
? .................................... 307
17.3
T
YPES OF
S
ERVICES
......................................... 308
17.4
A
MANUFACTURING LOGIC FOR SERVICES
? ........... 308
17.5
T
HE
S
EVEN
S
ERVICE
W
ASTES
............................ 309
17.6
P
ERFORMANCE AND
W
ORKLOAD
:
P
ARKINSON
S
L
AW
AND
S
CARCITY
............................................... 310
17.7
L
EAN
H
EALTHCARE
.......................................... 313
17.8
L
EAN
F
INANCIAL
S
ERVICES
................................ 313
17.9
L
EAN
IT ........................................................ 314
17.10
L
EAN
C
ONSTRUCTION
...................................... 315
17.11
L
EAN
P
ROFESSIONAL SERVICES
.......................... 315
17.12
L
EAN IN THE
P
UBLIC
S
ECTOR
............................. 315
17.13
L
EAN IN THE
O
FFICE
........................................ 316
17.14
L
EAN
S
TART
-U
P
............................................. 317
18
LEAN – HOW IT ALL CAME ABOUT ....................... 318
18.1
L
EAN BEFORE
T
OYOTA
..................................... 318
18.2
T
OYOTA
:
THE
B
IRTHPLACE OF
L
EAN
.................... 318
18.3
W
HY DO WE CALL IT
‘L
EAN
’? ............................ 320
18.4
A
L
EAN
C
HRONOLOGY
..................................... 322
19
FURTHER RESOURCES – WHERE TO GET HELP...... 326
19.1
C
OMPANION
V
OLUMES
................................... 326
19.2
C
ERTIFICATION
............................................... 326
19.3
R
ESEARCH
C
ENTRES
,
R
ESEARCH
P
ROGRAMMES AND
W
EB
R
ESOURCES
........................................... 326
ABBREVIATIONS ............................................................ 327
INDEX ............................................................................ 329
T
HE
L
EAN
J
OURNEY
1
1 The Lean Journey
This book has a single purpose: to help you make
Lean work in your organisation. It provides you
with the key principles and tools needed for a
lean transformation. It will guide your
implementation and act as a reference guide for
you to go back to as you advance on your lean
journey. The philosophy will always remain, yet
as new challenges arise, different tools will be
required. In this book we have assembled the
main tools, systems and principles we have found
to be useful when applying Lean to
manufacturing, as well as services, the public
sector, IT operations, and the office. We wish you
good luck in your journey!
1.1 What is Lean….?
Lean is about moving ever closer to
uninterrupted flow in the sequence of operations
that deliver perfect quality – in other words –
becoming more of a time-based competitor.
‘Flow’ is not only of physical products and
services but also the information and designs
necessary to run operations. This requires
continuous improvement in three dimensions:
Waste reduction
Value enhancement
People involvement
Without all three, Lean will not survive. Through
time, as conditions change, the emphasis may
shift from one to another and back again. But
always there should be elements of each and
guided by a clear customer-related purpose.
Note that the capabilities of your people need
continuous development.
Especially important is that value must be
defined in the eyes of the customer, in terms that
are meaningful to the customer.
A ‘quick and dirty’ definition of Lean is ‘doing
more with less’. This is of course directly in line
with the definition of productivity (outputs /
inputs). But this should be interpreted more
widely as doing good for customers and
stakeholders with less resources materials,
energy, pollution to achieve ultimate
sustainability.
The Lean Enterprise Institute states, ‘The core
idea is to maximize customer value while
minimizing waste. Simply, lean means creating
more value for customers with fewer resources.’
In 2014, Quality Progress magazine defined Lean
as ‘the permanent struggle to flow value to each
customer.’ This concise definition captures
several points:
There is no end point; it is a journey.
It is not easy.
Long term consistency is required.
It is about flow – and improving flow
means understanding both customers
and the system, and reducing
impediments to flow.
The individual customer should be the
focus. Not ‘mass’ but ‘one at a time’.
Roger Schmenner, emeritus professor at Indiana
talks about ‘swift, even flow’, which is also a neat
and succinct summary.
Masaaki Imai, pioneer of Kaizen, now thinks the
core concepts are Flow, Synchronization, and
Levelling, or ‘FSL’.
Gitlow has the useful concept that value is a
function of time, place, and form to make
progress at least one has to be improved, if not
all three. Time is delivery lead time. Place is to do
with customer convenience. Form is to do with
design and utility.
The TRIZ concept of value is the ratio of Benefits
divided by Cost plus Harm. Benefits may accrue
before, during, or after the event. Harm includes
all the possible ‘victims’ – environment, energy,
and safety as well as any social harm that may be
caused.
1.2 Lean Evolution
For many, Lean started with ‘tools’. Often, these
were not even a set of tools but completely
independent: 5S here, SMED there, kanban here
and A3 there. But, like any set of tools, they are
2
T
HE
L
EAN
J
OURNEY
there for a purpose, not an end in themselves.
Like Michelangelo chipping away all marble that
was not David, so Lean tools are there to chip
away everything that does not enhance value for
the customer. For a while, a pure tools approach
is not a bad thing. Like Michelangelo’s original
marble block, a lot can be removed with little
skill. Then came Lean through Principles – often
the 5 Lean Principles of Womack and Jones, or
principles of self-help, respect, responsibility
towards staff, customers and society. This is
much better, and better still if systemically
brought together.
But now some have begun to realise that ‘real’
Lean is behaviour-driven. What everyone does
every day without being told. But how to get to
this state of nirvana? Behaviour is built through
confidence and security. An example would be
pulling the Andon chord when a problem occurs
and doing this as a habit, in the confidence that
this will be supported and expected. No ‘lip
service’. And the habit of using an experimental
approach. Over time, with persistence, this builds
the ‘world view’ the things we take to be self-
evident.
The most important behaviour is that, at every
level, leaders are teachers continually
reinforcing the correct usage of the principles
and the tools. Not relying on a 10-day Lean
course, or a book, or intranet for their staff to
learn the principles and tools – but by self-
demonstration and coaching every day.
In some ways the word ‘Lean’ is an unfortunate
one, because it has connotations of being
manufacturing only (but by no means is confined
to it), as well ‘mean-ness’ or ‘cutting back’,
generally in terms of headcount. On the contrary,
Lean is about growth and opportunity. For
example, Toyota has grown not cut back. They
have grown because they have capitalized on the
huge advantages that Lean brings. It is better to
grow into profitability rather than to shrink into
profitability.
This leads to another important idea – that of
‘Lean Enterprise’. Womack and Jones have
emphasized that Lean is concerned with
enterprise not just with manufacturing. If you
have already started on your Lean journey
without involving design, marketing, accounting,
HR, distribution, and field service, you will have
to do so very soon or risk the whole programme.
These functions have a vital role to play in
answering what the organization will do with the
improved flexibility, times, and the rest. If the
answer is just ‘reduce costs’ management has
missed the point. But the Lean enterprise also
needs appropriate people policies, measures,
accounting, design and new product
introduction, supply chain activities, and service
initiatives – perhaps ‘servitization’.
David Cochrane makes an excellent point: Lean,
says he, is not what organizations need to do.
Lean is what organizations should become by
effective system design and implementation.
One way of understanding Lean is to view it as a
(proven) approach to dispense with increasingly
inappropriate ‘economies of scale’ and to adopt
‘economies of time’. To conclude, take Ohno’s
Method:
1. Mentally force yourself into tight spots.
2. Think hard; systematically observe reality.
3. Generate ideas; find and implement simple,
ingenious, low cost solutions.
4. Derive personal pleasure from
accomplishing Kaizen
1.3 The Double Diamond
The ‘Double Diamond’ is a useful concept that
has been used for decades in value engineering,
design (British Design Council), culture change,
and service. A typical example is shown in the
figure.
Within each diamond various alternatives are
generated, considered, and the appropriate
solution selected. Widen out the possibilities,
then narrow the focus. Never go blindly after one
solution – and then sometimes find it is a bad
solution and all the work has been wasted.
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Lean has traditionally been seen to apply in the
lower diamond. But to confine Lean to Execution
is increasingly inappropriate. Much waste, cost
and effectiveness is built in during stages in the
upper diamond. So the diamond concept is useful
as Lean has extended into design (for example by
Westrick and Cooper), into ‘3P’, into Lean
software (for example ‘Lean Startup’), and into
Lean Service (Bicheno).
Each diamond in the broad double diamond
contains several diamonds or sub-phases. In the
top diamond, for example, there is innovation
design, and Production Preparation Process (3P).
In the bottom diamond, the same widen-it-out-
then-narrow-it-down would be recommended
practice in A3, kaizen, value stream mapping,
layout, and Six Sigma – to mention just a few.
So in this book increased attention is paid to the
top diamond in comparison with the previous
edition, and the methodology is recommended
throughout.
1.4 Lean, the S-curve and Innovation
Throughout history, every innovation has gone
through an S-curve. Slow start, take off, fast
growth, slowing growth, and maturity. Lean is no
different. Neither is Six Sigma.
In the mid 1960’s the Olympic record for the high
jump was progressing slowly. The dominant
approach was the ‘Western Roll’. Enter Dick
Fosbury with a radically new approach, initially
scorned by his coach. But persistence won out
and the ‘Fosbury Flop’ triumphed in the 1968
Olympics. From that moment other approaches
were instantly outdated. The Western Roll could
be improved upon continuously, but will never
again win gold.
So it is with Lean: Kaizen and Breakthrough (or
Kaikaku) need to work together. Breakthroughs
often come from outside. As Steven Johnson has
pointed out in “Where Good Ideas Come From”,
they almost invariably involve the adjacent
possible’. Innovations are imported from
adjacent areas. So Henry Ford used ideas from
cattle slaughter disassembly, from ‘scientific
methods’ and from the electric motor that
enabled high consistency of parts and
movement. Toyota built on Ford, but added ideas
from the loom, from Juran’s quality ideas and
Deming teaching, and from American
supermarkets and trams.
Within each big S-curve there are little s curves
smaller innovations that accumulate through
time. These are necessary, but not sufficient.
Without the occasional breakthrough, Lean will
invariably stagnate.
A great danger in Lean, as in other fields, is
Groupthink. Lean people always talking to Lean
people. Always taking only one company as the
role model. As Harvard Business School professor
Clayton Christensen has shown, ‘disruptive’
innovations classically come from the outside
and are seen as irrelevant until they too improve
and cross the line to become ‘good enough’.
Perhaps the future of Lean lies with frugal
innovations from India, from additive
manufacturing, and from service concepts.
(Please see also Section 15.3.)
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1.5 Where to start? Lean Transformation
Frameworks
In 2015, Lean is well established in many
organizations. Many have developed their own
frameworks.
Lean Transformation is the core topic of this
book, yet if you are hoping to find a shortcut for
your Lean journey here, we will have to
disappoint you. While one tends to look for the ‘3
steps to heaven’, unfortunately all Lean
transformations are different, and there is no
one ‘golden bullet’ recipe to follow.
Three Frameworks are presented here – Toyota
House of Lean, the Shingo Model and the
Hierarchical Transformation Framework. These
are intended to help with the appropriate use of
the tools that follow. These are not the only
frameworks, and we will review some other
proven ones in section 1.11. In addition, there
are thousands of ‘house of Lean’ versions, plus
other (often rather) fuzzy frameworks. The
frameworks may help with deciding the approach
and priorities. But no framework should be
merely ‘lifted’. Innovation and adaptation will
always be required.
As George Box the famous statistician said, ‘All
models are wrong, but some models are useful’.
1.6 Value Stream Mapping (VSM)
It is possible to use VSM as guiding framework
for Lean Transformation. The basic idea is to go
to 'gemba' (the workplace) and define the
current state or 'as is' map. In a second step, the
future state or 'should be' process is defined. The
gap between these two maps becomes the
implementation plan: what actions need to be
taken to get from the current state towards the
future state.
After improvements have been made, and the
process is stable, new current and future state
maps are generated, and the cycle begins again.
One will never reach the initially defined future
state, but progressively move to an emerging
vision of a lean process (See Chapter 9 for details
on mapping).
1.7 The House of Lean
First, let us look at the conventional ‘House of
Lean’. The original was developed at Toyota. An
early version is shown below. Note the two
pillars: JIT and Jidoka (Flow and Quality or ‘Go’
and Stop’. Note that having both pillars is a
necessary regulating mechanism you need
both. Ohno noted that in the West, the
preference was for Just in Time and he was
dismayed that Jidoka and ‘automomation’
(automation with a human touch) were
frequently downplayed.
Later versions replace the two main pillars of Just
in Time and Jidoka with Continuous improvement
and ‘Respect for people’, built on a foundation of
Learning cycles. Even more lately Rother and
Liker have suggested that the Toyota system
rests on a scientific way of thinking. But there is
more. Scientific thinking is certainly needed for
incremental improvement or kaizen. But
occasionally creative ‘out of the box’ thinking is
needed to break through to the next level.
Here is the good news about such houses: They
are familiar and easy to understand. They seem
to make sense. They may have a proven record at
organizations like Toyota.
Here is the not so good news: They suggest you
need to build from the foundations up -
irrespective of situation. The walls are not
started before the foundations are complete –
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but often implementation is iterative. Several
successful implementations have begun with the
Policy Deployment roof. Moreover, the house is
strongly tools oriented, rather than system
oriented. Where does the customer come in?
What happens if you are failing your customers
due to poor delivery performance? How do you
deliver value? Sustainability issues often result
because employees misinterpret tools such as 5S
– seen as clean up but not extending to the
power of visual management. Another example
is Andon – seen as just a signal instead of a big
change in responsibility for both operator and
team leader. Management becomes
disenchanted because there is no impact on the
bottom line, and little on customer satisfaction –
for quite some time.
1.8 The Lean Enterprise House
Toyota and TPS continue to evolve. Toyota, like
many others, have recognised the limitations of
too much emphasis on tools. They now use a
Lean Enterprise house that differs from the
‘tools’ house. The enterprise house is a wider
view and emphasizes philosophy and approach.
The ‘whats’, not the ‘hows’. The Toyota
Production System may be a house of tools, but
the Toyota Enterprise system is far more broad.
The foundation is the ongoing challenge of
continually adapting to the needs of customers,
employees, and environment. There is kaizen or
continuous change for the better. There is
teamwork and emphasis on working together.
And there is Gemba - the approach of hands-on,
going to see oneself rather than management by
remote control.
The pillars are now continuous improvement and
respect for people. These two go back to the
origins of Toyota in the 1930s to 1950s with
Sakichi and Kachiro Toyoda. Perhaps they go
back to a main source of their inspiration, Samuel
Smiles’ Self Help. These two support the Toyota
Way – that hard to capture set of principles that
Jeffrey Liker as attempted to summarise. And
finally, the roof – thinking people – the real root
of sustained performance.
The concept of enterprise is important.
‘Enterprise’ means that Lean is not limited to
‘manufacturing’ or ‘operations’. A Lean mindset
is necessary for all functions – accounting, IT, HR,
marketing, sales, purchasing, distribution, and of
course design and development. And not just
waste, but value.
Appropriately some have begun to say that TPS
stands for Thinking People System, rather than
Toyota Production System.
Similarly with customers. There are today’s
customers and tomorrow’s customers. And
today’s customers come in different categories
those that are very valuable, an intermediate set,
and a third set that are just not worth having.
Possibly your products or services are
inappropriately focused. So waste and value may
be perceived differently depending on the
customer group. A pensioner may be loyal
because extra time and attention is taken, but for
a businessman extra time could be waste.
Scott Adams, in the stimulating book, Good
Products Bad Products, gives dimensions against
which a product will be judged by customers as
Performance and Cost, Human fit and
ergonomics, Craftsmanship, Emotional appeal,
Elegance and sophistication, Symbolism and
cultural values, and concern for the environment.
Adams makes the point that it is well nigh
impossible to score highly on most of these
factors, and that different customers will have
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different perceptions. Value, then, is an elusive
commodity and one that must be continually
adapted and refined.
Kano, speaking about quality, talks about ‘Basics’,
‘Performance Factors’, and ‘Delighters’. (See
Quality chapter.) Much the same can be said
about value. There are some activities that are
basic to value – defect free has become a basic in
some industries. There is ‘performance’ value
lead time for example in some businesses, and
‘delighter’ value. Thus in the Kano model, value
and quality are dynamic.
Similarly, Terry Hill talks about ‘order qualifiers’
and ‘order winners’. Qualifiers get you into the
league, but winners win the match. Both
continually escalate.
Further reading
Darrell Mann, Hands-on Systematic Innovation,
IFR, 2009
Scott Adams, Good Products, Bad Products,
McGraw Hill, 2012.
1.9 Shingo Prize Framework
In 1988 The Jon M Huntsman School of Business
at Utah State University introduced The Shingo
Prize in recognition of Shigeo Shingo’s life-time
accomplishments in the field of Operational
Excellence. The Shingo Model is a comprehensive
transformational model that recognizes that to
be truly successful the tools and techniques must
be led by guiding principles and that an
organisation must be able to demonstrate that
these guiding principles are embedded in their
culture through the behaviour of all employees
(Shingo-Institute, 2012).
The model asserts that lean transformation
occurs not through tools as tools only answer the
question of “how”, but rather through collective
behaviour which is realised through
understanding the interrelated and
interdependent relationships between guiding
principles, systems, tools and results so that we
can answer the “why” question (Shingo-Institute,
2014).
The model further implies that principles govern
the laws of science and determine the
consequences of human relationships which
ultimately influence the outcome of business
endeavours. The Shingo Model is built on 10
guiding principles which are supported with 20
supporting concepts and categorised into four
dimensions: Cultural Enablers, Continuous
Improvement, Enterprise Alignment, and Results.
Simply put, principles should drive behaviour and
tools that support those systems. The Shingo
Institute contend that “when taken in their
totality, these timeless principles become the
basis for building a lasting culture of excellence in
the execution of one’s mission statement”
(Shingo-Institute, 2014, p. 10).
The model has two assessment scales, Behaviour
and Results:
Behaviour (Cultural Enablers, Continuous Process
Improvement and Enterprise Alignment) assesses
the business through lenses that look at Role,
Frequency, Duration, Intensity and Scope to
determine the degree to which the Leaders’,
Managers’ and Associates’ behaviours are in
alignment with the principles of operational
excellence.
Results (Quality, Cost/Productivity, Delivery,
Customer Satisfaction, and
Safety/Environment/Morale) view the business
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through lenses that look at stability, trend/level,
alignment and improvement.
The scoring system is based on a 1,000 point
scale. The points are then divided between the
two categories (800 points for Behaviours and
200 points for Results). The elements of the
categories are weighted and then awarded
points based on importance to the operational
excellence model.
“Behaviours” are assessed on three levels
leaders, managers, an associate - in terms of
their role. Other aspects of behaviour are
frequency, duration, intensity, and scope.
“Results” are assessed in terms of stability, trend,
alignment, and improvement.
These categories – behaviours and results – are a
valuable thinking framework for Lean
transformation even without knowing the detail.
Perhaps the greatest advantage of the Shingo
Prize model is that it is a comprehensive and
proven assessment method. (Other assessment
models will be discussed in a later section.)
Arguably this may be the best way into Lean or to
make further progress with Lean. As such it helps
prevent ‘pet projects’, ‘quick fixes’ and other sub-
optimisations.
Finally, the Shingo Prize
framework should not be
thought of as a checklist
or ‘tickbox’, but rather as
prompting an integrated
set of questions that
should be asked.
Note: Thanks to George
Donaldson of News
International that
became the first Shingo
(Gold) winner in the UK
in 2014, with help for this
section.
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1.10 The Hierarchical Transformation
Framework
All too often Lean implementations have begun by
collecting up a team and then immediately
drawing up a current state value stream map
followed by kaizen bursts based on the ideas of
the team. This is almost invariably a bad idea.
While simple, it has been found too simplistic in
practice to guide you to the right improvements.
It is far better to stand back, understand
customers, products and demand, review the
‘system conditions’ such as KPI’s and the costing
system that drive behaviour, assess the skills and
culture and then take actions that may or may not
initially include value stream mapping.
This chapter sets out a general framework for
Lean implementation. However, it is not intended
to be generally prescriptive. That would be
presumptuous! Any framework will need local
adaptation. There are overlaps with both the
frameworks discussed earlier. A manager may
decide to adapt (say) the Shingo framework but
rely on sections of the Transformation Framework
for the detail. Any framework for Lean must by its
nature be iterative, adopting an experimental
approach – trying, succeeding, failing, retrying,
learning.
The Transformation Framework is intended to be
hierarchical and iterative. The hierarchy is
presented on three levels. The steps in Level 1 are
the broad, general, early steps. The steps in Level
1 are then expanded upon in Level 2, and in some
cases the Level 2 steps are further expanded on in
Level 3. The corresponding tools discussed in this
book are given in Levels 2 and 3. In each level or
sub-level the steps should be regarded as a set
rather than a strict sequence.
Level 1: Gaining the Big Picture
At Level 1, the key objective is to set the scene for
leading any Lean Transformation. This level is
concerned with doing the right things. Lower
levels are concerned with doing things right. Doing
the right thing requires gaining an appreciation of
the many aspects that could be involved in both
the short term and the long term. Prioritisation
will depend on circumstance, but understanding
the Principles will apply in all cases. An
appropriate Strategy will always be required.
Some quick wins may be possible, but sooner of
later any Lean transformation needs to bring
together people, customers, money as well as
operations.
By the end, you should be familiar with the range
of topics that are needed for Transformation and
have a ‘systems view’ of their interdependencies.
The relevant book sections are Chapters 1 and 2,
Sections 4.1, to 4.3; 5.1 to 5.3; 7.1 to 7.2. (You also
may want to read up on
the history of Lean in
Chapter 18.)
Level 2: Driving a
sustainable
transformation
At Level 2, the key
objective is
concerned with
‘doing things right’.
This Level gets into
the detail of the
‘whats’ and ‘hows’ to
achieve sustained
Transformation. By
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the end, you should be familiar with substantial
detail of many of the tools and systems of Lean.
This stage falls into many subcategories, which do
not necessarily have to be addressed in sequence.
Iteration is likely.
Level 2.1: Understanding the principles
At first, understand the principles that form the
basis of Lean. These are fundamental to all
activities, regardless of the firm’s context and
stage of the implementation. Chapters 2, 3 and 4
are relevant here.
Level 2.2: Understand the customers and the
nature of demand
Here, the main purpose is to provide the relevant
tools and systems for analysing and managing
demand.
By the end, you should be familiar with both
segmenting demand so as to gain maximum
advantage from various demand patterns and
with influencing demand to that demand variation
can be limited to what customers actually require
rather than by variation caused by the
organisation itself.
Relevant sections are: Chapter 8.1. and 8.2.,
Chapter 13, and 11.1 and 11.2.
Level 2.3: Strategy, planning, communication
Here, the main purpose is to identify those
products and processes that will have the greatest
impact on a Lean Transformation, and to develop
and deploy strategy and tactics so that everyone is
empowered to take actions appropriate to their
level or function.
By the end, you should be familiar with the
formulation of strategy for Lean and the concepts
of how best to deploy strategy and policy.
Relevant books sections are: Chapters 5 and 6 and
most importantly, Chapter 7.
Level 2.4: ‘Check’, map and develop the Future
State
Here, the main purpose is to develop expertise
with the vital mapping tools that are an essential
feature for any Transformation.
By the end, you should be familiar with a range of
mapping tools and how they may be integrated
effectively to transform a current state into a
future state.
Most relevant here is Chapter 9.
Level 2.5: Product rationalization and Lean
Design
At this stage the main purpose is to achieve
effective product design and rationalization so
that the right products are introduced effectively.
By the end, you should be familiar with concepts
that relate to pre-manufacture. Design
methodologies that both reduce development
time and ensure quality products are discussed.
The essential tradeoffs in product design and
rationalization are presented.
See Chapters 13 and 14.
Level 2.6: Implement the Foundation Stones
The Lean foundation stones are applicable in all
situations. Whilst they do not have to be fully or
even partly implemented at an early stage, a weak
foundation leads to a weak and non-sustaining
general implementation.
The foundation stones are 5S in Chapter 8.7.,
Standard Work in Chapter 8.9., and the
improvement cycles in Chapter 4.3.
Level 2.7: The Value Stream Implementation
Cycle
Value Stream implementation is a central, ongoing
activity within a Lean enterprise. The main steps
are given in Chapter 9.4., and some steps are
detailed further in Level 3.
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Level 2.8: Building a Lean Culture
Here, the main purpose is to give guidance for the
absolutely essential ‘people’ aspects of Lean
Transformation.
By the end, you should be familiar with current
concepts relating to the psychology of change for
Lean organisation. Together, these concepts can
create the culture change and buy-in that are
essential if Lean is to be sustained.
Chapter 5, and especially 5.6., are relevant.
Level 2.9: Implement Lean Supply
The quality, cost and delivery (lead-time) of a
process is the outcome of a co-production
between the manufacturing firm and its suppliers.
Lean implementations therefore must consider
the entire value stream. Here, the main purpose is
to address contemporary Lean Supply Chain issues
and give guidance as to their successful
implementation.
By the end, you should be familiar with Lean
supply chain concepts such as partnership, risk,
measures, inventory considerations and the
avoidance of polices that lead to demand
amplification
See Chapter 15.
Level 2.10: Implement Lean Distribution
Just as important as managing the upstream
supply chain, is to manage the downstream (or
distribution and retail) end.
See Chapter 15.
Level 2.11: Costing and Performance Measures
‘What you get is what you measure’ – so here the
main purpose is to appreciate the vital role that
accounting, costing, and measurement plays in
any Lean Transformation.
By the end, you should be familiar with the risks of
not involving the accounting function, the
distortions of costing systems, and better ways to
incorporate ‘the financials’ in a Lean
Transformation. Appropriate measurement
considerations are also proposed.
See Chapter 16, and Chapter 5.1.-5.4.
Level 2.12: Improve and Sustain
Here, the main purpose is to provide frameworks
that enable improvement to be both continuous
and effective.
By the end, you should be familiar with a
considerable range of tools and systems for
improvement that apply to any aspiring Lean
organization. There are appropriate CI tools for
every level tools and every stage from concept to
customer.
An overview is given in Chapter 4, where guidance
on finding detailed tools can be found.
Level 3: Detailed scheduling, cell and line design
In this section two aspects are expanded upon
from Level 2 Detailed scheduling, and Lean Cell
and Line Design.
Level 3.1: Designing the Scheduling System
Detailed scheduling system design is a late but
vital step in Lean implementation. Two sections
are given here depending on the type of
scheduling environment – repetitive with clear
value streams and minor changeovers, and more
complex situations having shared resources and
batching. Of course, many plants will have
elements of each.
See Chapters 11 and 12.
Level 3.2: Cell and Line Deign
Cells and assembly lines are found in many Lean
manufacturing environments. In this section,
guidance is given on how best to approach key
points and issues in the design of these elements.
See Chapter 11.7.
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Traditional
Lean
Leadership Systems F actory Physics Audit
Consultant
Blueprint
Approach Toyota as
exemplar Leadership Systems view Flow Shingo
prize Blueprint
Leading
authority
Womack &
Jones
Liker,
Koenigsaecker Seddon Hopp and
Spearman Utah Big consultant
Method Prescriptive Prescriptive Contingent Conti ngent Continge nt Prescriptive
Way in 5 Principles, 14
Principle s Top Down ‘Check’ Plan
Do
Lead time,
Mapping
Audit
Principle s
Start with top
mgmt; use
standard
blueprint
Man/Serv M M & S? S M M & S? M & S?
Direction Top down,
Purpose Gemba
Listen to
customer,
involv e people
Look at b/neck;
DBR? Audit by expe rt
Top down
‘Exploring
opportunity’
Early step (1) Walk and i/d
wastes; map
Policy
Deployment
i/d purpose;
understand
Demand
Capacity
Spider diagram
of strengths
weaknes s
Map; Kaizen
events
Early step (2) Waste, A3
Capability Eve nts, A3 i/d failure
demand
Variation,
CONWIP i/d priority keys
Evaluating
change
capability
Mapping Early; Classic
VSM Quite early
Downplay;
Outline only;
dirty data
Quite early Later Early; classic
VSM
5S and std
work
5S, std work
early; takt time Early No 5S; no /
little std work Later Early
5S part of
‘demonstrating
change’
Tools Used Used Emerge Used Used Used
Concerns
Expand to
s/chain; extend
to enterprise
Suppliers Interve ntion Software Suppliers Change
management
Limitations/
Weaknesses
Automotive /
Toyota applies
everywh ere
Scheduli ng
Call centre /
‘break – fix’
Dominate
Math Scheduling
Blueprint
approach
applie d
everywhe re
Notes 1 2 3 4 5 6
1.11 Other Approaches to Lean
Implementation.
Almost every ‘Lean Guru’ and consultancy has
their own approach to Lean Transformation.
There is no Six-Sigma-like DMAIC agreed process.
Inevitably, some are better than others, all claim
to work, most of them can quote at least one
successful implementation, sometimes many. The
point is a ‘horses for courses’ message: there is no
right or wrong. The approach should be chosen
based on need: Order fulfilment? Culture change?
Leadership? An audit approach can be a
comprehensive foundation. There are also
differences between manufacturing and services.
Remember also that whilst the Toyota system is
undoubtedly effective for short-cycle repetitive
manufacturing this does not mean that it will work
well in pharmaceutical, or in aerospace or in low
volume custom environments. Adaptation is
usually required. Always ask where the approach
originated and whether that is the situation that
you face. The table attempts to summarise some
of the better approaches known to the authors.
Notes on table:
1. Womack and Jones are authors not
consultants or active implementers. Strongly
champion Toyota. The ‘House of Lean’ may
be one model that is used. Womack and
Jones also proposed the ‘Purpose, People,
Process’ trilogy.
2. Liker and Convis have written on Lean
Leadership. Koenigsaecker is an author and
also a CEO who has ‘done it’. Rother,
through ‘Kata’, sees learning cycles as the
way forward.
3. This is an attempt to capture the Vanguard
methodology. John Seddon is a leading
figure and author on Service, with emphasis
on systems. Recently ‘Ohno and Deming had
it right’ but many don't.
4. Goldratt’s Theory of Constraints (TOC) is
morphing into Factory Physics.
5. There are several Audit approaches.
Kobayashi’s 20 Keys is probably the original.
Often attractive to top managers who like a
simple score, but a danger is that tick box
develops. Shingo prize has emerged as the
big one.
6. Several large consultancies use a fairly
standardised Lean roll-out procedure,
beginning with top level contact.
The Lean Toolbox: A handbook for lean transformation
(5
th
edition, 2016)
is available from Amazon.com and Amazon.co.uk.
The Lean Toolbox is also available in the following languages:
Swedish:
Ny verktygslåda för Lean-Filosofi, transformation, metoder och
verktyg,
Göteborg: Revere (with J Hillberg) ISBN: 9789163195488
Danish:
Lean værktøjskassen, LeanTeam.dk, ISBN: 9788799031641
Chinese:
Mechanical Industry Press, ISBN: 9787111531722
Also check
out the companion volumes:
The Service Systems Toolbox (2011)
The Lean Games and Simulations Book (2014)
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