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Lean 101

The five steps to lean

Lean is a continuous improvement process that follows five simple steps: define value, map the value stream, create flow, implement pull, and pursue perfection.

Nikolaus Correll
July 22, 2021

The five steps to lean

Up to now, we really have only seen one example of a lean process, optimizing the daily chore of unloading the dishwasher. What might have seemed like a random exploration, actually follows a proven five step process. Also known as the “five principles of lean manufacturing”, these have been defined by Womack and Jones in their book “The machine that changed the world“. Nowadays, these five principles are not only applied in manufacturing, but are well known management techniques to improve workplace efficiency. They are:

  1. Define Value
  2. Map the value stream
  3. Create flow
  4. Use a pull system
  5. Pursue perfection

These might sound pretty abstract, unless you have a “genba” (the Japanese word for “crime scene”) like your kitchen or manufacturing floor in mind. The five principles of lean are often depicted on a circle, as true optimality cannot be achieved in practice and most improvements let you discover additional opportunities.

Define Value

Defining value is much more difficult than it sounds, and often changes during the process or as your business evolves. When we started to think about how to unload the dishwasher as fast as possible, we quickly realized that we don’t want to put too much strain on people and excluded them to simply move faster very early on. We have also realized that we don’t want to give up the cultural values of maintaining a diverse inventory of dishes and tools. Once we optimized the process around these constraints, we found that storing items in shelves can be mostly eliminated by mixing clean and dirty dishes at the expense of additional water and energy usage. These are all the same problems a business has. We need to increase throughput, minimize cost, protect workers and the environment and so on. It is very difficult to keep all of these in mind at once and they change more often than not. It is therefore helpful to start from identifying customer value, and derive your goal from there. For example, customers might be ready to pay a premium for fast delivery of products made with a low carbon footprints. Others care more about lowest price, and so on.

Example 1: Customer value
A cut-and-saw manufacturer is making ski apparel, a seasonal good. Customers expect to experience this product in store during the winter months, allowing the manufacturer to spread out their manufacturing over the Summer.
In order to more evenly spread manufacturing over the year, the manufacturer decides to offer contract manufacturing. Now, customers expect goods with the same quality and at similar cost to arrive within a predefined, possibly short, time frame, requiring the manufacturer to change its process fundamentally.

Map the value stream

To map the value stream is to identify what the activities are that are creating customer value. In the dishwasher example, these were taking things out and putting them away. Moving them across the house is an activity that does not directly create value, but is so-called “waste”. The goal is to reduce waste as much as possible. Digging deeper, “taking things out” is also a sequence of actions considering of value-adding and necessary activities, each with their associated wastes such as motion, defects, etc. Clearly, there are wastes that stand out right away, whereas others take time to get discovered. What exactly the different kinds of waste are is introduced in the next chapter “The seven deadly wastes“, which is also the title of this book.

Example 2: Value stream
A ski manufacturer provides custom-made skis at high quality within six weeks from being ordered from the website. Skis are cut from wooden planks, machined into shape, equipped with a base, edges, and a top, pressed, and finally tuned. Every step contributes to customer value, a high-quality ski delivered within six weeks at reasonable time. Increasing customer value, that is improving quality at a lower cost and within shorter time will require changes to the activities that add value, for example reducing wastes.

Create flow

To create flow emphasizes the idea that any stand-still is waste. Instead, a process needs to keep moving, preferably exclusively relying on activities that actually add value. Waiting for something is the most obvious source of waste that stands in the way of “flow”. Often, tasks can be rearranged, work loads across stations can be balanced, and employees can be trained to be multi-skilled and adaptive to jump in where they are needed to keep things flowing. Having “flow” does not mean that we are done, however. This can be easily seen in the dishwasher example, where “flow” might mean quickly moving single items between the dishwasher and stations, an activity that looks “busy”, but is very wasteful.

Example 3: Flow
A maker of turbo compressors has been working in batches, preparing ten parts at a time and passing the batch on to the next station. Although this allows workers to develop specialized skills, 90% of the WIP (nine out of ten parts) is sitting idle at all times. The manufacturer has retrained each of their workers to master the entire process and one worker is now responsible for a single product, moving it along the value stream, thereby reducing inventory and waiting.

Establish pull

To establish ”pull” is the idea to limit the amount of work-in-process concurrently in your line to a constant number with the goal to never have too much inventory and never too little. In the dishwasher example, we found that starting to use items from the clean dishwasher can reduce overproduction. We only unload the dishwasher completely, once we start to run out of clean dishes. Another household example is to put cards at the location of a consumable to trigger reordering. In both examples, ”pull” helps to keep the inventory (dishes or consumables) within acceptable bounds. Pull therefore helps to reduce inventory and work-in-process, while adding information to the system. An efficient way to manage pull in a manufacturing system is to use so-called “Kanban” cards. We will pick-up on “pull” and “Kanban” in Chapter 7 and beyond.

Example 4: Pull
A rubber boat manufacturer immediately starts manufacturing once an order comes in. As the order volume grew, they ran out of physical space and ended up with a lot of unfinished products. One of their existing machines limits their production rate to eight boats a day. Since they are throttling taking in orders at this rate, their WIP has dramatically shrunk and their lead time has become again predictable. They can now focus on increasing their production rate.

Pursue perfection

To pursue perfection requires to continuously re-evaluate a running system. In Japan, this is done during so called “genba walks” where workers and management look out for waste. While you might be able to detect waste on your way to the water fountain, genba walks should also involve a discussion on whether the current process still meets customer and business needs, or whether the performance metrics that you aim for have changed.

Example 5: Pursue perfection
A maker of toner cartridges has gone through a number of lean improvement iterations. As their value stream extended over a large physical area, a lot of time was spent on transport. The manufacturer has since integrated a robotic cart, which allows them to use their workers in positions that add more value. They are now prepared to manage their growth.
A ”genba walk” involves weekly or monthly tours through the factory with everyone keeping their eyes open for things that could be improved.


Quiz

1.What is not a good example for “value”?

  1. Employee health and safety
  2. Offering a product at the lowest possible price
  3. Maximizing throughput
  4. Maximizing efficiency of capital use
  5. None of the above

2.Which activity does not directly contribute to customer value?

  1. Adding a clear coat to increase paint durability
  2. Transporting a part from assembly to the paint station
  3. Waxing and polishing

3.Which example of flow is better than the other?

  1. ‍All employees are constantly moving, hustling and bustling in between buildings to keep materials and parts going at a constant rate
  2. Employees are assembling engines at a slowly moving assembly line and play ”candy crush” on their phones once they are done and until the belt advances
  3. Not enough information to tell

4.What is not an example of pull?

  1. An employee informing the line manager of a certain sub-assembly running low
  2. An employee passing a work piece on for further processing
  3. A customer order generating a work order

5.For continuous improvement, it is sufficient to regularly check for inefficiencies

  1. ‍True
  2. False

Solutions: 1-5,2-2,3-3,4-2, 5-2

ABOUT THE AUTHOR
Nikolaus Correll

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