Lean Thinking - May the awareness be with you!

Welcome to the Lean Thinking course. 

This course is about learning to see. It is about creating awareness on value and waste as prerequisites to improving our work and keeping our customers happy. 

Compare it to losing weight; cutting off a piece of your belly is not gonna solve your problem! It takes focus, determination and perseverance. This goes for becoming a lean and agile company as well. 

Lean Thinking is a start!

Whatever it is that you do, you can use this in your work every single day.

This course will take you through the basics of Lean, its principles and its application. It's about creating a lean-mindset and learning to see before you take actions to improve things.

The course is build up of some theory and we will test your comprehension of it. In the end there's a brief exam on the matter. 

Enjoy the course and remember: May the awareness be with you!

 

1. Lean

What is Lean?

Lean is derived from the success of the Toyota Production System and made applicable for any business. Lean thinking is not a set of tools or a project. It’s a philosophy, mindset or mentality. When implemented correctly, it will never end.

Lean thinking provides:

  • a way to specify value,
  • line up value-creating actions in the best sequence,
  • conduct these activities without interruption whenever someone requests them,
  • and perform them more and more effectively.

Lean thinking is ‘lean’ because it provides a way to do more and more with less and less (human effort, equipment, time, space) while coming closer and closer to providing customers with exactly what they want.

Lean thinking also provides a way to make work more satisfying by providing immediate feedback on efforts made/work done. And, in striking contrast with process re-engineering, it provides a way to create new ways of working rather than simply destroying jobs in the name of efficiency.

 

 

What is true about Lean? (select all applicable answers)

  • Lean is just a buzzword
  • Lean is improving the quality of process and deliverables, reduces delivery times and subsequently production costs
  • Lean is doing more and more with less and less.
  • Lean is about cutting costs, reducing work and creating more value for shareholders.
  • Lean is providing customers with exactly what they want, when they want it and they're willing to pay for it.

Five principles of Lean

 

Lean is based on the following 5 fundamental principles:

Unfortunately most companies:

Specify value as being valuable for the company

Subsequently can't create a value stream

Thus forgetting flow and pull,

Jump to conclusions on continuous improvement,

And wonder why perfection is not within reach?

Can you place the five Lean principles in the right sequence?

  • Specify value
  • Value stream
  • Flow
  • Pull
  • Perfection

Can you match the requirements between the Lean principles?

  • You can't create a value stream
    before you specify what is of value for your customer
  • You can't create flow
    before you have transparency on your value stream
  • You can't create pull
    before you achieved flow in your process
  • You can't pursue perfection
    before your production is pulled through your processes by your customers

2. What is of value? And to whom?

Specify value

Specifying value has nothing to do with what we employees, management and stakeholders perceive as value. Our paying customers are the one, and the only one, to define if our output is of value to them. If not, they can and will stop buying from us!

What we do and how we do it is always experienced by our customers. They feel it when we:

  • don't deliver the quality we sold;
  • don't deliver on time as we promised;
  • charge a price including work resulting from not doing it first time right.

The customer journey is about the touch points between us as a company and our customers. That's where our customers value our work and pay for it. 

Our customers think they pay for added value. But they also pay for rework, delays, meetings, defects, reporting, etc. Everything we do is somehow calculated in the price we charge our customers. 

Look at it this way: If the product was delivered first time right, it might have been:

  • of better quality  - no repairs during production,
  • delivered faster - no delays in reworks during production or delivery, 
  • cheaper - no reworks, means nobody needed to fix it, saving their time, resulting in less costs, maybe even lower (competitive) prices. 

The question we should always ask first is: Is our customer willing to pay for all the work or only for some of the work we do?

Are the next statements true of false?

  • There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
  • In Lean, value is only perceived from customer perspective. Who the customer is, depends on the process.
  • Value streams only apply to processes with external customer interaction; the customer journey.
  • If I work in HR, I don't have customers.
  • Our customers pay for reworks, mistakes, delays, dead stock, etc. It's incorporated in the prices of the products or services they buy from us.
  • We don't have internal customers.

Identify the value stream

The value stream shows all activities performed to deliver a certain value to a paying customer. 

These activities are divided into 3 categories:

  1. Value adding activities (VA);
  2. Value-enabling activities / Business-value adding activities (BVA);
  3. Non-value adding activities (NVA);

Value adding activities are activities that truly add something in producing and delivering a product to a paying customer, such as the device, an activated sim-card, added services such as deezer and it is usable as soon as our customer walks out of the T-shop.

Value-enabling activities are activities that don't necessarily add value to the final product, but are required to make that product, such as hiring the right people, tools and facilities. They are also identified as business value adding activities, because it's of value to the business itself to do it, even though the customer couldn't care less (to a certain degree), such as financial administration, workforce management or security. 

Non-value adding activities are all activities that are not value adding or value enabling. These are generally identified as waste. 

So to provide maximum value for our customers we should eliminate all waste and reduce value-enabling activities as much as possible.

What kind of activities are valuable to the paying customer?

  • Value-enabling activities
  • Non-value adding activities
  • Value adding activities
  • Business-value adding activities

How do I identify waste?

Waste is sometimes not perceived as such. Identifying what is waste helps to define what is and what is not of value to our customers. 

There are 8 types of waste:

 

Watch the 'Toast Kaizen' video's and see the difference:

1. The current state of making toast: 

 

2. The improved condition of making toast and value-adding use of waiting time:

 

Ask yourself:

  • What type of wastes occur in your processes?
  • Where did you discovered them? 

The earlier you recognize defects or any of the other wastes in a process, the lower the costs of correcting them, and the smaller the chance of the effects of the waste reaching the customer. 

Can you repeat all types of waste?

There are 8 types of waste, combined in the acronyms DOWNTIME or TIMWOODS. For TIMWOODS, please select the right waste per letter:


T =  

 I =  

M =  

W =  

O =  

O =  

D =  

S =  

3. Make it flow, but only when ordered!

Flow

To gain a competitive advantage, it’s important to speed up the process, next to reducing waste. Reducing the time it takes to launch new products, to build, to deliver and to service them can increase a company’s success significantly, resulting in:

  • Faster time to market;
  • Shorter feedback loops, resulting in faster error detection and correction;
  • Reduced inventory levels;
  • Meeting and exceeding customers' expectations;
  • Reduced costs.

 

The best way to generate speed is to generate flow; a constant heartbeat in the process. This requires to look at process issues such as: 

  • Constraints: A limiting factor to organization’s performance, an obstacle to the organization achieving its goal. 
  • Bottlenecks: A resource with capacity less or equal to demand. 

Note: A constraint can be called bottleneck but a bottleneck is not always a constraint.

 

Constraints can be diverse, from lack or inbalanced distribution of resources to conflicting targets to different parts of the process. Work is divided in work packages with a certain cycle time. Some packages have longer cycle times than other packages. In the picture below we see that Operator C has a longer cycle time than average. This slows the whole process down, because other operators have less work on the same item. 

If you redistribute the work so every work package takes about the same time to execute, they can be performed in a constant heartbeat. This way the constraint at C is lifted.

A bottleneck is going from a 3-lane highway to a 2-lane highway during rush hour (full capacity of highway is demanded). 

To process the same amount of cars per minute (when being at full capacity) the speed of the 2-lane highway needs to increase with 50% compared to the speed at the 3-lane freeway to process the same amount of cars (3 lanes x 100% = 2 lanes x 150%)

The same applies to this picture. The speed is not adjusted to the maximum capacity, so traffic jams occur, slowing down the overall process. The capacity of the road has become the bottleneck.

What is it?

  • Two highways merge. One with 3 lanes, one with 2 lanes. After the merger, there are only 4 lanes.
    Bottleneck
  • Water flows downstream and meets a dam.
    Constraint
  • Work is divided in activities that require the same processing times.
    Takt rate

Pull

With flow alone, it will still be possible to generate waste. So pull is required to avoid waste. Pull is about only producing value when there’s demand for it. Creating pull starts with the customer and ideally ends with the supplier of (raw) materials.

Fast food chains are fairly good at this; Only produce a product after it’s ordered by a paying customer, and be able to do that fast! Otherwise it’s dead stock and wasting valuable resources.

These restaurants have a certain amount of ingredients ready to be processed to become a pizza or burger only after the customer ordered it.

Those ingredients are the only stock they have and only what they might need on one day. The daily demand for finished products determines the daily demand for every single ingredient.

A minimum of stock is kept to avoid running out of ingredients when there’s more demand than expected. When there’s less demand, most ingredients can be used the next day, but the demand and supply of new ingredients will be adjusted based on what’s still in stock.

The restaurant is the customer for these ingredients. The supplier of the buns, meat or veggies will produce based on the ordered amount by the restaurant. Less demand creates less supply. And so on. 

Is it 'Pull'? True or False!

  • Vermaat keeps pre-produced meals warm, waiting for someone to pick it up.
  • Car manufacturers only make the car after it's sold.
  • Having all radio antenna's required for a whole year of projects ordered at once.
  • UPS delivers a package at your door, only to find you're not home and they have to come back to deliver it.
  • Energy is only consumed when you switch on the light, appliance or device.

4. Pursue perfection.

Is perfection unattainable?

Vince Lombardi, a famous NFL-coach once said to his team:

"Gentlemen, we are going to relentlessly chase perfection, knowing full well we will not catch it, because nothing is perfect. But we are going to relentlessly chase it, because in the process we will catch excellence. I am not remotely interested in just being good."

And they did! His teams won 5 titles in 7 years, better than any other team in NFL history before and since! 

This means you have to be willing to improve every single day and do it one step at the time.

But how do you get there?

1. Define the current obvious and visible issues in a process. Identify how the work is done right now and what wastes you see. Determine who the customer of the process is and what quality is expected from this process to identify the issues. 

2. Don’t try to fix all problems at once. Start with the two or three biggest problems. Measure how big it is, where and how often it occurs. The biggest problems are often very visible and probably account for 60-80% of the total amount of things that go wrong.  

3. Analyze the measurements and statistics of the process to determine the possible solutions. For every issue, ask at least 5 x 'Why?' to identify the root causes. 

4. Improve the process by eliminating these root causes.

5. Keep measuring and Control the process by making sure this issue can never happen again. Then do it all again for the new issues that arise.

By having processes that are stable (repeatable quality level) and capable (always within customers specification limits) and continuously improving on them to reduce variance in the output, you will almost certainly become a world class player in your core business.

Become world class!

So the key throughout the previous steps is to continuously keep challenging the current state of your process and its deliverables.

After you improve something, the new state of that activity or deliverable will become the new standard. For your customers, it may be a delight; a need he didn't expected to be fulfilled.Over time, this 'delight' will become a 'must have'. This is never ending, because ongoing technological development will challenge everything you perceived was going well. What was great last year, might be very mediocre or even obsolete right now.

If you can instill this mindset, you’ll find out you’re improving your processes continuously with everybody involved. Improving quality will become a sport, where people get energized, enabled and motivated. No need to spend time, money and effort on reworks, but just on things that actually generate value. Reward this mindset and its results and this will create a culture of continuous improvement and innovation, where good is never good enough!

Are these statements true or false?

  • If you can deliver your product always between 1 and 5 days after the order was placed, while the desired delivery was within 6 days, your process is capable, but not stable
  • If you repeatedly deliver your product 1 day late, but never 2 days late, your process is stable, but not capable.
  • If you can deliver your product between 1 and 5 days after the order was placed , while the desired delivery was within 3 days, your process is not capable, neither stable.
  • If you repeatedly deliver your product 2 days after the order was placed, while the desired delivery was within 3 days, your process is both capable and stable.

Over time the output of any process can be measured and the variance in output quality can be visualized in a normality plot 

World class processes are both stable and capable over time.

The process is stable when the output has a repetitive quality level.

The process is capable when the delivered quality level always is within the customers upper and lower specification limits (usl, lsl). 

Can you determine if these statements are true or false? 

5. Take the exam!

Select the correct sequence of Lean principles?

  • Value stream - Value - Waste - Pull - Flow
  • Perfection - Flow - Pull - Value - Waste
  • Waste - Value stream - Pull - Flow - Perfection
  • Value - Value stream - Flow - Pull - Perfection
  • Value stream - Waste - Flow - Pull - Perfection

How many types of waste are there?

  • 5
  • 6
  • 7
  • 8
  • 9

Which of the following situations describes Flow? (select all applicable answers)

  • Merging traffic on the highway ('Ritsen')
  • Two small fast moving rivers merging into one big slow river
  • Longer trains during rush hours
  • Going from doctor to radiologist and back at a hospital, waiting before you see either of them.
  • A conveyor-belt at Ford's model-T production facility

Which of the following situations is Pull? (select all applicable answers)

  • Volkswagen requesting you to come in for service and maintenance
  • Ordering a 'sub' at Subway
  • A contractor designing and building your new kitchen
  • Using public transport
  • Request to fill in your tax assessment

Why should we want to pursue perfection? (select all applicable answers)

  • We want to deliver the best quality possible to our customers first time right
  • We want to deliver it faster to our customers, when they want it, where they want it.
  • We want to deliver it cheaper to our customers, by creating operational excellence
  • We want existing customers to stay with us and new customers to come to us
  • We want to be the best in what we do, saving on standardised processes and spending it on innovation

Thank you for following this e-learning!

You have come to the end of this e-learning. 

Thank you for following this course and we hope to have given you some awareness on the basics of Lean; its principles, how to look at processes and how to use these principles in your daily work.

As Yoda might say: "May Lean Awareness be strong with you!"

If you interest isn't fulfilled yet and you want to know more about processes in general, about Lean, maybe Lean Six Sigma, there is a lot of information to be found online.

If you want to know more on how to apply this in your own work you're invited to contact one of us from the Process Architecture team:

[email protected] 

06-24096688