85th Annual International Purchasing Conference & Educational Exhibit
New Orleans, Louisiana
May 2000
Author(s):
Barbara Florio, CPIM
Institute for Supply Management
85th Annual International Purchasing Conference and Educational Exhibit
New Orleans, Louisiana
April 30 -- May 3, 2000
Session EK, Tuesday, May 2, 2000
Thinking Lean
Presented by Barbara Florio, CPIM
Chair, Materials Management Group
What is lean thinking?
Lean thinking is a way of considering all of the tasks that take place along a value chain from the customers’ perspective, with the goal of trimming all waste and maximizing value in every process. Although it is often applied primarily to internal processes, in particular manufacturing, lean thinking is equally applicable to supply chain management.
Where did lean thinking originate?
The ideas were originally developed in Toyota’s manufacturing operations and became known as the Toyota Production System (TPS). The book The Machine that Changed the World (Womack, Jones & Roos, 1990) introduced the term "lean" to describe the Toyota methods of automobile production and contrasted this system with western automotive industries. In 1996, Womack and Jones published Lean Thinking which showed how the principles could be applied to any organization in any sector.
What are the principles of lean thinking?
- Specify value from the perspective of the end customer.
- Identify the value stream from each product family while removing unnecessary steps.
- Make value creating steps occur in continuous sequence to create flow.
- Permit the customer to pull.
- Manage toward perfection.
How would a materials management professional define these principles?
- Value is a product or capability provided to a customer at the right time at an appropriate price
- The value stream consists of all of the activities required to design, order, and provide a product from design concept to launch, order to delivery, and raw materials into the hands of the customer.
- Flow is the achievement of all tasks along the value stream without stoppages, scrap or backtracking movements.
- Pull is a system where nothing is produced or delivered until the customer signals a need.
- Perfection is the elimination of waste so that each step of the value stream creates value.
Lean Terminology
Andon lights/boards: A visual control device in a production area
Autonomation: semi-automatic operations where the operator and machine work together
Error-proofing: designing a potential failure or cause of failure out of a product or process
Five S’s: sort, straighten, sweep, schedule, and sustain – elements of a system to create a workplace suited for visual control and lean production
Five why’s: Taiichi Ohno’s practice of asking "why" five times in order to uncover the root cause of a problem so that effective countermeasures can be developed and implemented
Flow: the progressive achievement of tasks along the value stream
Flow manufacturing: a manufacturing methodology that pulls items from suppliers through a synchronized manufacturing process to the end product
Hoshin kanri: a strategic planning approach that focuses resources on the critical initiatives necessary to accomplish the business objectives of the firm
Just-in-time (JIT): system for procuring, producing and delivering the right items at the right time in the right amount
Kaikaku: radical improvement of an activity to eliminate waste
Kaizen: continuous incremental improvement of an activity to eliminate waste
Kanban: stocking system using signals to make production systems respond to real needs and not predictions and forecasts
Muda: waste – anything that interrupts flow, or consumes resources and produces no value
One piece flow: producing or procuring one unit at a time as opposed to in large lots
Quality at the source: prevention versus detection
Six Sigma: structured process improvement program for achieving virtually zero defects (3.4 parts per million) in manufacturing and business processes
Spaghetti chart: map of the path taken by a product as it travels down the value stream in a mass production organization
Total employee involvement (TEI): building a culture and practice of involvement and responsibility in every person in the organization
Value stream mapping: identifying the activities in the value stream and determining the value added to a product or service as it travels along the value stream
Resources for Additional Information
Websites:
Books:
- Cooper, Robin. When Lean Enterprises Collide: Competing Through Confrontation. Boston: Harvard Business School Press, 1995.
- Dimancescu, Daniel, Hines, Peter, and Rich, Nick. The Lean Enterprise. New York: Amacom, 1997.
- Hines, Peter. Creating World-Class Suppliers: Unlocking Mutual Competitive Advantage. London: Pitman, 1994.
- Hines, Peter. Value Stream Mapping. Reading, Massachusetts: Addison-Wesley, 1999.
- Lamming, Richard. Beyond Partnership: Strategies for Innovation and Lean Supply. New York: Prentice-Hall, 1993.
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