As mentioned above, continuous improvement teams started to run out of steam in the mid to late 1980s. About this time the automotive industry was under tre- mendous competitive pressure from Toyota to improve its quality performance and reduce cost. As a result, organizations emulated several of Toyota’s operational sys- tems embodied under the general term Lean. Lean systems are characterized by simple processes that have been optimized over time to eliminate the waste related to defects, unnecessary motion, job setups, and unnecessary movement of materi- als, waiting, and transportation of materials and jobs. In addition, high quality and low costs were additional benefits that relied on mistake-proofing strategies, and highly flexible cross-trained workers, to name just a few characteristics of Lean. The reason Lean tools and methods are very effective in process improvement is that everyone from the front office to the factory floor can get involved with improve- ment projects because they use simple tools and methods that can be applied to the analysis of any process workflow. These tools and methods include work simplifica- tion, standardization, cleaning local work areas, throwing out unneeded materials, value stream mapping, and mistake-proofing. These actions fall under the general category of 5-S, an acronym for sorting, simplifying, sweeping (cleaning the work area), standardization, and sustaining process improvements. Also, because people become involved in the team meetings, process analysis, and projects’ resultant process changes, they see the power of teamwork as well as the application of fact- based methods to process improvement. The value of Lean applications in process improvement has been very well documented and can yield significant productivity improvements. This makes it easy to gain senior management’s support for a Lean initiative. Lean tools and methods are also the basis for other initiatives because Lean simplifies and standardizes workflows, which facilitates subsequent process analysis and improvement. We will discuss Lean is more detail in Chapters 5 and 6.
Table 2.5 lists ten important steps that will move an organization toward an integrated Lean system. Under the direction of an executive steering committee, the first step is to organize local problem-solving groups. Organizing local problem- solving groups allows an organization to develop continuous improvement strate- gies that are aligned with local work cell activities. This enables workers to learn how to more efficiently operate and maintain their machines and work operations within their local works cells. Second, they are trained to identify process improve- ment opportunities and analyze process breakdowns using simple quality tools and methods that facilitate continuous improvement activities. Integral to the success of any initiative, including Lean, is the development of system performance metrics to monitor, control, and identify improvement opportunities. Metrics were discussed in detail in Chapter 1 and will be an important subject throughout this book. Standardization of processes is another major characteristic of Lean systems. This is because a stable process is required to meet external customer demand based on a system’s required takt time — the amount of time in which one unit of production
Organizational Change in a Competitive World n 41
must be completed to meet total daily demand for all production units. An example would be having a daily demand of 100 units and 500 minutes available per day to produce the units. The takt calculation would be one unit every five minutes. Takt time will be discussed in Chapter 6. As mentioned above, 5-S consists of five major activities designed to ensure the workplace is orderly and standardized, and its process workflow status is easily seen at a glance. Application of 5-S methods to a process workflow also improves its quality because there will be fewer mistakes within work operations. Lower error rates have an added advantage of reducing cycle time and cost.
At a higher level, a process workflow can be analyzed using value stream map- ping (VSM). VSM shows the interrelationships of operations within a process workflow, as well as its rework loops and other non-value-adding work tasks within operations. Non-value-adding work tasks are commonly associated with the move- ment of materials, setup of jobs, processing of work, inspection of work, storage of information or materials, and similar activities. It should be noted that process workflows that move information rather than materials are analogous. After the VSM has been analyzed relative to those workflow operations that either add or do not add value, the non-value-adding operations and their associated work tasks are eliminated from the process workflow. In summary, using a VSM has the practical effect of simplifying a process and its workflows. Process simplification reduces costs and operational cycle times and improves quality. Reorganizing the physical config- uration of a process to increase its throughput is another important Lean method. Bringing operations in closer proximity reduces unnecessary material movement
table 2.5 10 key Steps to deploy lean Systems
1. Organize problem-solving groups.
2. Develop system performance measurements and metrics. 3. Eliminate unnecessary activities.
4. Standardize processes using 5-S. 5. Reorganize physical configuration.
6. Upgrade quality through mistake-proofing and design modifications. 7. Implement Total Productive Maintenance (TPM) and Single Minute
Exchange of Dies (SMED).
8. Level the facility load using mixed-model scheduling and other methods. 9. Introduce Kanban quantities and standardized containers and other visual
controls.
between work stations and facilitates the real-time communication between work stations. As an example, using a particular operational layout called U-shaped work cells allows easy balancing of the workflow because workers can simply turn around to complete one or several work tasks. Also, as the work volume fluctuates (with the takt time recalculated in these situations), it is easier to expand or contract the workforce size. As the process is simplified and standardized, mistake-proofing and design modifications are also successively applied throughout a process. This has the effect of ensuring high quality throughout a process using very inexpen- sive error warning and control systems. Total Productive Maintenance (TPM) and Single Minute Exchange of Dies (SMED) methods are also implemented within a process to further ensure stabilization relative to its takt time. In addition to takt time stabilization, the external demand on a system can also be level loaded using mixed-model scheduling and other methods useful in creating a common product, process, or scheduling system. Once a Lean system is stabilized and optimized relative to its constraints, Kanban quantities and standardized containers can be used to control the process workflow. Kanban systems are useful in maintaining stable inventory levels and controlling the process workflow. The application of Lean methods also enables fast responses to unexpected process changes. Finally, development of supplier agreements and networks is integral to the long-term suc- cess of a Lean system. These Lean concepts, tools, and methods will be discussed in more detail in Chapters 5 and 6.