Womack et al. (1990) and Womack and Jones (1996) successfully capture Japanese thinking and lean practices which are rapidly spreading worldwide. The 1996 publication has been used as a fundamental guide for lean transformation and it also consolidates lean thinking into five lean principles, summarized as follows:
1. The starting point for lean thinking is to define and specify value from the customer perspective. The value is created by the producer; however it can be determined only by the customer. The value is expressed in terms of a product or service that is designed to meet a specific customer´s needs. Many
80 manufacturers tend to design new products and offer customers what is convenient for the manufacturer or what is most economical from their perspective. The products are constrained by existing facilities rather than by customer requirements.
2. Identify the value stream as second principle is defined in the book as ‘the set of all specific actions required to bring a specific product from concept through detailed design and engineering to production launch or from raw material to a final product’ (Womack & Jones 1996:19). The entire value stream should be mapped and all wasteful steps eliminated.
3. Flow is the third principle: it focuses on the creation of the flow from the value- added activities, after the non-value added activities have been eliminated. It often requires a change of conventional thinking patterns as the work of departments and functions needs to be redefined. The objective is to contribute to value creation along an entire stream and create value flow.
4. Pull, the fourth principle, simply means that the product will be produced only if it is required by a customer. Engineering will design and production will produce exactly what the customer wants and what he will be prepared to purchase. This will allow the customer to ‘pull’ rather than ‘push’ a product which is not required and which will therefore be overproduced.
5. Perfection is the fifth and the final principle, emphasizing the journey of continuous improvement. The most important focus is on transparency, so that everyone involved can see and understand how to contribute to value creation. Another key feature of lean work is the instant feedback for employees making improvements. The combination of radical improvement Kaikaku and incremental improvement Kaizen can produce endless improvements.
Bicheno and Holweg (2009:12) assert that Womack and Jones (1996) should be understood more as a manufacturing book, rather than as explaining the whole system. However this researcher’s view is that the book emphasizes not just lean manufacturing, but the whole lean enterprise and more importantly the entire lean system. The key characteristic of lean can be inferred from Bicheno and Holweg (2009:8): ‘The essence of Lean is the system approach. System thinking is holistic’. This means that while focusing on lean the entire organization should be seen as a
81 whole, rather than confined to selected parts. Systems evolve and are in constant interaction with their environment where they try continuously to adapt.
Finally, Haque and James-Moore (2004:2) argue that lean principles are in fact a series of steps for the implementation of lean thinking rather than a strategy. Most lean principles are universal, but every organization is unique and the application needs to be tailored to fit their situation. Lean principles suit different environments and processes, but suitable tools and techniques needs to be carefully selected for each specific context.
The Lean Formula
Bicheno and Holweg (2009:7) have produced an inspiring analysis of lean and illustrate its essence in the following formula depicted in Figure 4.3:
Figure 4. 3: Lean Formula
Source: Adapted from Bicheno and Holweg (2009:7)
Figure 4.3 depicts Lean as Load (amount of work imposed on the system) minus Capacity (resources available to do the work) = Gap (load minus capacity). Bicheno and Holweg (2009:7) explain that Load consists of two types of demand: value and failure demand. Value demand is made up of various demands, which are described as runners, repeaters and strangers. Failure demand is caused by the failure to do the thing right the first time, or from a failure to take action. In order to use capacity more efficiently, a shifting, or levelling, of demands is recommended. Capacity, according to
82 Ohno, is the combination of work and waste. By reducing waste the total capacity could be used more efficiently, or the failure demand could be cut. The Gap can be either positive or negative. If the gap is positive, it indicates an overload of the system; if the gap is negative, than the system is under-loaded. The gap can be narrowed if the variation is reduced, which results in meeting more demand and improving customer service.
The lean formula above can be further explicated: if ‘Load’ is greater than ‘Capacity’, an overload or overburden will be created in the system. On the other hand, if ‘Load’ is less than ‘Capacity’ there will be an ‘underload’ in the system. Bicheno and Holweg (2009:7) further explain that due to variation and capacity some degree of ‘underload’ is desirable. Therefore, seen in practical terms, once a factory is loaded to 100% of its capacity, it will not be able to work effectively and therefore not meet required demands.
4.5 REVIEW OF LITERATURE ON LEAN THINKING, LEAN PHILOSOPHY AND THE