COURSE OVERVIEW 8 Section One: Introduction to Lean 11. Section Two: Value and Waste 21. Section Three: Understanding and Using Lean: 41

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TABLE OF CONTENTS

COURSE OVERVIEW _________________________________________________________ 8 Section One: Introduction to Lean __________________________________________ 11 Introduction __________________________________________________________________ 12 Overview of the Five Principles ________________________________________________ 13 Section Two: Value and Waste ________________________________________________ 21

The Customer Defines Value _____________________________________________________ 22

Eliminate Waste _______________________________________________________________ 25 Section Three: Understanding and Using Lean: __________________________________ 41

Problem Solving Abililty _________________________________________________________ 43 Section Four: Using Tools of Lean _____________________________________________ 47

The Lean Tool Box______________________________________________________________ 48 Section Five: Lean Performance Measurables ____________________________________ 85

Introduction __________________________________________________________________ 87

Measurement in a Service or Office Environment ____________________________________ 87

Measuring Performance _________________________________________________________ 89 Section Six: Change Management and Using Teams to Implement Lean ______________ 93

Change Management ___________________________________________________________ 94

Working with Teams ___________________________________________________________ 95 The Role of the Change Leader __________________________________________________ 100 Creating the Improvement Culture _______________________________________________ 101

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Introduction

Lean, reduced to the most fundamental of definitions is ‘the purposeful elimination of waste activities’. In his book, Lean Thinking, James Womack defines Lean as ‘the process of determining what is of value and then making it flow’.

Lean principles began in manufacturing environments and are described in a number of ways: Lean Enterprise, Lean Manufacturing, Lean Production, Toyota Production System, etc. The development of Lean principles stem back to the time of Henry Ford and his production facilities, however, more refined principles are generally attributed to the Japanese production environment.

Lean can be defined as a systematic approach to identifying and eliminating waste through continuous improvement, flowing the product at the pull of the customer in pursuit of perfection.

Lean applies to an entire organisation. Although individual components or building blocks of Lean may be tactical and narrowly focused, using them together and applying them cross-functionally through the entire system is required to achieve maximum effectiveness.

Lean is a process philosophy with three purposes:

1. To eliminate wasted time, effort and material;

2. To provide customers with made to order products/services; and 3. To reduce cost while improving quality.

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Benefits of Implementing Lean

The creation of a Lean Enterprise will deliver wealth and prosperity to an organisation. The price of a goods and services is determined by the cost to supply the product and service and the profit determined by the organisation. Hence the selling price minus the cost of supplying the goods and service determines the profit. Waste will add to the cost of supplying goods and services, hence reducing an organisation’s profit margins.

By creating a Lean Enterprise organisations can expect to cut production times, reduce inventories, reduce errors and scrap within any process. Typically job related injuries are also reduced. Goods and services will reach the market place far quicker and value added products will require less investment costs. This is not the end of the benefits though. When fully adopted within a business, improvements are continuous and an organisation can expect to increase productivity whilst decreasing errors and lead times.

The investment required to implement Lean is insignificant to the rewards that will be gained. Consider if your competitor is doing Lean and you are not. How will you compete?

Typically the benefits of implementing Lean can be broken down into three broad categories: Operational, Administrative and Strategic Improvements. Most organisations that implement Lean do so for operational improvements, primarily because of the perception that Lean only applies to the operations side of the business. However, Lean’s administrative and strategic benefits are equally impressive. Some of Lean’s benefits are summarised below.

Operational Improvements

• Lead Time (Cycle Time) reduction.

• Productivity increase.

• Work In Progress Inventory reduction.

• Quality improved.

• Waste identified and removed

• Space utilisation improved.

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Administrative Improvements

• Reduction in order processing errors.

• Streamlining of customer service functions.

• Reduction of paperwork in office areas.

• Reduced staffing demands, allowing the same number of office staff to handle larger numbers of orders.

• Documentation and streamlining of processing steps enabling the outsourcing of non-critical functions, allowing the company to focus their efforts on customers’ needs.

• Reduction in turnover and the resulting attrition costs.

Strategic Improvements

x Identification of Root Causes allowing for more effective strategic planning

x Creation of Customer Value Proposition, providing clarity to ongoing strategy development

x Inclusion of staff as part of the Continuous Improvement development, allowing for key engagement

x Allowing for the innovation from all staff to build the business.

x Identifying key metrics to continue to improve and build the business x Creating motivated staff to take on the new directions of the business

Lean requires

x A different way of thinking

x A different way of looking at the organisation’s processes x A different way of looking at everything we do

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Activity – Barriers

Objective:

To determine barriers to effectively implementing Lean in an organization.

Introduction:

Form teams, then in your team discuss and record whether there are likely to be any barriers to the successful implementation of Lean in an organisation. As you undertake this activity consider organisational culture; executive; management; people; implementation as well as other perspectives.

Task:

Develop a list of barriers to implementing Lean and present it for discussion.

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Where to Begin

Stephen R. Covey gave the best advice on where to begin ‘Start with the end in mind’. Only when the executive vision of Lean is clear will it be possible to commence a course of action. Successful implementation strategies have shown that having good leaders with a sound knowledge of Lean who can quickly and effectively commence building a culture of continuous improvement on a day-to-day basis is a positive start.

The sequence of events that must be followed for a successful implementation are:

1. Understanding of Lean. 2. Ongoing commitment.

3. Initial Application areas identified as pilots 4. Resources made available.

5. JDI.

‘Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals’

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Overview of the Five Principles

1. The Customer Defines Value

Value is defined from the perspective of the final customer/end user. Value is expressed in terms of a specific service or product, which defines the customer’s needs at a specific price and at a specific time.

2. Eliminate Waste

Identify the value stream. Create a map of the current state and the future state of the value stream. Identify and categorise all forms of waste in the current state and eliminate it.

3. The Customer Establishes Pull

The customer will pull products from the organisation as they need them, thus eliminating the need for a sales forecast.

4. Involve and Empower People Who Add Value

Use empowered teams to create value and eliminate waste.

5. Total Cost is the Ultimate Performance Metric

The promise of wealth and prosperity can only be achieved using total cost as the driving measure.

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COURSE OVERVIEW

ACKNOWLEDGEMENTS

SAI Global would like to acknowledge the contribution of the following individuals:

David Smith David Sikorski

PURPOSE

Welcome to the Lean Active Workshop which is a two day training event that introduces the concepts of Lean and the tools used in Lean process improvements. The concept of Lean is focused on eliminating all waste within an organisation’s processes. Using specific tools and techniques will support the elimination of waste for a leaner organisation and one that provides greater value to customers.

LEARNING OUTCOMES

At the end of this event, participants should be able to:

REVIEW

• Understand the concepts of Lean;

• Describe the characteristics of a Lean organisation;

• Have an understanding of how Lean tools are used;

• Understand how Lean can be used at all levels in an organisation;

• Undertake Lean improvements.

ABOUT THIS COURSE

Course Content and Assessment Criteria

REVIEW

This course covers: 1. Introduction to Lean 2. Value and Waste

3. Understanding and using Lean 4. Using Tools of Lean

5. Lean performance measures

6. Change management and using teams to implement Lean

Event Duration

This is a two day active learning workshop that includes presentations, discussions and activities to reinforce learning.

Event Award

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