Lean Manufacturing began with Deming’s work with Toyota in the 1950s. The Wikipedia article below outlines the development of manufacturing to improve quality and efficiency by engaging the workforce to participate.
Lean manufacturing is a production method aimed primarily at reducing times within the production system as well as response times from suppliers and
to customers. It is
closely related to another concept called just-in-time
manufacturing (JIT manufacturing in short). Just-in-time manufacturing
tries to match production to demand by
only supplying goods which have been ordered and focuses on
efficiency, productivity (with a commitment to continuous
improvement), and reduction of "wastes" for
the producer and supplier of goods. Lean manufacturing adopts the just-in-time
approach and additionally focuses on reducing cycle, flow, and throughput times by further eliminating activities which do
not add any value for
the customer. Lean manufacturing also involves people who work outside of
the manufacturing process, such as in marketing and
customer service.
Lean manufacturing is particularly related
to the operational model implemented in the post-war 1950s and 1960s by
the Japanese automobile company Toyota called Toyota Production System (TPS), known in the US as "The Toyota Way". Toyota's system was erected on the two pillars of just-in-time
inventory management and automated quality control. The seven
"wastes" (muda in Japanese), first formulated by
Toyota engineer Shigeo Shingo, are the waste of superfluous inventory of raw
material and finished goods, the waste of
overproduction (producing more than what is needed now), the waste of
over-processing (processing or making parts beyond the standard expected by
customer), the waste of transportation (unnecessary movement of people and
goods inside the system), the waste of excess motion (mechanizing or automating
before improving the method), the waste of waiting (inactive working periods
due to job queues), and the waste of making defective products (reworking to
fix avoidable defects in products and processes).
The term Lean was coined
in 1988 by American businessman John Krafcik in his article "Triumph of the Lean Production System", and
defined in 1996 by American researchers James
Womack and Daniel Jones to consist of five key principles: "Precisely specify value by
specific product, identify the value stream for each product, make value flow
without interruptions, let customer pull value from the producer, and pursue
perfection."
Companies employ the strategy to increase efficiency. By receiving goods only as they need them for the production process, it reduces inventory costs and wastage, and increases productivity and profit. The downside is that it requires producers to forecast demand accurately as the benefits can be nullified by minor delays in the supply chain. It may also impact negatively on workers due to added stress and inflexible conditions. A successful operation depends on a company having regular outputs, high-quality processes, and reliable suppliers.
History
Fredrick Taylor and Henry
Ford documented their observations
relating to these topics, and Shigeo Shingo and Taiichi
Ohno applied their enhanced thoughts on
the subject at Toyota in the late 1940s after World War II. The resulting methods were
researched from the mid-20th century and dubbed Lean by John
Krafcik in 1988, and then were defined
in The
Machine that Changed the World and
further detailed by James
Womack and Daniel Jones in Lean Thinking (1996).
Japan, the Origins of Lean
The exact reasons for adoption of
just-in-time manufacturing in Japan are unclear, some people suggest it started
with a requirement to solve the lack of standardization, which is not the
complete story nor the actual reason. Japanese companies needed an immediate
solution for the extreme situation they were living after the World War II.
American supply chain specialist Gerhard Plenert has offered four quite vague
reasons, paraphrased here. During Japan's post–World War II rebuilding (of
economy, infrastructure, industry, political, and social-emotional stability):
1.
Japan's lack of cash made it difficult for
industry to finance the big-batch, large inventory production methods common
elsewhere.
2.
Japan lacked space to build big factories
loaded with inventory.
3.
The Japanese islands lack natural resources
with which to build products.
4.
Japan had high unemployment, which meant
that labor efficiency methods were not an obvious pathway to industrial
success.
Thus, the Japanese "leaned out"
their processes. "They built smaller factories ... in which the only
materials housed in the factory were those on which work was currently being
done. In this way, inventory levels were kept low, investment in in-process
inventories was at a minimum, and the investment in purchased natural resources
was quickly turned around so that additional materials were purchased."
Plenert goes on to explain Toyota's key role in developing this lean or
just-in-time production methodology.
American industrialists recognized the
threat of cheap offshore labor to American workers during the 1910s, and
explicitly stated the goal of what is now called lean manufacturing as a
countermeasure. Henry Towne, past president of the American
Society of Mechanical Engineers,
wrote in the foreword to Frederick Winslow Taylor's Shop Management (1911),
"We are justly proud of the high wage rates which prevail throughout our
country, and jealous of any interference with them by the products of the
cheaper labor of other countries. To maintain this condition, to strengthen our
control of home markets, and, above all, to broaden our opportunities in
foreign markets where we must compete with the products of other industrial
nations, we should welcome and encourage every influence tending to increase
the efficiency of our productive processes."
Continuous production improvement and
incentives for such were documented in Taylor's Principles of Scientific
Management (1911):
·
"... whenever a workman proposes an
improvement, it should be the policy of the management to make a careful
analysis of the new method, and if necessary conduct a series of experiments to
determine accurately the relative merit of the new suggestion and of the old
standard. And whenever the new method is found to be markedly superior to the
old, it should be adopted as the standard for the whole establishment."
·
"...after a workman has had the price
per piece of the work he is doing lowered two or three times as a result of his
having worked harder and increased his output, he is likely entirely to lose
sight of his employer's side of the case and become imbued with a grim
determination to have no more cuts if soldiering [marking time, just doing what
he is told] can prevent it."
Shigeo
Shingo cites reading Principles of
Scientific Management in 1931 and being "greatly impressed to
make the study and practice of scientific management his life's work".
Shingo and Taiichi
Ohno were key to the design of Toyota's
manufacturing process. Previously a textile company, Toyota moved into building automobiles in 1934. Kiichiro
Toyoda, founder of Toyota Motor Corporation,
directed the engine casting work and discovered many problems in their
manufacturing, with wasted resources on repair of poor-quality castings. Toyota
engaged in intense study of each stage of the process. In 1936, when Toyota won
its first truck contract with the Japanese government, the processes
encountered new problems, to which Toyota responded by developing Kaizen improvement teams, into what has become the Toyota Production System (TPS), and subsequently The Toyota Way.
Levels of demand in the postwar economy of
Japan were low; as a result, the focus of mass production on lowest cost per
item via economies of scale had little application. Having visited and seen
supermarkets in the United States, Ohno recognized that the scheduling of work
should not be driven by sales or production targets but by actual sales. Given
the financial situation during this period, over-production had to be avoided,
and thus the notion of "pull" (or "build-to-order" rather
than target-driven "push") came to underpin production scheduling.
Evolution in the rest of the world
Just-in-time manufacturing was introduced
in Australia in the 1950s by the British Motor Corporation (Australia) at its
Victoria Park plant in Sydney, from where the idea later migrated to Toyota.[11] News
about just-in-time/Toyota production system reached other western countries
from Japan in 1977 in two English-language articles: one referred to the
methodology as the "Ohno system", after Taiichi
Ohno, who was instrumental in its development
within Toyota. The other article, by Toyota authors in an international
journal, provided additional details. Finally, those and other publicity
were translated into implementations, beginning in 1980 and then quickly
multiplying throughout industry in the United States and other developed
countries. A seminal 1980 event was a conference in Detroit at Ford World
Headquarters co-sponsored by the Repetitive Manufacturing Group (RMG), which
had been founded 1979 within the American Production and Inventory Control
Society (APICS) to seek advances in manufacturing. The principal speaker, Fujio
Cho (later, president of Toyota Motor Corp.), in explaining the Toyota system,
stirred up the audience, and led to the RMG's shifting gears from things like
automation to just-in-time/Toyota production system.
At least some of audience's stirring had to
do with a perceived clash between the new just-in-time regime and manufacturing resource planning (MRP II), a computer software-based system of manufacturing planning
and control which had become prominent in industry in the 1960s and 1970s.
Debates in professional meetings on just-in-time vs. MRP II were followed by
published articles, one of them titled, "The Rise and Fall of
Just-in-Time". Less confrontational was Walt Goddard's, "Kanban
Versus MRP II—Which Is Best for You?" in 1982. Four years later,
Goddard had answered his own question with a book advocating
just-in-time. Among the best known of MRP II's advocates was George
Plossl, who authored two articles questioning just-in-time's kanban planning
method and the "japanning of America". But, as with
Goddard, Plossl later wrote that "JIT is a concept whose time has come".
Just-in-time/TPS implementations may be
found in many case-study articles from the 1980s and beyond. An article in a
1984 issue of Inc. magazine relates how Omark Industries (chain saws, ammunition, log loaders,
etc.) emerged as an extensive just-in-time implementer under its US home-grown
name ZIPS (zero inventory production system). At Omark's mother plant in Portland,
Oregon, after the work force had received 40
hours of ZIPS training, they were "turned loose" and things began to
happen. A first step was to "arbitrarily eliminate a week's lead time
[after which] things ran smoother. 'People asked that we try taking another
week's worth out.' After that, ZIPS spread throughout the plant's operations
'like an amoeba.'" The article also notes that Omark's 20 other plants
were similarly engaged in ZIPS, beginning with pilot projects. For example, at
one of Omark's smaller plants making drill bits in Mesabi,
Minnesota, "large-size drill inventory was cut
by 92%, productivity increased by 30%, scrap and rework ... dropped 20%, and
lead time ... from order to finished product was slashed from three weeks to
three days." The Inc. article states that companies using
just-in-time the most extensively include "the Big Four, Hewlett-Packard, Motorola, Westinghouse Electric, General
Electric, Deere & Company, and Black
and Decker".
By 1986, a case-study book on just-in-time
in the U.S. was able to devote a full chapter to ZIPS at Omark, along with
two chapters on just-in-time at several Hewlett-Packard plants, and single
chapters for Harley-Davidson, John Deere, IBM-Raleigh, North Carolina, and California-based Apple
Inc., a Toyota truck-bed plant, and New United
Motor Manufacturing joint venture between Toyota and General
Motors.
Two similar, contemporaneous books from the
UK are more international in scope.[23] One
of the books, with both conceptual articles and case studies, includes three
sections on just-in-time practices: in Japan (e.g., at Toyota, Mazda, and
Tokagawa Electric); in Europe (jmg Bostrom, Lucas Electric, Cummins Engine,
IBM, 3M, Datasolve Ltd., Renault, Massey Ferguson); and in the US and Australia
(Repco Manufacturing-Australia, Xerox Computer, and two on Hewlett-Packard).
The second book, reporting on what was billed as the First International
Conference on just-in-time manufacturing,[24] includes
case studies in three companies: Repco-Australia, IBM-UK, and 3M-UK. In
addition, a day two keynote address discussed just-in-time as applied
"across all disciplines, ... from accounting and systems to design and
production".
Rebranding as "lean"
John
Krafcik coined the term Lean in
his 1988 article, "Triumph of the Lean Production System". The
article states: (a) Lean manufacturing plants have higher levels of
productivity/quality than non-Lean and (b) "The level of plant technology
seems to have little effect on operating performance" (page 51). According
to the article, risks with implementing Lean can be reduced by:
"developing a well-trained, flexible workforce, product designs that are
easy to build with high quality, and a supportive, high-performance supplier
network" (page 51).
Middle era and to the present
Three more books which include just-in-time
implementations were published in 1993, 1995 and 1996, which are
start-up years of the lean manufacturing/lean management movement that was
launched in 1990 with publication of the book, The Machine That Changed
the World. That one, along with other books, articles, and case
studies on lean, were supplanting just-in-time terminology in the 1990s and
beyond. The same period, saw the rise of books and articles with similar
concepts and methodologies but with alternative names, including cycle
time management, time-based competition,[31] quick-response
manufacturing, flow, and pull-based production systems.
There is more to just-in-time than its
usual manufacturing-centered explication. Inasmuch as manufacturing ends with
order-fulfillment to distributors, retailers, and end users, and also includes
remanufacturing, repair, and warranty claims, just-in-time's concepts and
methods have application downstream from manufacturing itself. A 1993 book on
"world-class distribution logistics" discusses kanban links from
factories onward. And a manufacturer-to-retailer model developed in the
U.S. in the 1980s, referred to as quick response, has morphed
over time to what is called fast fashion.
Methodology
The strategic elements of lean can be quite
complex, and comprise multiple elements. Four different notions of lean have
been identified:
1. Lean as a fixed state or goal (being lean)
2. Lean as a continuous change process (becoming lean)
3. Lean as a set of tools or methods (doing lean/toolbox
lean)
4. Lean as a philosophy (lean thinking)
The other way to avoid market risk and
control the supply efficiently is to cut down in stock. P&G has completed
their goal to co-operate with Walmart and other wholesales companies by
building the response system of stocks directly to the suppliers companies.
In 1999, Spear and Bowen identified
four rules which characterize the "Toyota DNA":
1. All work shall be highly specified as to content,
sequence, timing, and outcome.
2. Every customer-supplier connection must be direct, and
there must be an unambiguous yes or no way to send requests and receive
responses.
3. The pathway for every product and service must be simple
and direct.
4. Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible
level in the organization.
This is a fundamentally different approach
from most improvement methodologies, and requires more persistence than basic
application of the tools, which may partially account for its lack of
popularity. The implementation of "smooth flow" exposes quality
problems that already existed, and waste reduction then happens as a natural
consequence, a system-wide perspective rather focusing directly upon the
wasteful practices themselves.
Takt time is the rate at which products
need to be produced to meet customer demand. The JIT system is designed to
produce products at the rate of takt time, which ensures that products are
produced just in time to meet customer demand.
Sepheri provides a list of methodologies of
just-in-time manufacturing that "are important but not exhaustive":
·
Housekeeping:
physical organization and discipline.
·
Make it
right the first time: elimination of defects.
·
Setup
reduction: flexible changeover approaches.
·
Lot sizes of
one: the ultimate lot size and flexibility.
·
Uniform
plant load: leveling as a control mechanism.
·
Balanced
flow: organizing flow scheduling throughput.
·
Skill
diversification: multi-functional workers.
·
Control by
visibility: communication media for activity.
·
Preventive
maintenance: flawless running, no defects.
·
Fitness for
use: producibility, design for process.
·
Compact
plant layout: product-oriented design.
·
Streamlining
movements: smoothing materials handling.
·
Supplier
networks: extensions of the factory.
·
Worker
involvement: small group improvement activities.
·
Cellular
manufacturing: production methods for flow.
·
Pull system:
signal [kanban] replenishment/resupply systems.
Key principles and waste
Womack and Jones define Lean as "...a
way to do more and more with less and less—less human effort, less equipment,
less time, and less space—while coming closer and closer to providing customers
exactly what they want" and then translate this into five key principles:
1. Value: Specify the value desired by the customer.
"Form a team for each product to stick with that product during its entire
production cycle", "Enter into a dialogue with the customer"
(e.g. Voice of the customer)
2. The Value Stream: Identify the value stream for each product providing that value and challenge
all of the wasted steps (generally nine out of ten) currently necessary to
provide it
3. Flow: Make the product flow continuously through the
remaining value-added steps
4. Pull: Introduce pull between all steps where continuous
flow is possible
5. Perfection: Manage toward perfection so that the number
of steps and the amount of time and information needed to serve the customer
continually falls
Lean is founded on the concept of
continuous and incremental improvements on product and process while
eliminating redundant activities. "The value of adding activities are
simply only those things the customer is willing to pay for, everything else is
waste, and should be eliminated, simplified, reduced, or integrated".
On principle 2, waste, see seven basic
waste types under The
Toyota Way. Additional waste types are:
Faulty goods (manufacturing of goods or services that do
not meet customer demand or specifications, Womack et al., 2003. See Lean services)
Waste of skills (Six Sigma)
Under-utilizing capabilities (Six Sigma)
Delegating tasks with inadequate training (Six Sigma)
Metrics (working to the wrong metrics or no metrics)
(Mika Geoffrey, 1999)
Participation (not utilizing workers by not allowing them
to contribute ideas and suggestions and be part of Participative Management)
(Mika Geoffrey, 1999)
Computers (improper use of computers: not having the
proper software, training on use and time spent surfing, playing games or just
wasting time) (Mika Geoffrey, 1999)
Implementation
One paper suggests that an organization
implementing Lean needs its own Lean plan as developed by the "Lean
Leadership". This should enable Lean teams to provide suggestions for
their managers who then makes the actual decisions about what to implement.
Coaching is recommended when an organization starts off with Lean to impart
knowledge and skills to shop-floor staff. Improvement metrics are required for
informed decision-making.
Lean philosophy and culture is as important
as tools and methodologies. Management should not decide on solutions without
understanding the true problem by consulting shop floor personnel.
The solution to a specific problem for a
specific company may not have generalized application. The solution must fit
the problem.
Value-stream mapping (VSM) and 5S are the most common approaches companies take on their first steps to
Lean. Lean can be focused on specific processes, or cover the entire supply
chain. Front-line workers should be involved in VSM activities. Implementing a
series of small improvements incrementally along the supply chain can bring
forth enhanced productivity.
Naming
Alternative terms for JIT manufacturing
have been used. Motorola's choice was short-cycle manufacturing (SCM). IBM's was continuous-flow manufacturing (CFM), and demand-flow
manufacturing (DFM), a term handed down from consultant John Constanza at his
Institute of Technology in Colorado. Still another alternative was
mentioned by Goddard, who said that "Toyota Production System is often
mistakenly referred to as the 'Kanban System'", and pointed out that kanban is but one element of TPS, as well as JIT production.
The wide use of the term JIT
manufacturing throughout the 1980s faded fast in the 1990s, as the new
term lean manufacturing became established as "a
more recent name for JIT". As just one testament to the commonality
of the two terms, Toyota production system (TPS) has been and
is widely used as a synonym for both JIT and lean manufacturing.
Objectives and benefits
Objectives and benefits of JIT
manufacturing may be stated in two primary ways: first, in specific and
quantitative terms, via published case studies; second, general listings and
discussion.
A case-study summary from Daman Products in
1999 lists the following benefits: reduced cycle times 97%, setup times 50%,
lead times from 4 to 8 weeks to 5 to 10 days, flow distance 90%. This was
achieved via four focused (cellular) factories, pull scheduling, kanban, visual
management, and employee empowerment.
Another study from NCR (Dundee, Scotland)
in 1998, a producer of make-to-order automated teller machines, includes some
of the same benefits while also focusing on JIT purchasing: In switching to JIT
over a weekend in 1998, eliminated buffer inventories, reducing inventory from
47 days to 5 days, flow time from 15 days to 2 days, with 60% of purchased
parts arriving JIT and 77% going dock to line, and suppliers reduced from 480
to 165.
Hewlett-Packard, one of western industry's
earliest JIT implementers, provides a set of four case studies from four H-P
divisions during the mid-1980s. The four divisions, Greeley, Fort Collins,
Computer Systems, and Vancouver, employed some but not all of the same
measures. At the time about half of H-P's 52 divisions had adopted JIT.
Lean
principles have been successfully applied to various sectors and services, such
as call centers and healthcare. In the former, lean's waste reduction practices
have been used to reduce handle time, within and between agent variation,
accent barriers, as well as attain near perfect process adherence. In the
latter, several hospitals have adopted the idea of lean hospital, a
concept that prioritizes the patient, thus increasing the employee commitment
and motivation, as well as boosting medical quality and cost effectiveness.
Lean
principles also have applications to software development and maintenance as
well as other sectors of information technology (IT). More generally, the
use of lean in information technology has become known as Lean IT. Lean methods are
also applicable to the public sector, but most results have been achieved using
a much more restricted range of techniques than lean provides.
The
challenge in moving lean to services is the lack of widely available reference
implementations to allow people to see how directly applying lean manufacturing
tools and practices can work and the impact it does have. This makes it more
difficult to build the level of belief seen as necessary for strong
implementation. However, some research does relate widely recognized examples
of success in retail and even airlines to the underlying principles of
lean. Despite this, it remains the case that the direct manufacturing
examples of 'techniques' or 'tools' need to be better 'translated' into a
service context to support the more prominent approaches of implementation,
which has not yet received the level of work or publicity that would give
starting points for implementors. The upshot of this is that each
implementation often 'feels its way' along as must the early industrial engineering practices of Toyota. This places huge
importance upon sponsorship to encourage and protect these experimental
developments.
Lean
management is nowadays implemented also in non-manufacturing processes and
administrative processes. In non-manufacturing processes is still huge
potential for optimization and efficiency increase. Some people have
advocated using STEM resources to teach children Lean thinking instead of
computer science.
Criticism
According
to Williams, it becomes necessary to find suppliers that are close by or can
supply materials quickly with limited advance notice. When ordering small
quantities of materials, suppliers' minimum order policies may pose a problem,
though
Employees
are at risk of precarious work when employed by
factories that utilize just-in-time and flexible production techniques. A
longitudinal study of US workers since 1970 indicates employers seeking to
easily adjust their workforce in response to supply and
demand conditions respond by creating more nonstandard work arrangements,
such as contracting and temporary work.
Natural
and human-made disasters will disrupt the flow of energy, goods and services.
The down-stream customers of those goods and services will, in turn, not be
able to produce their product or render their service because they were
counting on incoming deliveries "just in time" and so have little or
no inventory to work with. The disruption to the economic system will cascade
to some degree depending on the nature and severity of the original disaster
and may create shortages. The larger the
disaster the worse the effect on just-in-time failures. Electrical power is the
ultimate example of just-in-time delivery. A severe geomagnetic storm could disrupt
electrical power delivery for hours to years, locally or even globally. Lack of
supplies on hand to repair the electrical system would have catastrophic
effects.
The COVID-19 pandemic has caused disruption in JIT practices,
with various quarantine restrictions on international trade and commercial
activity in general interrupting supply while lacking stockpiles to handle the
disruption; along with increased demand for medical supplies like personal
protective equipment (PPE) and ventilators, and even panic buying, including of various
domestically manufactured (and so less vulnerable) products like panic buying of toilet paper, disturbing regular
demand. This has led to suggestions that stockpiles and diversification of
suppliers should be more heavily focused.
Critics
of Lean argue that this management method has significant drawbacks, especially
for the employees of companies operating under Lean. Common criticism of Lean
is that it fails to take into consideration the employee's safety and
well-being. Lean manufacturing is associated with an increased level of stress
among employees, who have a small margin of error in their work environment
which require perfection. Lean also over-focuses on cutting waste, which
may lead management to cut sectors of
the company that are not essential to the company's short-term productivity but
are nevertheless important to the company's legacy. Lean also over-focuses on
the present, which hinders a company's plans for the future.
Critics
also make negative comparison of Lean and 19th century scientific management, which had been fought by the labor movement
and was considered obsolete by the 1930s. Finally, lean is criticized for
lacking a standard methodology: "Lean is more a culture than a method, and
there is no standard lean production model."
After
years of success of Toyota's Lean Production, the consolidation of supply chain
networks has brought Toyota to the position of being the world's biggest
carmaker in the rapid expansion. In 2010, the crisis of safety-related problems
in Toyota made other carmakers that duplicated Toyota's supply chain system
wary that the same recall issue might happen to them. James Womack had warned
Toyota that cooperating with single outsourced suppliers might bring unexpected
problems.
Lean
manufacturing is different from lean enterprise. Recent research reports the
existence of several lean manufacturing processes but of few lean
enterprises. One distinguishing feature opposes lean accounting and
standard cost accounting. For standard cost accounting, SKUs are difficult to
grasp. SKUs include too much hypothesis and variance, i.e., SKUs hold too much
indeterminacy. Manufacturing may want to consider moving away from traditional
accounting and adopting lean accounting. In using lean accounting, one expected
gain is activity-based cost visibility, i.e., measuring the direct and indirect
costs at each step of an activity rather than traditional cost accounting that
limits itself to labor and supplies.
https://en.wikipedia.org/wiki/Lean_manufacturing
What is a lean team?
Lean teams enable companies to facilitate positive change in the workplace and respond to problems in a timely manner. Strictly speaking, a lean team is a group of individuals empowered to make quick decisions and take actions that benefit their company.
Comments
Like the 1970s, the US is facing higher interest costs. We are also facing shipping interruptions that challenge our ability to maintain “just-in-time” management of raw materials and products. Our shipping to and from overseas is plagued by stoppages in the Suez Canal and drought in the Panama Canal and our railroads are in need of repair. Our energy costs are up because of the Climate Change Hoax and our regulations are increasing to slow down the processes. We do have AI that can help connect our enterprise-wide computer systems and advance robotics.
Norb Leahy, Dunwoody GA Tea
Party Leader
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