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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
An essential guide to bringing lean to your business and your life
The Lean Book of Leanprovides a succinct overview of the concepts of Lean, explains them in everyday terms, and shows how the general principles can be applied in any business or personal situation. Disengaging the concept of Lean from any particular industry or sector, this book brings Lean out of the factory to help you apply it anywhere, anytime. You'll learn the major points and ideas along with practical tips and hints, and find additional insight in the illustrative examples. Lean is all about achieving the desired outcome with the minimum amount of fuss and effort, and this book practises what it preaches — concise enough to be read in a couple of sittings, it nonetheless delivers a wealth of information distilled into the essential bits you need to know.
The Lean Book of Lean discards unnecessary specialisation and minute detail, and gets to the point quickly, so you can get started right away.
- Understand the basic principles of lean
- Recognise lean behaviours that come naturally
- Study examples of lean practices, policies, behaviours, and operations
- Apply lean concepts to both your business and personal life
Lean is about being agile, efficient, responsive, productive, and smart. It applies to any and every aspect of life, from the factory floor to your morning routine. The Lean Book of Lean is the quick, smart guide to employing lean principles every day, so you can start doing more with less.
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The Lean Book of Lean
A Concise Guide to Lean Management for Life and Business
John A. A. Earley
This edition first published 2016 © 2016 John Earley
Registered officeJohn Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom
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ISBN 978-1-119-09619-1 (pbk) ISBN 978-1-119-09620-7 (ebk) ISBN 978-1-119-09621-4 (ebk) ISBN 978-1-119-27170-3 (ebk)
Cover Design: Kathy Davis/Wiley Cover Image: © singpentinkhappy/Shutterstock
CONTENTS
Acknowledgements
Preface
1: Introduction to Lean
The definition of Lean
Lean – the natural order of living
2: The Core Lean Principles
Be customer demand-driven
Maximise flow
Identify and eliminate waste
Declare war on variation
Organise your people around outcomes you want
Equip your people with the right skills
Clear and simple measures and controls
Defining your “Ideal State”
In conclusion
Note
3: More About Flow
Know your limitations (aka constraints)
The Whack-a-Mole game of constraints
Some everyday examples of flow – or the lack of it!
In conclusion
4: Lean Enterprise vs. Lean Manufacturing
Planning vs. execution
Priorities and decisions
Supplier relationships
Support functions
In conclusion
5: Organising for Lean
Turning tradition upside down
Getting ahead in a PCO
The football team
Theory vs. reality
The unfortunate but inevitable consequences
In conclusion
6: Measuring the Right Stuff and Metrics
What's important?
The balanced scorecard
Controls
Decision trees
In conclusion
7: Lean vs. Six Sigma
Basis for change
Incremental vs. transformational
What comes first, Lean or Six Sigma?
In conclusion
8: The Lean Mindset
It's not just about what you know
Lean critical mass
Lean leadership
Certification?
5S as a foundation for Lean
In conclusion
9: The Dreaded Business Case!
Business case, benefits case, case for action, best guess, what?
Some business case bear traps
In conclusion
10: Keys to Success and Sustainability
Top reasons for failure
How to avoid them
In conclusion
11: A Few Key Tools
Diagnostic tools
Implementation tools
If you don't have rhythm, you can't dance!
In conclusion
12: A Few Words On Technology
What's good, what's not
Closing the gaps
In conclusion
13: Getting help
We are not alone
Don't try this at home!
In conclusion
14: Results, What to Expect and What is Possible
Financial benefits
Non-financial benefits
So what's in it for me?
In conclusion
15: In Conclusion
Appendix: Glossary
Afterword
Index
EULA
List of Illustrations
Chapter 2
Figure 1
Figure 2
The 7 Wastes
Chapter 5
Figure 3
Layer Organisation Model
Chapter 7
Figure 4
Lean vs. Six Sigma Starting Point
Chapter 10
Figure 5
Example T-Map
Chapter 11
Figure 6
Example of a Value Stream Map
Figure 7
Example Fishbone Chart, aka Ishikawa Diagram
Chapter 12
Figure 8
Lean Impact on ERP
Guide
Cover
Table of Contents
Preface
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Acknowledgements
Without the help, support and inspiration from those around me throughout my life, this book would never have been written and my life would have been very different. While there are many who have guided, prodded and cajoled me into what I am, there are a few people to whom I would like to specifically say a big “thank you” in the context of this book.
Firstly, my wife Helen, who has supported and put up with me for over 30 years and kept believing in me, even when things haven't gone quite according to plan.
To Jim Prendergast, a Partner with PricewaterhouseCoopers, who recognised the Lean in me and let me loose to practise and develop my skills. His mentorship helped me to turn some good concepts and rough thoughts into practical approaches to helping people see the light. To the others in the “Lean Team” at PwC who were instrumental in a lot of the thinking behind this book.
To James C. Paterson, author of Lean Auditing and a colleague from my time at AstraZeneca. James very kindly introduced me to his contact at Wiley which opened the door to turning a pipe dream into reality. To Gemma from Wiley who sponsored this book and has been very patient with me during the writing and publishing process.
Thank you all for your help, support and encouragement.
Preface
Why did I choose to call this book The Lean Book of Lean? Having attempted to read many of the books published on the subject, I always found myself unable to finish them. That's not to say that they are irrelevant, badly written or uninteresting, it is just that with the little time available to your average busy person, there is always something which takes priority. I often questioned, why doesn't someone write a book which covers the major points, has some useful hints and tips, but can be read during your average 3 to 4 hour flight? (And have time for your in-flight drink as well!) After many years pondering this issue, I came to the conclusion that the “someone” might as well be me.
As more of an afterthought, but just as relevant, Lean is all about achieving a desired outcome with the minimal amount of fuss and effort, so I felt compelled to write a book which practises what it preaches.
In addition, I have become increasingly frustrated over the years with learned people and scholars trying to make out that Lean is magic, something only they can easily understand. I'm on slightly shaky ground here as I'm a consultant myself and have made a more than decent living from helping others “get it” so could be considered as one of the culprits mentioned above. To try and break this myth, I've tried to explain the concepts and principles in everyday terms and demonstrate that we all “do Lean” naturally in our everyday lives. In a light-hearted vein, I've also added a glossary in the back defining some of the key Lean terms in the same way.
Just to be very clear from the outset, I have not done extended research or interviewed all the “gods of Lean” to create this book. It is a collection of my own thoughts, experiences and, in some cases, opinions of the subject. I don't pretend to know everything. I don't profess to be right about anything. What I do have is 30 years of experience and battle scars of helping others on their journey, which I'm offering up for the price of this book.
So here it is: The Lean Book of Lean. Able to be read on your average flight (well, if you're a fast reader or take long flights!). Not the definitive compendium of Lean and all its facets, but hopefully sufficient to leave you motivated and confident that anyone can do it, and yes, that means you! Take what you want, discard what you don't need or don't agree with, but I hope you find it useful in some way and that it gives you a little food for thought in whatever capacity you live your life and for whatever reason you picked up this book.
Thanks for your time and interest.
1Introduction to Lean
Welcome to The Lean Book of Lean: a not-too-daunting volume about a subject that has been the subject of ebbs and flows of popularity over the last three decades. Lean has seemed to reinvent itself over and over with a few name changes along the way. To some, it's a silver bullet capable of saving the world as we know it; to others it's had its day and should move over and let the new silver bullet take the limelight. To others still, it's just a name for a collection of tools that have been around a long time and seem to be of some practical use. For me? Well, I'm inclined towards the last group. Enough of this philosophical wittering, I've only got 70,000 words to play with, so on with the book!
In this first chapter we will do a brief exploration into what Lean is, where it can be applied and what certified level of Master Wizard you need to achieve to be confident you can apply it without destroying the universe.
The definition of Lean
“Lean Production is ‘lean’ because it uses less of everything when compared to mass production – half the manufacturing space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also, it requires keeping far less than half the needed inventory on site, results in many fewer defects, and produces a greater and ever growing variety of productions.”
MIT's International Motor Vehicles Program (IMVP)
“‘Lean’ is not a new concept. If you are reducing inventory, expanding jobs and responsibilities, participating on a multi-functional work team, benchmarking, or creating and maintaining relationships with customers, then you are practicing a part of lean production.”
The Lean Aerospace Initiative (LAI)
“Lean Manufacturing is a manufacturing philosophy which shortens the time between the customer order and the product build/shipment by eliminating sources of waste.”
Mr John Shook
“TPS (what is now called Lean in some quarters) is a manufacturing phenomenon that seeks to maximize the work effort of a company's number one resource, the People. Lean is therefore a way of thinking to adapt to change, eliminate waste, and continuously improve.”
Mr Ohno in a discussion with Mr Cho: Toyota Motor Manufacturing Company
“Thin: lacking excess flesh”
www.wordnetweb.princeton.edu
The above are just a few definitions of Lean that I picked up from a quick trawl of the Internet; there are literally hundreds out there, each concocted to send a specific message to the audiences in mind. I particularly like the last one as it is closest to the true meaning of the word and less wrapped up in jargon, in other words, Lean. To me, the best definition of what we are talking about here – one I've used a lot and will refer back to a few times throughout this book – is summed up by the lazy person's approach to life:
“Doing the absolute minimum necessary to get the desired result.”
Lazy or smart? In my opinion, the successful lazy person has to be smart to figure out how to get away with it, so probably both. The way I see it, as long as you keep this principle in mind at all times when you are looking for improvement opportunities, you won't go far wrong. However, does this mean cutting corners, shoddy work and dissatisfaction with your performance in the eyes of those around you and your “customers”? No, not if you define “desired result” correctly. This is the one most critical part of any Lean application: defining the outcome you are looking for. Although this seems obvious, it never ceases to amaze me how many businesses embark on an improvement programme without a clear understanding of what they are trying to achieve. We will cover this in the next chapter in some depth, so enough on this for now.
Lean – the natural order of living
Many consultants, “black belts” and business leaders would like us to believe that Lean is some mystical state of mind, something which takes years of experience and astute business know-how to understand or implement. But I don't believe this is true, the evidence is all around us that Lean is a natural way of working for us, not something we have to study and practise devoutly for decades to understand. This one issue, the common belief that Lean is somehow magic, is the biggest blocker to progress in my opinion, the main reason it takes so long sometimes for the light bulb to come on. I've heard time and time again, “It can't be that simple” but yes it is, really it is.
To prove the point, let's take an everyday example, and on the way introduce some Lean jargon.
The shopping trip
All of us have done it – been to the supermarket for the food shopping. OK, so what, you might say, not much to think about there is there, and what has food shopping got to do with running a Lean business? But let's take a step back and think about the process a bit more.
What's the objective? To use scarce resources, your money and your time, to get all you need to run a house and feed a family for a few days.
Any parallels so far? Well, consider the resources: money and people; businesses use those, and both are always in short supply. Stuff to run a house and feed the family can be considered as buying supplies and raw materials, to be made into products for your family, sorry, customers. OK, it seems to work so far.
Now for the process. Most people going food shopping do some checking first to see what's needed before setting off, then create a list, either literally or subconsciously. The trick is getting the right amount. Too little and the kids start complaining about the lack of dinner, too much and the stuff won't fit in the fridge or goes off before you can use it. How do you do this? You look in the cupboards and the fridge and, based on what's there and your knowledge of how much you generally use in the periods between shopping trips, figure out what needs to be bought to last you through to the next time you go shopping. Oh, by the way, you just remembered that Granny is coming to stay for the weekend so you will need some extra milk, eggs and a larger piece of meat.
This is all so obvious and natural that most people can do it, and for the seasoned food shopper, it happens even without thinking about it. But we have introduced some very important Lean concepts here, so let's go over it again from a business point of view: Understanding the right level of inventory to support demand but avoid write-off, slow-moving and obsolete stock, based on historical demand. That's all about the core Lean concept of the Inventory Control Point (ICP) or Strategic Buffer Replenishment model of supply, where you periodically look at your current inventory and replenish back to the top of the buffer. The buffer is calculated based on historical demand and trends: a forecast. Just like when we go shopping, we might know that, on average, we use four litres of milk between shopping trips (the forecast) but that doesn't mean that we blindly go out and buy four litres every time we go shopping: we take a look in the fridge and realise that we ought to top up to five litres (four on average, plus one so we don't run out if we overuse); see there are two left and only buy three. The forecast is a guide, not something we execute blindly. Oh, and the Granny visit? That's adjusting the buffer for known events as part of the Event Management Process. No known events, just maintain the status quo, no need for a complicated planning session.
Now let's take a closer look at what the fridge does. The fridge is the buffer between the supply of food and the family, allowing periodic shopping trips and absorbing variability in the consumption of food. It's also a visible trigger that a shopping trip is necessary as the supply of critical foods gets low. In Lean terms, the fridge is a very effective kanban.
These simple mechanisms allow shopping trips to be made at regular intervals, the right amounts of food to be bought on each trip and avoid wasting food. The key thing here, though, is that this works perfectly without having to know in advance exactly what everyone is going to eat over the next week. In other words, the forecast does not have to be accurate at a detailed level, only at a macro demand level. The kanban (fridge), real time shopping list and relatively frequent shopping trips handle the day-to-day variability automatically.
However, just one cautionary footnote before we delve into more detail. As I'm sure everyone has experienced, sometimes this can all go wrong. The fridge is full with food all close to the use-by date and the things you want are just not there, or buried under this pile of soon-to-be-trashed food. Why did this happen, if it's such an effective Lean tool? Does this mean that everything said so far is just mumbo-jumbo and doesn't work in the real world? Well, let's take a look at what probably happened here.
When you take a closer look at what that expired stuff is before you chuck it all in the bin and reflect on all the wasted cash, we see a couple of recurring themes.
Firstly, a lot of it is the dreaded “impulse buy”, in other words, a lot of stuff you never really needed in the first place. Secondly, you'll find several packs of the same thing and if you cast your mind back you'll probably remember the “three for the price of two” deal on at the time, persuading you to part with your money to get something free. In reality it's not as free as you first thought, as you end up paying for two when you really needed one and end up throwing at least one away. All of these problems are as a result of caving in to the devious antics of the supermarket marketing ploys, which waste your money and fridge space but keep them in business.
Yes, but this is just silly shoppers being duped, right? Real business people don't fall for this do they? Really? Never heard of instances where Purchasing get a good deal by buying larger quantities of something that sits on the shelf for the next three years?
The bottom line here is discipline. This is at the heart of Lean thinking and good shopping or business management. If you don't stick to the rules, all the best ideas and processes in the world won't save you.
So there you have it. We all do some Lean in our everyday lives and we don't even think about it. Basic common sense, I hear you say, and indeed it is. This is just one example of Lean concepts showing up in everyday life – there are many more if you stop and think about it. So why do businesses have so much trouble and employ armies of people to do something that simple? In my experience, small entrepreneurial companies don't have this problem; they run their businesses like families and employ Lean concepts naturally, just like you and me. It's the bigger guys who seem to have the problem. Their sheer size, organisational structure and hierarchy seem to prevent them from behaving in a natural way. So we need to find a way to break through this constraint and get the organisation thinking like they do when they go home.
The first step in this is to define a small set of common sense-based principles that everyone can get their heads round and embrace.
2The Core Lean Principles
As I've hinted at before, Lean is simple and there should only be a few principles that need to be kept in mind to be successful. In this chapter I will introduce a few that I believe are core to the thinking. None of this will be earth-shattering insights from the heavens for you, but it should at least make you think a bit about how the parts fit together. So, here they are:
Be customer demand-driven – Don't do anything until there is demand from the customer to do it.
Maximise flow – Once something has been started, finish it. After all, if you apply the rule above, someone wants it now, so why hold it up?
Identify and eliminate waste – Learn to identify waste in all its forms: material, time and resources. Then take whatever steps necessary to eliminate it.
Declare war on variation – Variability kills. It creates an atmosphere of uncertainty, which causes much of the waste mentioned above. Systematically identify and eliminate the root cause, not just the symptoms.
Organise your people around outcomes you want – Create an organisational structure around delivery of your products or services to customers. Make sure there is clear individual or team accountability for end-to-end delivery.
Equip your people, at all levels, with the skills to be successful in their roles.
Clear and simple measures and controls – Lean environments are fast and things happen very quickly, so you need to keep aware of the situation and have early warning indicators at critical points in the business.
Finally, paint a clear and compelling picture of what the future looks and feels like in your “Ideal State” – then tell everyone!
This last point is absolutely critical. Without a clear understanding of where you are going, your organisation will flounder around and find its own destinations, which probably will not be consistent with the objectives of the business and certainly not consistent with each other. A favourite quote of mine by a certain grinning cat from a well-known children's book sums this up perfectly: “If you don't know where you're going, any road will get you there”1
If you start a change programme without a clear destination, when you get “there” it probably will not be where you really wanted to be and will have taken three times longer than you expected. Not good, so more on this later.
There are many other principles and rules that delve into detail on specific topics, but to me these are the cardinal ones, and are so fundamental that it is worth spending a little time to understand them in more detail. In keeping with the theme of this book, I'll try to provide examples in both the business context and in everyday life.
Be customer demand-driven
Sounds very obvious, but it's not always that easy. The first step is to understand who the customer is and what value means for that customer. Here are my definitions:
The customer is an external person or organisation which ultimately consumes/uses your product or service. Not somebody who does something to it, then just passes it on.
This is the first hurdle you need to overcome and one at which many organisations fall. The history of Lean doesn't help here, in that many see it, and still refer to it, as Lean Manufacturing, implying that it's all about processes, and stops at the factory gates. Nothing could be further from the real truth and power of Lean. When starting out, don't constrain yourself to the internal view, always look at your business from the point of view of the external customer. In most businesses, the customer is the consumer of the products or services and, as most large businesses are publicly owned, the shareholders. In some industries, customers may include regulators and governments as well. Now we have “who the customer is” sorted, we need to take a look at value:
Value is something that the customer is prepared to pay or sacrifice for.
This might seem an odd phrase: “sacrifice for”, but think about it. If you value something as an individual, you are prepared to make sacrifices to get it, keep it or care for it. The ultimate example is, of course, your family. What good parent wouldn't sacrifice everything for their child? The same is true in business: if you offer something of value to your customers, they'll very often do more than just part with money for it. They will use it, do without something else to get it, tell their friends about it and ultimately come back for more. All of which is good for your business.
Again, this all sounds very simple and obvious, but don't be complacent about it. In the complex world of big corporations, identifying the true customer and what they value can be a difficult task. It is vital, however, that you don't move on until you have this nailed, and please, please, please make sure that you validate your ideas with the customer to make sure.
So, we have customer value defined, which will help focus Lean on what is important. As a by-product, it will also help define new products and services to offer, but let's not go there right now as this is the Lean Book of Lean, not the Lean Encyclopedia!
With a clear handle on value, we should fire up the furnaces, get the engine in gear and start creating as much of it as possible, right? Well, not quite. Whatever “it” is, there is only value if there is current demand for it. If not, it's just going to sit around doing nothing at your expense until the demand miraculously appears, or it becomes obsolete and you have to give it, or throw it, away, wasting all that hard work which went into producing it in the first place.
A good example of this happened at a well-known fashion company, which embarked on a Lean Manufacturing programme that was an outstanding success: their productivity and production increased enormously and production costs plummeted. Unfortunately, they forgot about the demand-driven bit and linked their highly efficient production machine to the sales forecast created ahead of the season. Inevitably, actual sales did not match the forecast and they were left with frustrated customers who couldn't get the hot stuff they wanted, and warehouses full of the stuff that didn't really catch on. The result was that the lost orders and the cost of carrying and then writing off that excess inventory was ten times the savings they had made in the factory. When they looked back, they discovered that their shiny Lean factory actually wasn't agile enough to be capable of responding to the real demand as and when it materialised. They just did not think about Lean as something useful outside of the factory. We'll discuss the broader application of Lean compared to Lean Manufacturing a bit later.
So, the first principle of Lean is: do nothing, unless the customer requires you to do something, which usually comes in the form of an order. This is very hard sometimes, especially in an environment which is driven by traditional financial drivers, like overhead absorption, the killer of many a promising Lean programme. The pressure is on to keep the machines running, drive up utilisation and Overall Equipment Effectiveness (OEE). Lean is not necessarily in opposition to this, but puts a caveat on it: “if there is demand from the customer.”
So, let's try to put a “real life” angle on this to see if it all stacks up. Ask yourself these simple questions, would you:
Drive to pick up a friend from the other side of town on the off-chance they might want to come and visit you?
Make a meal when no one is hungry?
Go to fill up the tank when you're on full already, but it's Tuesday, fill-up day?
The answers here are obvious (hopefully!). The key thing here is to ask the question: Is there a real need for me to do this? Does someone need it?
Maximise flow
This is very simple in concept, but sometimes hard in practice. As mentioned above, this means that once you get the signal from the customer to start, stoke up the boilers, get the engines running and don't let anything get in the way until it's in the hands of the customer. At a local level this isn't too hard to do, but for a whole business, it isn't that easy. Look around the countryside at all the massive buildings dotted around with hundreds of truck-docking bays – those are warehouses. Each one filled to the gunwales with products waiting for somewhere to go or to be asked for by someone. In short: a testament to the failure of a business to maintain flow. To implement Lean properly, and get the full benefit for both you and your customers, the whole supply chain must be Lean, not just parts of it. If not, then you end up squeezing a balloon. One part gets thinner as you work on it and all that happens is that the waste you worked so hard to eliminate just pops out somewhere else and the net result is zero. I've seen so many times, Lean teams, site leaders and even COOs, clapping each other on the back saying how great their Lean programme is going and citing all the benefits delivered. However, the miserable old CFO is sitting in the corner looking at the company annual report, shaking his head and muttering to himself, “I don't see it here”. And of course, the miserable old goat is right. All that's happened is that the waste has been redistributed and changed form, not been expelled from the business, largely because flow was not maximised along the whole supply chain.
But flow is not all about eliminating waste and reducing inventory and cost, it makes your whole business more agile. With less to move around, it's a whole lot easier to change direction when the market changes or something new emerges from your R&D machine. I hear people talking all the time about Lean and Agile as if they are two different things. In my view they are one and the same thing: you can't be one without the other. I like the Agile term personally, as I think it conveys a better image of what it is all about. However, it's sometimes difficult to get the right message across given the common misconception mentioned above. An explanation I like and that seems to fit well is one that was thought up by Patrick Rigoni, a Founding Partner of SmartChain International, and goes as follows:
“True agility – combines responsiveness with flexibility to deliver flow and is ‘designed in’ with Lean and Demand Driven Replenishment.”
In Figure 1 it's all about finding ways to widen a) and shorten b). Notice too that this can apply to anything; here it is just termed “Operating Parameter”. This is deliberate as the business requirement should drive what exactly it is that you need to be Agile in: speed to market; delivery to customers; processing claims; getting round the supermarket.
Figure 1
I like this explanation a lot. I remember our team agonising over this for some time, trying to capture the essence of what agility was in relation to Lean in a way that is simple and easy to get your head around – after all, that's the mantra of Lean. Isn't it?
The secret to maximising flow is to identify the constraint, what's stopping you doing whatever it is, and eliminate it. Not much of a secret really, but it's surprising how difficult this can be when you don't have a good view of the end-to-end supply chain and, on top of that, the pesky thing keeps moving around! More on this later.
Identify and eliminate waste
Before we can start taking steps to eliminate waste, we need to learn how to recognise waste when we see it. To do this we have to come back to our old friend, value. By definition, if what we are doing creates or adds value, as we have defined it above, then what we are doing is not waste. That's fairly simple. Also, by the same token, anything we do that is not adding value is waste. So all we need to do is look around for all the things that are not adding value and stop doing them. Sounds very straightforward, but there is so much of it that it's very easy to get confused and overwhelmed. This is why we categorise waste into seven different types called, funnily enough: “The 7 Wastes”. These are shown in Figure 2. In order to further help look for them, they are grouped into what they apply to: people, processes and products or services. This approach has been around for a long time and there are many articles and book chapters on the subject of waste, which define and categorise them far better than I could do here, so while not wanting to skate over such an important subject, I'll encourage you to look up one of the established texts on the subject when you have time, rather than repeat it all here. However, in simple terms, this is what they are, with a brief everyday example included:
Motion –
People moving themselves, or parts of themselves, around. Having the fridge, the worktable and the cooker too far apart in the kitchen. Taking the plates from the dishwasher to the cupboard one at a time.
Waiting Time –
People waiting for something to arrive or something to happen: Going and standing at the bus stop for 30 minutes when you knew there wasn't a bus due. Waiting for the kettle to boil.
Overproduction –
Making more than was needed: The three extra copies of a report you printed just in case a few uninvited people showed up to the meeting. Overfilling the kettle – see Waiting Time above!
Overprocessing –
Doing more than is necessary for the purpose: Polishing the underside of the table – no one's going to look! Cutting, then trimming a fence post to exactly 125.25centimetres.
Defects –
Doing something wrong or breaking something: Burning the toast. Making something that's not in compliance with the required specification.
Inventory –
Actually should say “excess inventory”, products or materials waiting to be used: Car dealership forecourt full of cars for sale. Five cartons of milk in the fridge.
Transportation –
The product version of Motion above, products being moved around: Products in trucks moving from the manufacturer to the warehouse or on to the store. Passing the salt around the table at dinner.
Figure 2 The 7 Wastes
It's also worth mentioning that some texts quote a further, eighth waste: the misuse of capacity or resources. My belief is that this is a consequence of the other wastes rather than a waste in its own right, but that's just my opinion.
When looking for waste, you need to be absolutely ruthless, there's no room for sentiment here. If there isn't a clear and direct line of sight to customer value, then it's waste; sorry, but there you are. When you start pointing this out, you are going to become very unpopular very quickly, so it's best to prepare your audience before setting out. As a rule of thumb, 90%+ of everything a business does is waste. If you're not seeing this, then you're either not looking hard enough or you're being too soft. Once you understand this and manage to get your leaders understanding it too, huge improvements in performance are possible. Having said that, not all waste can be eliminated. There are two types to consider. Type 1 waste is that which is associated with doing your business, such as the company accounts or QA testing. While it can't be totally eliminated, you should look for ways to pare it down to the absolute minimum, but recognise that while it is unavoidable, it's still waste. You'll get into some very heated debates with your Head of Quality over this last one, but testing adds no value to the product if it was made properly in the first place – sorry, but there you are! The other, Type 2 waste, usually more than 60% of the total, adds no value whatsoever to anyone and is not required to satisfy any external regulation or need. This waste should be eliminated and the resources used for something more useful.
Sounds simple, but it's not. Persuading a large number of people that the majority of what they do on a day-to-day basis amounts to waste is hard, both for the message giver and the message receiver. Over the years, whole departments have been created to generate and distribute waste, which others use to generate more waste, and so the cycle goes on. At the risk of getting locked up for treason, just look at governments of countries for outstanding examples of this. Breaking this will be one of the hardest things you will have to do, as you will be butting up against company hierarchy and politics.
In this section I will leave you with one final comment on waste. Your most precious commodity is time. Time marches on relentlessly and once gone, you never get it back again. Ensuring time is not wasted must be the number one priority. If you think about it, the implications of this are quite profound. As someone who is getting on a bit now, I really am beginning to understand the meaning of this in every aspect of life.
Declare war on variation
Variation is the killer of Lean processes: it generates so much waste planning for it, trying to quantify it and buffering against it. All of which is treating the symptom, not the cause. This is where our friend, Six Sigma, comes into play. The Six Sigma suite of tools provides a systematic approach to defining, measuring and analysing variability and then designing and implementing changes to reduce and control it. This was codified into a method by Motorola in the 1980s under the acronym DMAIC (Define opportunity area, Measure current performance, Analyse opportunity potential, Improve performance, Control performance). Again, at the risk of sounding evasive, there are many books on the subject written by people far more versed in these tools than me. If you really want the full works on this you can do worse than getting your hands on a copy of one of Michael L. George's books, founder of The George Group. Briefly however, in principle it works like this:
Firstly, identify an area that is not performing well, or where there is a specific problem that needs fixing. This needs to be agreed and sponsored, as there needs to be real commitment to fixing it.
Secondly, spend some time understanding how the area you are trying to improve works and get some real data on performance at each step of the process. It is important that this is done properly as it is the basis of all to come. This means that you need to take the time to get a statistically relevant sample, taking in the true variability of the process.
Thirdly, analyse the data to understand the root causes of the behaviours that the process is exhibiting. It's important not just to focus on the down side; it's just as important to understand the causes of good outcomes so they can be replicated. There is a whole host of tools and models available to do this.
Fourthly, figure out how to improve performance or fix the problem and implement the solution (Ha! That sounds simple doesn't it? In practice it can be far from it).
Fifthly and finally, put measures, controls, accountabilities and fail-safe mechanisms in place to stop everything sliding back to the old ways.
I'm sure there will be many Six Sigma black belts having palpitations and fuming after reading this very brief explanation. If you are one of those, please be assured that I'm in no way trying to downplay the importance or effectiveness of this method for turning around performance. As will be discussed later, Six Sigma and Lean are good friends and, indeed, should be blended in any broad improvement programme.
Variation can kill the process, but much variation can be eliminated by applying some simple discipline into the way activities are carried out without the need to resort to some of the more powerful tools mentioned above. Empowerment is a much overused buzzword these days and I keep hearing how “everyone needs to be empowered”. While this might be true, if not done with a little discipline, all you end up with is a free-for-all and everything gets out of control. If the ways of working are inconsistent, the outcomes will be too. This is a problem for any business, but if you operate in any of the numerous regulated industries, it's a major issue, hence the enormous quality management departments in many of these businesses. There has to be “one right way” for everything. However, if you can't get to the “right” way then at least get to “one way” while you figure out what the “right” way is. This can be as simple as looking around your organisation at all the people doing a particular task and doing a rough evaluation on who does it the best. For production, this is fairly easy as there are probably pretty good measures around. For other tasks, this might be a bit more tricky, but don't sweat it too much, we're only looking for rank, not absolutes, here. Once discovered, get the people from the best group to document how they carry out the task and then teach the rest how to do it. The more difficult issue is then to make sure everyone does it, and sometimes this can involve a real battle against the “not invented here” brigade. Everyone will insist they are different and so-and-so's solution won't work here, but don't be having any of it. If there are differences, get them to prove it; the onus of proof should be on them, not you.
“Ah,” I hear you say. “Doesn't all this standardisation stifle innovation, the cornerstone of continuous improvement?” Not really, but continuous improvement needs to be introduced in a controlled way, not randomly. Once the new way is tested and shown to be better, this then becomes the new standard, hence my message above about not necessarily being “right” right off the bat. By way of an example of what I mean here: Imagine the person replacing the left rear wheel in the middle of a Formula One race having a bright idea about how to do it better and then trying it out there and then. Result, a three-wheeled F1 car exiting the pit lane into the barrier at a high rate of knots! No, these guys follow a well-rehearsed process to the letter; everything has to be done exactly to plan with no deviations. But, once back at base, they try out all sorts of stuff to shave 0.1 seconds off the time it takes, but this is done in a development environment, not in “production”. Once they find, test and perfect a better way, then this becomes the new standard. This is how F1 wheel changes have steadily reduced from 20+ seconds to fewer than 5 over the years, with a distinct lack of three-wheeled missiles coming out of the pit lane. So, proof positive the standard ways of working and innovation do work very well together.
