What is Lean?

• Lean Frame work

  Initiate -> Identify -> Eliminate -> Stabilize

  [item title="What are the Benefits of a Lean Transformation?"]

  All types of service and manufacturing organizations are discovering the advantages applying the principles of Lean. Perhaps you're faced with one, or many, of these challenges:

  • Missed order dates
  • High product or service cost relative to the competition
  • Losing market share due to increased delivery time or cost problems
  • Limited production capacity - space is used by inventory

  If so, Lean can have an immediate and positive impact on your company. Through the process of implementing Lean you will be able to find ways to achieve a number of benefits. Results will vary, but here are some typical savings and improvements:

• The True Costs Of Inventory

  Reducing inventory is an important goal of the lean organization. Carrying inventory has many associated costs. Obvious costs include: capital tied up in inventory and the associated loss of interest on that capital. Loss due to material handling damage, increased labor costs for material handling, and increased space and storage requirement. A cost from excess inventory that is not so obvious is quality. In fact, many companies have seen quality improvements resulting from inventory reductions while not focusing on quality. The reasoning is that if an upstream process is producing parts on a machine and defects occur halfway through the batch, in an organization with low levels of inventory the next downstream process will discover the defects sooner. An organization with low inventory levels can stop the process when the defect is discovered, throw out the defective inventory, and request the previous process to start another batch. The organization with lower inventory levels will also be more effective at determining what caused the defect because the batch that the defect occurred in is fresh in the minds of both production and maintenance.

• Other Benefits:

  • Reduced scrap and waste
  • Reduced inventory costs
  • Cross-trained employees
  • Reduced cycle time
  • Reduced obsolescence
  • Lower space/facility requirements
  • Increased quality & reliability
  • Lower overall costs
  • Self-directed work teams
  • Lead time reduction
  • Faster market response
  • Improved customer communication
  • Lower inventory levels and increased inventory turns
  • Improved vendor support and quality
  • Higher labor efficiency and quality
  • Improved flexibility in reacting to changes
  • Allows more strategic management focus

  Increased shipping and billing frequencies

The Eight Wastes of Lean

• Waiting:

  • Definition: The item/work in the process has stopped.
  • Manufacturing examples: Machine downtime, bottlenecked operations, equipment changeover
  • Service/Office examples: System downtime, system response time, approvals from others, information from customers

• Defects:

  • Definition: Any form of scrap, mistakes, errors or correction resulting from the work not being done correctly the first time.
  • Manufacturing Examples: Production of defective parts, scrap or waste.
  • Service/Office examples: Data input errors, design errors, engineering change orders and invoice errors.

• Extra Processing:

  • Definition: Having to do anything more than needed.
  • Manufacturing examples: Taking unneeded steps to process the parts, inefficient processing due to poor tool and product design.
  • Service/Office examples: Re-entering data, extra copies, unnecessary or excessive reports

• Inventory:

  • Definition: Any supply that is in excess, any form of batch processing. Producing more than customer demand.
  • Manufacturing examples: Any excess inventory, batch processing.
  • Service/Office examples: Office supplies, sales literature, batch processing transactions.

• Excessive Motion:

  • Definition: Movement of people.
  • Manufacturing examples: Reaching for, looking for, or stacking parts, tools, etc.
  • Service/Office examples: Walking to/from copier, central filing, fax machine or other offices.

• Transportation:

  • Definition: Movement of work or paperwork from one step to the next step in the process.
  • Manufacturing examples: Move materials, parts, or finished goods into and out of storage.
  • Service/Office examples: Movement of documents from site to site, office to office or in-basket to in-basket.

• Overproduction:

  • Definition: Producing more, sooner, or faster than is required by the next person.
  • Manufacturing examples: Inventory piling up at a slower downstream step.
  • Service/Office examples: Printing paperwork before it is really needed, purchasing items before they are needed, processing paperwork sooner than needed by the next person.

• Underutilized Employees:

  • Definition: People's creativity, ideas, and abilities are not fully utilized.
  • Manufacturing examples: Losing ideas, skills, and improvements by not listening to employees.
  • Service/Office examples: Limited employee authority and responsibility for basic tasks, management command and control.