Chapter 7: Lean Systems

History and Principles of Lean Systems

Lean systems are built on the principle of defining value from the viewpoint of the customer, and they aim to continually improve their system by eliminating every waste that does not contribute to the value of the product.

Lean systems are derived from the Toyota Production System (TPS) in the middle of the 20th century. Toyota was founded in 1926 by Sakichi Toyoda. Several years later, in 1950, Eiji Toyoda visited the largest Ford facility in Michigan, USA, which was producing almost 8,000 cars per day, while Toyota was producing only 2,500 cars per year at that time. After his visit, Eiji Toyoda decided that the Ford’s mass production system is not suitable for Toyota since Japanese market was too small and diverse for mass production. Therefore, Toyota Production System was built on two concepts: Jidoka and Just-inTime. They developed new approaches to decrease the setup and changeover times in production that allowed them to be much more flexible. They could produce small batches of multiple types of products and apply Just-inTime principles. Thus, Toyota became much more successful in satisfying customer needs and increased their sales significantly in a very short time. Different than Ford’s mass production system, TPS also focused on the workers and cared about their thoughts and cooperative efforts. They designed a “Team Development” approach to improve the processes and the quality of production.

Five main principles of lean systems, which were first introduced by Womack et al. (1990), are stated as: value, value stream, flow, pull and perfection.

Value: Lean systems approach starts with understanding the value of products and services for the customers. Value is defined by what the customer is willing to pay for.

Value Stream: Value stream is the combination of all steps and processes over the entire life cycle of products or services.

Flow: Flow is the creation of a chain of value adding steps with no interruption between the processes.

Pull: In a flow setting, pull principle states that nothing should be made until it is needed by the next step. The classical push systems, such as Ford’s mass production system, was focused on making production in large quantities. However, pull principle requires that no process should be made ahead of time and all inventories should be eliminated. This principle is related to the Justin-Time idea.

Perfection: Perfection principle aims to reach to a perfect system that satisfies the customer expectations completely by producing the highest quality products in a very short time at a very low cost by eliminating all waste from the system.

After the four steps defined above are accomplished, these steps should be re-applied over and over again until a system with perfect value is created with no waste. Lean approach propose continuous improvement, also called Kaizen, such that the system is perfected over time. Kaizen essentially uses a strategy composed of 4 phases known as the PDCA cycle: Plan (P), Do (D), Check (C), Act (A)

Plan: In this phase the problem or the improvement opportunity is identified and analyzed. In this step, the current situation is analyzed, objectives are clearly determined, solution alternatives are identified, and a plan is made to improve the system.

Do: In this phase, potential solutions are implemented and tested on a small scale of the real system and data is collected about the results.

Check: In this phase, the collected data and the results are analyzed and their effectiveness are measured. Unexpected issues and their causes are also identified in this step, and key learnings are obtained. Do and Check steps might be repeated many times until the expected results are obtained and determined objectives are reached. The best solution is decided as a result of Check phase.

Act: In this phase, the decided solution is implemented on a full scale and this level is used as the new standard. Standardizing, documenting, integrating it into the organization’s system and sustaining the improved process are also applied in this step

Enemies of Lean Systems

Lean systems have three types of enemies that cause inefficient use of resources. These three types are named as Muda (waste), Mura (unevenness) and Muri (overburden), also called 3Ms of lean systems.

Muda (Waste)

Lean systems aim to eliminate waste (Muda), which is defined as anything that does not add value for the customer. Originally, 7 types of such waste were defined by Taiichi Ohno as Defects, Transportation, Overprocessing, Overproduction, Inventory, Waiting, and Motion.

Defects are incurred when the final product does not meet the customer specifications. In such cases, a loss of value and a waste happens due to the scrap, repair, or rework of the product.

Transportation is related to unnecessary movements of products, materials, tools, inventory, equipment etc.

Overprocessing means doing more than what the customer requires. Adding more components to the product, doing more work than required, or having more steps in a product or service are considered as overprocessing since these operations are not wanted by the customer and thus they have no value for the customer.

Overproduction is producing more than, faster than or before than it’s needed.

All inventory that is more than necessary for a steady production flow in a Just-in Time manner is considered as waste.

Waiting refers to any idle time during the production of a product.

Motion waste is defined as any unnecessary movement of people that doesn’t add value to the product including walking, lifting, reaching, bending, stretching, and moving types of wastage.

Mura (Unevenness)

Mura means unevenness and imbalance of processes. Inconsistency between the activities, or non-uniformity and irregularity of the processes cause Mura, and Mura causes the wastes stated above. Lean systems aim to balance the workloads so that there is no Mura leading to waste. In order to avoid Mura, Takt Time, Just-in-Time, Kanban and other pull-based strategies can be utilized.

Muri (Overburden)

Muri is to cause overburden, meaning to give excessive or unreasonable work beyond one’s power, causing unnecessary stress to workers. Muri can be caused by Mura such that uneven workloads can cause some workers to be overburdened. Also, other problems in the system, such as lack of training, undefined or unclear work instructions, inappropriate work assignments, excessive performance measures etc. can cause Muri. Muri is also observed when workers or machines are utilized over their capabilities to complete a task. Muri may result in worker absenteeism, fatigue, illness, problems in worker health, work accidents and breakdowns of machines. In order to avoid Muri, activities should be standardized and workloads should be evenly distributed according to worker capabilities.

Lean Systems Philosophy

Lean systems philosophy first focuses on separating value and waste from each other. Any activity that does not add value for the customer should be eliminated. Just-in-time production and total quality management are two of the most important concepts in the philosophy of lean systems

Just-in-Time (JIT) Production: Just-in-Time production simply means producing the right quantity of products at the right place at the right time. According to JIT, each step of the production is planned such that every step is finished exactly when the next step needs it, and the final production is completed exactly when the customer wants the product. JIT system relies on principles such as the pull production strategy in a flow setting, and synchronization of the production rate with the demand rate based on the “Takt Time”. Takt time is the rate of customer requests of products from the production line, and is calculated based on the available production time in a period and the amount of demand in that period

Total Quality Management (TQM): TQM is a continuous improvement management concept and aims to reduce defects by standardizing each process and making the perfect production at the first time with very little variation to increase customer satisfaction. According to TQM, mistakes should be determined and prevented at their source. One of the main mechanisms to prevent mistakes is called poka yoke which means mistake proofing or avoiding inadvertent errors. Poka yoke aims to design systems such that incorrect operation is prevented. It aims to prevent defects from occurring in the first place, and if it is not possible, it aims to detect and eliminate errors as early as possible. TQM employs many other techniques such as control charts, fishbone diagrams, check sheet templates, histograms, pareto charts, scatter diagrams, stratification diagrams etc. to detect errors as soon as possible, identify the root causes of the problems and solve them before they can occur again.

Tools and Techniques of Lean Systems

There are several tools and techniques used in lean systems to identify and eliminate waste and to apply the philosophy of lean systems, such as one piece flow, cellular or U-shaped layouts, Kanban mechanism, 5S, and Single Minute Exchange of Dies (SMED) among others.

One-piece Flow and U-shaped Layout

One-piece flow, also known as “single piece flow” or “continuous flow”, is one of the key techniques of lean systems in order to apply the JIT philosophy and pull system principle. Onepiece flow requires that manufacturing is done one piece at a time (or a small batch at a time) with no work-in-process (WIP) inventory such that parts are continuously moved from one station to the next without waiting in between. One-piece flow works best with a cellular (generally U-shaped) layout

Kanban

Kanban is a visual method for controlling production in lean systems as a part of the pull approach. It is used to control inventory levels and the production and supply of components. Kanban aims to ensure that the production is done based on the customer demand in a pull setting. It utilizes a system of cards or signals through the value stream to pull product from customer demand back to raw materials.

5S

5S is a methodology that aims to create a clean, uncluttered, safe, and well organized workplace to reduce waste and increase productivity. It is the most common tool that helps to improve productivity by removing all wastes (Panneman, 2019). 5S represents five Japanese words beginning with the letter “S” used to create a workplace suited for visual control and lean production. These words are

• Seiri (Sort),
• Seiton (Set in order),
• Seiso (Shine),
• Seiketsu (Standardize)
• Shitsuke (Sustain)

Seiri (Sort): In this first phase, all items in a workplace are sorted and necessary items are distinguished from unnecessary ones.

Seiton (Set in order): In this second phase, fixed locations are defined for all necessary items and they are placed at their optimal locations depending on their usage.

Seiso (Shine): In this third phase, the workplace should be cleaned and all garbage, dirt, dust etc. should be eliminated.

Seiketsu (Standardize): In this forth phase, standards for always keeping the work environment clean and neat should be set.

Shitsuke (Sustain): In this last phase, the established standards should be maintained over the long term.

Single Minute Exchange of Dies (SMED)

SMED is a technique to reduce the equipment changeover times. SMED focuses on simplifying and streamlining all elements and decreasing the number of internal elements by converting them into external elements, if possible. In a basic SMED application, the first step is identifying the internal and external elements of the changeover process. External elements should be completed before the machine is stopped and everything that is required for the internal elements should be ready when the machine is stopped. Then, in the second step, each internal element should be analyzed and new ways of doing things should be searched in order to convert internal elements into external ones, if possible.