Deborah Nightingale 2002 Massachusetts Institute of Technology 1 Fundamentals of Lean Professor Deborah Nightingale September 9, 2002 Deborah Nightingale 2002 Massachusetts Institute of Technology 2 Lean is a New Approach to Managing Enterprises null Origin and evolution of lean concepts null Core lean principles & practices null How lean differs from craft and mass production models of industrial organization null Lean implementation steps null Value stream mapping Deborah Nightingale 2002 Massachusetts Institute of Technology 3 Lean was Born out of Necessity: How to Withstand the Mass Production Behemoths null On August 15, 1945 - end of war with Japan - Toyota faced a daunting challenge: How to succeed against Western mass production auto giants poised to enter Japanese market? null Kiichiro Toyoda to Taiichi Ohno (father of lean production): “Catch up with America in three years.” null Ohnos challenge: How to design a production system exploiting central weaknesses of mass production model null Japan faced many dilemmas: small & fragmented market, depleted workforce, scarce natural resources, little capital null Lean evolved as a coherent response to this challenge over a number of decades - a dynamic process of learning and adaptation later labeled as “lean production” by Western observers Deborah Nightingale 2002 Massachusetts Institute of Technology 4 Lean Response: Use Less of Everything, Offer Greater Variety of Higher Quality & More Affordable Products in Less Time null Best Japanese auto companies developed afundamentally different way of making things null These companies changed the dynamics ofinternational competition null New goals in manufacturing systems -combined benefits of craft and mass production null Improved quality null High productivity null Efficiency at low volumes null Production flexibility null Rapid, efficient development cycle null Product mix diversity null Lean production contrasts with traditionalmass production paradigm null Systemic principles are transferable Deborah Nightingale 2002 Massachusetts Institute of Technology 5 What The removal of muda! Muda- Is a Japanese word for waste Waste- any activity that absorbs resources & creates no value! Source: by Womack & Jones is Lean Thinking? LeanThinking Deborah Nightingale 2002 Massachusetts Institute of Technology 6 More Japanese Terms null Kaikaku- radical improvement null Kaizen- continuous incremental improvement Deborah Nightingale 2002 Massachusetts Institute of Technology 7 Taiichi Ohno (1912-1990) Toyota Executive null Types of Muda: null Mistakes which require recertification null Production of items no one wants null Processing steps which really arent needed null Employee or goods movement/transport from one place or another without any purpose Deborah Nightingale 2002 Massachusetts Institute of Technology 8 Taiichi Ohno (1912-1990) Toyota Executive null Types of Muda: null People in downstream activity waiting because upstream activity has not delivered on time null Goods and services that dont meet the need of customer Deborah Nightingale 2002 Massachusetts Institute of Technology 9 Antidote to Muda: Lean Thinking null Provides way to specify value null Line up value creating actions in best sequence null Conduct activities without interruption whenever someone null Perform them more and more effectively null Provides a way to make work more satisfying requests them Deborah Nightingale 2002 Massachusetts Institute of Technology 10 Lean Thinking is the Dynamic Process of Eliminating Waste with the Goal of Creating Value for all Enterprise Stakeholders null Customer-focused: “pull” enterprise activities null Knowledge-driven: Draws upon knowledge and innovation from everyone - workers, suppliers null Eliminating waste: Stresses elimination, not just reduction, of all types of waste null Creating value: Puts premium on “growing the pie”, not just reducing costs, to benefit all stakeholders null Dynamic and continuous: Pursues on-going systemic as well as incremental improvement - both innovation and continual improvement Customer needs and expectations Deborah Nightingale 2002 Massachusetts Institute of Technology 11 Lean Encompasses a Set of Mutually-Positively-Reinforcing Concepts, Practices and Tools Creating a Virtuous Cycle null Synchronizing flow and pull: “Pull” based just-in-time production enabled by kanban system null Striving for perfect quality: Completely defect- free parts must flow to each subsequent process; variability reduction; quality designed-in, not based on inspection null Flexibility and responsiveness: Small lot sizes and quick set-up times; ability to respond to shifts in demand null Trust-based relationships: Mutual commitments and obligations, internally and externally with suppliers null Continuous improvement (Kaizen): Continuous improvement through work sta