《Integrating The Lean Enterprise》Fundamentals of lean

Fundamentals of lean Professor Deborah Nightingale September 9, 2002 Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 1 Fundamentals of Lean Professor Deborah Nightingale September 9, 2002

ean is a New Approach to Managing Enterprises Origin and evolution of lean concepts Core lean principles practices How lean differs from craft and mass production models of industrial organization >Lean implementation steps Value stream mapping Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 2 Lean is a New Approach to Managing Enterprises ¾ Origin and evolution of lean concepts ¾ Core lean principles & practices ¾ How lean differs from craft and mass production models of industrial organization ¾ Lean implementation steps ¾ Value stream mapping

Lean was Born out of Necessity: How to Withstand the mass production behemoths 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? Kiichiro Toyoda to taichi ohno(father of lean production ): Catch up V Ohr biting cen Jap dep 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

Deborah Nightingale © 2002 Massachusetts Institute of Technology 3 Lean was Born out of Necessity: How to Withstand the Mass Production Behemoths ¾ 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? ¾ Kiichiro Toyoda to Taiichi Ohno (father of lean production): “Catch up with America in three years.” ¾ Ohno’s challenge: How to design a production system exploiting central weaknesses of mass production model ¾ Japan faced many dilemmas: small & fragmented market, depleted workforce, scarce natural resources, little capital ¾ 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

Lean Response: Use Less of Everything, Ofer Greater Variety of Higher Quality More Affordable Products in less time Best Japanese auto companies developed a fundamentally different way of making things These companies changed the dynamics of international competition New goals in manufacturing systems combined benefits of craft and mass production Improved quality High productivi Efficiency at low volumes Production flexibility Rapid, efficient development cycle Product mix diversity Lean production contrasts with traditional mass production paradigm Systemic principles are transferable Deborah Nightingale 2002 Massachusetts Institute of Technology

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 ¾ Best Japanese auto companies developed a fundamentally different way of making things ¾ These companies changed the dynamics of international competition ¾ New goals in manufacturing systems -- combined benefits of craft and mass production ¾ Improved quality ¾ High productivity ¾ Efficiency at low volumes ¾ Production flexibility ¾ Rapid, efficient development cycle ¾ Product mix diversity ¾ Lean production contrasts with traditional mass production paradigm ¾ Systemic principles are transferable

What is Lean Thinking? The removal of muda! Muda- Is a Japanese word for waste Waste- any activity that absorbs resources creates no value! Source: Lean Thinking by Womack Jones Deborah Nightingale 2002 Massachusetts Institute of Technology

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

More Japanese Terms Kaikaku- radical improvement Kaizen-continuous incremental improvement Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 6 More Japanese Terms ¾ Kaikaku- radical improvement ¾ Kaizen- continuous incremental improvement

Taiichi ohno (1912-1990) Toyota EXecutive > Types of Muda Mistakes which require recertification Production of items no one wants Processing steps which really arent needed Employee or goods movement/transport from one place or another without any purpose Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 7 Taiichi Ohno (1912-1990) Toyota Executive ¾ Types of Muda: ¾ Mistakes which require recertification ¾Production of items no one wants ¾Processing steps which really aren’t needed ¾Employee or goods movement/transport from one place or another without any purpose

Taiichi ohno(1912-1990) Toyota EXecutive > Types of Muda People in downstream activity waiting because upstream activity has not delivered on time Goods and services that dont meet the need of customer Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 8 Taiichi Ohno (1912-1990) Toyota Executive ¾ Types of Muda: ¾People in downstream activity waiting because upstream activity has not delivered on time ¾Goods and services that don’t meet the need of customer

Antidote to Muda: Lean Thinking Provides way to specify value Line up value creating actions in best sequence Conduct activities without interruption whenever someone requests them Perform them more and more effectively Provides a way to make work more satisfying Deborah Nightingale 2002 Massachusetts Institute of Technology

Deborah Nightingale © 2002 Massachusetts Institute of Technology 9 Antidote to Muda: Lean Thinking ¾ Provides way to specify value ¾ Line up value creating actions in best sequence ¾ Conduct activities without interruption whenever someone ¾ Perform them more and more effectively ¾ Provides a way to make work more satisfying requests them

Lean Thinking is the Dynamic Process of Eliminating Waste with the Goal of Creating Value for all Enterprise Stakeholders Customer-focused: Customer needs and expectations pull enterprise activities Knowledge-driven Draws upon knowledge and innovation from everyone --workers, suppliers > Eliminating waste: Stresses elimination, not just reduction, of all types of waste Creating value: Puts premium on growing the pie, not just reducing costs, to benefit all stakeholders Dynamic and continuous: Pursues on-going systemic as well as incremental improvement --both innovation and continual improvement Deborah Nightingale 2002 Massachusetts Institute of Technology

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 ¾ Customer-focused: “pull” enterprise activities ¾ Knowledge-driven: Draws upon knowledge and innovation from everyone -- workers, suppliers ¾ Eliminating waste: Stresses elimination, not just reduction, of all types of waste ¾ Creating value: Puts premium on “growing the pie”, not just reducing costs, to benefit all stakeholders ¾ Dynamic and continuous: Pursues on-going systemic as well as incremental improvement -- both innovation and continual improvement Customer needs and expectations