What is ‘Lean'?

The ‘Lean' concept is fairly straightforward and could be summarised as

“Meeting customers' requirements, using no more
resources than strictly necessary”.

This now widespread philosophy has been developed over several decades by organisations facing the increasing scarcity and rising costs of available resources.

Initially focussed on tracking down and eliminating non-value-adding operations (the Japanese ‘muda' and the 7 Wastes), this concept led to some specific techniques being applied to the production flow under certain conditions:

• Scheduling pattern - MRP (inventory-based) & Seiban (make-to-order)
• WIP reduction - Demand flow, Piecemeal flow & Kanban
• Takt time - Line balancing & De-bottlenecking
• Layout - Cell manufacturing & U-shaped flow lines

Standard measures of ‘Leanness' can be considered accordingly, such as Inventory Turns and the ‘Lean' Ratio (throughput time vs. technical time).

However, it is essential to understand that these techniques are derived from a targeted objective in a given context with specific parameters , and hence do not universally apply.

In fact, the ‘Lean' philosophy is a matter more of rationale than of knowledge.

It is an equation rather than a solution, an open question rather than a package.

It cannot certainly be formalised into a standard framework and indeed requires the objective and context to be put into perspective.

The wrong technique applied in the wrong context may actually be fatal to the organisation.

Cell manufacturing may or may not be appropriate, piecemeal flow may or may not make sense; it all depends on the targeted objective (cost reduction, on-time delivery, etc…) under contextual parameters (order sizes, process complexity, machine cycle times,…).

Also, removing buffers will certainly unveil problems but will definitely not solve them, and will actually make them more acute. For instance, drastically reducing WIP along the flow with failure-prone equipment is a recipe for disaster.

Last but not least, successful implementation of the right technique in the right context requires consistent discipline at all levels. The best engineered Kanban system will simply not work if a single card is lost along the way.

Which means that getting lean just for the sake of it might actually be getting into deep trouble.


So, where and how to start?

An absolute prerequisite is to simultaneously improve all aspects of operations:

• Working environment: Safety, Environment, 5S (Housekeeping)
• Process control: TQM (Total Quality Management)
• Process variations: 6-sigma, SPC (Statistical Process Control)
• Equipment reliability: TPM (Total Preventive Maintenance)
• Equipment flexibility: SMED (Single-Minute Exchange of Die)
• Workforce versatility: OJT (On-the-Job Training)

In this respect, Dr R. Schonberger's 16 Principles provide a valuable and comprehensive roadmap through the WCP (World-Class by Principles) assessment grid.

Once this preliminary improvement consistently under way, the next step is to start tracking and eliminating wastage, by systematically mapping non-added-value throughout all processes.

At this stage, it will be time to investigate the relevance of the ‘Lean' techniques to the current situation and to gradually remove buffers along both the information and production flows.

Issues anticipated during the initial improvement phase (as highlighted by the WCP scoring) will naturally surface as buffers dwindle, and may thus require further attention before the ‘Lean' process can proceed.

Once these issues satisfactorily tackled, ‘Lean' techniques investigation can resume with buffers and non-added-value being further removed in a continuous ‘Lean' improvement loop, guided by the WCP roadmap.


What are the expected benefits?

By dramatically enhancing overall process control, this continuous ‘Lean' improvement loop directly impacts what the customers really want: quality, speed, flexibility, on-time delivery and value.

Internally, the most visible effects are witnessed on time and space, with throughput times and inventories commonly reduced by 80% to 90%.

Finally, this whole journey would be meaningless if it was not for its financial benefits.

Through increased customer satisfaction and enhanced operational control, the continuous WCP-guided ‘Lean' improvement loop usually boosts the EBITDA by an additional 5% to 15% of Sales within a couple of years.

(EBITDA: Earnings Before Interests, Taxes, Depreciation and Amortisation)