Implementation of the Lean Methodology
Lean methodology is one of the most successful strategies for improving and scaling a business, based on two general principles: respect for people and continuous improvement. This methodology is used worldwide, in sectors of the economy such as: marketing services, logistics, medical services, higher education and other production activities.
The term “Lean” first appeared in 1988 used by John Krafcik, to be defined as “The machine that changed the world”. A Toyota industrial engineer, Taiichi Ohno, developed the Lean methodology in the 1950s, known as the Toyota Production System, taking the first steps in improving performance in manufacturing and transactional environments. The Japanese manufacturer implemented this system after World War II, in order to improve the efficiency and flexibility of its production.
The lean methodology has been improved and adapted over the years, proving its flexible nature. At the same time, principles were established to define the implementation of the lean methodology, these being:
- The value of each product is determined from the perspective of the final customer.
- Identification of the activities that underlie the creation of the added value products or services, eliminating from the process those activities that lower the level of added value or those activities that produce financial losses.
- Ordering the activities from the product creation or service flow so that there is no interruption in the creation process, a continuous workflow is required.
- Following the establishment of the workflow, the signal for the production of products or the provision of services is of the “pull” type, in which the client requests the realization of a good or the provision of a service. Unlike the push strategy, where the workflow works regardless of market demand, the pull strategy is geared to producing only as much as is needed to meet market demand.
- Step five creates the continuous character of the lean methodology, following the process of perfecting the product or service until it reaches a maximum of added value, and the losses of any kind are eliminated in the greatest proportion. If the product or service is not of the highest added value then the process of improvement continues.
Thus, lean emphasizes the removal of any form of waste in the process of making a product or service, thereby improving the entire flow of creation. Moreover, it is desired to obtain products of the highest quality, aiming for improvement.
II. Types of errors associated with the lean methodology
In the process of implementation or production / performance, there may be some errors that dissociate the current workflow from a functional workflow through the lean strategy. That is why it is very important to know in advance the types of errors that may occur. The lean framework provides eight types of errors that should be minimized or eliminated with their identification:
- Unnecessary movement: Excessive physical movements exercised by employees should be avoided, as they lead to reduced productivity.
- Inventory: Materials or products that are not immediately needed for customer needs will need to be removed.
- Defective: representing the deviations of the products or services from the fulfilment of the client’s need, being necessary the reprocessing or reproduction of the product or service. In this respect, it is recommended to implement and continuously improve, according to the lean methodology, a quality control flow.
- Waiting time: it can become an impediment for the customer in the process of delivering added value, which is why there must be a continuous workflow, with correlated activities and only strictly necessary to meet the client’s needs.
- Over-processing: represents the possible stages of the workflow that are not absolutely necessary for the realization of the product or the provision of the service.
- Overproduction: Although the “pull” principle should prevent this error from appearing in the lean workflow, it can happen if the process is not properly supervised.
- Under-utilization of employees: improper use of human capital that leads to decreased productivity.
- Inefficient logistics: the value chain in which the business is located must communicate effectively with the other components of the chain, such as suppliers, distributors or customers; otherwise multiple and complex problems may occur.
III. Six Sigma
Lean is often applied in combination with Six Sigma. The latter focuses on reducing variation and defects. Together, the two create a strategy with strong emphasis on efficiency and professionalism. Through such a strategy, managers can benefit from substantial benefits, such as: improving productivity, a smarter working process, better use of resources, etc. As a result, the company will be more flexible and able to respond more quickly to consumer demands. Womack and Jones recommend managers and directors to reflect on the following issues, whose adoption can lead to substantial changes in an organization’s vision. While lean focuses on eliminating unnecessary surplus and implementing a set of standardized tools to increase efficiency, Six Sigma focuses on eliminating flaws and reducing variation that may occur in the workflow. Six Sigma and lean combine to create some basic principles, such as:
- – Designing an activity that involves the production of a minimum quantity of waste and which limits the overproduction
- – Existence of processes, activities or components of value-added services or products for the consumer.
- – Designing a continuous system for creating added value through innovation, which is recurrently improved.
Another component of the lean methodology is Kaizen. Its Japanese translation is “change for the better”. The essence is that “change is good and good change is even better.” Thus, any member of a company that makes a change to the company is a kaizen. An event of this type has the role of improving the aspects of the organization’s activity as a whole. The Kaizen principle is adaptable to the individual needs and should be the reason for the daily activity of the employees.
V. Score Methodology
Score is a methodology for managing Kaizen events. This methodology is based on five defining phases:
- – Selection: it consists of identifying the processes that need improvement
- – Clarification: consists in clearly identifying the problem and the objective of the project.
- – Organization: consists of training and mobilizing team members to achieve the objectives at the organization level.
- – Sprint: Consists of a few days or weeks of actual implementation of the process improvements.
- – Evaluation: It consists of analyzing the results and benefits achieved so far. It is followed by collecting feedback in order to define future activities.
In fact, there are lean Kaizen events that use the Score method, following three principles. First of all, advanced planning, which requires detail but also time for adjustments.
Secondly, change events need to involve learning. In this way, team members need to know the tools including the lean techniques, at the same time, they need to be familiar with the process of scoring.
In the last phase, another important factor in the change process is an efficient management regarding the change itself. The determining factor of change is the ability to manage change effectively, but not every person can naturally acquire this ability, but it can be achieved over time.
VI. 5S System
The 5S system creates a framework that organizes the workflow in the workplace. This is achievable by applying the five essential standards of the system:
- – Sorting: consists of eliminating unnecessary objects and tools in the workplace, ie those that are not directly involved in the process of creating added value.
- – Setting: consists of organizing work tools in order to ensure work facilitation and efficiency.
- – Brightness: consists of the contribution of each member of the team in keeping the workplace clean and tidy.
- – Standardization: consists of passing tasks and roles through a similar, standardized and efficient workflow.
- – Sustainability: it requires the involvement of each team member in this process to ensure the long-term sustainability of the organization.
VII. Terms specific to lean methodology
Just-In-Time (JIT): is a form of manufacturing and a logistics method of controlling stocks. JIT is the system that meets the needs of the customer, when they appear and are notified by the company.
Gemba: Japanese translation is the “real place”. It refers exactly to the place where the process activities are carried out.
Value flow mapping: consists of creating a flow chart that presents the defining stages of the value process, with the purpose of identifying waste and reducing the manufacturing time.
Bottleneck: Its objective is to identify possible bottlenecks that slow down or stop processes.
Kanban: the Japanese translation is “signs”, with the purpose of identifying the phases through which the product goes: it must be done, in progress and completed.
Continuous flow: this instrument integrates all the production elements through continuous examination, evaluation and improvement.
VIII. Agility, competition and quality
The more efficient a process, the company demonstrates the quality of the products. Moreover, by analyzing the production made by the competition and improving the whole process of the activity so that they can be folded at the market level, a recovery is determined regarding the company level. In this way, by observing the first two principles, a strategic growth of the whole process related to the company’s activity is determined, on a qualitative level.
Thus, lean methodology has substantially improved strategies in a wide range of areas and the use of its principles brings significant long-term benefits at company level. If you want to implement lean in your organization, but planning tactics is unclear, call on our consultants who will provide you with the best solutions for your business.
About the author:
Junior Marketing Consultant
Iulia is pursuing a BBA (Bachelor of Business Administration) program at the University of Bucharest. Within Idea Perpetua, Iulia implements Entrepreneurship and Human Resources Consulting projects. At the same time, Iulia is oriented towards achieving the quantitative and qualitative objectives of the clients, aiming at capitalizing on the potential of the people and creating a favorable context for the personal and professional development of the team.