Business enterprises in the 21st century are challenged to sustain market share by providing the best value to their customers. Value, therefore, is in terms of the customer’s definition. Frequently this means: (a) the highest quality products and services, (b) in smaller but more frequent quantities, (c) at the lowest possible cost. This focus on the customer is changing the landscape of business and industry in many ways, as decision makers apply different strategies in their quest for sustainable market share. This report outlines some of the resources available to increase knowledge and implement lean thinking in your organization. I begin with an overview of related terms and concepts, followed by a description of the context and methods. The body includes a review of a few select lean articles and books. Some excellent online learning opportunities are discovered, and two large consulting firms are examined. I close with what I see are the gaps in knowledge.
The goal of this report is to enable the reader to make an informed decision about which available resources to utilize. Professionals seeking knowledge of lean thinking want to find the information and training programs that best fit their needs. Through this exercise I seek to improve my own ability to fulfill client needs, find organizations that I would associate with, and compare my own approach with others.
Lean Terms, Concepts
Total Quality Management (TQM), Six-Sigma, and Agile represent aggregate rather than customer focus. While these systems improve the environment for change, they still fail to affect customer value directly. Practice has shown this author that customer value can be greatly influenced by reducing cycle time in product development and production. Cycle time improvement also supports: greater accuracy in product costing, segregated financial reporting, and minimal working capital.
Lean production was a term used to describe the Japanese approach to automotive production pioneered by Toyota following post-war reconstruction (Womack 1990). Since value is defined where value is created, manufacturing has been the focus of most lean thinking. Success of a few major corporations implementing lean techniques is evidenced by dramatic reductions of lead times and working capital. Pratt & Whitney reduced throughput time in their entire production system from eighteen to six months, and inventory dropped by 70 percent, during a two year period of lean implementation (Womack, 1996).
Value stream mapping is one important tactic of lean thinking. This technique is adapted from process mapping used by manufacturing engineers to identify the flow of material and information, as well as capital employed, to produce a product or service. The first step in value stream mapping is to identify each activity as: (a) directly adding value as the customer perceives it, (b) not adding value but necessary in the short term, and (c) adding no value and not necessary, so can be eliminated immediately.
Context
The finished report fulfills a graduate school requirement for comparative analysis of business and industry education systems. My technical experience has been directly related to developing manufacturing systems to meet prescribed outcomes of cost and time. Technology provides the tools that enable the transformation of material into more desirable and useful products. Technique is how we develop systems to meet these needs at a competitive advantage. My focus is on developing training programs for clients who find useful my comprehensive and application knowledge in technological systems. Clients are defined as (a) technical forums I would participate in, (b) not-for-profit organizations that support sustainable causes, (c) training providers that can use my technical resources, and (d) organizations that could utilize me directly to provide training services.
Methods of Dissemination
I begin by reviewing literature available in journal and book form. These texts are essentially public domain, as they are free or at low cost to the reader. Reading provides a prerequisite knowledge base for those exploring lean techniques. Online forums and discussion groups provide another service, where anyone is invited to participate in a community-like environment via the internet.
Several universities and schools offer degree programs, continuing education classes, seminars, and workshops to professionals concerned with reengineering their organizations. Certification programs are offered by SME, American Production and Inventory Control Society (APICS), and others.
Countless organizations provide seminars, workshops, and training programs for a fee. I reduce the searching to a few case examples that represent a reasonable scope. The reader can then align themselves with examples of the best solution for their needs.
Hardcopy
The Machine That Changed The World by Jim Womack began the lean movement in the United States. The book was the result of a 5-year, $5M research project by the International Motor Vehicle Program at Massachusetts Institute of Technology. IMVP members recognized that despite competitive pressure from Japan, vehicle manufacturers acted powerless to make productivity gains. Manufacturers continued to lobby for trade barriers that provided no long term solution to losing market share. IMVP was concerned trade restrictions threatened to isolate the United States and Europe from the rest of the world. They sought industry and government support to study how auto manufacturing differed throughout the world. The Machine was published in 1990 and 1991 under slightly different titles, but the text is identical. The authors believed the cultural differences that often receive credit for Japanese success were secondary to the logic and techniques of lean production. They claimed these techniques could apply universally. The Machine is not just about Japanese auto manufacturing. The study looked at the industry world-wide, and the book makes many comparisons to highlight how different approaches yield varying outcomes. This is not a how-to book, nor a dry summary of findings. It is a story of how things came to be and is now considered historical and therefore not prerequisite reading for exploring lean thinking.
Lean Thinking is an excellent text for someone who wants to know what to do tomorrow. Womack and Jones (1996) lay a scholarly roadmap of concept, then back it up with real world examples. The text gives enough depth to help trainers with difficult questions. There is evidence of the author’s extensive experience teaching lean to eager partner manufacturing enterprises small and large. They provide a chapter on combining lean with German Technik at Porche, with the milestone of the first defect-free car they ever produced.
Taiichi Ohno (1988) wrote a set of brief essays on the thought process and spirit behind the leap from mass production to lean production that could accommodate wide variety in continuous flow. This is not a book on how to implement lean, rather talks about the spirit of lean thinking and a ready-shoot-aim attitude that typifies the environment of change at Toyota. In Toyota Production Systems, Ohno writes about the influence of American style mass production and how the Japanese desired a system that allowed cost cutting while producing small quantities of many vehicle models. The book is a translation of his earlier work, Toyota seisan hohshiki, published in 1978 by Diamond, Inc., Tokyo. The translation gives interesting insight into the thought processes and principles used by Japanese managers. Muramatsu Rintaroh of Waseda University cautions that implementing components of the Toyota Production System, like Kanban, without the philosophy of the whole system, could result in failure. Ohno writes of philosophy, but in terms easy to understand. The relationship of Kanban to the American supermarket is an example, where he explains the similarities and influence other systems can have. The book presents controversial concepts, such as having excess capacity and how increasing output can hinder productivity. Ohno uncovers the epistemology of lean thinking in this text.
Shigeo Shingo was an influential Japanese author of over 25 books on manufacturing improvement. Under his direction the Matsushita appliance plant took lees than four hours to turn raw steel into a completed washing machine, at the rate of 5,500 per day with about 400 employees.The Shingo Production Management System outlines approaches and gives examples of how to eliminate waste and search for the single best solution to every problem. He credits Frank B. Gilbreth and the concept of motion economy as the foundation for SMED (single minute exchange of die), poka-yoke mistake proofing, and non-stock production. He puts ideas into context that is easy for manufacturing personnel to understand, along with diagrams that are fun to look at. While Ohno may be thought of as a philosopher, Shingo is a methodologist. The text gives the reader a sense of empowerment to demonstrate TPS techniques. I frequently use what I call Shingo’s five W’s of root-cause problem solving: (a) why, (b) why, (c) why, (d) why, and (e) why. My cohorts are sometimes surprised with the simplicity of the idea, but they immediately know what action to take.
Kanban: Just-In-Time at Toyota is an excellent reference for shop floor applications. It was the primary text we used at Briggs & Stratton to shorten lead times from months to hours. By the time implementation was complete, molten metal could be transformed into 25,000 engines within twenty-four hours. This is a small book with many cartoon figures that illustrate the concept of kanban. It is easy to read, as I have done many times when called on to explain concepts.
International Manufacturing Strategies. Lindberg, Voss, and Blackmon (1998) report the results of a survey of 600 companies in twenty countries. Multinational firms are adapting manufacturing strategies to local context in many regions. Domestic players seek to compete on a global basis and seek wider understanding. The International Manufacturing Strategy Survey (IMSS) was conducted by Chalmers University of Technology and London Business School. Its aim was to “create possibilities for comparative analysis of manufacturing strategies in the engineering industry throughout the world.” They provide detailed analysis of the survey for each individual country and region. Japan is seen as the world leader in production processes, so a causal comparative analysis was conducted between them and the rest of the world. Lindberg et al. used single-tailed t tests and reported much higher levels of lean production practices in Japan than in the West. Other analysis concerned Argentina, Brazil, Portugal, Spain, Scandinavia, and Europe. Between-country comparisons are made within regions where feasible. In Korea they found better performing manufacturers had diversified markets, while overall companies paid little attention to strategy. The authors devote a chapter to socio-economic factors in each country which should be reviewed prior to analyzing results of the study. I wanted to see the survey instrument to improve my understanding of the data, and to use it as a benchmarking tool. The printing I had failed to include it in the appendix as the author promised.
The author’s propose a new manufacturing paradigm that is multi-focused, in fact “goals ... should be set on multifocusedness and allow for strategic flexibility.” They also call for integration between customers and suppliers, and between production and engineering. Managers will need to assume a new “information role ... that ... monitoring ... will also be done by lower level managers and by the workforce.” I did like their proposal that:
due to the growing importance of process-ownership management needs to ... work effectively as a team member. ... Through the required higher degree of flow and product layout management needs to have sufficient understanding of and proficiency in the performance of certain stages of the whole production chain.
This sounds a lot like lean thinking. I thought the conclusions would have been more enlightening based on the outstanding job done in the research.
Lean Six Sigma for Services describes how all business processes can benefit from lean techniques. Michael L. George provides case evidence of lean techniques applied to procurement, surgical suites, Research & Development, government offices, and more. Mike Joyce, Vice President at Lockheed Martin gives his review on Amazon:
Lockheed Martin is driving operating excellence in all work that we do. We recognized that our business support processes have as much opportunity for improvement as our design and build areas. By applying Lean process speed and Six Sigma quality tools to all elements of work, such as marketing, legal, contract administration, procurement, etc., we can drive competitive advantage. The lessons learned and practical case studies contained in Lean Six Sigma for Service provide a template which can create great value for customers, employees and shareholders.
Lean Assembly is written for engineers and production supervisors seeking to apply lean thinking to assembly operations. Baudin (2002) provides guidelines and examples of assembly process analysis. He describes in detail the concepts of lean production and how they apply to assembly operations. Readers will find diagrams, figures, and images that help explain these concepts in simple terms. With so few books available on lean assembly, this is a must-read for anyone in a related decision making capacity. The author’s literature search found relevant Japanese and German texts.
The Lean Company; Making the Right Choices draws on the author’s experiences in the Next Generation Manufacturing Project (NGM). NGM developed a framework for managers to create systems that allow for the type of changes needed. This framework was developed with the help of nearly 500 contributors. This book is intended for decision makers who create the environment and evaluate proposals for change. The authors provide scenarios typical of what a CEO or divisional manager might encounter. I thought they reinforced obsolete paradigms in thinking. For example, workers are viewed as commodities that might “walk” if given knowledge then not treated correctly. Communities are not identified as stakeholders. Lean implementation projects are viewed in light of traditional costing models, with little evidence for the ability of projects to pay for themselves in the short term as they often do.
Lean University Curriculum
University courses can be developed to teach lean techniques. Logendran (1998) outlines some of the challenges and experiences he had developing a graduate level course in cellular manufacturing at Oregon State University. By collaborating with Freightliner Corporation, students were able to apply coursework to analysis and improvement in an industry setting. His report is short and serves as a good baseline, but could use more detail. More data on outcomes at Freightliner would have been helpful.
Todd, Red, Magelby, and Coe (2001) found lean manufacturing was one of the most important challenges engineering graduates face. They had 120 survey respondents at an International Aerospace Manufacturing Technology Conference. 94% of them also said undergraduate manufacturing engineering were strongly needed in the United States. They recommend infusing related experiences into existing mechanical engineering programs to help fill the gap. Careful structure is needed to provide current relevant industry topics, like lean manufacturing. This approach requires mechanical engineering faculty with manufacturing applications experience.
Online Learning Opportunities
Organizations and universities offer web-based tutorials, presentations, and reading material. The Lean Aerospace Initiative at MIT offers short courses, workshops, and a vast array of online learning opportunities with published presentations and reports. Presentations are available from faculty, government, and industry. The purpose of the LAI is to translate knowledge of the Toyota Production System to the aerospace industry for the benefit of the Department of Defense and the industry. Shaw, Lengyel, and Ferre (2004) found 25-35% of aerospace industry processes were lean. They recognize opportunity exists for government agencies to oversee and integrate with lean initiatives in supplier companies with revenue in the $20-50M range. Among the best practices found, second tier suppliers should have lean tools supplied by consulting firms and independent contractors.
MIT Open CourseWare is “a free and open educational resource for faculty, students, and self-learners around the world.” A search for lean produced several presentations and course materials that are available. OCW supports MIT's mission to advance knowledge and education, and serve the world in the 21st century. I have used OCW for material science and mechanical engineering and found the resources very useful in facilitating discussion. There are over 500 complete undergraduate and graduate course materials available in a complete host of categories including biology, economics, engineering, and human science. A complete listing can be viewed at: http://ocw.mit.edu/OcwWeb/index.htm
The Lean Enterprise Institute has online forums in: (a) specifying value, (b) mapping, (c) flow, (d) pull, (e) perfection, and (f) change management. Anybody can register and participate in these forums free of charge. A participant may ask a question and get responses from other forum members worldwide. Jim Womack is the founder of LEI, and states the organization has a simple objective: “We try to describe in plain language the fundamental ideas of lean thinking.” The visitor to lean.org should go to “community” then “lean thinkers corner” if they want the most descriptive online learning materials. LEI also offers workshops, seminars, and books. LEI’s five steps of Lean Implementation are:
- Step
1: Specify
Value
Define value from the perspective of the final customer. Express value in terms of a specific product, which meets the customer's needs at a specific price and at a specific time.
- Step
2: Map
Identify the value stream, the set of all specific actions required to bring a specific product through the three critical management tasks of any business: the problem-solving task, the information management task, and the physical transformation task. Create a map of the Current State and the Future State of the value stream. Identify and categorize waste in the Current State, and eliminate it!
- Step
3: Flow
Make the remaining steps in the value stream flow. Eliminate functional barriers and develop a product-focussed organization that dramatically improves lead-time.
- Step
4: Pull
Let the customer pull products as needed, eliminating the need for a sales forecast.
- Step
5: Perfection
There is no end to the process of reducing effort, time, space, cost, and mistakes. Return to the first step and begin the next lean transformation, offering a product which is ever more nearly what the customer wants.
The Society of Manufacturing Engineers Lean Manufacturing Enterprise Technical Group has online discussion forums, articles, a newsletter, and seminars. Their web links page contained a Boeing site that proved particularly informative in understanding the initiatives under way. SME offers highly technical resources on the subject of lean. They also test for Certified Enterprise Integrator credentials. I was disturbed to find that a PE license in Manufacturing Engineering is no longer offered, due to lack of participation. www.sme.org
The Center for Quick Response Manufacturing is directed by Rajan Suri at the University of Wisconsin, Madison. QRM is similar to lean, and the center has industry partners throughout Wisconsin, Minnesota, and Illinois. The center gives these regional manufacturers a local entity that can provide training and technical assistance. Most of their publications are available for free and practical. QRM is an example of a University and industry partnership that has grown from a desire to develop theory and make it practical. QRM applies to small and medium size companies aiming to reduce product lead times. www.engr.wisc.edu/centers/cqrm/
Service Providers
Minnesota Technology, Inc. provides consulting and training services to businesses in the metro area. They have a Lean Enterprise Team. They sponsored a survey of randomly selected manufacturers outside the metro area. Of 151 respondents, 75% of them were top executives. 52% said their firm was facing competition from China. Asked if they didn’t respond to competition what the loss would be in sales, the mean response was 20.4%. When asked to cite methods to overcome these pressures, 38% would lower production cost through technology and automation. 21% would use aggressive marketing, improved customer response, and niche marketing. I argue that these Greater Minnesota leaders are misinformed, as they already have the tools they need to compete; they need to apply lean techniques immediately.
http://www.minnesotatechnology.org/business/lean.asp
Strategos offers a full line of consulting services specializing in lean techniques. I found claim that lean techniques goes back to Eli Whitney who was credited with the cotton gin and more importantly interchangeable parts. He contracted with the U.S. Army in 1799 to manufacture 10,000 muskets. http://www.strategosinc.com/
Where do I go now?
Womack and Jones (1996) Pratt & Whitney example shows wide scale parallel implementation of lean techniques can provide immediate and lasting benefits. Many reengineering efforts fail because of the top-down approach. Lean is implemented with the involvement of all employees through knowledge creation, demonstration, and practice.
Large and small enterprises seek training programs that enable their human resources to implement strategies of reduced cycle time and working capital. It does not make sense for small to medium size companies to have full time trainers on staff. Even larger organizations need part-time facilitators to carry the lean message throughout the organization.
The largest gap I see is convincing organizations to apply lean techniques in whatever discipline. This is a top-down approach. As a manufacturing engineer I struggled to convince workers to improve measures by applying lean techniques from the ground up. As a teacher I give multiple, responsive assessments as one technique. In the manufacturing technology class I teach lean concepts. Other technology classes learn about customer focus and cycle time improvement. I developed some online learning materials to help explain some of the processes that I failed to find sufficient data on. These include a Business Process Improvement training module, and one-piece-flow simulation. I also created an interactive “lean manufacturing quiz” to add some fun to the discussion process. These can be viewed at: http://www.tc.umn.edu/~heid0102/
Knowledge can be gained from books, articles, seminars, and consultants. Once convinced lean is the right approach, one needs a roadmap and task list. Here is the list I start with:
1. Define implementation team
management
planning
engineering
supervision
technicians
customers (internal)
suppliers (internal or external)
2. Build commitment of team members
provide a vision for the ideal situation
educate and communicate
define pilot project
demonstrate management commitment to change (ongoing)
clearly define expectations
reinforce competence
3. Establish objectives
target product / process group
define scope; how far on supply, demand sides do we implement
meet customer demand
minimize WIP (whether product or paperwork)
minimize cycle time
build quality into process
implement pilot within 120 days
4. Define and delegate activities in support of objectives
process operation chart (matrix showing product, demand, resources)
collect baseline data (layout, space, WIP, times, yield, lates)
level demand (supplier and customer involvement critical)
define inspection required (make quality part of the process)
reduce change over times (define, simplify, make external)
define new layout (simulate on paper, plan future needs)
simplify planning and reporting (use exception reporting)
define new roles and train personnel, planners, suppliers, customers
6. Implement changes in a “Kaizen” atmosphere
coordinate facilities
move equipment, offices
“Ready, Shoot, Aim”
7. Implement visual management and control
8. Measure performance against baseline, and ongoing improvement
9. Define, review, and refine process.
The gap remains between the knowledge and the delineation between value and waste. That is where I see my role. As a facilitator of change, with experience in a number of manufacturing organizations, I propose to fill the gap by providing a combination of training and on-site services to small and medium sized companies that includes analysis and application while facilitating change utilizing existing personnel to implement pilot programs.
This effort I title 8sigma. As a machine tool applications engineer, I encountered the need for eight sigma performance on large flexible manufacturing system projects. Our standard was a process capability index of 1.33 CpK, which is the statistical equivalent of eight sigma. I carry on this standard with my training efforts in the lean thinking arena. The need for a name also relates to securing a URL that can be easily remembered, where individuals can view my materials and make decisions about my capabilities to assist them. For this reason I have acquired the domain name: www.8sigma.com
References
Baudin, M. (2002). Lean Assembly; the Nuts and Bolts of Making Assembly Operations Flow. New York, NY, Productivity Press.
Fernands, J. (2003) Impact of China-Based Manufacturing on Greater Minnesota Manufacturing Companies. Minnesota Technology, Inc. Retrieved May 10, 2004 from: http://www.minnesotatechnology.org/publications/reports/documents/ChinaStudy.pdf
George, M. (2003). Lean Six Sigma for services: how to use Lean Speed and Six Sigma Quality to improve services and transactions. New York: McGraw-Hill
Joyce, Mike book review retrieved May 8, 2004 from: http://www.amazon.com/exec/obidos/ASIN/0071418210/ref=pd_sxp_elt_l1/102-2529929-3336150
Jordon, Jr., J.A., Michel, F.J. (2001). The Lean Company; Making the Right Choices. Dearborn, MI, The Society of Manufacturing Engineers.
Lindberg, P., Voss, A., Blackmon, K.L. (1998). International Manufacturing Strategies: Context, Content, and Change. Dordrecht, The Netherlands, Kluwer Academic Publishers.
Logendran, R. (1998). A methodology for transferring research experiences in design and scheduling of cellular manufacturing systems. Journal of Engineering Education, 1998 supplement, pp 507-509.
Lu, D.J. (1989). Kanban just-in-time at Toyota: management begins at the workplace. Stamford, Conn. Productivitiy Press
Todd, R.H., Red, W.E., Magelby, S.P., Coe, S. (2001). Manufacturing: a strategic opportunity for engineering education. Journal of Engineering Education, July, 2001, pp 397-405.
Ohno, Taiichi (1998). The Toyota Production System: Beyond Large-Scale Production. Portland, Oregon: Productivity Press.
Shaw, T.E., Lengyel, A., and Ferre, G. (2004). An assessment of the degree of implementation of the lean aerospace initiative principles and practices within the U.S. aerospace and defense industry. The Defense Contract Management Agency, February 4, 2004.
Shingo, S. (1992). The Shingo production management system. Cambridge, MA: Productivity Press.
Womack, J.P., Jones, D.T., Roos, D. (1990). The machine that changed the world: based on the Massachusetts Institute of Technology 5-million dollar 5-year study on the future of the automobile. New York: Rawson Associates
Womack, J.P., Jones, D.T., (1996). Lean Thinking: Banish Waste and Create Wealth in Your Corporation. New York, NY: Simon & Schuster.