The Five Principles of Lean Thinking

There are FIVE overriding principles to Lean. 1. Identify Customers and Specify Value - The starting point is to recognise that only a small fraction of the total time and effort in any organisation actually adds value for the end customer. By clearly defining Value for a specific product or service from the end customers perspective, all the non value activities - or waste - can be targeted for removal. 2. Identify and Map the Value Stream The Value Stream is the entire set of activities across all parts of the organisation involved in jointly delivering the product or service. This represents the end-to-end process that delivers the value to the customer. Once you understand what your customer wants the next step is to identify how you are delivering (or not) that to them. 3. Create Flow by Eliminating Waste Typically when you first map the Value Stream you will find that only 5% of activities add value, this can rise to 45% in a service environment. Eliminating this waste ensures that your product or service flows to the customer without any interruption, detour or waiting. 4. Respond to Customer Pull This is about understanding the customer demand on your service and then creating your process to respond to this. Such that you produce only what the customer wants when the customer wants it. 5. Pursue Perfection - Creating flow and pull starts with radically reorganising individual process steps, but the gains become truly significant as all the steps link together. As this happens more and more layers of waste become visible and the process continues towards the theoretical end point of perfection, where every asset and every action adds value for the end customer. In following these five principles of Lean you will implement a philosophy that will become just the way things are done. You are ensuring that you are driving towards the overall organisational strategy by constant review of your processes to ensure that they are constantly and consistently delivering value to your customer. This allows the organisation to maintain its high level of service whilst being able to grow and flex with a changing environment and it does this through implementing sustainable change.

Lean Thinking starts with the customer and the denition of value. Therefore, as a manufacturing process is a vehicle to deliver value (a product) to a customer, the principles of lean thinking should be applicable to the Process Industries and the specic manufacturing processes within that industry. We can remove waste from many steps of our manufacturing processes, from how we develop the initial product and process design, how we assure compliance, to how we design to operate a completed facility. However, to be truly lean we have to link all these elements within a robust supply chainwe need to ensure the ow of value. This leads to what many are calling a lean enterprise (LERC, 2004). The Lean Enterprise Research Centre (LERC, 2004) at Cardiff Business School highlighted that for most production operations: . 5% of activities add value; . 35% are necessary non-value activities; . 60% add no value at all. Therefore, there is no doubt that the elimination of waste represents a huge potential in terms of manufacturing improvementsthe key is to: . identify both waste and value; . develop our knowledge management base; . realize that sustainable improvement requires the buy in of the people operating the processes and managing the business, and therefore a culture of continuous improvement. Value The identication of value and the denition of value propositions for specic customers is the starting point. Without a robust understanding of what the customer values you cannot move forwards. Outside of the process industries there are many examples of what we mean by a value propositionas a consumer buying a washing machine what we value may be the ability to wash our clothes at home; for others the value may be related to cost or specic design features or even the colour. The challenge for the manufacturer is to develop a product portfolio based on these value propositions.

Waste Any activity in a process which does not add value to the customer is called waste. Sometimes the waste is a necessary part of the process and adds value to the company and this cannot be eliminated, e.g., nancial controls.