Chapter 1

What is Lean?
Lean manufacturing is a management philosophy focusing on reduction of the seven
wastes to improve overall customer value:
Transportation
Inventory
Motion
Waiting time
Over-production
Processing Itself
Defective Product (Scrap in manufactured products or any type of business.)
By eliminating waste (muda), quality is improved, production time and costs are reduced.
To solve the problem of waste, Lean Manufacturing has several "tools" at its disposal.
These include constant process analysis (kaizen), "pull" production (by means of kanban)
and mistake-proofing (poka-yoke).
Key lean manufacturing principles include:

Pull processing: products are pulled from the consumer end, not pushed from the
production end

Perfect first-time quality - quest for zero defects, revealing & solving problems at
the source

Waste minimization eliminating all activities that do not add value & safety
nets, maximize use of scarce resources (capital, people and land)

Continuous improvement reducing costs, improving quality, increasing

productivity and information sharing

Flexibility producing different mixes or greater diversity of products quickly,

without sacrificing efficiency at lower volumes of production

Building and maintaining a long term relationship with suppliers through

collaborative risk sharing, cost sharing and information sharing arrangements.

Lean is basically all about getting the right things, to the right place, at the right time, in
the right quantity while minimizing waste and being flexible and open to change.
Lean thinking got its name from a 1990s best seller called "The Machine That Changed
the World : The Story of Lean Production". The book chronicles the transitions of
automobile manufacturing from craft production to mass production to lean production.
The seminal book "Lean Thinking" by Womack and Jones, introduced five core concepts:
1. Specify value in the eyes of the customer
2. Identify the value stream and eliminate waste
3. Make value flow at the pull of the customer
4. Involve and empower employees
5. Continuously improve in the pursuit of perfection.
Finally, there is an understanding that Toyota's mentoring process (loosely called Senpai
and Kohai relationship) so strongly supported in Japan is one of the ways to foster Lean
Thinking up and down the organizational structure. The closest equivalent to Toyota's
mentoring process is the concept of Lean Sensei, which encourages companies,
organizations, and teams to seek out outside, third-party "Sensei" that can provide
unbiased advice and coaching, as indicated in Jim Womack's Lean Thinking book.
Experienced kaizen members at Toyota, for example, often bring up the concept of
"Senpai, Kohai," and "Sensei," because they strongly feel that transferring of Toyota
culture down and across the Toyota can only happen when more experienced Toyota
Sensei continuously coaches and guides the less experienced lean champions.
Unfortunately, most lean practitioners in North America focuses on the tools and
methodologies of lean, versus the philosophy and culture of lean. Some exceptions
include Shingijitsu Consulting out of Japan, which is made up of ex-Toyota managers,
and Lean Sensei International based in North America, which coaches lean through
Toyota-style cultural experience.
Lean Manufacturing can also be defined as:

"A systematic approach to identifying and eliminating waste (non-value-added activities)

through continuous improvement by flowing the product at the pull of the customer in
pursuit of perfection."
VALUE
In lean production, the value of a product is defined solely by the customer. The product
must meet the customer's needs at both a specific time and price. The thousands of
mundane and sophisticated things that manufacturers do to deliver a product are generally
of little interest to customers. To view value from the eyes of the customer requires most
companies to undergo comprehensive analysis of all their business processes.
Identifying the value in lean production means to understand all the activities required to
produce a specific product, and then to optimize the whole process from the view of the
customer.
This viewpoint is critically important because it helps identify activities that clearly add
value, activities that add no value but cannot be avoided, and activities that add no value
and can be avoided.
CONTINUOUS IMPROVEMENT
The transition to a lean environment does not occur overnight. A continuous
improvement mentality is necessary to reach your company's goals. The term "continuous
improvement" means incremental improvement of products, processes, or services over
time, with the goal of reducing waste to improve workplace functionality, customer
service, or product performance (Suzaki, 1987). Continuous improvement principles, as
practiced by the most devoted manufacturers, result in astonishing improvements in
performance that competitors find nearly impossible to achieve.
Lean production, applied correctly, results in the ability of an organization to learn. As in
any organization, mistakes will always be made. However, mistakes are not usually

repeated because this is a form of waste that the lean production philosophy and its
methods seek to eliminate.
CUSTOMER FOCUS
A lean manufacturing enterprise thinks more about its customers than it does about
running machines fast to absorb labor and overhead. Ensuring customer input and
feedback assures quality and customer satisfaction, all of which support sales.

PERFECTION
The concept of perfection in lean production means that there are endless opportunities
for improving the utilization of all types of assets. The systematic elimination of waste
will reduce the costs of operating the extended enterprise and fulfills customer's desire for
maximum value at the lowest price. While perfection may never be achieved, its pursuit
is a goal worth striving for because it helps maintain constant vigilance against wasteful
practices.
FOCUS ON WASTE
The aim of Lean Manufacturing is the elimination of waste in every area of production
including customer relations, product design, supplier networks, and factory
management. Its goal is to incorporate less human effort, less inventory, less time to
develop products, and less space to become highly responsive to customer demand while
producing top quality products in the most efficient and economical manner possible.
Essentially, a "waste" is anything that the customer is not willing to pay for. Typically the
types of waste considered in a lean manufacturing system include:
1. Overproduction: to produce more than demanded or produce it before it is needed. It
is visible as storage of material. It is the result of producing to speculative demand.
Overproduction means making more than is required by the next process, making earlier
than is required by the next process, or making faster than is required by the next process.

Causes for overproduction waste include:

Just-in-case logic

Misuse of automation

Long process setup

Unlevel scheduling

Unbalanced work load

Over engineered

Redundant inspections

2. Waiting: for a machine to process should be eliminated. The principle is to maximize

the utilization/efficiency of the worker instead of maximizing the utilization of the
machines. Causes of waiting waste include:

Unbalanced work load

Unplanned maintenance

Long process set-up times

Misuses of automation

Upstream quality problems

Unlevel scheduling

3. Inventory or Work in Process (WIP): is material between operations due to large lot
production or processes with long cycle times. Causes of excess inventory include:

Protecting the company from inefficiencies and unexpected problems

Product complexity

Unleveled scheduling

Poor market forecast

Unbalanced workload

Unreliable shipments by suppliers

Misunderstood communications

Reward systems

4. Processing waste: should be minimized by asking why a specific processing step is

needed and why a specific product is produced. All unnecessary processing steps should
be eliminated. Causes for processing waste include:

Product changes without process changes

Just-in-case logic

True customer requirements undefined

Over processing to accommodate downtime

Lack of communications

Redundant approvals

Extra copies/excessive information

5. Transportation: does not add any value to the product. Instead of improving the
transportation, it should be minimized or eliminated (e.g. forming cells). Causes of
transportation waste includes:

Poor plant layout

Poor understanding of the process flow for production

Large batch sizes, long lead times, and large storage areas

6. Motion: of the workers, machines, and transport (e.g. due to the inappropriate location
of tools and parts) is waste. Instead of automating wasted motion, the operation itself
should be improved. Causes of motion waste include:

Poor people/machine effectiveness

Inconsistent work methods

Unfavorable facility or cell layout

Poor workplace organization and housekeeping

Extra "busy" movements while waiting

7. Making defective products: is pure waste. Prevent the occurrence of defects instead
of finding and repairing defects. Causes of processing waste include:

Weak process control

Poor quality

Unbalanced inventory level

Deficient planned maintenance

Inadequate education/training/work instructions

Product design

Customer needs not understood

8. Underutilizing people: not taking advantage of people's abilities. Causes of people

waste include:

Old guard thinking, politics, the business culture

Poor hiring practices

Low or no investment in training

Low pay, high turnover strategy

Nearly every waste in the production process can fit into at least one of these categories.
Those that understand the concept deeply view waste as the singular enemy that greatly
limits business performance and threatens prosperity unless it is relentlessly eliminated
over time. Lean manufacturing is an approach that eliminates waste by reducing costs in
the overall production process, in operations within that process, and in the utilization of
production labor. The focus is on making the entire process flow, not the improvement of
one or more individual operations.
SOME BASIC ELEMENTS OF LEAN MANUFACTURING

Elimination of waste

Equipment reliability

Process capability

Continuous flow

Material flows one part at a time

Less inventory required throughout the production process, raw material, WIP,
and finished goods

Defect reduction

Lead time reduction

Error proofing

Stop the Line quality system

Kanban systems

Standard work

Visual management

In station process control

Level production

Takt Time

Quick Changeover

Teamwork

Point of use storage

The Five Core Concepts of Lean Manufacturing:

Specify value in the eyes of the customer

Identify the value stream and eliminate waste

Make value flow at the pull of the customer

Involve and empower employees

Continuously improve in the pursuit of perfection.

HISTORY OF LEAN MANUFACTURING:

Henry Ford and Mass Production

1950: Fords River Rouge Facility was building 7000 Cars/Day.

Mass Production of the same vehicle

Same design and color

Each Person repeats his/her task

Multi tasking not required.

The History of Lean:

Lean Thinking came to the United States in the mid 1980s from Japanese
"just-in-time" manufacturing practices.

These concepts were widely adopted and came to be known as Lean

Production.

In time, the abstractions behind lean production spread to logistics, the

military, construction, software development and even the service industry
throughout the Modern world.

Lean Manufacturing is the latest buzzword in manufacturing circles. It is not especially

new. It derives from the Toyota Production System or Just In Time Production, Henry
Ford and other predecessors.
The lineage of Lean manufacturing and Just In Time (JIT) Production goes back to
Eli Whitney and the concept of interchangeable parts. This article traces the high points
of that long history.
Early Developments
Eli Whitney is most famous as the inventor of the cotton gin.
However, the gin was a minor accomplishment compared to his
perfection of interchangeable parts. Whitney developed this about
1799 when he took a contract from the U.S. Army for the
manufacture of 10,000 muskets at the unbelievably low price of
$13.40 each.

For the next 100 years manufacturers primarily concerned themselves with individual
technologies. During this time our system of engineering drawings developed, modern
machine tools were perfected and large scale processes such as the Bessemer process for
making steel held the center of attention.
As products moved from one discrete process to the next through the logistics system and
within factories, few people concerned themselves with:

What happened between processes

How multiple processes were arranged within the factory

How the chain of processes functioned as a system.

How each worker went about a task

This changed in the late 1890's with the work of early Industrial Engineers.
Frederick W. Taylor began to look at individual workers and work
methods. The result was Time Study and standardized work. Taylor
was a

controversial figure. He called his ideas Scientific

Management. The concept of applying science to management was

sound but Taylor simply ignored the behavioral sciences. In addition,
he had a peculiar attitude towards factory workers.
Frank Gilbreth (Cheaper By The Dozen) added Motion Study and invented Process
Charting. Process charts focused attention on all work elements including those nonvalue added elements which normally occur between the "official" elements.
Lillian Gilbreth brought psychology into the mix by studying the motivations of workers
and how attitudes affected the outcome of a process. There were, of course, many other
contributors. These were the people who originated the idea of "eliminating waste", a key
tenet of JIT and Lean Manufacturing.
THE FORD SYSTEM
Starting about 1910, Ford and his right-hand-man, Charles E. Sorensen, fashioned the
first comprehensive Manufacturing Strategy. They took all the elements of a
manufacturing system-- people, machines, tooling, and products-- and arranged them in a

continuous system for manufacturing the Model T automobile. Ford was so incredibly
successful he quickly became one of the world's richest men and put the world on wheels.
Ford is considered by many to be the first practitioner of Just In Time and Lean
Manufacturing.
Ford's success inspired many others to copy his methods. But most of those who copied
did not understand the fundamentals. Ford assembly lines were often employed for
products and processes that were unsuitable for them.
It is even doubtful that Henry Ford himself fully understood what he had done and why it
was so successful. When the world began to change, the Ford system began to break
down and Henry Ford refused to change the system.
For example, Ford production depended on a labor force that was so desperate for money
and jobs that workers would sacrifice their dignity and self esteem. The prosperity of the
1920's and the advent of labor unions produced conflict with the Ford system. Product
proliferation also put strains on the Ford system. Annual model changes, multiple
colors, and options did not fit well in Ford factories.
At General Motors, Alfred P. Sloan took a more pragmatic approach. He developed
business and manufacturing strategies for managing very large enterprises and dealing
with variety. By the mid 1930's General Motors had passed Ford in domination of the
automotive market. Yet, many elements of Ford production were sound, even in the new
age. Ford methods were a deciding factor in the Allied victory of World War II.
Ironically, Henry Ford hated war and refused to build armaments long after war was
inevitable. However, when Ford plants finally retooled for war production, they did so on
a fantastic scale as epitomized by the Willow Run Bomber plant that built "A bomber An
Hour."
A LEAN MANUFACTURING TIMELINE

JUST IN TIME AND THE TOYOTA PRODUCTION SYSTEM

The Allied victory and the massive quantities of material behind it (see "A Bomber An
Hour") caught the attention of Japanese industrialists. They studied American production
methods with particular attention to Ford practices and the Statistical Quality Control
practices of Ishikawa, Edwards Deming, and Joseph Juran.
At Toyota Motor Company, Taichii Ohno and Shigeo Shingo, began to
incorporate Ford production and other techniques into an approach called
Toyota Production System or Just In Time . They recognized the central role
of inventory.
The Toyota people also recognized that the Ford system had contradictions and
shortcomings, particularly with respect to employees. With General Douglas
MacAurthur actively promoting labor unions in the occupation years, Ford's harsh
attitudes and demeaning job structures were unworkable in post-war Japan. They were
also unworkable in the American context, but that would not be evident for some years.

America's "Greatest Generation" carried over attitudes from the Great Depression that
made the system work in spite of its defects.
Toyota soon discovered that factory workers had far more to contribute than just
muscle power. This discovery probably originated in the Quality Circle movement.
Ishikawa, Deming, and Juran all made major contributions to the quality movement. It
culminated in team development and cellular manufacturing.
Another key discovery involved product variety. The Ford system was built around a
single, never changing product. It did not cope well with multiple or new products.
Shingo, at Ohno's suggestion, went to work on the setup and changeover problem.
Reducing setups to minutes and seconds allowed small batches and an almost continuous
flow like the original Ford concept. It introduced a flexibility that Henry Ford thought he
did not need.
All of this took place between about 1949 and 1975. To some extent it spread to other
Japanese companies. When the productivity and quality gains became evident to the
outside world, American executives traveled to Japan to study it.
They brought back, mostly, the superficial aspects like kanban cards and quality circles.
Most early attempts to emulate Toyota failed because they were not integrated into a
complete system and because few understood the underlying principles. Norman Bodek
first published the works of Shingo and Ohno in English. He did much to transfer this
knowledge and build awareness in the Western world. Robert Hall and Richard
Schonberger also wrote popular books.

TOYOTA PRODUCTION SYSTEM

Flow Production
Flexible Tools
Short Product Runs
Wide Product Variety
1st Time Quality: Do it Right the first time
Work to Demand

WAY TO TOYOTA

JIT & Mass

Production

TQM
(Deming & Juran)

Employee
Empowerment
& Kaizen

Toyota Production System (TPS)

Japan becomes the Manufacturing Quality Leader

JIT (JUST IN TIME)
Just-in-Time originally encapsulated the logistics aspects of the Toyota
Production System
JIT normally refers but not limited to flexible plant, manufacture in cells formed
into natural groups (group technology), production smoothing, Takt times (line
balancing), level scheduling, the SMED system (Single Minute Exchange of Die)
for set up reduction, standard working, simple visible controls, and low inventory
pull system like Kanban.
JIT/LEAN PRODUCTION
Just-in-time: Repetitive production system in which processing and movement of
materials and goods occur just as they are needed, usually in small batches
JIT is characteristic of lean production systems
JIT operates with very little fat

The Focus of Toyota Production System

Real TPS is not just about flow or pull production or cellular manufacturing or
"load leveling". TPS in Toyota is primarily concerned with making a profit, and
satisfying the customer with the highest possible quality at the lowest cost in the
shortest lead-time, while developing the talents and skills of its workforce through
rigorous improvement routines and problem solving disciplines. This stated aim is
mixed in with the twin production principles of Just in Time (make and deliver the right
part, in the right amount, at the right time), and Jidoka (build in quality at the process),
as well as the notion of continuous improvement by standardization and elimination of
waste in all operations to improve quality, cost, productivity, lead-time, safety, morale
and other metrics as needed.2

PROCESS DESIGN
Small lot sizes
Setup time reduction
Manufacturing cells
Limited work in process

Quality improvement
Production flexibility
Little inventory storage
PERSONNEL/ORGANIZATIONAL ELEMENTS
Workers as assets: The Internal Customer
Cross-trained workers
Continuous improvement
Cost accounting
Leadership/project management
MANUFACTURING PLANNING AND CONTROL
Level loading
Pull systems
Pull v/s Push System
Visual systems: Kanban
Close vendor relationships: One Family
Reduced transaction processing
PULL/PUSH SYSTEMS
Pull system: System for moving work where a workstation pulls output from the
preceding station as needed. (e.g. Kanban)
Push system: System for moving work where output is pushed to the next station
as it is completed
JIT GOALS
Eliminate disruptions
Make system flexible
Reduce setup and lead times
Eliminate waste
Minimize WIP

Simplify the process

SOURCES OF WASTE
Waste form overproduction
Waste of waiting time
Transportation waste
Inventory waste
Processing waste
Waste of motion
Waste from product defects/Rework
JIT BUILDING BLOCKS
Product design
Process design
Personnel/organizational elements
Manufacturing planning and control
PRODUCT DESIGN
Standard parts
Modular design
Consistent Quality
Product Design Flexibility
BENEFITS OF SMALL LOT SIZES

Reduces inventory
Less rework
Less storage space
Problems are more apparent
Increases product flexibility
Easier to balance operations

PRODUCTION FLEXIBILITY
Reduce downtime by reducing changeover time

Use preventive maintenance to reduce breakdowns

Cross-train workers to help clear bottlenecks
Reserve capacity for important customers
========------------====================--------------Key Units of Measurement
Cost
Time
Safety
Compliance
Quality
Internal/External Customer Satisfaction
Productivity/ Throughput
People Involvement
Employee Empowerment
Team Work
Mutual Understanding within the team
Inter Team Relationship
Employee Recognition
Professional Approach
Whos Job is this?
(Everybody says this is somebodys job but nobody says it is his job type of thing).
Lean at Toyota
First Global Bench Mark of Industrial performance by MIT.
The leader in PD, Supply Chain Management, Customer relations, Product
reliability.
Toyota V/s the Competitors in the west:
the factory space,

1/3 the defects,

in the time.
QUICK RESPONSE MANUFACTURING
Quick Response Manufacturing (QRM) is a company-wide strategy that pursues the
relentless reduction of lead time all QRM principles stem from this singular driving
concern.
QRM is most effective for companies making a large variety of products with variable
demand, as well as for companies making highly engineered products.
Lean: 7 main categories of Waste:

1. Over Production
Companies suffering with quality problems will overproduce to ensure customer orders
can be satisfied This kind of issue can be tackled using (Pokeyoka) and by understanding
the machine process capabilities of the production equipment. Six Sigma methodology
combined with Lean Manufacturing Principles is the answer.
Flexible Manufacturing
Reduce downtime by reducing changeover time
Use preventive maintenance to reduce breakdowns
Cross-train workers to help clear bottlenecks
Reserve capacity for important customers
Customer Cycle Time
Customer cycle time is the time required to produce a part or assembly based on
customer demand. This is also referred to as takt time. Customer cycle time is
calculated as follows:

Customer
Cycle Time

2. Waiting

Total net operating time per shift or day

Total customer(s) requirements needed
per shift or day

x 60

Products and parts which are left standing around such as WIP or finished goods is a
major cause of waste, WIP is usually cause by producing large batches rather than what is
actually needed. It would be better to remove the movement altogether.
3. Transportation
The usual cause of excessive transportation is plant layout. In companies that evolved
over time products will have changed, but the layout of the equipment may not have been
considered or optimized. Using value stream mapping tools will provide the information
necessary to minimize transportation
4. Inventory
Many companies will over order to meet current demand due to waste in the processes
and the mistaken belief that ordering larger quantities will save money. Having 20% of
the ordered material standing around for months will not save money but tie up cash in
stock. Kanban system is the answer will drive production when and only when it is
needed.
5. Motion
Good practices often reduce motion. Putting materials in set locations, keeping an area
tidy will remove the need to move parts and materials around to simply make space for
more. The best solution is to lay the plant out to reduce motion and the distance traveled.
Facility Design and Management
6. Over-processing
Rework is one of the biggest causes of over processing. By implementing Six Sigma and
CSM systems, waste caused by rework can be identified and resolved. Poor setup of
machine operations and their effectiveness will extend cycle times and reduce output
7. Defective units
It may sound surprising that when value stream mapping is carried out in many
organizations, 99% of the time the activities are adding no value to the product. Six

Sigma Methodology is the answer to bring down the PPM. Try FMEA, RCA, 7WHY,
FTA, Gap Analysis.

BASIC RULES TO ELIMINATE WASTE

To address business complexity, you must follow three key rules:
Rule #1 - Eliminate complexity that customers will not pay for
Rule #2 - Increase the complexity (variety) that customers will pay for
Rule #3 - Minimize the costs of the complexity you offer
Lean Improvement Cycle

Plan

Do

Act

Chec
k

WCM:
World Class Manufacturing promises to make continuous improvement (Kaizen) to the
way we do business.
Everyone adds value to the Organization
Proactive rather then reactive
Absolutely No Communication Gap
Right decision at the very Right time
Market growth and Market development
Think out of the Box

Plan for the better future in a competitive Market.