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Delivery Excellence CoE

A history of Lean
GDF v3.0 training

GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

In this session we will cover . . .

A definition of Lean
A history of Lean (Toyota Production System)
Lean Principles
How Lean has been applied in non-manufacturing
environments
What Lean means to the GTS Way

GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

What is Lean?
Objective

Deliver exactly what customers need, when and where


they need it

Eliminate everything that does not add value in the


customers eyes (waste, variability, rigidity)

Value stream, or process, as primary work unit

Focused on improving performance and health through


changes in operating system; management system;
mindsets, behaviors, and capabilities

Clear view of future state (i.e. there are a right way and
wrong way to manage a process)

Insulate, stabilize, and transform process performance

Wide range of tools (five whys, fishbone diagrams)


applied on a just in time basis

Learn-by-doing approach to performance improvement


and capability-building

Focus and scope

Approach and tools

GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

The Lean Elevator Speech

Lean involves determining what the customer


defines as value and quality and designing the
system to meet that no more, no less. It
doesnt mean delivering less or working harder,
it means working smarter to deliver what the
customer values.

GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

ITD Lean minimizes three sources of productivity loss simultaneously


Waste

Variability

Inflexibility

Sample distribution

Overproduction
Intellect

Waiting

Overprocessing

Motion

Voice of the
customer

Configuration

Changeover

Transportation

Rework

Custom and
practice

Capability
Capacity

Inventory
+/- 3 Standard deviations
Voice of the process

Typical focus of
Lean

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IBM Confidential

Typical focus of
Six Sigma

Typical focus of
de-bottlenecking

2009 IBM Corporation

Delivery Excellence CoE

Waste adds cost, without delivering what customer value

Intellect
Not using employees
full intellectual
contribution
Overprocessing
Adding excess value
when the customer
does not require it

Overproduction
Producing more than
what the customer
needs

Waste

Rework
Reprocessing, or
correcting work

Waiting
Employees waiting for
another process or a
machine/tool
Motion
Extra physical/mental
motion that doesnt
add value
Transportation
Moving product from
one place to another

Inventory
Building and storing
extra
services/products the
customer has not
ordered
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GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

Where did Lean originate? The Toyota Production System


Devastation and Post-war
restrictions cause depression
Toyota faces the biggest strike in its
history as the company struggles to
even pay its employees

Toyota Motor Company


achieves mass
production efficiency in a
low volume, high
diversity environment.

Taiichi Ohno
Toyota
introduces
Major
strike
founded
TPS
WWII
1933
1946
1950

Japanese companies in the US and Europe


obtained similar results to those in Asia.
European and US companies realized that their
successes was due to a systematic approach to
operations

Supplier
development
1960

1970

W. Edwards Deming visits Japan


and begins to teach about variation
and systems thinking

Toyota is a dwarf compared to American car


companies export is impossible (In 1950, GM
3,656,000, Toyota 11,000)

Toyota engineers such as Ohno


are part of this experience

Capital infrastructure is limited

GDF version 3.0

IBM Confidential

Taiichi Ohno, chief engineer at Toyota, invents


an alternative: the Toyota Production System
(TPS)

Transplants
1980

1990

Sales G&A

2000

Toyota introduces TPS


into the supply base

2009 IBM Corporation

Delivery Excellence CoE

Toyotas 14-point approach* drives the Toyota Production System


(a.k.a. Lean)
Section I: Long-Term Philosophy
Base your management decisions on a long-term philosophy, even at the expense of short-term
financial goals

Section II: The Right Process Will Produce the Right Results

Create continuous process flow to bring problems to the surface


Use pull systems to avoid overproduction
Level out the workload (Work like the tortoise, not the hare)
Build a culture of stopping to fix problems, to get quality right the first time
Standardized tasks are the foundation for continual improvement and employee empowerment
Use visual control so no problems are hidden
Use only reliable, thoroughly tested technology that serves your people and processes

Section III: Add Value to the Organization by Developing Your People and Partners
Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others

Develop exceptional people and teams who follow your companys philosophy
Respect your extended network of partners and suppliers by challenging them and helping them
improve

Section IV: Continuously Solving Root Problems Drives Organizational Learning


Go and see for yourself to thoroughly understand the situation

Make decisions slowly by consensus, thoroughly consider all options; implement decisions rapidly
Become a learning organization through relentless reflection and continuous improvement (kaizen)
*Taken from The Toyota Way by Jeffrey K. Liker, Chapter 4
8

GDF version 3.0

IBM Confidential

2009 IBM Corporation

Delivery Excellence CoE

Lean has been adopted in many different environments since its


inception
ITO/BPO

Hospitality

Store retail
Banking

Upstream E&P

Airlines

Insurance

Law Firms

Railroads
Naval operations and
maintenance

Chemicals

Hospital

Shipbuilding
Pharma

Aerospace
Consumer
products

Pulp
and paper

Services

Food production

High Tech

Process Industries

Industrial productsMedical devices


High fashion
Toyota

GDF version 3.0

Automotive

IBM Confidential

Manufacturing

2009 IBM Corporation

Delivery Excellence CoE

The GTS Way principles were guided by The Toyota Way and by our
experience implementing Lean & GDF
1.
2.

Problem
Solving

3.
4.

People

5.
6.
7.
8.

Processes

9.
10.
11.

Philosophy

Source: Jun Ho Son, SO Strategy: Presentation to


Global SSO/TIM Planning Session, Copenhagen, dated
July 8, 2008
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12.
13.

Go and see for yourself to thoroughly understand the situation (genchi


genbutsu).
Take time to make decisions by mutual understanding, thoroughly
considering all options; implement decisions rapidly (nemanwashi).
Become a learning organization through relentless reflection and
continuous improvement.
Grow leaders who thoroughly understand the work, live the IBM
values, communicate the vision and teach it to others
Develop exceptional people and teams who embrace the IBM Values.
Respect your extended network of partners and suppliers by including
them in your improvement processes and challenging them to grow.
Create continuous client-focused process flows to bring problems to
the surface.
Our systems/processes should provide your downline customers with
what they want, but only when they want it and in the amount they
want
Level out the workload in all parts of our engagement and delivery
processes.
Build a culture that encourages the immediate identification of
problems, addresses root causes, and provides minimal time for
resolution in order to achieve sustainable quality.
Standardized tasks are the foundation for continuous improvement
and employee empowerment.
Visually display metrics so no problems are hidden.
Use only reliable, thoroughly tested technology to support your people
and processes to maximize stability, availability, reliability and
predictability for our clients.

14. Base management decisions on the IBM Values.


2009 IBM Corporation

Delivery Excellence CoE

Key takeaways from this session

Lean removes three sources of productivity loss


simultaneously waste, variability, inflexibility
A Lean system starts with defining what the customer
values and designing the production system to meet that
no more, no less
Lean can apply to services and non-services
environments
The GTS Way and GDF are based on Lean principles

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GDF version 3.0

IBM Confidential

2009 IBM Corporation