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Source: Business-improvement.eu
Lean: Value adding organization
Assembly at Ford, 191414 misconceptions about Lean (1/2)
By Dr Jaap van Ede, editor-in-chief Business-improvement.eu, 14-02-2019  [ part 1 ] [ part 2 ]
Available in Dutch on Procesverbeteren.nl

The term Lean, referring to low-stock production, exists thirty years. Yet, there are still many misunderstandings regarding this improvement method! In a series of two articles, we list fourteen of those.

Do you think Lean means producing in a One Piece Flow, that Lean is all about daily production kick-offs, that Lean soon will become obsolete, or that Lean is an operations management tool? We deal with this misunderstandings in this article.

Do you think that without Toyota there would not have been Lean, that Lean makes work boring, or that Smart Industry and Agile fit in badly with it? We examine those misconceptions in part2.

We also explain where Lean stands for today, since it is nothing more or less than a set of best practices. Lean continues to develop, in an almost scientific way!

Perhaps you know more misconceptions about Lean, or do you not agree with some of our conclusions. In that case, we invite you to react.

1. Lean is all about reducing waste
Lean manufacturing is defined in this article as:

Ceaselessly striving for an increased production flow and thereby maximum value addition for (end) customers, with everyone contributing to this goal. All distortions of the flow are made visible and are seen as improvement opportunities.

‘Reducing waste’ is deliberately not included in this definition! The reason: it would have been better if Lean had been called value manufacturing. The main goal of Lean is not working with a minimum of waste and materials, but to realize the highest possible value creation for the customers.

Of course this also means less waste, but as a consequence and not as the primary goal. Focussing only on waste reduction, or even worse cost reduction, leads to a lot of resistance in organizations. Then, employees are no longer willing to think along, which is a prerequisite if you really want to become lean.

Note that Lean tools, like Value Stream Mapping, Kanban, 5S and improvement boards, are also not mentioned in my definition of Lean. Those tools are never goals in itself.

Lean assembly of trucks at Scania
Lean (streaming) assembly of trucks at Scania

2. Lean works only when the products are tangible
Lean increases the flow in a chain that creates value for the end customer. To this end, the gearing of the processing steps to one another is continuously improved.

For clarity, this article focuses on improving the flow in manufacturing. However, Lean can improve all processes where there are multiple processing steps to be executed in series. Such chains are encountered in many places, also in service organizations and in office environments. This is why, for example, you see successful applications of Lean in healthcare, within administrations and in educational institutions. Project management can also be done in a Lean way. And the products can even be digital, see the picture below!

Lean production of digital maps at the Dutch Land Registry and Mapping Agency
Lean production of digital maps at the "Kadaster", the Dutch Land Registry and Mapping Agency. A magnetic board makes the digital workflow visible


3. Lean stands for production in a One Piece Flow
One Piece Flow (OPF) means processing one single article, and then immediately moving this on to the next processing step. This way, you have no intermediate stocks. A classical example is a conveyor belt.

Many people think that you are only truly Lean when you produce in such a OPF, since Lean means gearing production steps as closely to one another as possible, with short waiting times between them.

Why is this done? First, this makes the flow in the production chain as high as possible. As a result the througput time is reduced and demand driven production becomes possible. This is a prerequisite for Lean, because value is only added if you make products that were already ordered.

Second, errors will come to light quickly in a OPF production chain, beause these usually are discovered a few production steps later. In addition, since the amount of work in progress is low, so will the amount a rework to be done in case of errors.

Third, in a OPF blockages in the flow become clearly visible. This is a prerequisite to improve continuously, because it shows you where improvement is possible. Finally, in a production chain which is - literally - as lean as possible, as little time and money as possible is lost due to storage and searching for intermediate stocks.

Assembly of bathtubs in a One Piece Flow Villeroy & Boch
Assembly of bathtubs in a One Piece Flow at Villeroy & Boch

Lean production does always strive for batch sizes - the amount of articles processed at one production step - as small as possible. Usually, in companies that apply Lean, batch sizes are continuousy decreasing. The reason for this is that these companies become increasingly better in 'balancing' the workflow, and reducing the variation in the workflow. As a result, a Lean factory is a calm environment, without hectic events on the shopfloor.

However, this does not mean that you always should strive for the lowest batch size possible, which is a batch size of one, to create a OPF. In some cases this can have bigger disadvantages then advantages. For example, try at home with two people to wash the dishes in a One Piece Flow (wash one piece, dry one piece). Then you will notice that this works only when there is totally no variation in the processing times. Also, working in an OPF is not always pleasant. Remember the Charlie Chaplin movie Modern Times, a parody of working at a conveyor belt. See also Lean misconception 9: Lean makes the work boring.

Striving for a OPF should never become a dogma in Lean. The true goal is to have batches as small as workable, and as a result to have the shortest possible lead times.

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4. Lean will be outdated soon
Look at the definition of Lean at the beginning of this article. Probably you will agree that with this definition it is very unlikely that Lean will become outdated soon.

The goal of Lean - maximum flow in production chains - is already centuries old. Pursuing it probably will remain worthwhile for a long time to come. At least as long as there are multiple steps needed to convert raw materials to finished products.

Ford's moving production line in 1913
Striving for maximum flow in production chains is already centuries old and is universally applicable. This photo shows a breakthrough: Ford's moving production line in 1913. A rope pulled the cars along 84 processing stations. This hugely simplified the assembly of the Ford Model T out of 3000 parts. (Picture Ford)

However, this does not mean that the best practices to increase the flow do not change! New things are constantly invented. This way, Lean continues to renew itself. In addition, Lean might have another name ten years from now. Before the 1980s we did not talk about Lean, but many of the principles we now apply under the heading ‘Lean’ were already known at that time.

A glimpse of current developments regarding Lean, including the impact of smart industry, can be found at misconception 8: Lean develops only within Toyota

5. Lean is applied only by managers
This is not true. Everyone should help to improve their own work processes. After all, nobody knows the work better than the people who execute it every day. That is why the employees themselves should, for example, apply Lean tools like 5S and value stream mapping, to make their own work not only more efficient, but also more pleasant.

Value Stream Mapping within the VUmc hospital in the Netherlands
Value Stream Mapping within the VUmc hospital in the Netherlands

An example of how Lean should not be practised: using a tool such as time registration to monitor employees. How much time needs Sofie, for example, to perform a certain care task. It is far better to let the employees themselves measure which tasks take a long time, and ask them to develop better ways of working. In the case of Sofie, this could be some kind of device, that makes her work easier.

Managers should not improve processes themselves, unless there are complex and / or department-transcending problems. Then for example a Lean Six Sigma Black Belt, a full-time process improver, could thoroughly analyze and solve the problem.

The main role of Lean managers is to coach production team leaders, to make their own processes better, together with their team members. It is the task of a Lean manager to ensure that this is done in the right way. It is the intention that you begin with grasping the current situation. Then you determine what the next goal is, and you formulate what prevents you to achieve it. Next, an improvement step is made and it is evaluated what has been learned. After this, this improvement cycle repeats itself.

The Improvement Kata in a nut shell
The improvement Kata in a nut shell.  (source: Mike Rother, © business-improvement.eu, 2011)

In Lean terms, this way of improving is called 'Kata', Japanese for form. Kata refers to well-practised patterns of movement that you encounter in, for example, Eastern combat sports. In this case it refers to learned behavior to solve problems. If all goes well, after completing every Kata not only a problem is solved, the team leader has also become a slightly better problem solver!

A Lean organization should be a learning organization, in which everyone coaches each other and learns from each other.

The manager also has a second task: he or she should indicate in which direction the production workers should improve. More about this below.

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6. Lean means improvement boards and daily production kick-offs
Many companies start with Lean completely bottom-up, with the aim to create enthusiasm and commitment. Improvement boards are then introduced within departments, and points for improvement are noted on those boards during short standing production meetings (day starts). In the beginning this often leads to quick and tangible successes. However, after one or two years you often see a relapse. The question then arises: Is process improvement still fun, and how do all the small improvement initiatives contribute to our company mission?

Daily production meeting at Gunvor Petroleum Antwerpen
Daily production meeting at Gunvor Petroleum Antwerpen (IBR). These short meetings are important, but it should be clear in which direction to improve first.

These justified questions indicate exactly what it is lacking: direction. Lean means not improving at random, but with a goal: to increase value streams as a whole, from product development to market introduction, and from raw materials to product delivery. The performance at a certain department level is not important. What really counts is the amount of valuable products or services that reaches the customers.

It is the task of the Lean manager to ensure that everyone, at each department, knows which improvements currently have priority, and how they can contribute personally (in their own work) to those improvements..

One of the ways to do that is to make a so-called X-matrix. Within Lean this is done under headings as Hoshin Kanri (compass for improvement) and Oobeya (large room or war space, referring to the space in which the X-matrix hangs). An X-matrix links long-term targets to sub-targets to be strived for in the short term, and these to sub-sub goals, and so on. An X-matrix also contains performance indicators, to be used locally within departments. Companies such as Rockwool apply Hoshin Kanri, and today the X-matrixes even appear in hospitals.

7. Lean is operations management
Many companies start with Lean on their shop floor, or even at the department level. In itself there is nothing with that, but the ultimate goal should be to improve the flow of materials chain-wide, in combination with the flow of information and tools needed to carry out the production steps.

So, the improvement should be end-to-end, 'from sand to customer'. You do not become Lean on your own, but together with the partners in the complete value chain, that manufactures and delivers the final product!

Lean concerns both internal and external coordination, and is therefore not limited to operations management.Lean concerns both internal and external coordination, and is therefore not limited to operations management.

Taiichi Ohno, one of the founding fathers of Lean, said the following about the Toyota Production System: ‘All we are doing is looking at the time line, from the moment the customer gives us an order, to the point when we collect the cash. And we are reducing that time line’.

So, Lean not only encompasses operations management, but also supply chain management

Seven more misunderstandings
In part two of this article seven more misunderstandings about Lean are addressed:

8.   Toyota = Lean, so Lean = Toyota
9.   Lean only develops itself within Toyota
10. Smart Industry conflicts with Lean
11. Lean makes work boring
12. Lean matureness can be measured
13. Lean is better/worse than QRM or the TOC
14. Lean is the opposite of Agile

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