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Source: Business-improvement.eu
Lean: Value adding organization
Production of the Toyota Yaris14 misconceptions about Lean (2/2)
By Dr Jaap van Ede, editor-in-chief Business-improvement.eu, 15-01-2020  [ part 1 ] [ part 2 ]
Preliminary version available earlier with a free subscription. 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 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 deal with this misunderstandings in this article.

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 examined those misconceptions already in part 1.

In both articles 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.

Lean manufacturing is defined in this series of 2 articles 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.

Part 1 covered the following seven misconceptions about Lean:

  1. Lean is all about reducing waste
  2. Lean works only when the products are tangible
  3. Lean stands for production in a One Piece Flow
  4. Lean will be outdated soon
  5. Lean is applied only by managers
  6. Lean means improvement boards and daily production kick-offs
  7. Lean is operations management

In part 2, we discuss another seven misunderstandings!

8. Toyota = Lean, so Lean = Toyota
John F. Krafcik, at the time MBA student at the Massachusetts Institute of Technology (MIT), introduced the term Lean. He did this in his article Triumph of the Lean production system, more than thirty years ago. In this article Krafcik explained why Japanese car factories, such as Toyota, characterized by few intermediate stocks and, as a result, vulnerable production chains, performed better than the Western car factories, which at the time applied 'robust' or 'buffered' production systems. Toyota is therefore indeed linked to the origin of the term Lean.

Toyota made just-in-time production possible of multiple car variants (colors, versions) on a single production lineToyota made just-in-time production possible of multiple car variants (colors, versions) on a single production line. On the photo the assembly of the Lexus RX 350 (Photo Toyota)

In addition Toyota was - and partly still is - further with Lean than others. However, if there is something wrong with this company, such as the big recall years ago, it is illogical to use this to proof ‘that Lean does not work’. It is equally strange to use tricks or cut corners in such an event, to show that Toyota remains superior, because Lean would have failed otherwise.

Lean, being a set of principles, is very similar to physics. It continues to develop on the basis of hypothesis and experimentation. In this metaphor you could compare Henry Ford, the inventor of moving production lines, with Newton.

Henry Ford can be seen as the Newton of Lean knowledge
Henry Ford can be seen as the Newton of Lean knowledge. The picture above shows that right-angled supply to flowing assembly lines was already applied in 1913. Even Kanban-like supply boxes are present! (Photo Ford)

Taiichi Ohno from Toyota can be seen as the Einstein of Lean thinking. To the ideas of Ford, he added the concept of demand-driven production: making things just-in-time for delivery. Stocks have no value for the customer.

Ohno made it also possible to make multiple product variants on one assembly line. To this end, he introduced the Kanban system, with cards that signal when certain materials are used. At that moment, replenishment should follow, right angled to the production line. Third, Ohno promoted all people in his factory to ‘thinkers’. Each and every person should constantly try to improve the flow towards the customer, and should be challenged and coached to do this.

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9. Lean only develops itself within Toyota
New tools and organization methods are constantly being invented, that contribute to the main goal of Lean: increasing flow. Literally and figuratively. Theoretically, Lean should also make the work easier and more enjoyable.

Lean inventions are seen not only inside, but also outside Toyota. Sometimes it concerns solutions that companies develop to cope with specific logistical problems that they encounter. In the case descriptions on this website you will find many ideas that might inspire you.

In addition to these comparatively 'small' inventions there are also developments with a much bigger impact. In the nineties, for example, Rajan Suri developed his so-called POLCA-system. This is a Kanban-variant for job shop production environments (high mix, low volume production). Later, POLCA became part of the improvement method Quick Response Manufacturing (QRM).

Production control with a POLCA-loopProduction control with a POLCA-loop.  © C.J. van Ede & J. Riezebos (2007-2019)

QRM is a special form of Lean, for situations in which companies have to produce many different products in small series. Production lines with fixed routings then become impossible, and Kanban is not an option.

POLCA splits the workplace into flexible production cells or mini-factories, which each make a certain group of semi-finished products. Production in a cell with as destination another cell is only allowed, if the latter cell by sending a POLCA-card has indicated that they have free capacity to process the product further. This way, on average, the flow on the shop floor is maximized and the throughput times are minimized.

The organizational model of Buurtzorg is based on self managementThe organizational model of care-provider Buurtzorg is based on self management. The picture shows an enthousiastic team in the city of Warnsveld, The Netherlands.

Today, new approaches continue to be developed to increase the impact of Lean. One example: self-managing teams. You might not immediately see the relationship with Lean, but it is there, since self-managing teams make it possible to make optimal use of the competencies of the employees. Everyone can and should think along, otherwise talent is being wasted. A Lean company should not only strive for production processes as 'slim' as possible, also unneeded management activities should stop. This is one of the most recent insights: managing only what helps, and certainly not disturbs the production workers

People like Ricardo Semler and Jos de Blok (Buurtzorg) are frontrunners in this respect, be it that they do not position this as Lean themselves. They also add a new dimension: a shift from profit maximization to democratization. Everyone is not only invited to think along, but also co-determines what will happen. Giving meaning to work is going to count.

Smart Industry: The dutch metal processing company De Cromvoirtse digitized the whole process from quotation to delivery
Smart Industry: The dutch metal processing company De Cromvoirtse digitized the whole process from quotation to delivery, to make One Piece Flow production possible

The development of Smart Industry or Industry 4.0 also starts to contribute to the further development of Lean. For example, some dutch metal processing companies, including De Cromvoirtse and Tailorsteel247, succeeded to digitize the whole chain from quotation to production. That way, they made customer-driven production in a One Piece Flow possible, without humans. Their employess switched from boring and repetitive production work to other tasks, like programming and process improvement tasks. Those tasks remain necessary, because even a 'smart' factory not automatically becomes Lean!

10. Smart Industry conflicts with Lean
The idea that smart industry conflicts with Lean manufacturing is widespread. Lean strives for no more automation then needed. It is for example better to make the flow of materials in a factory transparent, than opening a screen in an ERP package, to see the amounts of intermediate stocks. The latter takes more time, and the data are often outdated.

Smart Industry, on the other hand, seems to glorify the use of ICT: the more automation, the smarter your factory.

However, there is no true conflict between Lean and Smart. In each factory the process chain should be as slim (Lean) ánd as flexible as possible. Smart techniques predominantly contribute to the latter: flexibilisation. Just as a person can make many different products, an intelligent factory can do this too, it's that simple!

Smart Industry makes it also easier to split a factory into QRM-like mini-factories, along which intermediairy products then for example are transported on self-driving carts (AGVs). In addition, smart industry makes it possible to add or remove mini-factories more easily.

Smart industry experiments at Audi: Car bodies choose their own assembly route along production islands
Smart industry experiments at Audi: Car bodies choose their own assembly route along production islands.

In this respect, the experiments with fertigungsinseln at car manufacturer Audi a few years ago are interesting, see the picture above. In this concept, cars are no longer manufactured with an assembly line. Instead, car bodies choose their own route along production islands, depending on their need for parts. Smart industry is indispensable for the digital communication to accomplish this. Some kind of 'mastermind' could 'tell' the robots on a production island what their next assembly tasks looks like. The industrial internet of things (IIOT) - the name of the matching communication network - ensures that car bodies (on carts) automatically choose the right route. The theoretical result is a self-thinking and self-managing factory: a cellular e-factory!

From a logistics perspective, such a cellular factory is far from new. The already mentioned Lean variant Quick Response Manufacturing (QRM) considers it even as the ideal solution for high mix, low volume production. However, Smart industry now facilitates the development of factories for this. That said, regarding IIOT, there are two major challenges. First, the security of the network, and second the development of a communication standard.

Continuously striving for the greatest possible throughput, or in QRM terms waiting times as short as possible, remains the most important goal, also in a smart factory. Even in the futuristic situation at Audi - you cannot buy a car made in such a factory yet! - the three main Lean principles remain valid: make the flow towards the customer visible, develop a system to control this flow, and continuously try to enlarge it. BMW formulates it like this: Smart industry should be in the service of Lean. The German company SEW Eurodrive says: Lean and Smart join forces.

It is very well possible to build a bad smart factory, with investments that never return, because of illogical workflows and frequent computer failures. In addition, it is not always good to make your production as flexible as possible. Sometimes this brings along unnecessary variation, caused for example by product variants that few customers want.

If it is possible to form traditional Lean production lines for groups of products, then you should continue to do so. From a mathematical point of view, a Lean production line with a One Piece Flow - performing one operation on one semi-finished product and then immediately moving it to the next station - has the shortest lead time. In addition, the capacity utilization on the processing stations is then greater than with varying routings. In that case semi-finished products sometimes have to wait for each other.

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11. Lean makes work boring
To be honest: when I first saw a Lean production line for pacemakers at Medtronic 25 years ago, I thought so too!

In an One Piece Flow (OPF) production chain, employees must perform their actions within a fixed 'takt time'. Overload (muri) should however be prevented by ensuring that the takt time is more than sufficient to complete a task.

This reduces stress, but still there remains some tension. First, being an operator you are obliged to follow the rythm of the takt. Second, your capacity is underused, because you have time left when you complete a task amply within the takt time. Third, you repeat the same or a similar task over and over. This can be experienced as boring. You could say that technically OPF is the most superior production system. However, for the people working with it, not naturally built for 100% error-free and steady work, this is not true.

Fortunately, solutions to make working in a One Piece Flow more pleasant are developed regularly. For example, it is possible to adapt an OPF production chain to the people, so that they can move more freely from station to station. The Dutch company Mansveld Combinatiebouw produces switching and control panels in a Lean way, but without takt times. This is possible because the operators are allowed to overtake each other. As a result this is more a One Piece Production line than a One Piece Flow line.

Another solution is the bumping system that KONI applies. Products in the making then move along the workstations, as if it were a regular OPF production line. However, as an operator you now move along. So you perform multiple tasks consecutively, on the same semi-finished product. You continue to do this until the operator who is working in front of you has no more work. In that case this person walks backwards and takes over your work. The word bumping describes this moment. The result of this way of working is that the operators no longer 'feel' the takt time of the OPF line. In addition their tasks become much more diverse.

A third option is the use of capacity buffers between the production stations. Just as the pursuit of OPF should never become a dogma, zero stock between production steps should not be seen as a holy grail within Lean.

What the best way is to deal with the pressure that working with cycle and takt times brings along, depends on the context. This might be an interesting subject for scientific research.

A Lean factory is a calm factory: everything flows regularly, rush orders do not disturb the flow.
A Lean factory is a calm factory: everything flows regularly, rush orders do not disturb the flow. On the photo: production of the Toyota Yaris in France (Photo Toyota)

Lean is often blamed for repetitive work. However, this is not logical. The amount of repetitive work is the same in factories that are not Lean. In that case, employees often produce large batches of intermediate stocks. As a result they can determine their work pace more freely. However, their work is regularly disturbed by rush orders, which are often needed because of the long lead times.

Working the Lean way, on the other hand, makes the work flow calm and with few disturbances. That aspect is often appreciated. There is not only flow literally, in a Lean factory you can also experience a sense of flow figuratively speaking.

Perhaps even more important: in a traditional factory employees are not allowed to think. That is considered the privilege of management. In contrast, in a Lean factory every employee is challenged to continually improve their own work tasks. Besides this, employees often recieve training to be able to take over each other's tasks. This makes the production flexibility greater and the work becomes more diverse.

Finally, machines and robots are taking over more and more repetitive work. Think of the digitization revolution that is currently taking place under the heading smart industry. The more interesting work, like continuously improving processes, is left over for the employees.

Visual management makes disturbances in the flow visible and it prevents mistakes Visual management makes disturbances in the flow visible and it prevents mistakes. Above an example of this 'Poka Yoke' principle at Rixona: green valves are normally open and red ones closed.

12. Lean matureness can be measured

It is not possible to measure how far you are with rolling out a sort of ideal Lean template. Why? Because there is not such a blueprint! Each logistic situation and corporate culture is different. Therefore, Lean means adapting and not copying solutions from others.

With trial-and-error - within safe limits - you should work towards (intermediate) goals, to increase the flow towards the customers step-by-step. This is the way the now famous Toyota Production System (TPS) was built. Of course you can use Toyota and other Lean companies as sources of inspiration, but in the end you have to develop your own production system. This makes it even more important to involve everyone in the organization in thinking about process improvement.

Not only is every logistic situation different, soft (human) factors are difficult to measure. Which company do you think is more Lean: a company full of improvement boards, or an organization in which everyone thinks Lean, and realizes that everything should contribute to enlarge the production flow?

In a period of ten years Auping worked via trail-and-error towards the preliminary Lean result above
In a period of ten years Auping worked via trail-and-error towards the preliminary Lean result above. Beds and mattresses move in a flowing stream through their factory. At every point, the customer is known.

Does this mean that a Lean assessment or audit never makes any sense? No, but consider this as a strength-weakness analysis, to learn which issues should be tackled first. The result can vary from a road map with points of interest, to finding a lever which can initiate a Lean journey.

If your processes are unstable, then you might, for example, begin with standardization. And if your management style turns out to be directive, then a switch to a more coaching approach might be needed, to invite everyone to think along and to develop new skills. A blueprint of how all these things will be done must never be the goal of a Lean assesment.

13. Lean is better/worse than QRM or the TOC
The definition of Lean, as given in this article, is also roughly applicable to Quick Response Manufacturing (QRM) and the Theory of Constraints (TOC). In fact, all logistics improvement methods focus on making the production flow visible, and then controlling and increasing it. Moreover, the way in which this is done is always based on the scientific method: formulating a hypothesis, testing it, and then adaptating it. Therefore it makes no sense to say that a certain improvement method is better than another!

One of the well-known Lean principles is that semi-finished products must remain in motionEverything is about increasing the production flow. One of the well-known Lean principles is that semi-finished products must remain in motion. Here the sorting of vegetable seeds at the Dutch company Rijk Zwaan.

Yet, there are differences in approach. Lean encompasses a lot of principles to involve everyone in process improvement, and to realize improvements in small steps. This makes Lean the bottom-up method par excellence. QRM has many tools to realize flow in situations with low volume / high variety production. The TOC is most suitable to identify breakthrough improvements and to develop corresponding strategies.

Because of these differences, Lean, TOC and QRM can complement each other when it comes to improving your logistics. Which method is most suitable to start with depends on your specific situation.

Improving your logistics might even be not the most urgent thing you should do. If you need to improve the productivity of your machine park, applying Total Productive Maintenance (TPM) is more appropriate to begin with. And if variation in your processes is your biggest problem, leading to quality problems, then Six Sigma offers good tools to identify and tackle the causes of those problems.

In general, companies start with one of the improvement methods mentioned above. However, after several years, they often combine (nearly) all approaches. Unilever is a good example of this.

14. Lean is the opposite of Agile
To be Agile, being able to adapt to market demand changes quickly, seems to be the opposite of Lean: being efficient. This apparent contrast can also be characterized as change (Agile) versus improvement (Lean), or as innovation (Agile) versus efficiency (Lean).

Companies must to be efficient or Lean, and they must to be agile enough to adapt to changing customer needs
Companies must be efficient, which is achieved by 'streaming'  (Lean) production, and they must be able to adapt quickly to changing customer needs (Agile). So, balancing between Lean and Agile is needed.

Until recently Agile was, in contrast to Lean, primarily a buzzword: if you want competitive advantage, you have to be flexible and therefore Agile. How you should accomplish this remained unclear. Today this is different. There are several tools and methods to become Agile, among others Scrum, Lean Startup and Holacracy.

All these methods turn out to work just like Lean. They sense opportunities and respond to them. Options for change are identified, actions are taken to 'harvest' them, and finally it is checked whether the results are as expected.

The strong overlap with the well-known plan-do-check-act cycle of Lean is striking. Improving with Lean or adjusting with Agile therefore works technically the same. Lean and Agile are therefore like Yin and Yang, or two sides of the same coin. You should seek for the right balance between continuous improvement (Lean) and continuous change (Agile).

> Did you read part one of this article yet?

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