Lean Production Principles
From Supply Chain Management Encyclopedia
Russian: Принципы бережливого производства
Lean Production Principles are those rules (requirements), which needed to be followed in order to develop a Lean Enterprise. Companies that belong to this type are able to create items or processes with high added value with fewer resources of time, materials, and smaller errors. The lean usually starts from the creating more value to the customer with fewer resources. Value is an item or specific feature, for which a customer is ready to pay. Lean production allows concentrating the resources for producing only value-added products. The essence of the lean concept is eliminating waste (muda) of all types and in all areas of the organization. Waste is any activity that consumes resources but does not create value for the customer and should be eliminated.
Seven types of waste in Lean Production
Taiichi Ohno, being founder of the Lean system and developer of Toyota Production System (TPS) identified seven sources of waste (muda):
- 1.Overproduction: products being produced in excess from what are required; items produced too early from the real demand appeared.
- 2.Inventory: raw materials, finished goods, work in process that is not directly required to fulfill customer orders. Inventory need a lot of space for storage and diverts recourses from current operations.
- 3.Defects & Rework: any extra operations such as reprocessing, defects removal.
- 4.Over-processing: work (operations), which is not required by technology used, so does not add value to the product.
- 5.Motion: any movement that is not required for the successful implementation of the operation.
- 6.Transportation: unnecessary movement from place to place materials, people, information; unnecessary duration or documents.
- 7.Waiting: time spent in waiting supplies, people, documents, equipment or information.
The basic principles of Lean Production
Lean Principles are most completely developed by Taiichi Ohno and used for Toyota production system:
- 1. Autonomation. Autonomization means bringing human intelligence in machines. Also, this principle is known as the "Jidoka" meaning embedded quality. The essence of the principle - the quality must be embedded in the process, i.e. upgrade equipment so that each machine can discover it own defects, and then immediately stop processing and signal that needs help.
- 2. Just-in-Time. The essence of the principle is that every previous stage of produce only what is necessary to following one, by quantity and time. Due to this reduced inventory and implementing of pull-system became possible. Pull system means that each stage pulls necessary products from previous stage. Instrument for the implementation of the principle is "Kanban" information system.
- 3. Cells. Equipment deployment principle, in which exact place of each unit of equipment is positioned to constitute the continuous production line. In that case operations are performed continuously and without interruptions. U-shape is typical configuration of the cell. It allows organizing not-interrupted flow of products and allocates workers flexibly.
- 4. Production leveling. This principle requires keeping the balance between workload for the employee and volumes and ranges of products according to consumer demand.
Lean Production principles development
- Specify value from the standpoint of the end customer by product family.
- Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
- Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
- As flow is introduced, let customers pull value from the next upstream activity.
- As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.
Complete set of lean principles is represented in J. Womack and D. Jones works.T he authors represent lean principles as a five step iterative process. These 5 steps are:
- 1st step includes the valuation of a particular product (goods and services). Value is defined from the perspectives of the consumer, so it is identified outside of the production.
- 2nd step involves determination of value stream. Value stream is a sequence of all necessary actions to produce the specific product which meets consumer needs. If any action does not create value, we must change or remove it from the process. The main result of the step is performed in Value Stream Map.
- 3rd step involves flow creation from raw materials to finished products through specialized cells.
- 4th step involves making the remaining steps in the value stream flow, to pull the products out of the production system. If products couldn’t be directly used at the next stage of production, it is not needed to produce them.
- 5th step involves improvement to create more value and reduce waste. When all losses are eliminated from the process, and the products move to the consumer it becomes clear that process of improvements has not the end. Each process allows seeking perfect forms of products, sources for cost-cutting and so on. This principle is also known as Kaizen.
- ↑ Dorgan S.J., Dowdy J. How good management raises productivity. The McKinsey Quarterly, 2002, #3.
- ↑ Levinson W.A., Rerick R.A. Lean Enterprise: A Synergistic Approach to Minimizing Waste. - ASQ Quality Press, 2002
- ↑ Taiichi Ohno (1988). Toyota Production System: Beyond Large-Scale Production (English translation ed.). Portland, Oregon: Productivity Press. pp. 75-76. ISBN 0-915299-14-3.
- ↑ James P. Womack, Daniel T. Jones, Lean manufacturing. How to get rid of the waste and to achieve prosperity-ply voltage of your company - M.: Harvard Business Review, 2005