0
The theory: Reason for using and applying Lean in current business environment
Strong pressure on EBIT combined with increased customer demands requires
companies to improve their processes
Process improvement opportunities through the value chain
Issues
■ Need for both cost reduction and constant high
quality outputs at the same time
■ As organisations grow they tend to accumulate
inefficiencies and they lose sight of what truly
adds value for their customers
■ Improvements are often temporary; sustainable
changes and continuous improvement are hard to
achieve
■ Need for continuous and fast adaptation to a
changing environment
The voice of the customer becomes more
important
■ Increased competition with pressure on margins
■ Need to continuously increase shareholder value
■ Increased demand for customer added value
■ Increased value chain cooperation
Realise constant high quality
Increase service levels
Shorten time to market
Set up a learning
organisation
Optimise transportation
Improve planning
Shorten finance cycle
times
Speed up administrative
processes
Shorten R&D processes
More stable production processes
Optimise inventory
levels
Smarter supplier processes
Improve
customer
satisfaction
Improve shareholder
and management
satisfaction
Improve
employee
satisfaction
Improvement challenges
=+ + Lean
1
The theory: The Lean Concept
Lean provides significant improvement potential by reducing spreading and
elimination of unnecessary process steps
Realise low costs
■ In a Lean process there is no ‘waste’ in terms of what is not valuable for the
customer
■ Workspace lay-out is optimal and easy to understand, everything is on-hand
and easy to find. Activities are error proof, defects are prevented
Eliminate non-value added work
■ The business processes are viewed from the customers’ perspective where the
value of an activity is defined solely by the customer, this is what he wants to
pay for
■ Any activity in the workflow that adds time, effort or cost but does not create
value to the customer is considered as waste
Improve the whole system
■ In stead of optimising individual parts or processes, Lean seeks to improve the
whole system (Operating System, Management Infrastructure, Mindset and
Behaviours)
Lean
Speed and efficiency by identifying added value and eliminating waste
2
The theory: The Lean Concept
The essence of Lean is the integration of the elements Management infrastructure,
Operating systems and Mind setting & behaviour
Lean operating system
■ This system is about the way in which people, goods and resources are being
controlled in the process to create value for the customer with minimized
losses. In this way, the so called flow is created, by which a product, as a figure
of speech, flows through the process and no double work has to be done. The
information streams form part of this, this is about making the processes,
procedures and the lay out of the process at an office or a factory visible.
Management infrastructure
■ This concerns the management organisation, processes and systems that are
necessary to support the Lean operating system. Part of this are the
organisational structure and the processes to develop people, like for example
the target and appraisal system
Mind setting & behaviour
■ This element concerns the way of thinking and behaving at all levels of the
organisation underlying the formal systems and structures. It is important to
use the mind set of the customer; what does he want and what creates value in
our process and the continuing desire to improve
De 5 principals of Lean:
1. Value: What creates value from the customer’s point of view?
2. Value stream: What does the total value chain look like, from supplier to
customer?
3. Flow: Creating a standardized workflow with a constant input
4. Pull: Creating the process in such a way that customer demand drives the
proces
5. Perfection: Realise continuous improvement
Lean
Lean
operating
system
Management
infrastructure
Mind setting &
behaviour
■ Customer focus
■ Lay-out
■ Process renewal
■ Work instructions
■ Performance management
■ Planning methods
■ Clear roles and responsibilities
■ Controlled processes
■ Coaching
■ Teamwork
■ Communication
3
The theory: The Lean Concept
Cost reduction can beTheory: The Lean concept accomplished with Lean through
reducing ‘waste’ (non value-adding activities)
Lean concept
■ Working in a Lean environment
means eliminating waste from
everything we do in business
■ Using the Lean concept, the
business processes are viewed
from the customers’
perspective where the value of
an activity is defined solely by
the customer
■ Activities that add value to the
customer are those that make
the product or service resemble
more of what the customer
actually wants and for which he
is willing to pay
■ Any activity in the workflow that
adds time, effort or cost but
does not create value is
considered as waste
■ A Lean process eliminates
waste that reduces the speed
and efficiency of the operation
Eight types ofwaste
Defective or ineffective treatmentWaste from
producing defects
Waste from
inventory
Excessively long queues;
excessive levels in stock
Unnecessary moving of
employees, equipment and
products
Waste in
transportation
Excessive complex processes;
over-specified processes
Waste from
overproduction
Periods of inactivity for people,
machines, equipment and
information
Waste of waiting
time
Producing too much or producing
too early
Waste in
processing
Excessive walking, bending,
turning, reachingWaste of motion
■ Low skill levels
■ Poor machine conditions
■ Instable processes
■ Poor forecast or scheduling
■ Inadequate purchase conditions
■ Insufficient insight into inventory
■ Poor layout
■ Sequential processes physically separated
■ No immediate testing of semi finished products
■ Ineffective or unnecessary steps in the process
■ Poor product design
■ Excessive testing
■ Poor supplier delivery performance or quality
■ Poor labour utilisation
■ Lack of flexibility in skills
■ No alignment with customer needs
■ Poor scheduling
■ Unbalanced material flow
■ Poor layout of workplace, tools and materials
■ Lack of visual controls
■ Undesired split of activities
Non-optimal use of talent, skills
and time of employees Waste of talent
■ Poor scheduling of employees
■ Poor use of talent of employees
■ Detachment of employees and management
4
In practice: Lean
The application of Lean process provides significant and structural improvement
potential
Lean – Speed and efficiency by ‘creating value and eliminating waste’ by means of the structured DMAIC approach
Lean: the fastest delivery (speed), without defects (quality), against the lowest possible price (costs)
• The structured DMAIC approach will be combined with the pragmatic tools of Lean
Se
rvic
e Q
ua
lity
Stop the
Bleeding
Move to
Excellence
Reduced variation
Low
Variation
High variation
Chaos
Non productive
Stable Operations
Improved productivity
Operational Excellence
Operating Leverage
High
Performance
86% or more
Mediocre
Performance
less then 86%
Lean
Lean
Top Related