Part 2:  Lean 101

By Ron Ketterling, President BASM

As introduced in our January/February newsletter, we always strive to be ahead of the business automation curve.  So several of us took a week to attend a Lean Manufacturing class through a local college.  The 40 hour class was taught by a consultant / industrial engineer with expertise in lean manufacturing.  The instructor identified 15 areas where the manufacturing process can by wasteful, and ways to streamline those processes.  Our goal in taking this class was to make sure that as we are working with our customers we have a good understanding of how an ERP / MRP system can fit into a lean organization.  In addition, we also saw it as an opportunity to be better business automation consultants.  The class provided us with the insight to see issues we may not have seen as issues before and it demonstrated how simple changes could cause big improvements.  A one hour process that can be converted to a 15 minute process by doing it better, faster, without money out-of-pocket, could be a huge benefit to a company.

 In part two of our six part series we want to share the basic principles of Lean Manufacturing.  So, what is “Lean”? It is a simple and effective way of conducting business processes.  It characterizes all activities as either value-added or non-value-added with the focus on eliminating non value-added activities (wastes). Waste is eliminated by employing simple principles and tools that have been practiced and improved for many years.  The Toyota Production System is Toyota’s unique implementation of Lean.  Eiji Toyoda, founder of Toyota, took his inspiration from others and refined these ideas into the Toyota Production System.  Toyoda greatly admired Henry Ford and in 1950 took a team of managers on a 12-week tour of US auto plants.  He took the principles Henry Ford outlined in his two books (My Life and Work – 1923, and Today and Tomorrow – 1926), coupled them with Dr. W. Edward Deming’s (another American) Quality Management principles and with Taiiichi Ohno, refined these concepts into the Toyota Production System. 

The five main lean principles are:

  • Specify value from the standpoint of the end customer
  • Identify all the steps in the value stream and eliminate all non-value added activity
  • Create flow for value-creating process steps
  •  Let customers pull value from upstream activity
  • Pursue perfection through continuous improvement

 The ultimate goal of lean is to eliminate the waste between the time of request and delivery by utilizing our resources to do the work that our customer pays us for. Why focus on lead time?  Because when you reduce lead time, you: improve productivity, reduce inventory, increase responsiveness, improve quality, reduce capital expenses, and improve delivery performance. No need to get bogged down chasing all of these objectives at one time.  Focus on lead time and you will see positive gains in all of these metrics. 

Key principles in lean manufacturing focus on producing exactly what the customer wants, when they want it, in the smallest possible quantities to gain efficiencies.  You can achieve this when the processes have been designed for the workers success, as the worker is central to value creation.  However, eliminating waste in the processes must first be identified which is often the most difficult step. 

We’re not trying to be your lean manufacturing guru, but we do want to understand the thought process to help get the software systems work in a more lean way. We always want our clients to be better at what they do; and if BASM, as your partner, can help you do it better, with more profitably, it’s a win for everyone and we’ve done our job.  In our next issue, we’ll cover the 7 Forms of Waste.