IE 361Current Quality Culture Mini PaperFall 2002Lean OperationsPrepared by:Heather KruseKirsten PetersJeff EllsworthAmity WestphalenWhat is Lean?Lean production originally started as an assembly-line manufacturing methodology developed forToyota and the manufacturers of automobiles during the 1980’s. Some people still know it as the“Toyota Production System.” Engineer Taiichi Ohno is credited with developing the leanproduction methods and says that the goal of lean production is, “to get the right things to theright place at the right time, the first time, while minimizing waste and being open to change.” Ithas been discovered that in addition to eliminating waste, his ideas have led to improved productflow and better quality.2Today, lean manufacturing is implemented by companies such as Dell Computer, Ford, GM,Cisco, Honeywell and Rockwell Int’l.5 Reports have been made that these companies haveimproved productivity of workers by 25 to 40 percent, reduced required manufacturing space by50 percent, virtually eliminated defective returns and achieved six sigma quality.1 Leanproduction has become a set of guiding principles that encourages a continuously improvingorganization and is not limited to assembly line procedures. Lean strategies are now applied toevery department of a company. Lean management requires human resources and quantitativemethods to work together to improve the materials and services supplied to and from anorganization, as well as the processes within the organization and the quality of the consumersatisfaction.3The Lean ProcessThe rules for implementing lean strategies can be summarized in the following ten steps2:1. Eliminate Waste 6. Do it Right the First Time2. Minimize Inventory 7. Empower Workers3. Maximize Flow 8. Design for Rapid Changeover4. Pull Production from Customer Demand 9. Partner with Suppliers5. Meet Customer Requirements 10. Continuous ImprovementEliminate WasteWaste is defined as any product, process, or service, which does not add value to the ultimatecustomer. Waste in business processes/production can be separated into seven types: waiting,unnecessary motion, processing, inventory, moving items, excessive production, and correctionof defects.4One very important way waste is eliminated is through a value stream analysis. Value streammapping includes mapping a business processes’ material and information flows from beginningto end using a visual representation of every process. This includes developing a current statemap and a plan for proposed future state. The difference between the two states becomes thebasis for the lean production plan. The team mapping out the process is a cross-functional teamand includes operators, engineers, quality, and often management.Workplace organization, or 5S, is a way of organizing workspace area to minimize waste. Thisis an on-going process of keeping everything in its place. The 5S’s are sorting, simplifying,sweeping, standardizing and sustaining.4Minimize InventoryUsing a principle known as “Just-In-Time” can minimize inventory. This is the concept ofscheduling the production so that each good or service required is to be available exactly whenneeded and not a moment sooner nor a moment later4. This will not only leave more space forproduction by reducing inventory space needed, but could slash the prices of the company’sproducts by eliminating the huge investment in all the mass-produced products that yield noreturn until a buyer is found.Maximize FlowFlow is the progressive perfomance of tasks along the value stream so that a product proceedsfrom design to launch or order to delivery with no stops, waste, or backtracking.4 Individualprocesses are examined to determine the steps required to increase the smoothness of the flow.Many times, flow maximization is a result of other completed steps of lean management.Pull Production from Customer DemandThis concept essentially means that a step in the production process will not be completed untilthere is a need for the process, such as a customer desiring the product. The pull system is basedon the communication of real-time needs from downstream operations and results in finishedproduct that was requested by a consumer or a product that is needed to reach a similar goal.4The push system schedules upstream operation based on theoretical downstream proceedings andis not based on need. This is the opposite of the pull system and can result in excessiveproduction.Meet Customer RequirementsValue is a term used to decide if the product is precisely what the consumer desires. This is aproduct or service provided to the customer at a specific time and a specific price, that has beendefined by the customer.4 Value can be determined by answering the following questions: “Doesthe activity change the form, fit, or function of the product of service?” and “Is the activitysomething that the customer would be willing to pay for if they were aware of it?”One popular way that companies are giving their customers exactly what each individual desires,is by using web pages which facilitate customer orders on the web page with flexibility andcustomization. The companies can also receive instant feedback on design, quality, and serviceissues.5Do It Right the First TimeCompanies must prevent product failures rather than react to them. To do this they must createthe culture to design quality and reliability into their products. Companies will use productdevelopment teams to ensure that the quality and reliability issues of customers, manufacturing,service, and suppliers are properly represented. The company must open communication channelswith customers to obtain timely and detailed product failure data and maintain a well-conceivedfailure database of product field failure modes supporting failure analysis to root cause and try tounderstand in detail the capabilities and limitations of both internal and suppliers manufacturingoperations. The benefits of this include freeing resources that were previously used in monitoringand correcting quality and reliability mishaps, permitting tasks to be performed faster and on-time, reducing warranty costs, and making it easier and cheaper for manufacturers and suppliersto produce quality products.5 Also, it will increase sales because reliable products make happycustomers.Empower WorkersGiving workers the power to make a difference in a process through value streams and