Joshua is a graduate student at the USF. He has interests in business technology, analytics, finance, and lean six sigma.
Lean From Japan to the United States
To understand lean more clearly, we should go back to the roots of lean within the Toyota Production System (TPS).
This system was started in the late 1930s but was enhanced after an engineer from Toyota visited a Ford manufacturing plant to do research on the automotive giant’s methods. Taiichi Ohno was the engineer that took on the task.
Ohno went back home with plenty of knowledge about Ford's automobile manufacturing processes. Ohno even had a lot of ideas about how to improve the methods and processes of the Ford system.
Even as the TPS was popularized in Japan, most manufacturers in the United States rejected the ideas that surrounded the TPS due to its unpopular lean practices. The United States didn't start using principles of the TPS until the economy started to take a dive in the 1970s. At this time, the Japanese began taking a lot of market share from multiple industries which prompted executives in the United States to respond by adopting lean ideas.
Since the TPS is a large complex system that keeps facilities lean, efficient, and successful, TPS caused a disruption that would change manufacturing in the United States for the better.
The TPS principles concentrate on producing a product that is needed, when it is needed, and in the quantities needed. Therefore, all these factors ensure that unnecessary product inventory can be eliminated. TPS is essentially a waste eliminating system and the principles of this system have proved to work toward the success of different types of industries all over the world. To take the definition a little further, TPS eliminates waste by reducing or minimizing suppler, customer, and internal variability.
Even after principles of the TPS are implemented, continuous training of the workforce and participation from everyone in the company is needed for a lean program to be successful. It can't be seen in the short term because it's really a mindset of how to go about all tasks in a company.
Luckily for the United States, many companies caught on and adopted some, if not all principles of lean systems such as just-in-time inventory (JTI), Kanban, and Kaizen. Each of these will be explained, but let's first look at the five principles of lean.
5 Principles of Lean
To be able to follow lean you must understand the lean principles. The five principles of lean can be described as:
Principle 1: Always specify value from the customer's standpoint for each of the customer's product groups.
In the sales world, whether you are in service or manufacturing, the customer should be the focus. If the customer changes, the products will need to change to accommodate them. If the customer needs faster delivery to satisfy demand, customer deliveries will ship faster.
In the past, far too many companies spent time worrying about what was best for them instead of what was best for the customer. Now that the world economies are more global and competitive than ever, no customer should be left behind.
Principle 2: Each step within the value stream of a product should be evaluated by how much it contributes to the creation of value. Non-value steps should be eliminated.
Every contributing factor of the process must add value to the final good or service. Rework is a common non-value step within a process. When rework is being completed a problem is being corrected and value is not being added to goods.
Principle 3: Steps creating value need to occur in a tight sequence to reduce restriction of flow to the customer.
Moving an assembly process away from batch building can reduce inventory movement, the processing of paper, and time spent on quality activities.
Principle 4: Use the pull system of production in flow to drive planning, and scheduling of up-stream production.
Pulling during production opposed to pushing can lead to more organized production activities. The focus is to only produce what you need when you need it.
Principle 5: When value is found and value streams are identified, wasteful steps are removed, and flow/pull should be introduced and the process can be repeated.
Perfection may not be realistically attainable, but perfection should be the goal as lean principles are continuously repeated. Perfection in lean production is where perfect value is added to processes and as a result there is no trace of waste from the processes.
The Just-in-Time Approach to Inventory Management
One of the more common practices of lean used today is having a Just-in-Time (JIT) approach to inventory management. This is an approach that was developed and implemented into the TPS.
This method is based primarily on the pull production system. The idea behind JIT is the premise that only having the amount of inventory that you need will reduce waste. Any company that implements JIT can't expect the approach to run perfectly the first day. JIT requires company-wide training and process tweaking before it can work. JIT can be implemented using a Kanban system discussed next.
Below the diagram shows the goals that the JIT approach aims to accomplish.
This is a method that keeps inventories low and as stated earlier, can be used for implementing JIT.
Kanban means card or visible record. Essentially, they are cards that track the use of inventory. Kanban simplifies replenishing inventory for the people using the inventory for processes.
One way a Kanban card can be used in manufacturing is by keeping card in bins that hold the oldest inventory. When the bin is pulled for use in production, the card is submitted to purchasing. This will ensure that inventory will only be ordered when levels run low.
The Kanban system has also been referred to as the supermarket method because of its wide use within supermarkets.
Kaizen means continuous improvement and is a pillar of the TPS. Over time, the customer view of quality changes. As a result, you must improve systems and processes to adhere to customer standards.
Implementation of Kaizen early in the TPS created the competitive environment that would cause other big companies to adopt the concept. In fact, some companies have departments dedicated to Kaizen alone.
Kaizen is does more than focus on specific customer needs. Many companies are building Kaizen into the company culture. When Kaizen is introduced, employees are encouraged to let management know what improvement can be made to either reduce waste, make a process more efficient, enhance safety and of course increase customer satisfaction.
- Kaizen Gaining the Benefits of Continuous Improvement. (n.d.). Retrieved January 4, 2019, from https://www.mindtools.com/pages/article/newSTR_97.htm
- Boyer, K. & Verma, R. (2010). Operations & supply chain management for the 21st century. Mason, OH: South-Western.
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This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2019 Joshua Crowder