Lean

Lean – value, waste and the system Toyota built

What is lean, really? A walk through the system Toyota built – value and waste, the seven wastes, the five principles, kanban and just-in-time, kaizen and PDCA – and through the criticism about redundancies, fragile supply chains and work pressure.

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What this covers

Where lean comes from, and who coined the word
Value defined by the customer – and everything else
The seven wastes, on a shop floor and in an office
The five principles from Lean Thinking
Pulling instead of pushing – kanban and just-in-time
Muda, mura and muri – the two Ms that get forgotten
The toolbox, and what the Japanese words actually mean

What this covers (cont.)

Kaizen and PDCA – improvement as a habit rather than a project
The criticism – redundancies, fragility and work pressure
What holds up once the decoration is stripped away

Where it comes from

Lean is a Western umbrella term for the Toyota Production System, developed at Toyota in Japan in the decades after the Second World War. Taiichi Ohno is regarded as its principal architect, with Shigeo Shingo as a central contributor.

Value, and everything else

The whole system rests on one distinction, and it is worth taking seriously before moving on to the tools.

Value is what the customer is actually willing to pay for. Everything else is waste.

The test: would the customer pay more for this step if they saw it? Welding the frame – yes. The part sitting in a warehouse for three weeks first, being carted back and forth between two buildings, someone filling in a form nobody reads – no. That does not make those steps unnecessary today, but it does make them candidates for removal.

The seven wastes

Ohno set out seven kinds of waste. They were conceived for a factory, but they translate to office work surprisingly directly.

The seven wastes

Waste	On a shop floor	In an office
Overproduction	Making more than the next step needs now	Reports nobody reads, meetings nobody needed
Waiting	A machine idle, an operator waiting for parts	Waiting for an approval, a reply, an access right
Transport	Parts moved between buildings and halls	A case passed between four departments
Overprocessing	Tighter tolerances than the customer needs	Fifteen fields where five would do
Inventory	Halls of half-finished goods	Queues of unfinished cases and unanswered enquiries
Motion	The operator reaching for a tool	Searching four systems to find one number
Defects	Scrapped parts, rework	Bad data that has to be corrected further down the chain

Ohno rated overproduction the worst, and the reasoning is worth noting: it creates all the others. Make more than is needed and you get inventory, transport, waiting and defects that are not discovered until long after they happened.

The five principles

In Lean Thinking (1996) Womack and Jones set out five principles describing the order the work should be done in. They have become the most common way into lean outside the car industry.

The order, as Womack and Jones set it out

1. Specify valueSeen from the customer, not from your own department. This step is the one most often skipped.
2. Map the value streamEvery step from order to delivered. Including the ones nobody has drawn before.
3. Create flowGet the work moving without stalling in queues between the steps.
4. Let the customer pullNothing is made until the next step actually asks for it.
5. Pursue perfectionNot an end point, but never declaring it finished.

The order is not decoration. Create flow before you know what the customer values, and the result is that the wrong thing gets produced faster – a more expensive mistake than producing it slowly.

Pulling instead of pushing

This is the biggest practical break from conventional planning, and it is easy to recognise for anyone who has worked with production planning.

Two ways to govern work

Push

The plan decides

Produced against a forecast and a plan
Finished goods are pushed on to the next step
When the forecast is wrong, inventory builds
Classic MRP and ERP logic

Pull

Demand decides

Produced when the next step asks for it
A signal triggers replenishment – that is what kanban is
Inventory stays low because it is not refilled unprompted
Requires short changeover times to be possible at all

Ohno has described the idea as coming from American self-service shops: the shelf is refilled when someone has taken something, not according to a plan made in advance. The last bullet on the right matters – without short changeovers, small batches become too expensive, and the whole pull idea collapses.

Muda, mura and muri

This is where Western lean parts company with Toyota, and it may be the most useful part of the whole episode.

The three Ms

The word	What it means	What it looks like
Muda	Waste	The seven above. The only one most people look for.
Mura	Unevenness	A quiet Monday, chaos on Friday. Swings in load and staffing.
Muri	Overburden	People and machines run beyond capacity, over time.

The three hang together: unevenness creates overburden at the peaks and waste in the troughs. Hunt only for waste without doing anything about the swings and you get a system that looks efficient on paper and breaks in a busy week. Levelling – heijunka – is Toyota's answer to mura.

The toolbox

The Japanese words are one reason lean seems more mysterious than it is. Most of them mean something fairly everyday.

The words you will meet

Word	Means	Used for
Kaizen	Improvement	Many small improvements in daily work, made by the people doing it
Kanban	Sign, signal	A card or an empty bin that says “refill” – the engine of pull
Jidoka	Automation with a human touch	Equipment that stops itself on a fault, and the right to stop the line
Poka-yoke	Guarding against slips	Design that makes fitting a part the wrong way physically impossible
Heijunka	Levelling	Evening out volume and product mix, so the peaks disappear
Gemba	The actual place	Going where the work happens and seeing for yourself, rather than reading a report
5S	Five words that all begin with s	Sort, set in order, shine, standardise and sustain

Jidoka is the one most often left out when lean is installed, and the one that says most about the culture: an operator who sees something wrong has the right to halt the entire line. It is cheaper to stop for a minute than to make two hundred parts with the same fault.

Improvement as a habit

Kaizen is the part that separates lean from a project. The idea is not one big push once a year, but small changes all the time, proposed and carried out by the people doing the work.

PDCA – and then again

1PlanDescribe the problem and what you think the cause is. State a measure that could turn out to be wrong.
2DoTry it at small scale. Do not roll anything out across the organisation yet.
3CheckMeasure it against something. Did it actually get better, or just different?
4ActIf it worked, it becomes the new standard. If it did not, you start again with what you learned.

↻ And then it starts over on the next problem

The loop is usually credited to W. Edwards Deming, who himself pointed to Walter Shewhart and preferred the variant PDSA – study rather than check. The point is the same either way: a measure is a hypothesis until it has been measured.

The criticism

This is a walk through what lean is, and the objections belong in that. Several of them are well founded.

Just-in-time is efficient and fragile for precisely the same reason: there is no inventory to fall back on.

That is not a flaw in the method, but a cost of it. Low inventories free up capital and expose problems quickly. Those same low inventories mean one stoppage anywhere propagates through the whole chain. The disruptions to world trade in recent years made that trade-off visible to everyone, and many organisations have since built buffers back in deliberately.

What holds up

Once the decoration is stripped away, a few ideas are left that hold outside a car factory too.

Key points

Lean is about flow, not about saving. Cost reduction is a side effect, not the aim.
Value is what the customer will actually pay for. Everything else is a candidate for removal.
Ohno rated overproduction the worst waste: it hides all the others.
Pulling rather than pushing is the biggest practical break from conventional planning.

Key points (cont.)

Western lean tends to hunt only for waste, and misses unevenness and overburden.
Kaizen is many small improvements in daily work, not one large project.
Lean installed as tools without the culture behind it tends to stall within a year.
Just-in-time is efficient and fragile for precisely the same reason.

Questions this answers

What is lean, really?
Where does lean come from, and who coined the word?
What do value and waste mean in lean?
What are the seven wastes?
What is the difference between pushing and pulling work?
What are kanban, kaizen, jidoka and poka-yoke?

Questions this answers (cont.)

What do muda, mura and muri mean?
Why do so many lean rollouts fail?
Is lean just a nicer word for cutting staff?
Does just-in-time make the supply chain fragile?

Sources

Taiichi Ohno – Toyota Production System: Beyond Large-Scale Production (Japanese 1978, English 1988)
John Krafcik – Triumph of the Lean Production System, Sloan Management Review (1988)
James P. Womack, Daniel T. Jones and Daniel Roos – The Machine That Changed the World (1990)
James P. Womack and Daniel T. Jones – Lean Thinking (1996)
Jeffrey K. Liker – The Toyota Way (2004)

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