Lean Operations
Operations Management
Value and Waste
In Lean Operations, “value” and “waste” are central concepts. Importantly, these are defined with reference to the customer. At every step, lean methodology checks for value and waste.
Are we providing value to the customer?
Since providing value to the customer is the ultimate goal of operations, “lean” considers any operation, any storage, any effort, any time spent, any expenditure of material or other resources that is done for any purpose other than providing “value to the customer” as waste.
There is a difference between “adding value to a product / service” and “adding value to the customer”.
Value is what the customer is willing to pay for
What is value? According to the lean thinking, value exists only when the customer is willing to pay for a product or service.
Any operation or part of it has to be tested on the criterion of “Will the customer be willing to pay for it?”
Value-stream Mapping and Waste Visualisation
In order to pinpoint areas where there is “waste” we can is the Value-Stream Mapping and Waste Visualisation.
Value-stream Mapping and Waste Visualisation
Steps in Value Stream Mapping |
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Traditional thinking versus Lean Thinking
The basic difference between traditional thinking and lean thinking is the emphasis that Lean puts on providing value to the customer.
Thus customer is at the forefront of the design of products, services and the processes / operations.
History of Lean Operations
The Toyota Production System was developed to improve quality and productivity and is predicated upon two philosophies central to the Japanese culture:
Toyota classifies waste into three broad types:
Elimination of waste.
Waste is anything that is not �absolutely essential to production.
Respect for People.
Respect for people is key to the Toyota Production System. They have traditionally striven to ensure lifetime employment for permanent positions and to maintain level payrolls even when business conditions deteriorate.
Types of waste
Muda – (Waste)
The rough equivalent of this word is “non-value adding work”. Muda can be of two types.
Type 1: Non-value-added tasks which seem to be essential.
Type 2: Non-value-added tasks which can be eliminated immediately.
Seven Types of Muda
Muda | Description |
1. Defective products | The result of not getting the job done right the first time. |
2. Overproduction | Overproduction ties up production facilities and surplus inventory is simply idle. |
3. Inventories | The waste associated with the expense of idle inventory, plus the extra storage and handling requirements necessary to maintain it. |
4. Excess motion | As a result of inefficient design of the workplace and the location of tools and materials. |
5. Processing steps | The traditional notion of waste, exemplified by leftovers that often result from poor product or process design. |
6. Transportation | The time and effort spent transporting products around the factory as a result of poor distribution. |
7. Waiting | Allowing queues to build up between operations, resulting in longer lead times and more work in progress. |
Seven Eight Types of Muda
8. Non-utilized potential
Not using people’s talents, skills & knowledge to their �full.
Types of waste
Muri – (overburden)
This is the unreasonable work that is imposed on the equipment and people due to poor management.
Types of waste
Mura - (unevenness)
This is the waste of inconsistency and variation in the quality and volume of products and services. When there is unevenness in the flow of operations, it may give rise to several wasteful stocks, stoppages, delays, sudden increases and decreases in speed of work and unmanageable variations in the process and their outputs.
Muda, Muri, and Mura are interdependent
The wastes of Muda, Muri and Mura are interdependent or tangled with each other. In a sense, they cause each other.
5’S Technique of eliminating waste
5S stands for the five word in Japanese that start with the letter “S”. These words are the five actions that would help remove waste from the operations.
Concept | Description |
Seiri (Sort) | Organise the work area by sorting and keeping only tools, materials and instructions necessary for the process in question, eliminating all the unnecessary items from the work area. |
Seiton (Straighten) | Orderly arrangement of all the necessary items so that they are easy to use and accessible for anyone. |
Seiso (Shine) | Cleanliness or keeping everything in the work area shining has many advantages. |
Seiketsu (Standardise) | Work practices should be standardised and should be identical across all work stations doing the same particular job. |
Shitsuke (Sustain | The organisation has to continue applying the various 5S and continue to improve. |
Lean Services
Many lean techniques have successfully applied by service firm. The suitability of each technique and the corresponding work steps depend on the characteristics of the firm’s market, production and equipment technology, skill sets, and corporate culture.
Successfully techniques applied to service companies:
Book: LEAN SERVICE: A Practical Guide for SME Owner/Managers
Starbucks’ Lean Ruins the Experience
Starbucks’ Lean Ruins the Experience
Bibliography
Chary, S. N. (2019). Production and operations management. (6.a ed.). McGraw-Hill Education.