Lean system

This Lean method helps to create and maintain a visual workplace. Visual management, which is clear and uniform for all employees, allows you to quickly identify process wastes and take action to eliminate them.

A workspace is arranged in the following 5S steps:

Sort

• Sorting all items, documents, supplies and information in the workspace into necessary and unnecessary

Set In Order

• Removing all unnecessary items and waste from the workspace

Sanitation

• Cleaning the workspace

Standardise

• Labelling storage places for supplies and documents
• Establishing cleanliness standards
• Creating a visual standard – agreement on routines and procedures to be followed

Sustain

• Creating a system and routines for maintaining the system
• Performing regular audits according to visual standards. Audit assessment is recorded on the audit sheet. In case of any non-conformities, actions are taken to eliminate them
• Updating and continuously improving 5S standards at workspaces

With 5S, time is not wasted on looking for information or work supplies – they are easy to see, grab and return to their place. It prevents you from ordering any unnecessary materials and supplies.

Kaizen Teian is a Lean method for encouraging employees to voice and implement their ideas. Kaizen is a Japanese word for “continual improvement” or “change for better”. The Kaizen principle is to involve all employees in the continual improvement and improve organisational processes. Usually, all suggestions and ideas are simply called kaizen. According to the Kaizen philosophy, a suggestion must have very specific requirements:

• Kaizen aims to improve safety at work, increase the quality of products or services and reduce wastes. The LEAN methodology identifies 7 wastes: waiting, inventory, transportation, motion, overproduction, defects and over-processing;
• the Kaizen method proposes fundamental rather than superficial changes by identifying and removing the root cause of the problem so that it does not reoccur.
• Kaizen is becoming a new standard. One of the objectives of the Kaizen process is to make sure that all employees in the company make minor improvements and that processes and standards are consistently improved by standardising each of these improvements. With standardisation, suggestions no longer repeat and the company’s performance is constantly improving.

Kaizen training and the process created involve employees, enable them to deliver targeted and necessary ideas, thus contributing to the improvement of their workplaces, the facilitation of their work and the elimination of wastes (“muda”). In the long run, the implemented suggestions help the company to improve its operations, the working environment, the quality of products or services, and save resources.

Untapped creativity of employees is often identified as one of the main wastes within any organisation. The experience of international organisations shows that the involvement of employees in the improvement of processes and workplaces brings major benefits. For example, thanks to ideas from its employees Panasonic saved $175 million within one year. The Lithuanian experience shows that the implementation of this system increases the number of useful ideas from several dozens to more than a thousand per year.

PDCA (plan, do, check, act) is a Lean method for structural problem solving. Its main goal is to find the root cause of the problem and anticipate actions to eliminate it. A standard 8-step problem solving path using the PDCA form on an A3 sheet of paper:

• Making a brief, but accurate description of the problem. Getting familiar with the process at the onset of the problem, recording it on the form. Identifying a specific, time-defined and measurable goal.
• The Ishikawa diagram (also known as the fishbone diagram) is used for a causal analysis in four key areas and the identification of root causes.
• All valid root causes and actions to eliminate each of them are listed on the form.
• Responsible persons who will have to implement the actions planned are appointed.
• Deadlines are set.
• The result is measured.
• All changes are standardised. If needed, training is organised for employees in accordance with new standards.
• The form includes all the people who contribute to solving the problem. These people are acknowledged and the solution is shared with other interested teams.

Benefits of the PDCA problem solving method:

• it is easier for the company to solve problems, because there is a clear problem-solving structure and logic, clear and simple action plans, an understandable communication standard – everything fits on an A3 sheet of paper;
• employees improve their personal skills and competences necessary to work independently and solve problems by themselves;
• the company has a better atmosphere because PDCA includes a teamwork which increases cooperation with colleagues and executives;
• the company increases its efficiency and learns how to respond to changes more flexibly, improve the quality of its products or services and reduce process wastes.

PDCA helps the company to constantly improve its operations and remain competitive.

In the Toyota company it is said that the manager has to look at the problem solution using the PDCA method and within 3 to 5 minutes, without any additional explanation, understand what the problem was, how it happened, what the root causes were, what actions were taken to eliminate it, what result the team achieved and how it standardised actions to ensure that the problem does not reoccur, with whom it shared best practices so that others would not repeat the same mistakes.

SMED (Single Minute Exchange of Die) is a Lean method with the aim to:

• reduce constantly generating waste during equipment changeover, when moving from the production of one product to the production of another product. The Lean methodology identifies seven wastes: waiting, inventory, transportation, motion, overproduction, defects and over-processing;
• increase the equipment load and productivity to minimise equipment downtime;
• cut the changeover time which affects lot sizes and inventory.

The SMED method is often compared to tyre change in Formula 1 races. When implementing changes under the SMED method, all team members must know exactly what and how they need to perform during the changeover.

Companies that apply the SMED method receive obvious benefits:

• reduced time of changeovers;
• production with less storage becomes a reality as it is possible to produce not only large quantities;
• equipment and production capacity increases without significant investment;
• reduced number and time of changeovers, increased product quality;
• safer changeovers;
• changeovers can be carried out not only by highly qualified employees;
• the company learns how to quickly respond to market changes.

Our experience shows that our clients have succeeded to reduce changeover times by 30–70%.

Standardised Work is a Lean method used for standardising operations performed by employees, thus ensuring stable processes and good results. Companies often face a problem where employees vary in their qualifications or skills, which directly affects their performance. To avoid this, it is necessary to standardise processes and work and to disseminate good practices within the organisation.

• process standards and best practices are established on work organisation, efficiency, effectiveness, quality and safety;
• based on the new standards and best practices, the existing employees receive training and new employees are trained faster;
• workplaces have visual instructions, employee skills maps, motion charts, etc;
• the opportunity to effectively apply other Lean methods (PDCA, Kaizen, etc.).

TPM (Total Productive Maintenance) is a Lean method focused on preventive maintenance of equipment to ensure a stable process. It creates an equipment maintenance system and divides the responsibility between technical/repair and production departments. Inspection instructions indicate when and what to do and who must do it to ensure proper maintenance.

The TPM system also helps measure OEE – the overall equipment efficiency. It is calculated according to the following formula: OEE = availability x performance x quality. It is a global production efficiency indicator that reflects not only the downtime, faults or work organisation (minor stops, speed loss), but also takes into account the impact of product quality. Effectiveness loses its meaning, if a poor quality product is produced. A World-Class overall equipment efficiency (OEE) score is 85%.

The TPM method ensures stable production and reduces:

• number of defects;
• number of accidents;
• unplanned downtime;
• speed loss;
• excessive equipment maintenance costs.

Kanban (“signboard, billboard”) is a tool to ensure a consistent flow of process value, reduce wastes and manage inventory efficiently. A visual signalling system combines individual processes, clearly showing employees when the order is to be made or where, when and which inventory or products are to be delivered to the necessary processes.

Kanban helps reduce inventory levels, increases inventory turnover, speeds up customer and supplier response times, improves the accuracy of production schedules and shortens the time of order execution.

The Kanban method evaluates the actual consumption of products and implements a pull system to ensure the required amount of inventory from one process to another.

Kanban is an important element of the JIT (Just-in-Time) system. A standardised system helps employees clearly share responsibilities, thereby facilitating their work and, at the same time, ensuring a reduction in inventory levels and avoiding additional planning and control.

Key points of Kanban:

• the previous process does not transfer poor-quality products to the next process;
• the next process takes exactly the same amount of products and the same products it has used;
• the previous process produces only the amount ordered by the next process.

So, Kanban helps the company:

• reduce the stock of products and materials;
• follow the JIT principle (produced only when needed);
• align production processes;
• create visual management and control;
• ensure continuous production flows.

Asaichi is a meeting-based system to manage the most important processes in the organisation. Brief and effective meetings help to continuously monitor key indicators, immediately escalate problems and assign people responsible for the identification and solution of them. Working towards a common goal increases cooperation amongst employees from different fields as well as develops discipline and responsibility. The Asaichi system is inseparable from other Lean methods and helps to successfully integrate them into the organisation’s operations.

Key points of Asaichi:

• meetings must be short and efficient;
• meetings should cover issues related to safety at work, quality, efficiency, wastes and Lean;
• meetings are intended to inform, appoint responsible persons and establish deadlines, but not solve problems;
• preparations must be done before the meeting – collecting and visualising information;
• meetings are attended by representatives from relevant departments;
• employees are trained and educated.

Asaichi is also a Japanese morning fish market where only the freshest production is sold. The same principle applies to meetings: effectively discussing the latest information from different activities of the organisation.

A Japanese term dojo (道場) means “place of the way”. Dojos were usually adjunct to temples. The term dojo primarily refers to a training and examination place for students, specifically for karate, judo or other martial arts.

The training of new employees is often hasty and non-systematic. At DOJO centres, employees train on training stands rather than in lines, where they can physically attempt to perform certain operations and get basic work skills.
This method is used for training new employees and refreshing the knowledge of old employees. Later, qualification examinations are held.

Asaichi is a meeting-based system to manage the most important processes in the organisation. Brief and effective meetings help to continuously monitor key indicators, immediately escalate problems and assign people responsible for the identification and solution of them. Working towards a common goal increases cooperation amongst employees from different fields as well as develops discipline and responsibility. The Asaichi system is inseparable from other Lean methods and helps to successfully integrate them into the organisation’s operations.

Key points of Asaichi:

• meetings must be short and efficient;
• meetings should cover issues related to safety at work, quality, efficiency, wastes and Lean;
• meetings are intended to inform, appoint responsible persons and establish deadlines, but not solve problems;
• preparations must be done before the meeting – collecting and visualising information;
• meetings are attended by representatives from relevant departments;
• employees are trained and educated.

Asaichi is also a Japanese morning fish market where only the freshest production is sold. The same principle applies to meetings: effectively discussing the latest information from different activities of the organisation.

Kaizen Teian in an office environment creates possibilities for each employee to participate in process improvement. The meaning of a Japanese word Kaizen is “continual improvement” or “change for the better”. Kaizen principle is to include all organisation employees into a continuous pursuit of improvement and making their working environment a better place. As a standard, all suggestions and ideas are commonly referred to as kaizen. Kaizen philosophy states that each suggestion must comply with very specific requirements:

• Kaizen aims to improve information protection (e.g. confidentiality), increase the quality of products or services and reduce wastes. The LEAN methodology identifies seven wastes: waiting, inventory, transportation, motion, overproduction, defects and over-processing.
• the Kaizen method proposes fundamental rather than superficial changes by identifying and removing the root cause of the problem so that it does not reoccur.
• Kaizen is becoming a new standard. One of the objectives of the Kaizen process is to make sure that all employees in the company make minor improvements and that processes and standards are consistently improved by standardising each of these improvements. With standardisation, suggestions no longer repeat and the company’s performance is constantly improving.

Kaizen training and the process created involve employees, enable them to deliver targeted and necessary ideas, thus contributing to the improvement of their workplaces, the facilitation of their work and the elimination of wastes (“muda”). In the long run, the implemented suggestions help the company to improve its operations, the working environment, the quality of products or services, and save resources.

We hear saying that only the production environment has opportunities to improve processes. This myth is disproved by the success of the Kaizen Teian process in design firms, service companies and public authorities. The Lithuanian experience shows that the implementation of this system increases the number of useful ideas from several dozens to more than a thousand per year.

PDCA (plan, do, check, act) is a Lean method for structural problem solving. Its main goal is to find the root cause of the problem and anticipate actions to eliminate it. A standard 8-step problem solving path using the PDCA form on an A3 sheet of paper:

• Making a brief, but accurate description of the problem. Getting familiar with the process at the onset of the problem, recording it on the form. Identifying a specific, time-defined and measurable goal.
• The Ishikawa diagram (also known as the fishbone diagram) is used for a causal analysis in four key areas and the identification of root causes.
• All valid root causes and actions to eliminate each of them are listed on the form.
• Responsible persons who will have to implement the actions planned are appointed.
• Deadlines are set.
• The result is measured.
• All changes are standardised. If needed, training is organised for employees in accordance with new standards.
• The form includes all the people who contribute to solving the problem. These people are acknowledged and the solution is shared with other interested teams.

Benefits of the PDCA problem solving method:

• it is easier for the company to solve problems, because there is a clear problem-solving structure and logic, clear and simple action plans, an understandable communication standard – everything fits on an A3 sheet of paper;
• employees improve their personal skills and competences necessary to work independently and solve problems by themselves;
• the company has a better atmosphere because PDCA includes a teamwork which increases cooperation with colleagues and executives;
• the company increases its efficiency and learns how to respond to changes more flexibly, improve the quality of its products or services and reduce process wastes.

PDCA helps the company to constantly improve its operations and remain competitive.

In the Toyota company it is said that the manager has to look at the problem solution using the PDCA method and within 3 to 5 minutes, without any additional explanation, understand what the problem was, how it happened, what the root causes were, what actions were taken to eliminate it, what result the team achieved and how it standardised actions to ensure that the problem does not reoccur, with whom it shared best practices so that others do not repeat the same mistakes.

The VACA method is used for analysing various administration processes (e.g. planning, purchasing, decision-making) in order to shorten the time of order execution and improve the quality of processes, services or products. The business process selected using the method is divided into different activities or steps. Each step is evaluated against four criteria: value creation, relevance, capacity and availability. The actual duration of the operation is measured and compared with the value-generating time. A detailed picture of the process makes it easier to identify problems and opportunities. After evaluating the priority of each of them, a specific action plan is developed. It also includes the assignment of responsible persons and deadlines. Later, the result is measured.

Key points of the VACA method:

• easier identification of problems: breaking down the process into small steps makes it easier to see obstacles;
• clear priorities and problem-solving steps: the Pareto chart is used for identifying the biggest problems and a simple and clear action plan ensures the end result;
• opportunity to apply other Lean methods, e.g. employees propose kaizen for solving a certain problem or taking advantage of the existing opportunities.

VACA helps identify non-value-added process steps, plan actions to improve them and establish their implementation priorities for the best result.

In the office, 5S defines a visual workplace, which includes electronic information (files, catalogues, servers, desktops, clouds, e-mail, etc.).

In the computer, 5S is a Lean tool which helps to apply 5S principles (sort, set in order, sanitation, standardise and sustain) in digital information storages. Clear standards establish how computer desktops should look, how to store and name files, etc.

It is believed that, if done correctly, 5S ensures that any information in the computer is found within 30 seconds.

In the office, 5S defines the visual workplace, which includes electronic information. Visual management, which is clear and uniform for all employees, allows you to quickly organise work, quickly identify wastes and take action to eliminate them. Work operations become simpler, cooperation stronger and work culture better.

Workspaces and electronic information are set in order by the following 5S steps:

Sort

• Sorting all the items and information in the workspace into necessary and unnecessary

Set In Order

• Removing all unnecessary items and information from the workspace

Sanitation

• Cleaning the workspace (where relevant)

Standardise

• Creating a visual standard for labelling and storing supplies, documents and information

Sustain

• Creating a system and discipline for regular audits. It maintains the standards set because non-conformities are immediately eliminated and opportunities for further improvement of standards identified

5S principles facilitate work in common workspaces, ensure easier inventory control and prevent from ordering any unnecessary materials and supplies.

For key performance indicators, visual management ensures fast response to deviations and the achievement of the organisation’s objectives.

5S introduced at the office involves employees in creating a pleasant and collaborative work environment and improving their work culture. In this environment, employees are quick to spot problems and can immediately take action to address them.

Standardised Work in the office is a Lean method which aims to find and establish best practices in performing recurring operations and actions, thus ensuring stable processes and high-quality results. Due to different experience and skills, employees often perform the same task differently, which directly affects performance. To avoid that, operations and processes are standardised and the best practices are shared within the organisation.

Key points of this method:

• focus only on recurring operations performed by employees rather than on all processes within the company;
• identifying wastes and non-conformities with the standard;
• opening opportunities to apply other Lean methods (5S, Kaizen Teian, PDCA, etc.).

This method allows the organisation to evaluate the work done, identify and eliminate non-value-added operations and create clear work standards. It helps to measure workload and calculate the necessary staffing needs for the task. Well-defined employee skills plans establish training needs.

Good work practices, including work organisation, productivity, quality and safety, are incorporated through visual management. This ensures fast training of new employees and the stability and quality of their performance. Visual management of performance indicators helps the organisation to respond immediately to any non-conformities and achieve the organisation’s objectives.

Standardised Work for executive leadership is a critical element of leadership, which ensures:

• correct and predictive progress of corporate processes through visual management and daily accountability;
• timely and effective planning of executive’s works through clear work standards and timelines.

In automotive terms, Standardised Work of executive leadership is an engine which makes the company move forward.
Companies whose executive officers have standardised their work can enjoy:

• consistency;
• reliability;
• continuous improvements;
• clear objectives;
• successful teamwork;
• engagement of executive officers in processes.

VSM (Value Stream Mapping) is a Lean method for analysing and planning process and information flows, determining where value is created for the customer and where the waste is generated.

Usually the VSM method is applied as follows:

• a map of the current situation is created using special symbols and methodology;
• bottlenecks and problem areas where processes do not create value for the customer are identified;
• a map of the target situation is drawn;
• actions aimed at addressing problem areas or obtaining additional benefits are planned and implemented.

Depending on the process, the VSM method can help companies to:

• reduce inventory levels;
• shorten the delivery time of raw materials;
• shorten the time of order execution;
• cut storage, transportation and maintenance costs.

Whatever the product for the customer is, there is always a flow of a certain value. The aim of VSM is to find this value and increase it.

Lean leadership is an important element of the Lean system. The primary goal is to involve every employee in taking the initiative to solve problems and improve their work. Another goal is to ensure that the work of each employee is focused on value creation for customers and the well-being of the organisation.

Toyota’s chairman Fujio Cho offers three keys to Lean’s leadership:

1. Go see: senior management must spend time on the front lines;
2. Ask “why”: use the “why” technique daily;
3. Show respect: respect your people.

Driving forces behind Lean leadership:

• Setting goals
  • Implementing the strategy
  • Establishing clear directions
  • Explaining the goals in everyday activities
  • Explaining expectations
• Interconnection
  • Effective communication
  • Team-building
  • Motivation
• Empowerment
  • Time management
  • Setting priorities
  • Delegation
  • Problem solving
  • Decision-making

A leader does not expect any benefits when delegating tasks to others – a leader actively participates in the implementation of Lean.

A3 planning is a Lean method allowing managers, appointed teams and employees plan their activities, achieve their goals and control the results. Practice shows that a report of several dozen slides can be placed on an A3 sheet of paper, thus significantly shortening the time needed for its presentation to the management.

This method is applied using an A3 sheet of paper with the following standard parts:

1. establishing the objective;
2. describing the current situation in detail;
3. describing the future situation in detail;
4. planning actions to achieve the future situation, assigning responsible persons;
5. measuring the results and comparing them to the target.

The A3 method:

• enhances logical thinking;
• facilitates decision-making (when to do/what to do);
• standardises communication methods;
• facilitates inter-functional management;
• facilitates the problem-solving process;
• strengthens teamwork, trains employees.

A3 is just a paper size, but the important thing is not the size, but the way of thinking. A3 planning began at Toyota in the 60s as the Quality Circle problem solving report-out format. At Toyota, it evolved to become the standard format of thinking for problem solving, proposals, plans, status reviews and strategic plans. What is important is not the format, but rather the process and thinking behind it.

Obeya (from Japanese “large room” or “war room”) is a project management tool used by Toyota as a component of the Lean system.

Conceptually akin to traditional “war rooms,” an Obeya contains maps, visually engaging charts and graphs depicting such information as timing, milestones, problems and actions.

During the product and service development, all individuals involved in managerial planning meet in Obeya to speed communication and decision-making. This is intended to reduce “departmental thinking” and improve on methods like email and social networking.

Components of the Obeya room:

• a projector or other device for product reviews;
• project goals;
• expected result;
• indicators;
• project timelines;
• a scheme with a detailed project specification
• a problem stand.

At Toyota, vehicle development is possible in significantly less than 20 months; by comparison, the average for other car makers is 36 months.

Hoshin Kanri (strategy deployment) is a Lean method to ensure the management or control of the company’s strategic direction. It is also a management method to support the organisation’s growth and development processes. Hoshin = policy, plan, direction. Kanri = management, administration.
The Hoshin Kanri methodology was developed in 1965 by Bridgestone Corp. (Japan), but from 1961 Toyota used a similar performance management system.

Hoshin Kanri shapes the focus and attention to goals, works on leadership thinking and harmonises goals across the organisation.

The Hoshin Kanri is system is created as follows:

1. basic assumptions: vision, mission principles and values of the company;
2. strategic planning of the company in the medium and long-term perspectives;
3. internal breakdown into objectives of directors, unit heads, department heads and, finally, employees.

Hoshin Kanri is a management system for defining the appropriate direction of the organisation’s activities and effectively implementing the necessary actions and outcomes. The company’s strategy and strategic direction are based on the A3 method.