Lean Thinking

Lean Thinking

While exploring Lean, Lean & Agile… I came across this great  compilation ‘Lean Primer – by Craig Larman & Bas Vodde‘. I found each word of the research work to be insightful to understand the ‘Lean Thinking’  the Toyota Way. This article is completely adaptation from the same compilation.

Does your organization measure “productivity” or “efficiency” in terms of how busy people are, or time spent—watching the runner? Or, in terms of fast delivery of value to the real customer—watching the baton? What is the value-to-waste ratio in your work? And what are the impediments to the flow of value—and how can people feel inspired to continuously strive to improve that flow? Lean thinking addresses this. Also Lean Principles reflect the Lean Philosophy at work.

Lean thinking is a proven system that applies to product development and production, as evidenced by Toyota and others. And although most often applied to products, it is also used in service areas—both within Toyota and in domains such as health.

Lean (or lean thinking) is the English name—popularized by MIT researchers — to describe the system now known as the Toyota Way inside the company that created it. Lean is heavily based on Toyota Production System (TPS)

Wakamatsu and Kondo, Toyota experts, put it precisely:

“The essence of [the Toyota system] is that each individual employee is given the opportunity to find problems in his own way of working, to solve them and to make improvements.”

What are the pillars of lean?

Toyota president Gary Convis:

“The Toyota Way can be briefly summarized through the two pillars that support it: Continuous Improvement and Respect for People. Continuous improvement, often called kaizen, defines Toyota’s basic approach to doing business. Challenge everything. More important than the actual improvements that individuals contribute, the true value of continuous improvement is in creating an atmosphere of continuous learning and an environment that not only accepts, but actually embraces change. Such an environment can only be created where there is respect for people—hence the second pillar of the Toyota Way.”

And from Toyota CEO Katsuaki Watanabe:

The Toyota Way has two main pillars: continuous improvement and respect for people. Respect is necessary to work with people. By “people” we mean employees, supply partners, and customers. …We don’t mean just the end customer; on the assembly line the person at the next workstation is also your customer. That leads to teamwork. If you adopt that principle, you’ll also keep analyzing what you do in order to see if you’re doing things perfectly, so you’re not troubling your customer. That nurtures your ability to identify problems, and if you closely observe things, it will lead to kaizen—continuous improvement. The root of the Toyota Way is to be dissatisfied with the status quo; you have to ask constantly, “Why are we doing this?”

 

To understand Lean Thinking (Toyota Way) better, We need to understanding the Lean Thinking House. The diagram below summarizes the modern Toyota Way as a “lean thinking house” with the major elements of Lean Thinking:

Lean Thinking House

Lean Thinking House

1. Lean Goal:

The global or system goal of lean thinking is to quickly deliver things of value (to the customer and society) in shorter and shorter cycle times of all processes, while still achieving highest quality and morale levels— flow of value to the customer without delay.

How does Toyota achieve the “global goal” in their two main processes, product development and production?

Development—out-learn the competition, through generating more useful knowledge and using and remembering it effectively.

Production—out-improve the competition, by a focus on short cycles, small batches and queues, stopping to find and fix the root cause of problems, relentlessly removing all wastes (waiting, handoff, …).

2. Lean Foundation: Management Support

Management applies and teaches lean thinking, and bases decisions on this longterm philosophy.

Management support is the key. Toyota invest a lot to build a great foundation of lean thinking. most new employees first go through several months of education before starting other work. During this period they learn the foundations of lean thinking, they learn to see ‘waste’ (a  subject we will return to), and they do hands-on work in many areas of Toyota. In this way, new Toyota people…

– learn problem solving through hands-on improvement experiments
– learn to see how lean thinking applies in different domains
– learn kaizen mindset (continuous improvement)
– appreciate a core principle in Toyota called Go See and gemba

Go See means people—especially managers—are expected to “go see with their own eyes” rather than sit behind desks or believe that the truth can be learned only from reports or numbers. It is related to appreciating the importance of gemba—going to the physical front-line place of value work where the hands-on value workers are.

The management culture is managers act as teachers of thinking skills. Toyota managers are educated in lean thinking, continuous improvement, root cause analysis, the statistics of variability, and systems thinking —and coach others in these thinking tools. For successful adoption of lean, there are management qualities needed for any meaningful, sustained success.

3. Pillar One: Respect For People

Respect for people sounds nebulous, but includes concrete actions and culture within Toyota. They broadly reflect respect for and sensitivity to morale, not making people do wasteful work, real teamwork, mentoring to develop skillful people, humanizing the work and environment, safe and clean environment (inside and outside of Toyota), and philosophical integrity among the management team.

The reach of this pillar is internal, external and all (employee, contractor, vendors, clients, users) in the system.

4. Pillar Two: Continuous Improvement

Continuous Improvement is based on many ideas that brings strength to the house and brings the innovation and opportunity to do better all the time and by with contribution from anyone and everyone.

Go See is a principle not found in many management cultures. This principle is described as critical and fundamental.

Go to the source [the place of real value work—gemba] to find the facts to make correct decisions, build consensus, and achieve goals at our best speed. [Toyota01]

In a lean-thinking culture, all people, but especially managers—including senior managers— should not spend all their time in separate offices or meeting rooms, receiving information via reports, computers, management reporting tools, and status meetings.

Rather, to know what is going on and help improve (by eliminating the distortion that comes from indirect information), management should frequently go to the place of real work (Gemba) and see and understand for themselves.

Kaizen is both a personal mindset and a practice. As a mindset, it suggests “My work is to do my work and to improve my work” and “continuously improve for its own sake.”
More formally as a practice, kaizen implies:
1. choose and practice techniques the team has agreed to try, until they
are well understood—that is, master standardized work
2. experiment until you find a better way
3. repeat forever

Five Whys (usually written 5 Whys) is a simple and widely used tool used in kaizen. It helps develop problem solving and root cause analysis skills. In response to a problem or defect, a team considers “why?” at least five times.
The important point of 5 Whys is not the technique or the number 5, but that it is part of the “stop and fix” root-cause problem-solving mindset and culture pervasive at Toyota. People are taught to become deep problem solvers; to not live with problems, but to think things through deeply.
There is also a connection between Go See and 5 Whys: It is easy for people to guess wrong or weak answers unless they see the facts at the real place of the problem.

Improvement by Banishing Waste

Value—The moments of action or thought creating the product that the customer is willing to pay for. In other words, value is defined in the eyes of the external customer. Imagine a customer was observing the work in your office. At what moments would they be willing to reach into their pocket, pull out money, and give it to you?

Waste—All other moments or actions that do not add value but consume resources. Wastes come from overburdened workers, bottlenecks, waiting, handoff, wishful thinking, and information scatter, among many others.

One kind of analysis in lean thinking is to estimate all waste and value moments “from concept to cash.” From such a time line one can sum the value time and lead time (concept to cash), and then calculate

value ratio = total-value-time / total-lead-time

Study and anlysis with many product development groups, the value ratio is found to be around 7 percent. In other words, 93 percent or more of the time in development was waste time.

In Toyota Way (Lean Thinking), the focus is on eliminating (Banishing) waste to improve the value ratio.

5. 14 Principles

The two pillars, respect for people and continuous improvement, are not the entire picture—literally or figuratively. There are other potent lean principles that form the overall system of lean, some of which recapitulate elements in the two pillars.

1. Base management decisions on a long-term philosophy, even at the expense of short-term financial goals.

2. Move toward flow; move to ever-smaller batch sizes and cycle times to deliver value fast & expose weakness.

3. Use pull systems; decide as late as possible.

4. Level the work—reduce variability and overburden to remove unevenness.

5. Build a culture of stopping and fixing problems; teach everyone to methodically study problems.

6. Master norms (practices) to enable kaizen and employee empowerment.

7. Use simple visual management to reveal problems and coordinate.

8. Use only well-tested technology that serves your people and process.

9. Grow leaders from within who thoroughly understand the work, live the philosophy, and teach it to others.

10. Develop exceptional people and teams who follow your company’s philosophy.

11. Respect your extended network of partners by challenging them to grow and helping them improve.

12. Go see for yourself at the real place of work to really understand the situation and help.

13. Make decisions slowly by consensus, thoroughly considering options; implement rapidly.

14. Become and sustain a learning organization through relentless reflection and kaizen.

6. Lean Product Development Practices

The two pillars and 14 principles are core to lean thinking. However, there are other principles and practices to outlearn the competition, specific to lean product development.

Outlearn the Competition:
Lean product development (LPD) focuses on creating more useful knowledge and learning better than the competition. Also, leveraging that knowledge and not wasting the fruits of the effort by forgetting what has been learned.

A general lean strategy, based on a simple insight from information theory, is to increase the value of information created and lower the cost of creating knowledge.

Higher-value information—Several ideas help. For example:

  • Focus on uncertain things—Choose to implement and test unclear or risky things early. The value of the feedback is high precisely because the outcomes are less predictable—predictable things do not teach us much.
  • Focus on early testing and feedback—Information has a real cost of delay, which is one reason why testing only once at the end of a long sequential cycle—motivated by the misguided local optimization of believing that it will lower testing costs—is almost always unskillful.

Lower-cost information— Adopting lean principles ends up reducing the overhead cost of processes. In fact, one can broadly look at these methods as succeeding by lowering the cost of change—competing on agility or flexibility. And that includes lowering the cost of learning. For example:

  • Focus on large-scale test automation—to learn about defects and behavior. The cost of frequently re-executing automated tests is usually insignificant in comparison to the valuable early feedback.
  • Focus on frequent or continuous integration—to learn about defects and lack of synchronization. And by integrating frequently in small batches, teams will drive down the average overhead cost by the “lake and rocks” effect.
  • Focus on mentoring from experts and spreading knowledge—to reduce the cost of rediscovery.

CONCLUSION

As you investigate lean thinking, it is easy to see that it is a broad system that spans all groups and functions of the enterprise, including product development, sales, production, service, and HR. Lean applies to the enterprise. Also read the broad Lean Principles.
Lean thinking is much more than tools such as visual management or queue management, or merely elimination of waste. As can been seen at Toyota, it is an enterprise system resting on the foundation of manager-teachers in lean thinking, with the pillars of respect for people and continuous improvement. Its successful introduction will take years and requires widespread education and coaching.

Reference:

http://www.leanprimer.com/downloads/lean_primer.pdf
Copyright (c) Craig Larman & Bas Vodde 2009

RECOMMENDED READINGS

❑ Dr. Jeffrey Liker’s The Toyota Way is a thorough cogent summary from a researcher who has spent decades studying Toyota and their principles and practices.
❑ Inside the Mind of Toyota by Professor Satoshi Hino. Hino spent many years working in product development, followed by an academic career. Hino has “spent more than 20 years researching the subject of this book.” This is a data-driven book that looks at the evolution and principles of the original lean thinking management system.
❑ Extreme Toyota by Osono, Shimizu, and Takeuchi is a well-researched analysis of the Toyota Way values, contradictions, and culture, based on six years of research and 220 interviews. It includes an in-depth analysis of Toyota’s strong business performance.
❑ Lean Product and Process Development by Allen Ward and The Toyota Product Development System by Liker and Morgan are useful for insights into development from a lean perspective.
❑ The Birth of Lean, edited by Shimokawa and Fujimoto, conveys a clear sense of the mindset, principles, culture, and personalities behind lean thinking.
❑ Toyota Culture by Liker and Michael Hoseus. Hoseus has worked both as a plant manager and HR manager at Toyota, bringing an insider’s in-depth understanding
to this book on the heart of what makes a lean enterprise work.
❑ Lean Thinking by Drs. Womack and Jones is an entertaining and well-written summary of some lean principles by authors who know their subject well. As cautioned earlier, it presents an anecdotal and condensed view that may give the casual reader the wrong impression that the essential key of lean is waste reduction rather than a culture of manager-teachers who understand lean thinking and help build the pillars of respect for people and continuous improvement with Go See and other behaviors.
❑ The Machine That Changed the World: The Story of Lean Production by Womack,  Jones, and Roos was based on a five-year study at MIT into lean and the Toyota system.
❑ Workplace Management by Taichii Ohno is a short book by the creator of the Toyota
Production System. It was out-of-print but has been recently re-translated by Jon Miller and is now available. The book does not talk much about TPS but it contains a series of short chapters that show well how Taichii Ohno thought about management and lean systems.

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