One fundamental principle of Lean is to harness the creativity of all individuals to generate ideas and processes that enhance the workplace. It’s not about pushing people to work harder, faster, or longer.
There are five key ideas supporting Lean process improvement. Let’s take a look at those now.
Value
According to the Oxford English Dictionary, value is defined as “the regard that something is held to deserve; importance or worth.” In the context of Lean, value refers to the desired outcomes of a product, service, or process—essentially, what is worthwhile. Any process should generate more value than it consumes. For instance, if producing a widget costs $20 but sells for only $15, it does not create value. There are two primary ways to enhance value: increasing revenue or reducing costs, both achievable through Lean methodologies.
Waste
The second key concept of Lean is waste, which directly contrasts with value. Waste encompasses anything undesirable or lacking worth. The elimination of waste is foundational to most Lean practices. Taiichi Ohno, in his book Toyota Production System, defines waste in production as “all elements that increase cost without adding value,” such as excess personnel, inventory, and equipment.
Variation
Variation exists in all processes, even when it is unwelcome. For example, while the Earth takes approximately 365.25 days to orbit the Sun, this is merely an average; actual time can vary slightly. In production, variations lead to waste, making it essential to identify and address their causes. Variations typically stem from three main sources:
- System Variations: These arise from common, random, or systemic causes. To minimize these, one must identify and rectify the root cause of the variation.
- Special Cause Variations: These result from specific events, such as a competitor launching a lower-priced product, which impacts your sales. Understanding these causes can help mitigate their effects.
- Structural Variation: These occur due to cycles or long-term trends, like seasonal product sales. While you can’t eliminate such variations, you can implement strategies to lessen their impact.
Complexity
Complexity can also contribute to waste, characterized by four elements:
- Size: The number of parts in a process.
- Volume: The scale of the process.
- Density: The relationship between size and volume.
- Time: The duration required to complete a product cycle.
Simplifying these components can reduce complexity, making processes more efficient.
Continuous Improvement
The final concept is continuous improvement. Lean practices should not be viewed as a one-time effort but as an ongoing cycle. Commitment to continuous learning and knowledge management is crucial, facilitated through organizational problem-solving, sustained Lean initiatives, and the PDSA (Plan-Do-Study-Act) cycle, which we will explore later in the course.
