What Is Lean?

Lean is a type of manufacturing and a way of organizing a business. It is both a philosophy and a collection of specific methods. Many people are familiar with the individual methods, but pinning down the essence of lean can be more difficult. In this article, I’ll explain how lean came about, what its core philosophy is and how the different methods fit into its fundamental principles.

Where Does the Term Lean Come From?

In the 1980s, American and European manufacturers were struggling to compete with Japan. Japanese productivity was much higher, and nobody in the West understood why. In 1984, MIT was given funding for a five-year study to understand how automotive production methods differed around the world. This project, the International Motor Vehicle Program (IMVP), involved two stages: First identify all the operations required to build a car, and then visit manufacturers all around the world to understand how they performed these operations.

The IMVP found that the Toyota Production System (TPS) was considerably more efficient than other manufacturing systems, and its principles were already being adopted by many Japanese companies. These principles were unknown in the West at the time. The researchers called them lean. They described their findings in the book The Machine that Changed the World and asserted that lean could be transformational in every industry around the world.

The Toyota Production System

To understand the essence of the lean philosophy, it is best to start by understanding how it came about. In the period immediately following the Second World War, Japanese manufacturing was finding it very hard to compete. Toyota was a small car manufacturer run by the Toyoda family. In 1950, Eiji Toyoda went on a fact-finding mission at Ford’s Detroit plant. This factory was producing more cars in one day than Toyota had ever produced. Eiji saw that they could not compete directly by adopting mass production, but he also identified a lot of waste within Ford’s approach. For starters, Toyota had to produce small batches of different types of vehicle. Additionally, the strong unions in Japan would not accept the harsh working practices that immigrants to America were subjected to. However, the biggest problem was that to compete using mass production required massive capital investment.

Ford was using 300 stamping machines for each model of car, with each machine setup to stamp one of the cars body panels. One of those machines was a serious investment for Toyota. There was no way they could afford to buy enough machines to make all of the different vehicles required in the Japanese market. When Eiji explained this problem to his chief engineer, Taiichi Ohno, he came up with a simple solution. If they could dramatically reduce the tool change time on the stamping machines, they could produce all the panels on just a few machines. They would produce a small batch of each panel in turn. They developed a system of rollers and adjustment screws to enable these tool changes. Over a 10-year period, this reduced the changeover time from a day to just three minutes.

By reducing changeovers to a negligible time, they were able to achieve the same efficiency as a larger plant with much lower capital investment and smaller production volume. Surprisingly, there were other benefits that meant they could actually make cars more cheaply than the larger factories. First, they didn’t have the cost of carrying inventory. Most significantly, quality was improved. Because the machine operators were much more intimately involved in machine setup, they detected any errors much more quickly and were able to correct mistakes almost instantly.

The foundations of the Toyota Production System (TPS) had been laid. Flexible machines kept the efficiency of machine-made interchangeable parts but were not operated by unskilled workers doing repetitive jobs. Instead, skilled workers were engaged in a range of tasks making many different components, as well as setting machines, checking for quality and identifying the root cause of any defects. Anyone who wasn’t adding value to the product started to be viewed as “muda”—waste. Jobs such as inspector, foreman, cleaner and repair man were all replaced by flexible teams of production workers. These teams were responsible for their section of the assembly line, including doing their own cleaning, repairs and quality checking. The team leader worked with the team to produce parts and complete subsidiary functions.

Toyota adopted the principle of transferring responsibility to those adding value throughout its business. Subcontractors were organized into tiers so Toyota only dealt directly with “tier 1” suppliers. The tier 1 suppliers were responsible for managing tier 2 suppliers and often also for the design of complete sub-systems. Since the sales force were the ones generating the sales, which involved day-to-day contact with customers, they were given responsibility for gathering marketing data about customers’ preferences.

Ohno continued to look for sources of waste in the production system. He saw that if a defective part was allowed to continue down the production line, then the mistake would be repeated, increasing the waste. The only way to avoid this was to deal with the problem immediately. Every worker was told to look for defects and given access to a cord that would stop the entire production line. When a worker encountered a problem they couldn’t immediately fix, they would stop the line. The whole team would then come together to fix the problem. They would ask the five whys—a simple technique to identify the root cause. Once the root cause was identified, they would look at how it could be eliminated so the same problem would not happen again, a process they called “poka yoke,” meaning failure proofing.

Beyond Division of Labor

From the beginnings of human civilization up until the birth of lean manufacturing, there has been a consistent trend toward the division of labor and increasing specialization of the workforce. Lean bucks this trends with its emphasis on teamwork and shared responsibility.

The first division of labor, seen in even the earliest societies, could be considered to be that between “men’s work” and “women’s work”. As societies became organized into larger cities and nations, the division of labor continued with the emergence of distinct professions such as farmers, craftsmen, merchants, priests and rulers. Initially, goods were made by skilled craftsmen who were able to produce a complete product using highly adaptable tools. However, as early as 370 BC Xenophon wrote of increasing specialization leading to greater productivity.

“In a small city the same man must make beds and chairs and ploughs and tables, and often build houses as well; and indeed he will be only too glad if he can find enough employers in all trades to keep him. Now it is impossible that a single man working at a dozen crafts can do them all well; but in the great cities, owing to the wide demand for each particular thing, a single craft will suffice for a means of livelihood, and often enough even a single department of that; there are shoe-makers who will only make sandals for men and others only for women. Or one artisan will get his living merely by stitching shoes, another by cutting them out, a third by shaping the upper leathers, and a fourth will do nothing but fit the parts together. Necessarily the man who spends all his time and trouble on the smallest task will do that task the best.”Cyropaedia: the education of Cyrus, Xenophon c370 BC.

The division of labor was increased significantly during the industrial revolution. Special-purpose production machinery enabled repetitive tasks carried out by unskilled works to replicate the work of skilled craftsmen. This type of highly specialized division of labor is famously described in 18^th century pin production by Adam Smith, although he noted that in more complex industries, “the labor can neither be so much subdivided, nor reduced to so great a simplicity of operation.”

The armory practice manufacturers in America replaced the senor craftsmen who had previously maintained quality with inspectors, maintenance engineers and foremen who didn’t actually make anything themselves. Mass production took the division of labor to its ultimate conclusion with unskilled assembly workers each fitting a single component on a moving assembly line.

Lean manufacturing finally breaks this trend, with skilled teams of works all actively engaged in producing a product, as well as many subsidiary functions such as maintaining machines and checking quality. It is only because of flexible automation that this can be made efficient. It is possible to turn the normal view of lean on its head and argue that nobody is adding value in a lean factory—the machines are doing all the real work, and the people are purely doing the non-value added functions such as maintenance, production planning and quality improvement.

A Brief History of Quality Engineering

Lean uses statistical tools for monitoring processes and getting to the root cause of problems. The origin of these methods can be traced back to before the Toyota Production System. In fact, they have their roots in American manufacturing. Their development really began with American arms manufacturers in the early 19^th century.

To cut a long story short, American small-arms manufacturers were some of the first to realize the benefits of interchangeable parts. By making parts with consistent dimensions, they were able to replace skilled craftsmen with machine tools, arranged in lines, which would carry out successive operations. Each machine was set using gauges, and parts were inspected at the end of the line. This waswhen quality started to be defined in terms of the dimensional variation between parts.

In 1924, Walter Shewhart, working at Weston Electric, sent a one-page memo defining all the basic principles of Statistical Process Control (SPC). He stated that process variation could be divided into chance causes, which produced unavoidable random variability and assignable causes, causing avoidable variability due to faults in machinery, operator errors, defects in materials, etc. He defined a process as being in “statistical control” when assignable causes were negligible, and made achieving this a fundamental aim of SPC. He also showed how control charts could be used to graphically understand process variation.

These SPC methods were adopted within the US WWII “War Standards.”W. Edwards Deming, a student of Shewhart, became the statistical advisor to Japanese industry while under the U.S. occupationin the 1950s and 1960s. Many Japanese manufacturers enthusiastically adopted these methods. By the 1980s, they were more widely used in Japan than in America.

Lean Today

According to Womack et al, the lean plant has two key organizational features, “It transfers the maximum number of tasks and responsibilities to those workers actually adding value to the car on the line, and it has in place a system for detecting defects that quickly traces every problem, once discovered, to its ultimate cause.”

Organizations that claim to be lean often only pay lip service to these ideals. Specialized nonvalue-adding job functions abound, and little real responsibility is given to production workers. It was once a requirement that even the most senior managers joining Toyota had to spend two years working hands-on the production line. Many companies now make this two days at most. It is also very unusual for production to stop for a single defect.

Where the transfer of responsibility has perhaps remained strongest is within supply chains. Prime manufacturers only deal directly with tier 1 suppliers who in turn have complete responsibility of managing their supply chain. The tier 1 suppliers are also often given considerable responsibility of the design of components and sub-systems, and the development of manufacturing processes.

Today, lean is often seen more in terms of a set of methods for eliminating waste through the identification of defects causes and error proofing:

• Heijunka (Level Scheduling): The deliberate scheduling of small batches, which requires frequent machine changes but reduces lead times and inventory.
• Single-Minute Exchange of Die (SMED): Systematic way of reducing tool changeovers to less than ten minutes.
• Andon: A system used to notify workers in a production area that a fault has been detected. This may be activated by a worker pulling a cord or pushing a button, or it may be automatically triggered by a production machine. This may result in a red light flashing or a siren sounding.
• Root Cause Analysis: A method used to get to the underlying reason of why a problem happened. For example, your car might not start because the battery is flat, but the underlying cause was a lack of maintenance.
• Five Whys:A simple method for root cause analysis in which you simply ask why did the fault occur and then why did that occur? You would normally get to the root cause by the fifth “why” if not before. In the example of your car not starting, you might identify that the battery is flat because the alternator is faulty, and that is because you didn’t service the car.
• Poka-Yoke: Error proofing a process is normally carried out after root cause analysis to remove the cause.
• Kaizen (Continuous Improvement): This is the principle of working together to incrementally improve the process.
• Gemba: This term simply mean the real place and is used to remind workers to get out of the office and visit the factory floor where the real manufacturing is happening.
• Value Stream Mapping: A value stream is made up of the steps or processes required to turn raw material into a product of value to the customer. Mapping this value stream means drawing it as a single diagram. This gives valuable insight and can be used to remove non value adding operations.
• Five S: A way of organizing the workplace in five steps, normally translated from Japanese as sort, set in order, shine, standardize and sustain. It aims to reduce wasted time lost by hunting for tools and being distracted by unnecessary items.
• Kanban: A way of scheduling work using a board with work cards. Kanban is the Japanese word for a sign or billboard. The term Kanban Board is often used in the West. Kanban is a pull system and simple visual way of avoiding excessive buildup of work.
• Control Chart: A graphical way of viewing variation in production processes and identifying when a process is going “out of control,” signifying that products will soon be out of specification. This is one of the methods that has been adopted from the earlier practice of Statistical Process Control.

There isn’t time to go into detail about all of these methods in this article, but look out for future articles were I will explain each method in full.