Lean is a management philosophy aimed at reducing waste—a philosophy that, to be effective, must become “second nature” to the way we work. Lean’s roots can be traced to the early 1900’s, although the term was coined in the early 1990s. The following illustrates Lean’s evolution:
There are several elements to Lean, but four fundamental principles will help to kick-start a Lean initiative. They are:
Here’s how each principle contributes to your organization’s Lean initiative.
Takt time (takt: German for “beat” or “measure,” refers to music) tells organizations how many products or services must be produced/delivered based on customer demand. The formula to calculate takt time is:
Takt time = time available / customer demand
This equation can be used for any frequency of time and customer demand; however, typically, daily amounts are used.
When you know how much time is available to meet customer demand, you know exactly how much time is required for each product or service. Knowing takt time allows you to not only see the waste, but it allows you to see the strategic opportunities as well.
For example, assume that one department employs three staff to process orders. You calculate that the department has 1,080 minutes of available time (i.e., three employees each available for 480 minutes per day). You also calculate that it takes 30 minutes to process each order and there are 25 orders each day.
Therefore, 30 minutes multiplied by 25 orders equals 750 minutes—but your staff is available for 1,080 minutes. The strategic opportunity is to determine what to do with the remaining 330 minutes. Do you reduce staff working hours, reallocate staff to another area, determine how to increase customer demand, etc.?
The next principle, standard work is about ensuring that all work done is based on written standards and procedures. This is necessary to ensure that anyone doing the job does it in exactly the same way (i.e., standard work). Having procedures in place to ensure standard work is the basis for all improvement in any organization.
The third principle, one-piece flow is a difficult concept for organizations. This is because most organizations “think” along traditional functional hierarchies. In a one-piece flow system, all services relating to the value stream are co-located in one department based on the logical sequence of work.
As an example, consider parking tickets. In the traditional organization, parking tickets are issued by one department (e.g., Streets and Transportation), payment is collected by another (e.g., Finance) and challenges or complaints about parking tickets are handled by yet another department (e.g., Bylaw Disputes).
In a one-piece flow system, all the work relating to parking tickets is handled in one place by people who work side-by-side, e.g., Parking Department. Therefore, instead of the parking ticket process taking months to complete, it can be completed within days.
The final key fundamental principle, pull systems are simple; however, they can be difficult to implement. In a pull system, products and services are provided to the customer when the customer calls for them. Therefore, the organization only starts to fill customer orders at the time they are ordered and not before—drawing on inventory as required.
In a traditional organization with a push system, products and services are completed based on anticipated customer demands. In this instance, inventory becomes a real problem, not only in terms of space utilization for inventory storage, but also the associated costs of carrying (and, perhaps, destroying) inventory.
As you implement Lean in your organization, keep in mind these fundamental principles and return to them when things go off-track. No matter the nature of your organization—private or public—treat all the work you do as a business and the principles of Lean will be much easier to apply.