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Monday, August 7, 2017

The Secret Origin Of Lean Manufacturing

Lean manufacturing is a systematic method for waste minimization ("Muda") within a manufacturing system without sacrificing productivity.

Lean manufacturing also takes into account waste created through overburden ("Muri") and waste created through unevenness in work loads ("Mura" - inconsistency).

Working from the perspective of the client who consumes a product or service, "value" is any action or process that a customer would be willing to pay for.

Waste, in our look at lean manufacturing, is anything (and I mean anything from wasted meetings, production line stuff, labor, etc,) which does not advance the process, and everything that does not increase added value. 

Those bracketed terms are Japanese, and for the record, are listed as such in the English Wikipedia entry on lean manufacturing.

Why? Because try as some countries might want everyone to buy their own products—buy American, for example—any profitable business is utilizing lean manufacturing aspects to add value while removing everything that is not of value.

It is, of course, because we’re on THIS blog-site, a Japanese concept.

Have you ever heard of Ohno Taiichi (surname first)? I hadn’t until earlier this morning when I glanced a Twitter tweet featuring words attributed to him:

“Data is, of course, important in manufacturing, but I place the greatest emphasis on facts.”

Ohno Taiichi (大野耐) born February 29, 1912 in Dalian, China is the person considered to be the father of the Toyota Production System… or what everyone else called Lean Manufacturing.

Ohno Taiichi
While everyone would probably agree that what made Toyota a great automobile manufacturing company was its ability to produce automobiles that people wanted to drive and buy—that’s obvious to ordinary people like myself—but there’s always that part of the equation the general public fails to recognize.

In 1992, the Toyota Motor Corporation first published an official description of its Toyota Production System (later revised in 1998).

The Toyota Production System is based upon two core concepts:

1) JIT (Just-In-Time), whereby a manufacturing facility only makes what is needed , when it is needed, and only in the amount that is needed. IE. Don’t make more than is required;
2) Jidoka (Autonomation): yes, Autonomation is spelled correctly, but it is essentially intelligent automation, or automation with a human touch. This means no production line workers, but human are present in a supervisory role to oversee the automated machinery’s production in a “quality-control” manner.

I know, I know… we’re getting technical here, but bear with me… this is how the manufacturing sector—for the most part—works, or rather when it works best in today’s highly competitive automotive (not automobile) sectors. Gone are the days when you could trade three chicken eggs for an iron horseshoe - it seems fair, to me, if you, the blacksmith wants to eat chicken eggs that evening. 

What really sucked about the horseshoe example I concocted above, is that the blacksmith had more than likely created a set of four horseshoes, but only sold one… this is the blacksmith being proactive, sure, but how long does his product sit on the shelf? How much smithy-shop shelf space does it take up? What if the next customer comes in and asks for a pair of iron gauntlets (gloves), but because he used the iron to make the horseshoes nobody asked for, he is now short of the required iron ore to make the gauntlets meaning there is a delay while he gets more raw product in.

This is what Lean Manufacturing proposes to avoid.

Want a different example?

Let’s say you own a restaurant?

Everyday for two weeks straight, you get a lunchtime crowd order of 200 hamburgers.

To avoid the crush and overburdening of your four line cooks, you begin cooking the 200 hamburgers at 10AM, creating the last one just in time for that lunchtime rush.

Now… for whatever reason—you only get a day’s order for 180 hamburgers. What happens to those 20 extra burgers you had cooked earlier?

Waste.

Maybe these guys will sell-out with their burger product... maybe they won't. Why waste the energy and resources on "maybe"?
A waste of resources - meat, chef time, even fuel for whatever cooking method you are using, to say nothing of a carbon footprint that needed not be as large that day. I didn’t even mention how the you, the restauranteer, may have over-estimated the market and purchased in advance a week’s supply of buns, and a six-month supply (based on the 200 daily order) of condiments. If the 180 order is the new norm, you may not require four line cooks… maybe just three who work harder.

This will, in the long run provide the eatery with reduced overhead costs… and even with the reduction in actual sales, could result in greater overall profits. You save on labor, ingredients and more. You could even pass the savings on to the customer, which could increase your customer base when word gets out that you have a great product at a great price.

For the Tokyo Production System, aka Lean Manufacturing, there are eight types of manufacturing inconsistencies (mura) that are important to avoid:
  1. Waste of overproduction (largest waste);
  2. Waste of time on hand (waiting);
  3. Waste of transportation;
  4. Waste of processing itself;
  5. Waste of stock at hand;
  6. Waste of movement;
  7. Waste of making defective products;
  8. Waste of underutilized workers
Basically, avoid waste as much as possible… reduce it by all means, eliminate it it all is preferable.

While I provided examples of a smithy and a restaurant, the origins of lean manufacturing are actually based on American supermarkets.

Toyoda Kiichiro
While it is true that Toyoda Kiichiro (surname first) - the son of Toyota founder Toyoda Sakichi (he’s known as the father of Japan’s industrial revolution, and worthy of a blog entry here soon enough) came up with the business concept of "just-in-time production", our man Ohno Taiichi saw that American supermarkets tried to avoid waste as much as possible, because who needs to throw out their inventory from spoilage?

The concept is:
A customer in a supermarket takes the desired amount of goods off the shelf and purchases them. The store restocks the shelf with enough new product to fill up the shelf space. Similarly, a work-center that needed parts would go to a "store shelf" (the inventory storage point) for the particular part and "buy" (withdraw) the quantity it needed, and the "shelf" would be "restocked" by the work-center that produced the part, making only enough to replace the inventory that had been withdrawn.


Yup  - low inventory levels. 

Lean Manufacturing consists of these tenets, with kaizen being the only one I had previously heard of, but didn’t know the definition of.

Continuous improvement
  • Challenge - We form a long-term vision, meeting challenges with courage and creativity to realize our dreams; 
  • Kaizen - We improve our business operations continuously, always driving for innovation and evolution; 
  • Genchi Genbutsu - Go to the source to find the facts to make correct decisions.
Respect for people
  • Respect  - We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust;
  • Teamwork - We stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.
It boils down to this: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

That's all we need to know about Lean Manufacturing... and the role Japan and American supermarkets had in its creation.

I know, I know... not my usual write-up... but Lean Manufacturing is a term that is bandied about in everyday media, and I don't think most of know exactly what it references. Bad media.

But at least we now have a better understanding...

Banzai,
Andrew Joseph
PS: Image above is of the Leaning Tower of Pisa... a different type of lean manufacturing. Ha. 

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