P ARTE P RIMERA
L ÉON F ICHA TÉCNICA
It is both interesting and concerning that the focus of Lean is not unanimously agreed by the numerous researchers that have studied the subject over the years. For this inquiry, it is relevant to summarise the dominant tenets of the literature. We have discussed the five principles espoused by Womack and Jones (2003). Ohno himself believes that there are two principles that formed the TPS: JIT and Autonomation (Ohno, 1988). Other writers have similar but discriminate views and identify more than two or different pillars, depending on the environment (e.g. Skorstad, 1994; Radnor, 2010, Barraza et al, 2009).
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2.3.5.1.Focus on the customer and customer value
Pettersen (2009) finds that there is little focus on the customer in all the articles and books he used for his attempt to find a universal definition for Lean. In his findings however, he does include the supply chain from supplier to customer as a focus point for Lean. In contrast, Total Quality Management (TQM) referred to both internal and external customer requirements as a constant theme. Schonberger (2007) discusses the shift from JIT and inventory reduction to quick response times to satisfy the customer, e.g. by reducing waiting times; Dell being a typical example. The quick response time was identified as adding value for the customer.
Customer value in the Lean philosophy is the opposite of waste in the factory and , in fact, the entire supply chain (Hines et al, 2004). But Hines et al also point out that there is a risk in focussing solely on the removal of waste in order to create customer value. They point out that other tangible and intangible factors such as brand, image, environment and local production also play a role in the customer value proposition (figure 2-15). Jones and Sasser (2001) would agree with Hines et al, pointing out that only ‘totally satisfied customers’ make a difference; if the customers have alternatives, ‘satisfied customers’ will stray the very moment they are not completely satisfied; ‘totally satisfied customers’ will remain loyal.
FIGURE 2-15: RELATION BETWEEN CUS TOMER VALUE, COST AND WASTE (SOURCE: HINES ET AL, 2004 , P997) .
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Although the customer is of obvious importance, no matter what paradigm is adopted by the organisation, the customer focus in the Lean philosophy should not be seen in isolation. Instead, the customer value proposition forms part of the integrated value model.
2.3.5.2.Focus on removing waste
Numerous articles reiterate Ohno’s seven wastes (e.g. Hines & Rich, 1997; Jones et al, 1997; Schonberger, 2007; Hines et al, 2004), ascribed to Ohno and identified as waste in processing, time, defects, motion, overproduction, inventory and transportation. Over the years, these have been interpreted and several articles point towards an eighth waste, being human potential or knowledge (e.g. Womack and Jones, 2003; Kilpatrick, 2003; Liker, 2004). Others added a different eight waste, e.g. Emiliani and Stec (2004) who add ‘behaviours that do not add value’ as eight waste. Koskela (2004) makes a case for adding ‘making do’, i.e. doing a job despite the fact that not all prerequisite conditions are fulfilled, as eighth waste.
Schneiderman (1988) places nine wastes identified by Ryuzaburo Kaku (Canon) next to Ohno’s seven wastes: Kaku identifies wastes in rejects, parts inventory, indirect labour, equipment and facilities, expenses, design, human resources, operations, and waste in production (start - up) of new products. Hines goes one step further when he transforms the conventional wastes into ‘green wastes’ (Hines, 2009).
In a recent presentation to the ‘New Zealand Lean Leadership Network’ (NZLLN), Mark Powell, CEO of the Warehouse Group of companies, explained how retail has its own challenges and presented a table of ten wastes identified for the Warehouse Group. As an aside and in a personal conversation, Powell, whose thinking has been strongly influenced by his studies under Jones at the Cardiff Business School, confirmed that his thinking relates substantially to Lean principles, but that the retail sector had done very little in studying its applications in that sector. He prefers the term ‘Value Stream Management’ over the term ‘Lean’ (personal conversation with Mark Powell, CEO of the Warehouse Group, 25-10-2013). In order to contribute to knowledge, he undertook to present his views on retail value stream management academically (Powell and Childerhouse, 2010).
Table 2-4 summarises a number of different approaches from literature towards identifying waste.
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TABLE 2-4: SUMMARY OF DIFFERENT WASTE PERSPECTIVES.
Ryuzaburo Kaku, Canon (in
Scneiderman, 1998)
Taiichi Ohno,
Toyota Hines (2009) Koskela (2004) Hines (2009b) Womack and Jones (2003) Hines and Rich (1997) Emiliani and Stec (2004) Powell and Childerhouse (2010)
The Nine Wastes The Seven Wastes Eight Wastes including 'making-do’
Eight Green
Wastes Lean thinking Warehouse environment Retail environment Waste in rejects Waste in processing itself Over-production Over-production Greenhouse gases Over-production Faster-than-necessary pace Over-production Lost sales & customers
Waste in parts
inventory Waste of time Defects Defects Eutrophication Defects Waiting Defects Excessive ‘push’ stocks Waste in indirect
labour Waste of making defective parts Unnecessary Motion Unnecessary Motion Excessive resource Usage Unnecessary Motion Conveyance Unnecessary Motion Excessive ‘pull’ stocks
Waste in equipment
and facilities Waste of motion
Unnecessary Inventory Unnecessary Inventory Excessive Water usage Unnecessary Inventory Processing Unnecessary
Inventory Delay & waiting
Waste in expenses Waste of overproduction Inappropriate processing Inappropriate processing Excessive Power usage Inappropriate processing Excess stock Inappropriate processing Unnecessary transportation
Waste in design Waste of inventory Transportation Transportation Pollution Transportation Unnecessary motion Transportation Excessive movement & handling
Waste in human resources
Waste of
transportation Waiting Waiting Rubbish Waiting
Correction of
mistakes. Waiting
Unnecessary processes or layers
Waste in operations Lost People Potential Making-Do Poor Health & Safety Knowledge Behaviours Defects, errors and poor process reliability
Waste in production start-up of new products
Rigidity, the lack of flexibility & responsiveness
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It is fascinating that Ohno himself states:
“I don’t know who came up with it but people often talk about ‘the seven types of waste‘. This might have started when the book came out, but waste is not limited to seven types. There is an old expression: ‘He without bad habits has seven’, meaning even if you think there is no waste, you will find at least seven types. So I came up with overproduction, waiting etc., but that doesn’t mean there are only seven types. So don’t bother thinking about ‘what type of waste is this?’ Just get on with it and do kaizen” (Ohno, 2013, p175).
Essentially, it appears that the attempts at cataloguing waste have come about by not completely comprehending what Ohno had in mind when he came up with the seven so well - known wastes. From the attempts at grouping wastes in different environments, and from Ohno’s own words, it is quite clear that any identified waste, any situation that does not add value and is unnecessary, can be categorised as waste and it becomes rather irrelevant how many waste groups there are. Regardless of focus on removing waste to increase customer value (e.g. Dennis, 2002; Bicheno, 2004), or removing waste to reduce costs (e.g. Ohno, 1988; Monden, 1998; Shingo, 1989), it is this approach that will further be adopted during the ensuing industry research.
2.3.5.3.Focus on Just-In-Time
A clarification of terms may be helpful to avoid a reasonably common confusion in
terminology. The term ‘Lean’ will be used for the combined philosophies, methods and tools that are used to reduce waste and increase customer value. The term Just-In-Time (JIT) will be used for the method where the focus is on reducing wasteful inventory by delivering only what is needed, when it is needed and how it is needed (Ohno, 2013), with all the direct and indirect consequences.
Just-In-Time (JIT) was an early US adoption of Lean methodology but soon overtaken by the term Lean, rightly or wrongly. Shah and Ward (2007) point out that, for a period in the early 1980s, JIT became the production system in the US. JIT in today’s terminology is not
considered synonymous with the term Lean. It encompasses a substantial proportion of the Lean paradigm in that it focuses on small lot productions which then implies quick change-
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overs, kanban, low inventory, synchronised parts production, rapid delivery and a skilled and versatile workforce. JIT is not the same as Lean but it is however an important part of the Lean philosophy.
The JIT and consequent systems developed organically at Toyota. Cusumano (1994) and Ohno himself (Ohno, 2013) refer to the production of low volumes at a competitive price as a necessity at the time. We know from Womack et al (1990) that the system was considered ‘fragile’ in the 1990s as the lack of a single component could stop the production process. Ohno states that to get JIT introduced (the system was called the ‘Ohno system’ while being trialled) there was a significant mind-set shift required, and that shift in mind-set took time and persuasion to achieve (Ohno, 2013).
To indicate how important JIT was for Toyota, one only has to look at where it is placed by influential writers. Holweg refers to Ohno’s description of autonomation and JIT as the two pillars of TPS (Holweg, 2007). Similarly, Monden (1998) described JIT as one of the two pillars of TPS; JIT eliminating waste in the process as one pillar and appreciation and utilisation of the worker’s capabilities as the second. It is logical to conclude that JIT was one of the
fundamental concepts of the Toyota Production System (TPS). Liker and Morgan (2006) refer to JIT and Jidoka as the two pillars of TPS, similar to Holweg. Their assertion is slightly confusing when considering other work by Liker in which he presents continuous improvement and respect for people to be the pillars of TPS (Liker & Hoseus, 2007).
It is interesting to note that there is some empirical evidence that higher levels of JIT employed by a number of companies confirm the hypothesis that higher levels of JIT lead to higher levels of profitability (Fullerton et al, 2003). It must be noted though that in their approach, JIT is fairly synonymous with standard Lean practices such as waste reduction through reduced setup times, uniform workloads and preventative maintenance. Fullerton et al (2003) also acknowledge that the part of the sample that was identified as JIT was
precluded from random selection, which may affect the validity of their outcomes somewhat.
Although JIT plays a large role in the TPS, it remains to be seen what role it can play in an industry where not all activities require parts and where input of activity is weather
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2.3.5.4.Focus on respect for people
Toyota presents ‘The Toyota Way’ as a model based on two pillars, respect for people and continuous improvement (Liker & Hoseus,
2007; figure 2-16). Earlier, we saw that Monden also indicates respect for people as vital to the Toyota production System (Monden, 1998). The significance of the people becomes clear when Liker & Hoseus (2007) dedicate a whole volume to the Toyota culture as the heart and soul of the Toyota way. But respect for people doesn’t
mean to bow your head. Much like Deming (1986) argued that management should
‘Remove the barriers that rob people of their right to pride in their work’ (Deming, 1986, p24),
Ohno (2013) states:
‘I think that it ruins people when there is no race to get each person to add their good ideas to the work they do within a company’ and …..
’the ability to add your creative ideas and changes to your own work is what makes it possible to do work that is worthy of humans’ (Ohno, 2013, p178).
Respect for people in this sense will provide people with motivation and satisfaction, two critical elements of human functioning (Lundberg et al, 2009). Imai (1997) agrees and
differentiates between the role of management to support kaizen leading to a sense of pride in operators, and the role of management to control kaizen.
2.3.5.5.Focus on continuous improvement
Another element recognised as fundamental to sustainable Lean is the concept of kaizen or continuous improvement (CI). Lean is said to be a constant iterative process; people continue
FIGURE 2-16: TOYOTA CULTURE ( LIKER & HOSEUS, 2007, PXXVIII).
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to learn as they continue to be engaged and improve their processes. Toyota presents ‘The Toyota Way as a model based on two pillars, respect for people and continuous improvement (Liker, 2004). Womack and Jones (2003) recognise continuous improvement as the last link in the chain of Lean principles: ‘Perfection’. It is the concept of continuous innovation or perfection that provides the Lean employer with an extra source of improving his organisation. It is often argued that western people prefer to have technological breakthroughs and innovations, while Japanese people are used to small incremental
improvements (figure 2-17). Imai (1986) depicts quite clearly where innovation fits in relation to kaizen and that they can easily go hand-in-hand.
Imai (1986) differentiates between the process of innovation and the process of Kaizen. Figures 2-18, 2-19 and 2-20 illustrate the difference between both processes.
FIGURE 2-18: INNOVATION AS IMAI SEES IT (IMAI, 1986, P26) .
Science Technology Design Production Market
Innovation Kaizen
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FIGURE 2-19: THE COMBINATION OF I NNOVATION AND CONTINUOUS IMPROVEMENT AS IMAI SEES IT (IMAI, 1986, P27).
Ohno believes that kaizen ideas are infinite; each kaizen idea provides the basis for another. Continuous improvement should take place, particularly when times are good. Ohno warns against complacency and states that in bad times, all people can do is cut costs, most often by reducing staff; in poor times, people do not have the mind-set for continuous improvements (Ohno, 2013). Liker and Morgan (2006) believe that kaizen is rarely practiced in most
organisations. Problems that surface are only valuable if the workers have the tools and are allowed and encouraged to deal with the problems themselves and then solve them at the root cause. Continuous improvement is therefore an endless journey of improvement and an essential element of any Lean culture. Particularly when we start attempting to develop a Lean approach in a new industry, it will be the people and incremental improvements that will add up to better results and a more prosperous sector.