Lean For Dummies®
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Library of Congress Control Number: 2006939603
ISBN: 978-0-470-09931-5
Manufactured in the United States of America
10 9 8 7 6
Natalie J. Sayer began studying and applying Lean before it was formally known as Lean. Over her 20-year career in the automotive industry in the United States and Mexico, Natalie honed her skills applying Lean and Organizational Development methods across functional areas of Fortune 130 companies. In 1996, Natalie was an instrumental team member in the Lean transformation of a GM facility in Matamoros, Mexico. The team was awarded the 1996 GM President’s Council Honors for the project. While working with General Motors, she had multiple opportunities to visit and learn from New United Motor Manufacturing, Inc. (NUMMI). Natalie has trained, coached, mentored, and rolled up her sleeves to implement Lean practices, whether working in a company or volunteering at a food bank.
She received a Bachelor of Mechanical Engineering from the University of Dayton in 1988 and a Master of Manufacturing Systems Engineering from the University of Michigan in 1992. She is a graduate of Coach University and Corporate Coach University. Natalie is also a Six Sigma Black Belt and a Global Leadership Executive Coach.
In 2003, Natalie founded I-Emerge, an Arizona-based global consultancy dedicated to the facilitation of people and processes experiencing significant change. The I-Emerge toolbox includes executive and personal coaching, group facilitation, Lean methods, public speaking, and Organizational Development tools and assessments. She is a passionate people person, who lives her life with the convictions that “there is always a better way” and “change won’t happen without the people.”
Beyond I-Emerge, Natalie can be found on stage acting in musical theater, teaching graduate school, traveling to exotic places, learning something new, working on causes advancing people and literacy, or spending time with friends and family.
Bruce Williams strives for perfection and added value as a scientist, educator, consultant, and entrepreneur. Leveraging the Lean principle of standardized work, this is his third For Dummies book in three years, having previously coauthored the best-selling Six Sigma For Dummies in 2005 and the Six Sigma Workbook For Dummies in 2006.
Undergraduate degrees in physics and astrophysics from the University of Colorado testify to his early pursuit of understanding the ultimate nature of root cause.
He was a sculler in the value stream of aerospace systems, where he shot the rapids in the tumultuous whitewater of the Hubble Space Telescope program. With graduate degrees in technical management and computer science from Johns Hopkins University and the University of Colorado, Bruce elevated his value-stream role to that of tugboat captain, leading and managing technical teams and projects.
A decade of personal Kaizen has inspired his continuous journey through technology, software, business development, and management. A Kaikaku moment unleashed his entrepreneurial self in 1999. He is now sea captain of Savvi International, charting the deeper value-stream waters of solutions for business performance improvement using Six Sigma, Lean, and Business Process Management.
He lives with his standard family in the rural desert foothills of North Scottsdale, Arizona, flowing just-in-time value in response to their continuous demand pull. He regularly suffers the muri of 5S’ing the house on weekends. His hobbies include mucking the muda of the family horses.
Natalie J. Sayer: To Frank Cooney, Al Billis, and Pam Oakes, my first Lean teachers; to Jim, Patt, and Eric Sayer, my family who support all my endeavors; and to Anne Ramsey, Derek O’Neal, Lori Kobriger, and the rest of my inner circle. Thank you all.
Bruce Williams: To the Lean person within all of us. Recognize and nurture your Lean self. Every waste you eliminate today sets the stage for a better world tomorrow.
The authors acknowledge Craig Gygi for his expertise, dedication, and encouragement. You established the standard for us to follow; we hope we’ve done you proud.
We especially thank Frank Cooney for his mentoring, advice, and technical review. Lean can be a hard thing to pin down. Thanks, Frank, for bringing your tremendous body of practical experience to bear.
We’d also like to acknowledge our good friends and colleagues Janet Young, Vern Young, Dr. Deborah Peck, Eleanor Clements, Scott Kurish, and Dr. Kiran Garimella for your counsel, ideas, review, and support. Additionally, we’d like to acknowledge everyone at the Phoenix Think Tank, a place where great minds, ideas, and support meet to create “an exquisite shifting in thought.”
Thanks to Ken Carraher of iGrafx and Debbie Rosen of webMethods for their unflinching support in providing whatever we needed. We could easily have filled the book with value-stream maps, process models, and dashboards. We’ll just have to save them all for the Lean Workbook For Dummies!
As authors and researchers, we humbly bow to the miracle that is Google.
All people interested in Lean owe their ongoing gratitude to Mark Graban and his associates, who through their blog site translate Lean to the world around us.
As consumers, and on behalf of consumers everywhere, we acknowledge the uniquely groundbreaking contributions of brilliant pioneers W. Edwards Deming, Taiichi Ohno, and Shigeo Shingo, as well as U.S. Lean leaders Norm Bodek and Jim Womack. Through their achievements, we are all better off.
But most of all, we acknowledge the many thousands of Lean practitioners around the world, who regularly confront established structures, functional silos, arcane accounting practices, and entrenched procedures to cut the waste and find the real customer value. You make Lean thrive. You are our heroes.
We’re proud of this book; please send us your comments through our Dummies online registration form located at www.dummies.com/register/.
Some of the people who helped bring this book to market include the following:
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Title
Introduction
About This Book
Conventions Used in This Book
Foolish Assumptions
How This Book Is Organized
Icons Used in This Book
Where to Go from Here
Part I : Lean Basics
Chapter 1: Defining Lean
What Is Lean?
The Lean Pedigree
Lean and Its Continuous Process Improvement Cousins
Chapter 2: The Foundation and Language of Lean
Understanding Lean Basics
Getting into Shape
Part II : Understanding Flow and the Value Stream
Chapter 3: Seeing Value through the Eyes of the Customer
What Is Value?
To Add Value or Not to Add Value, That Is the Question
Understanding How the Customer Defines Value
Understanding How the Consumer Defines Value
Introducing the Value Stream
Chapter 4: A Resource Runs through It: Value Stream Mapping
The Who, What, and Why of Value Stream Maps
Row, Row, Row Your Boat: Getting Started
Sorting Through the Tributaries: Creating the Current-State Value Stream Map
Summing Up the Process
Check the Chart: Validating the Value Stream Map
Chapter 5: Charting the Course: Using Value Stream Maps
Investigating the Value Stream for Clues
Painting a Picture of the Future
Creating the Mosaic of Continuous Improvement: Setting the Stage for Kaizen
Chapter 6: Flowing in the Right Direction: Lean Projects and Kaizen
Kaizen: A Way of Life
Improving the Value Stream with Kaizen
Kaizen: The Workshop
Part III : The Lean Toolbox
Chapter 7: Customer and Value-Stream Tools
Communing with the Customer
Working with the Value Stream
Using Qualitative Tools
Working with Software Tools
Chapter 8: Flow and Pull Tools
Flow
Pull
Chapter 9: Perfection Tools
Beginning with Standardized Work
Improving with Kaizen
Seeing Is Knowing: Visual-Management Tools
Everyday Improvement Tools
Computer Tools
Chapter 10: Management Tools
Managing Strategy
Go and See
Software and Information Management
Part IV : The Lean Enterprise
Chapter 11: Lean in the Organization: Principles, Behaviors, and Change
Assessing Organizational Culture
Changing the Organization
Forecasting the Future
Chapter 12: Power to the People
The Human Side of Change
The Master and the Students
Chapter 13: Go Lean: Implementation Strategy, Startup, and Evolution
Preparing to Go Lean
Beginning the Journey: The Lean Rollout
Living Lean
Chapter 14: Lean within the Enterprise
Lean Enterprise Management
Lean Product Development
Lean Supplier Management
Lean Production Processes
Lean Customer Management
Lean and the Quality Organization
Chapter 15: Lean across Industry
Starting with What’s Common
Lean Manufacturing
Lean Services
Lean Transactions
Lean Government
Lean in Healthcare
Lean Everywhere
Part V : The Part of Tens
Chapter 16: Ten Best Practices of Lean
Feel the Force (of the Customer), Luke
Step by Step, Inch by Inch
Follow the Value Stream
Eat Your Vegetables
Turn Over a Rock
People First!
Genchi Gambutsu
The Art of Simplicity
At a Glance
Standardize Something — Standardize Everything!
Chapter 17: Ten Pitfalls to Avoid
Yawn
Same-Old Same-Old Senior Management
Quick Fix!
Cherry-Picking
Beans Are Beans
Playing the Shell Game
The Grease Monkeys
Busy Bees
Stuck in the Middle Again
Lean Six Sigma
Chapter 18: Ten Places to Go for Help
Books and Publications
Online Information
Blog Sites
Professional Societies and Associations
Conferences and Symposia
Consultants, Facilitators, and Trainers
Lean Periodicals
Software Providers
Practitioners
Related Genres
Glossary
: Further Reading
The principles and practices of Lean organizations are recognized the world over as the most powerful and effective way to build and sustain continuously improving businesses and institutions. Following a Lean path, any business in any industry of any size or type can improve itself continuously over the long term. Led by advancements first pioneered at the Toyota Motor Corporation over 50 years ago, Lean is now established as the most consistently successful approach to organizing and operating any enterprise.
If you’re in certain manufacturing industries, or public institutions like the U.S. military, you’ve probably heard about Lean. You may even have been through a Kaizen event or been part of implementing a pull system. If so, you’ve already experienced some of the power of Lean tools.
But if you’re like most people, the term Lean itself may be unfamiliar to you, let alone its principles and practices. Even within those businesses and organizations that have adopted Lean methods, most people don’t really understand the bigger picture of Lean. Organizations often implement Lean piecemeal, leaving some of the most important elements behind — and with much less than optimal results.
For decades, the whole system of Lean principles and practices was known only to specialized manufacturers, certain academic researchers, and quality gurus. The Toyota Production System (TPS) was the incubator where the methods, techniques, and tools of Lean were pioneered and refined. Its full potential has been a mystery to most organizations and professionals.
All that began to change in the late 1980s, as the term Lean was coined to describe the fundamentals of business systems like TPS to the rest of the world. As the understanding of Lean has spread across continents, industries, and organizations, it has become less of a mystery and much easier to understand and implement.
Simply stated, Lean is a philosophy and a proven long-term approach that aligns everything in the business to deliver increasing customer value. It’s about orienting people and systems to deliver a continuous stream of value to the customer, and eliminate waste and deficiencies in the process. Lean is an everyday practice at all levels to perform consistently, as well as to consistently improve performance.
This book makes Lean accessible to you. We wrote it because Lean is applicable everywhere — it’s applicable in large and complex corporations, but also in small businesses and industries, as well as public-sector institutions — at all levels.
We wrote this book for you, the individual. You may be a small-business owner, an ambitious career person, or a manager who wants to know what Lean is and how to apply it. You may be a college student or job applicant who wants to have an edge in upcoming job interviews. No matter who you are, if you want to know more about Lean, this is the book for you.
Lean For Dummies is not just an overview or survey of Lean. It’s a comprehensive description of the philosophies and principles of Lean, as well as the methods and tools to put Lean into practice.
This book is
A reference book that’s organized into parts, chapters, and sections, so that you can flip right to what you need, when you need it
A comprehensive text that addresses both the common tools of Lean and the improvement principles and practices
A guide for leading a Lean initiative, helping you identify and manage Lean projects, and using Lean tools and procedures
Step-by-step instructions for Value Stream Mapping and the methodology of Lean projects
Instructions on where you can go for additional help, because the field of Lean is much too large to fit in just a few hundred pages
Lean is different, and it contains Japanese terms and ideas that may be foreign to you. But we’ve taken this difficult subject and made it understandable through examples, simple explanations, and visual aids.
When a specialized word first appears in our book, we italicize it, and provide a definition. We also italicize any foreign-language words, including the many Japanese terms that make up the lingo of Lean.
For terms and phrases that industry practitioners use as acronyms, we define the term first and then use it in its abbreviated form going forward.
We put any Web addresses and e-mail addresses in monofont, to set it apart from the rest of the text. When this book was printed, some Web addresses may have needed to break across two lines of text. If that happened, rest assured that we haven’t put in any extra characters (such as hyphens) to indicate the break. So, when using one of these Web addresses, just type in exactly what you see in this book, pretending as though the line break doesn’t exist.
We use some business-management and statistical concepts and language in the course of the book. To get extra smart on the statistical and problem-solving aspects, check out Six Sigma For Dummies, by Craig Gygi, Neil DeCarlo, and Bruce Williams; Six Sigma Workbook for Dummies by Craig Gygi, Bruce Williams, and Terry Gustafson. Also check out Managing For Dummies, 2nd Edition, by Bob Nelson, PhD, and Peter Economy; Statistics For Dummies, by Deborah Rumsey, PhD; and Coaching & Mentoring For Dummies and Managing Teams For Dummies, both by Marty Brounstein (all published by Wiley).
We assume you’ve heard something about Lean and are intrigued and compelled to find out more, for one or more of the following reasons:
You’re contemplating using Lean in your business or organization, and you need to understand what you might be in for.
Your business or organization is implementing Lean, and you need to get up to speed. Perhaps you’ve even been tapped to participate in a Kaizen event or a Value Stream Mapping exercise.
You believe Lean is the pathway to better performance in your job and can help you advance your career.
You’re considering a job or career change, and your new opportunities require you to understand Lean practices.
You’re a student in business, international business, operations, or industrial engineering and you realize that Lean is part of your future.
We assume that you realize Lean demands a rigorous approach to analyzing the value stream of business processes. We also assume that you accept that Lean practice calls for capturing data and applying analytical tools to discover the true nature of value creation and the causes of waste in your environment. In addition, we assume that you might be from any industry, including manufacturing, service, transactional, healthcare, or even government. For these reasons, we have devoted several chapters of this book to describing and defining the Lean toolset.
We break this book into five separate parts. Each chapter is written as an independent standalone section, which means you can move around the book and delve into a given topic without necessarily having to read all the preceding material first. Anywhere we expound upon or extend other material, we cross-reference the chapter or part of origin, so you can tie it together.
Part I is an overview of Lean, including the pedigree, tenets, and language of Lean. In this part, we address the key tenets underlying the foundation of Lean practice. Chapter 1 is a comprehensive overview of Lean. Chapter 2 addresses the key tenets as well as the language and lexicon of Lean.
Part II gets into the essence of Lean: understanding the way value is created and flowed to the customer. In four chapters, we thoroughly describe the flow of value. Chapter 3 defines value precisely, in terms of the customer and the end consumer. Chapter 4 introduces and explains the process of Value Stream Mapping, one of the key tools of Lean. Chapter 5 explains how to use a Value Stream Map to define where you want to go and how you’ll approach getting there. Chapter 6 explains the principles and practices of Kaizen — the basis for continuous improvement.
In this part, we present a comprehensive listing and overview of the many customer, value stream, flow, pull, perfection, and management tools of Lean in four chapters. Collectively, these tools form the Lean toolkit.
Chapter 7 describes the many tools used to understand the value stream and customer needs and wants. Chapter 8 describes the flow and pull tools. Chapter 9 covers the perfection tools used within Lean to create standardized work, improve with Kaizen, visualization, and everyday improvements. Chapter 10 addresses the management tools of hoshin, gemba, and the growing suite of software applications that support Lean practice.
Part IV contains five chapters and describes how Lean becomes part of the enterprise. In this part, we explain the issues and challenges with implementing Lean in an organization. Chapter 11 addresses organizational issues specifically. Chapter 12 focuses on the people elements of Lean — often the most overlooked (and risky) part. Chapter 13 addresses the life cycle of a Lean implementation, from strategy to startup and, finally, evolution. Chapter 14 explains how Lean works in the different functions and organization of a business. Chapter 15 addresses Lean in different industries.
This part, in the For Dummies tradition, is a compilation of key points of reference. Chapter 16 discusses ten practices for success. Chapter 17 addresses ten pitfalls to avoid. And in Chapter 18, we tell you about ten additional places you can go for help.
Throughout the book, you’ll see small symbols called icons in the margins, and these highlight special types of information. We use these to help you better understand and apply the material. When you see any of the following icons, this is what they mean:
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The beauty of a For Dummies book is that you don’t have to start at the beginning and slowly work your way through. Instead, each chapter is self-contained, which means you can start with whichever chapters interest you the most. You can use Lean For Dummies as a reference book, which means you can jump in and out of certain parts, chapters, and sections as you wish.
Here are some suggestions on where to start:
If you’re brand new to Lean, start at the beginning, with Chapter 1.
Want to know about the basics of Value Stream Mapping? Check out Chapter 4.
If you want to know all the tools of Lean, jump in at Chapter 7.
Interested in the organizational and people elements of Lean? Go to Chapters 11 and 12.
If you want to understand all the Lean lingo and terminology, flip to the glossary.
Lean is a journey. Like any journey, it is exciting and exhilarating, stretching and life altering, challenging and unexpected. But it is worth it. We wish you well on this journey. With this book by your side, you have what it takes to live Lean and thrive!
In this part . . .
T hink of Lean as a fitness program for your business. Like a diet and exercise regime for your body, Lean is a way to get your business fit for life, through a focus on your customer, the implementation of new business practices, and the ongoing commitment to continuous improvement. In this part, we fill you in on the foundations, philosophy, and basics of Lean.