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The Value of Lean

Thinking

Process
Coaching
Incorporated

Presented by:
Brian D Krichbaum

What is Lean Thinking?

A systematic approach to identifying and


eliminating waste through continuous improvement
by flowing the service or product at the pull
of customers in pursuit of perfection.

Process
Coaching
Incorporated

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2008 Process Coaching

History of Lean Manufacturing

1798
Eli Whitney develops
interchangeable
parts

1908 through 1913


Henry Ford develops
the moving assembly
line.

Process
Coaching
Incorporated

1920s
Sakichi Toyoda
develops mistake
proofing and 5 Whys

August 4, 1937
First supermarket
in the United
States opened

1933 - Toyota
Motor Company
established

1950s - Taiichi
Ohno develops the
Toyota Production
System (TPS)

June August 1950


Deming introduces lean
quality principles to
Japanese engineers and
managers

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2008 Process Coaching

House of Lean

Process
Coaching
Incorporated

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2008 Process Coaching

Benefits of Lean Production


Reduction in overhead / operating costs
Productivity Increase (30% - 40%)
Throughput Time Decrease (70% +)
Increase Profit
Customer Lead Time Reductions (50% +)
Work in Process Inventory reductions (70%+)
On Time Delivery to customers (95% +)
Quality Performance Improvements
Process
Coaching
Incorporated

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2008 Process Coaching

The Eight Deadly Wastes

Overproduction
Waiting

Excess Inventory
Defects

Transportation (Moving)
Non-Value Added

Excess Motion
Underutilized Resources

Processing

Process
Coaching
Incorporated

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2008 Process Coaching

Value Added Activity


5% Value
Added

95% NonValue Added

What is value added activity?


Tasks that customers recognize as valuable
Tasks that are done right the first time
Tasks that transform the product or service
Process
Coaching
Incorporated

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2008 Process Coaching

Lean Manufacturing Principles1


Specify Value
Identify the Value Stream
Make value creating steps flow
Let the customer pull product
Strive towards Perfection
James Womack, Lean Thinking, (Simon & Schuster, 1996), p. 16 - 26

Process
Coaching
Incorporated

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2008 Process Coaching

Lean Manufacturing Principles


Specify Value
Correctly specifying value is critical in lean

thinking
Providing the wrong good or service the
correct way is still waste
Value must be defined in terms of specific
products at specific prices at specific times
Only the ultimate customer can define value
but they often dont know how to do it!
Process
Coaching
Incorporated

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2008 Process Coaching

Lean Manufacturing Principles


Specify Value
Customers and producers must challenge old

value definitions and work together to define


what is needed not just a better widget
Look at the whole product not just the
features, but how it is used to determine its
requirements
Define the Target Cost (the cost of producing
the product waste free)

Process
Coaching
Incorporated

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2008 Process Coaching

Lean Manufacturing Principles


Identify the Value Stream
When the steps for producing a product arent

identified, they cant be challenged


The purpose of value stream mapping is to
identify waste
We map the current state and the future (lean)
state
All value streams have internal (our plant) and
external (our plant + suppliers + customers)
components
Process
Coaching
Incorporated

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2008 Process Coaching