Lean Management

Summary of Lean Concepts as they Apply to Acme Alliance

There are five principles of Lean:

  1. Learn and accept the difference between Waste and Work 
  2. Learn to map Value and non-Value - Strive to Stability
  3. Flow - Do whatever you can to create flow in your work
  4. Pull - Produce only what our clients want and work to replenishment, not forecasts
  5. Benchmark against perfection - an absolute reference, not a relative one

There are seven things we measure at Acme - Combined, these are a powerful measure of how we are doing:

  1. Internal Scrap - How many times did we try to add value and then scrap the part? This includes "Warm Up" parts
  2. Returns from Clients - How many parts did we ship that the client disliked so much that they returned the part
  3. 5-S - How effective are we at creating a safe, clean and productive work area (includes offices and factory)
  4. Variance from Quoted Rates - How are we doing financially compared with how we quoted a job?
  5. Setup Time - How long does it take us to set-up a job, considering setups add no Value
  6. On-Time delivery - Did we ship when we said we would and when the client wanted the parts?
  7. Variance from Lead-Time - If we were late, how late were we?

Some simple comments that help summarize Lean and what we expect of Lean at Acme:

  • "Lean is about taking all things that are implicit and making them explicit"
  • "Lean is about allowing anyone (even a visitor) to see the difference between a normal and an abnormal situation"
  • "Lean is about Thinking"
  • All thinking is done in a cycle, the cycle of Plan, Do, Check, Adjust (PDCA)
  • Problem-solving has no place for "Hunchology", it demands use of the Scientific Method
  • PDCA is best practiced with the use of the written word - on an A3 size sheet of paper

All outputs (Y) are a function of inputs (X's). You cannot achieve stable outputs without stable inputs Stability comes from the study of Man, Material, Methods, Machines, Measurement and Environment

The Scientific Method:

  • Name the problem or question
  • Form an educated guess of the cause (a hypothesis) and make predictions
  • Test your hypothesis with well-documented experiments(s) Check your results and let others test your conclusions
  • Perform this test:
  • Do operators know the pace and where they stand against the Standard?
  • Do operators KNOW if the part they just completed meets specification?
  • Do operators know what to do if the part is defective?

There are four Rules of Lean in order of priority:

Do not worry about the next item until the preceding items are assured:

  1. Safety - Is the work environment safe for all employees?
  2. Quality - Do we have a stable, repeatable and defect-free process for making parts?
  3. Delivery - Are we making the right quantity at the right time to meet client requirements?
  4. Cost - Can we make the parts safely, without defects, on time AND at a cost we can afford?

There are three Steps in Implementing Lean:

  1. Go See
  2. Ask "Why?"
  3. Show Respect

Waste comes in seven forms:

  1. Waiting - This is a person, a machine or a process
  2. Overproduction - Making more than the client needs RIGHT NOW
  3. Inventory - Any materila in our plant that we cannot sell RIGHT NOW
  4. Overprocessing - Performing more than the client needs
  5. Transport - Moving parts
  6. Movement - Moving people
  7. Rework - Making defects