Lean Manufacturing techniques are extremely powerful not only for production but for all areas in the firm. It is also not only limited to production-based businesses. Over the last 10 years, I have seen the very same principles being applied to startups (lean startups, lean analytics, scaling lean), services (optimizing costs and service level), project management, etc.
You can use them to improve the quality of your product, cut costs, increase the speed of delivery and simplify your business model. The lean techniques are the cornerstone of all low-cost business models. That’s why if you want to be a true badass you have to master them and use them to make your life and the life of your customer much easier. Below is my favorite pick of techniques that you should know by heart:
- 5 Why. The most simple and powerful technique is the 5 Why – asking questions till you get to the main problem that is causing all other problems. This technique should sound familiar as it is exactly what kids do to grown-ups – they torture adults by asking constant questions. Learn from them 🙂 . Below is a short example that will show you how to use this technique
- Bottlenecks Analysis. To produce more you have to concentrate on bottlenecks. By improving them you can improve the whole factory and system. Let’s see how you can find and improve bottlenecks:
The same approach is used to scale the business by creating enabling investments either on the supply or demand side. In some cases, you can also use it in the distribution.
- OEE / OLE. OEE stands for Overall Equipment Efficiency. In this method, you analyze what a specific machine does during a shift and what time is wasted. By analyzing each and every component you can come up with a plan to improve its operations. Should you do such an analysis for every machine? Nope! You do it mainly for machines that you consider bottlenecks. In this way, you can improve how much the machine produces and in this way increase the overall production. Below is an example of how to use this technique
OLE is very similar to OEE but you calculate it for people (the L stands for Labor) rather than machines. In OLE you analyze what a specific person or a group of people do and what you can do to improve their efficiency. In this way, you can significantly lower labor costs and speed up processes
- 5S. This is a whole philosophy about how you should treat your workplace. In short, you want to keep your workplace ordered to decrease wasting time on finding the things or materials you need. An extremely powerful technique not only on the production floor but also in the office. It consists of 5 stages and each and every name starts with “S”. First “S” stands for Sorting (removing things that you don’t need). The second “S” stands for Set in order. During this stage, you have to arrange essential items in such a way that it is easy to access them. In other words, you create set places for them. The third “S” is Shine. Since you have already put everything in order it’s time to keep it in this way. In this stage, you try to keep your working stations, tools, and machines clean and keep the order set during previous stages. During the 4th stage Standardize you establish rules, checklists standards, and procedures to keep everything clean and in order. The last “S” is Sustain. The last stage is about doing everything that is possible to sustain the effect. You achieve that by turning 5S into a habit and using visual language and prompts to sustain the habits. Below is a nice example from the office that should help you grasp the spirit of this technique:
- Continuous flow. The continuous flow aim is to minimize work in progress in order to lower your inventory and minimize the risk of some mistakes. If you work on 2 things at the same time then you switch between tasks, you make mistakes, you have to move things around, and thus waste a lot of time. If you do just 1 thing then you can finish it much faster and without much inefficiencies. That’s in short the main reason why continuous flows make so much sense
- Kanban. Kanban (sometimes called the supermarket) is an extremely important tool that allows you to implement continuous flow. In most cases, you have a complicated production process with many stages. The Kanban allows each and every stage to talk to each other and helps you lower inventory and concentrate on what really matters. Below is a movie that will explain it in more detail.
A similar approach can be also used to manage projects:
- Standardization. Standardization is one of the most important parts of improving the efficiency of work. This works perfectly not only for production but also for any other process, especially done in the head office. A great example is what you do in consulting. You create standards for everything: PowerPoint presentations, excels, dress code, proposals, specific deliverables, written procedures, etc. You achieve it sometimes via templates or standardized modules
- Universal worker. The dream come true for every manager is to have universal workers that are capable of doing everything. Thanks to this he can move around his people depending on what is required from his team. This gives you a huge gain in efficiency and increases the speed of execution. Obviously, you will never have fully universal workers but you can make them much more flexible. On the opposite side, you have a situation where you have plenty of narrowly specialized specialists. In this case, your team becomes unmanageable, slow, and will not be able to deal with an ever-changing environment.
- 2 machines per 1 worker. This may sound funny but traditionally you would have at most 1 machine per 1 worker. The operator of a specific machine would put something in it and wait till it is done to proceed with the next stage or next item. As the machines became more and more automatic and require less attention from operators you can in many cases have 1 operator take care of 2 or more machines. This quite often requires changes in the layout of the factory and still helps you drastically reduce labor costs
- SMED. Usually, you produce more than 1 product. Different products may require you to perform specific changes to the machines so they can handle different products (different sizes, colors, etc.). Those changes to the machines we call set-ups and they can be very time-consuming. That’s why lean manufacturing has created an interesting approach to finding ways to shorten those set-ups. Those techniques we call SMED. Below are nice examples of how to apply SMED and shorten set-ups
- Zero defect rules. Traditionally you would check whether the product was high (the right) quality at the very end of the production process, which to be honest is stupid as you have already put all the work required to produce the product. That’s why it is so important to use the zero-defect rule. This rule requires the product to be checked at all stages. If you spot that there is something wrong with the product that came to you, you should remove it from the flow instead of working on it or trying to fix it. In this way, you don’t add the work to a product that has been mishandled in previous stages.
- Milk Run. In lean you try to get reduce different types of waste. One of the biggest ones is transportation & movement. In such situations, the so-called milk run will help you improve the productivity of the whole team, and factory. Let’s have a look at a movie that explains this concept:
- Critical Chain. Most projects are not delivered by the promised deadline. If you look at the reasons behind that you will discover that one of the main reasons is how people give time estimation and how the potential buffer is scattered all over the organization. In such situations, the critical chain can help you deliver the project on time. Let’s see how it impacts the situation:
- Adjust the Definition of Waste. Lean Manufacturing is trying to remove any type of waste in the organization. There are 8 main types of waste. However, for every organization, you should enlist what you actually mean by it. Let’s see how we can define the waste for office work:
- Map Sources of Waste. I also recommend mapping the sources of the waste. This will help you define potential improvements. Let’s look at some potential sources of waste again in office work:
That’s in short. I hope you found it useful. For mode techniques and details on how to use them and how to calculate the impact of proposed changes check my online course Essential Lean Manufacturing for Management Consultants. . You will find there +4 hours of content and more than 80 lectures, that will teach you all the things you need to master essential Lean Manufacturing Techniques.
Check the presentations where we also discuss the Lean Manufacturing method.