Welcome to Part 1 of a 5-part series on Lean Design. You would not expect to build a house without a good set of drawings and a design, and likewise you should not expect to achieve high-performing business processes without a formal design. A “Lean Design” implies that the process or processes will be extraordinarily efficient, free of waste, able to produce high quality, and meet the designed capacity goals.
Although a manufacturing assembly line is a common target for Lean Design, I am using the term “Value Stream” to emphasize that good process design can be applied to any work flow, including work done in hospitals, in service organizations, in software development, or any place where the same work is done repetitively.
Here is what you can expect in this series:
- In this first section I’ll define what is meant by the terms Value Stream and Lean Design. I’ll introduce the foundational goal of flow, and the obstacles to flow that need to be overcome.
- We will review how a company grew by 500% in a few years, by applying flow methods. We’ll cover how flow can be measured, and be used for Kaizen, benchmarking, and product costing.
- We’ll walk you through the step-by-step methodology to design a Value Stream to optimize the work flow. Note: material flow is critical, but will need to be addressed outside of this series.
- Once a Value Stream is designed, it will need to be physically implemented and managed. We’ll cover the most important requirements to sustain the new environment.
- In this final section we’ll review some of the available tools and resources that support the Lean Design methodology. There are many commercially available tools, to speed up and formalize the Lean Design process.
DEFINITION OF TERMS
The term Value Stream has come into common usage in the Lean World since the late 1990’s, and refers to the collection of all of the processes required to deliver a product to a customer, from start to finish. These processes can be shown in a flow-chart format called a Value Stream Map. The main idea is that you should understand the entire work-flow of a product (or service), to better understand what needs to be improved from a total system perspective. Without a Value Stream analysis, there will be a tendency to focus on processes that you already are familiar with, or that are easy to improve, but which may not be the most critical.
Lean Design refers to the formal methodology for documenting a Value Stream in detail and designing a value stream that flows. A high-performing Value Stream needs to be designed, and although it can always be improved over time, the design is typically done as a focused and short-term effort.
WHAT IS THE “PERFECT VALUE STREAM”?
In order to create the Perfect Value Stream in a factory, hospital, or other work environment it will need to be designed. The key is to understand what the Perfect Value Stream might be like, apply a proven design methodology do design it, and get as close to perfection as possible. The core principle is something called flow.
Flow means that you design the work so that it can progress step-by-step from start to completion, without delays or mistakes. Achieving flow will give you, by definition, the shortest possible lead-time, but that’s not all: productivity will also be high, as will quality. Floor space will be reduced at the design stage. Lead-time or elapsed time required to do the work will be reduced not by rushing and working faster, but by designing the work so that it can be done in a continuous, uninterrupted sequence of steps. You may even work slower, if that will lead to better flow and fewer mistakes. Remember the story of the Tortoise and the Hare?
AN IMPERFECT ANALOGY
You may be familiar with a cartoon showing a boat, a body of water, and rocks. By lowering the level of the water (the inventory), the rocks (problems) are exposed and can be addressed through a Kaizen effort. This analogy is good, but limited because the water is not flowing! A better comparison would be a mountain stream with rocks, with the rocks representing impediments to the flow. After all, excellent Material Flow is what you are trying to achieve as well as excellent Work Flow, right?
Using this same analogy to refer to Work Flow is appropriate as well, but you need to be a bit careful. Instead of lowering the water (in this case the work content), it makes more sense to focus on reducing the rocks first. Once the rocks are sufficiently below the surface, then the work content can be reduced, not the other way around. What are these rocks, or impediments to good work flow?
HOW TO IMPROVE FLOW
Here is a partial list of the types of improvements that can be made to improve the Work Flow. I’m sure you can add to the list, but here are the big ones.
1. FLOW-BASED DESIGN
I am putting this one first, because without a good design based on Flow Manufacturing principles, you will be starting out on the wrong foot. I will be talking about design more in this series, but let’s be clear that you need to start with a good Value Stream Design as a foundation.
Without Standard Work Definitions people will naturally do work in different ways, and most likely not the One Best Way. This is a basic requirement, in both a Lean and Non-Lean work environment. Document the most efficient, safest, most ergonomically sound way of working that you know today, train people to do that, and then improve it over time. That is Lean in a nutshell.
3. REDUCE VARIABILITY
Variability is a killer of good flow, and will come from a variety of sources. Standardized work will reduce normal human variability to a certain extent, but people will still be people and work at different rates. A mixed model production line will experience variability in work content due to the different models and options that will be built on the same line, because different models don’t necessarily have the same work content time. Variability will also be introduced into the flow by changes in customer demand. The mix and volume of products can change often, based on customer orders received. What happens when the work cannot advance smoothly is that workers will either be blocked or waiting, and both flow and productivity will be negatively affected. The action to address variability (but not eliminate it) is called Heijunka or Smoothing, along with the prudent use of IPKs or In-Process Kanbans.
4. IMPROVE QUALITY
Rework and scrap are major obstacles to good flow, especially if the units need to be returned upstream to be processed a second time. Imagine having to flow a river back upstream! A Lean tool that can be applied, in addition to good product design, is called Poke Yoke or Error-Proofing. Another simple and inexpensive practice is called Check-Do-Check or operator-based inspection.
One of the first things that Toyota worked on in the early days was changeover reduction. When a line is being changed over, nothing is being produced, and nothing is flowing. The Lean tool used here is called SMED or Single Minute Exchange of Dies.
6. OUTSIDE PROCESSING
When the product needs to go outside of the factory for processing, this will extend the lead-time significantly. This is often necessary because of processes that are not available internally, but this is also the reason that Lean factories tend to be more vertically integrated, so that that they can perform as much work as possible in-house, in a flow.
If products are built and moved to the next step in a batch, then the other units in the batch will be waiting while a single unit is worked on. One-by-one Production is one of the core principles of the Toyota Production System, in the interest of achieving optimum flow (and catching problems early).
I could go on, but you get the idea. The core reason why you focus on these issues is to achieve good flow, so that you can reduce the elapsed time between the receipt of a customer order and getting paid for that order. By the way, we have seen cases when the biggest delay in the total flow time was not building the product itself, but getting paid for it!
In Part 2 of this series I will share a Case History of a company that went from $5M in annual sales to $25M in just a few years, by focusing on flow in a machining environment. We’ll take a look at how the benefits of flow can be quantified.