House of Lean:

Lean often uses the analogy of a house to portray the key components of Lean.

At the base of the house are the Lean Values. It is from these core values that all other aspects of Lean are derived. These values also provide the stability of people, processes, systems and information.  On this foundation of values are the Lean Principles. The principles of Lean provide guidance for how all things in Lean are developed and improved. Many of the principles have roots in the history of Lean described above. For example:

• Build In Quality and the Automated Loom

• Just In Time and the Ford Assembly Line and US Supermarkets. 

The principles and values of Lean are all there to support and empower the Customer Driven Metrics of Quality, Cost and Delivery. 

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Lean Values:

Values are the fundamental beliefs upon which your business and its behavior are based. In a Lean organization there are three core values from which everything else is derived. 

 

Customer First

Customer First means that the needs of the customer are always the priority. Delivering exactly what the customer wants, when they want it, at the desired level of quality. By focusing on the needs of the customers we are able to understand which activities add value to the customers and which are waste. When considering the needs of customers, Lean addresses the needs of all customers, both external and internal. Most organizations understand the need to focus on their external customers, but few organizations place the same focus on internal customers. It is the understanding and focus on internal customers that drive teamwork, identification of waste, and process improvement.

 

Respect for People

Respect of People is the core value that releases the energy, knowledge and capabilities of the people in the organization. While it includes the human values of trust and honesty, it goes past that to the point: that the people are considered the most valuable asset of the organization. In Lean the people doing the job are the experts and these experts are used to improve and enhance the processes. Because of these understandings, there is clear belief in Lean that the problems are in the processes not with the people. It is this trust in people that empowers the drive to be bold and drive improvement.    

 

Continuous Improvement 

Continuous Improvement is the drive / desire to always be looking for a better way. In Lean we are always striving to identify and solve problems. This continuous cycle of discovering and solving problems drive improvement across the organization. Ideally you find something to improve everyday. The most effective large changes come from a series of aligned small changes. The Customers provide the focus for what needs to improve; Lean Principles provide guidance on how to improve; and people provide the expertise and energy to drive Continuous Improvement. 

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Lean Principles:

Principles are fundamental to an organization’s Lean culture. The Lean principles provide guidance for how all things in Lean are developed and improved. This provides a unifying element that provides direction for the organization. With these principles as the guide, continuous improvement can take place at many levels in a decentralized environment without ending up in chaos. With everyone working to advance the principles you will have alignment across the organization. Many of the books written about Toyota have documented different versions of the principle they observed. Some combine values and principles; while others break the principles into their sub-elements. Through our many years of working within Toyota we’ve learned that there are six Lean Principles:

• Build In Quality

• Just In Time

• Standardized Work

• Visual Management

• Fact Based Decisions

• Go Look, Go See

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Build In Quality

Build In Quality starts with Quality (kind, count, condition, cost, velocity, etc.) that is defined by or tied directly to the Customer. The only way to achieve true quality with the fewest number of errors & defects is to strengthen the source process so that errors are not created in the first place. This is accomplished by error proofing at the source (autonomous or self-inspection) by building preventative measures into the processes that highlight “errors” & “defects”. Detecting “errors” & “defects” is critical so they are be corrected before reaching the customer and the processes can be improved immediately. 

 

Just In Time 

The highly specified & highly connected coordination of customer requirements, pathways, processes, and connections that deliver the right item or service in the right quantity at the right quality to the right place at the right time…every time! Just In Time is used to synchronize the entire system / value stream around delivering value to the customer. The synchronization of JIT is achieved through the optimization of 4 components:

1. Level & Balance: The smoothing of workload over time and between processes

2. Continuous Flow Processing:  The movement of materials and information such that it moves through to the customer with the absolute minimum stoppages or delays

3. Pull System: Aligning the system based on the request of the customer pulling what/when ready vs. the uncontrolled pushing by the supplier

4. Takt Time: The optimal Pace required by the operation to meet the customer demand requirements with minimal waste  

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Standardized Work

Standardized Work is the balanced, sustained relationship between Standard Sequence, Standard Time, and Standard In-Process Stock (the connection between activities). It defines the standard content, sequence, timing and expected outcome of an activity, event or process. Standardized Work represents the current best, simplest, and safest way of doing the work by setting. These combine to set expectations for how tasks should be performed. Having clear expectations is critical in identifying and solving problems. 

 

Visual Management 

Visual Management supports all the other Principles by making normal expectations visual to all, so that problems can be identified. It promotes work areas that are self-explaining and self-regulating. Visual Management creates synergy by allowing everyone to See Together, Know Together, and Act Together, all keys to highly specified, standardized work environments.

 

Fact Based Decisions 

Decisions are made based on facts in order to properly react to changing customer and business requirements. Decision-making without facts increases cost and creates risk. Facts drive effective problem solving and problem solving drives improvement. Fact Based Decision-making and problem solving are key to establishing an environment that can effectively change and adapt to the needs of the business and its customers rapidly. 

 

Go Look, Go See

Go Look, Go See, in Japanese Genchi Genbutsu, means going to the workplace to see and understand. Sometimes known as “management by walking around” with the intent of closing the gap between Leaders and the place where value-added activities take place and associated information resides. This connects Leaders to Team Members and the Leaders & Team Members to Customers building trust by ensuring “fact-based decision-making” on the “right things”. 

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Lean Capabilities:

Lean is a leadership driven, business management philosophy & culture with the goal of creating an integrated system to accomplish all cost, capital, customer, and culture objectives that drive a competitive advantage. Culture, as defined by Edgar Schein (Organizational Development, MIT), represents the pattern of shared basic assumptions that groups learned as they solved their problems. Culture, in a business context, is a reflection of the way organizations actually do things. The Lean Capabilities characterize the critical proficiencies and tangible experiences that define the way things are to be done. Understanding and implementing these Lean Capabilities is the key a successful Lean implementation. It is through these capabilities that the Lean Value and Lean Principle are brought to life. The Lean Capabilities are:*

1. Design and operate work to reveal problems 

2. Contain and solve problems close in person, place and time

3. Accumulate and share knowledge

4. Leaders that coach and develop the previous capabilities in others

 

* Note: These capabilities have been adapted from the work of Dr. Steven Spear. Of all the researchers that studied Toyota and the Toyota Production System Dr. Spear most accurately captured the culture and how the business is executed. His 1999 Harvard Business Review article, “Decoding the DNA of the Toyota Production System,” and his book, “The High Velocity Edge” are excellent reads on this topic. 

 

Capability 1: Design and operate work to reveal problems:

The process of synchronizing all elements of a larger system in order to deliver products or services efficiently, effectively, and consistently while purposely exposing problems through both architectural design and functional means. 

Creating a plan, with as much detail as possible, for how the operation / system is supposed to work; then executing this plan with tests built into the activities and processes to identify when the plan is working and when it’s not. If the plan works, then the practices are repeated and sustained. If plan is not working, then a problem has been identified and the plan / activity / process is improved using Capability 2.  

 

Capability 2: Contain and Solve problems close in person, place and time:

Once a problem is detected, no matter the size, team members who are affected swarm the problem at the time and place of its occurrence. Through this urgent, automatic response, the problem is immediately contained before it has a chance to spread either downstream or upstream. It is then diagnosed in real time and treated in a mandatory, systematic & disciplined fashion using the “scientific method,” – Plan Do Check Act.

 

Capability 3: Accumulate and Share Knowledge:

Lean organizations multiply the power of new knowledge gained, particularly through the actions taken via Capability 2, by making it available wisely and smartly throughout the broader organization. They do this by sharing not only the solutions (results) that are discovered, but also the “processes by which they were discovered”, both “what was learned” and “how it was learned”.

 

Capability 4: Leaders that coach and develop the previous capabilities in others: 

Leaders are responsible for developing the organization’s ability to see problems, solve problems where they are seen, in order to build knowledge, and spread that knowledge so that it is “useful” throughout the entire organization. The ongoing appreciation, expectation, and pursuit of Leader’s developing those that they are responsible for; in order to create the long-term organizational capacity to be self-correcting, self-improving, and self-innovating as a consistently developed practice. Lean Leaders must ensure that a regular part of their work is both the delivery of products & services as well as the continuous improvement of the processes by which those products & services are delivered. They must teach team members and other leaders: how to make continuous improvement part of their jobs and dedicate the time and resources to do so. 

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