Lean

Organizations strive to eliminate three basic categories of waste in their business processes.

Basic Waste Category are:

  • Wasteful activity – Work that adds no value to a product or service. Eliminating such activities from business processes will help organizations cut cost.
  • Unevenness – This denotes inconsistencies that exist in a business process. Unevenness and inconsistencies can be avoided by eliminating inventory and supplying items to the production process only when they are needed.
  • Overburden – This is caused by an unreasonable or excessive strain on resources. It can be eliminated by simplifying and standardizing processes.

Among these three basic categories of wastes, Lean focuses on eliminating activities that do not add any value. These activities are further classified into seven types of wastes: transport, inventory, motion, waiting, overproduction, over processing, and defects.


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Lean manufacturing has a few important goals, which have led many industries to implement. Lean in their production processes. The goals include:

  • Improving quality to stay ahead of competition in the market. This is done by capturing customer requirements and redesigning operational processes to meet those requirements.
  • Eliminating waste to make processes more efficient. This is done by eliminating activities that do not add any value to the product or service.
  • Reducing variabilities and inconsistencies by standardizing processes and outputs.
  • And, reducing costs by ensuring that production does not exceed customer demands. By preventing overproduction, organizations can also make sure that inventory costs do not increase.

 The implementation of Lean techniques in an organization is guided by a few important principles.

Principle

Description

Value Defining the value
Value stream Identifying the value stream
Flow Creating flow in the value stream
Pull Creating pull in the value stream
Perfection Creating a continuous improvement culture
Leveling Creating a balanced workflow
Standardized processes Developing standards and following them
Kanban Using a visual signaling system
Visual control Using visual control methods
Quick changeover Enabling the reduction of time
Defect prevention Reducing the cost of poor quality

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In a Continuous improvement journey, improvement projects are nothing but the lifeline. In this series of articles, we covered on the Need for Project Selection and the Criteria for project. Now we’ll answer the big question – Where can I get my projects from? Essentially various sources of the project!
Customers Interactions: “Customers” are the biggest source for improvement projects. Classically, negative customer sentiments are good places to start. Your customers are unhappy, so it’s time to fix the issue. Mixed or ambiguous sentiments are also relevant places to start.
·Customer Complaints:If your organization has a list of customer complaints, then that is an apt place to commence. Complaints are not only sore for your customers, but for you too. Such complaints may cover a vast product or service attributes such as product or service quality, delivery time, responsiveness, people issues, pricing or areas of monetary impact including warranty claims,process & policy issues.

· Repeat Complaints: You can go one step further and target repeat complaints instead. Repetitive complaints from the same customer with the same tagging indicates high priority area for improvement.
·Enquiries & Requests: Few organizations target the need of customers to call or contact the organization and, reduce them. It might not be a complaint, instead just an enquiry or request. In other words, interactions with the organization that can be avoided. Looking at enquiries and requests serve as a proactive means to identify future problem areas.
·VoC Program output: If your organization conducts structured VoC surveys, then the outputs of such mechanism can be a good source of Continuous Improvement or Lean Six Sigma projects
·Customer Experience (CX) Dipstick: Customer Experience is usually hidden and not so obvious as customer feedback. Structured and unstructured mechanisms can be deployed to understand the customer experience. For example, many organizations now use mystery shopping to unearth issues in customer experience. Observation or Listening posts are also a good way to identify how customer experience can be improved.
First Time Right (FTR): If you closely have a look at your company’s process, you will find that there are many internal defects (work-in-progress) occurring, such as rework, repairs & in-process rejections. Such defects are silent killers because they drain organization’s efficiency and effectiveness silently. If your organization is measuring FTR, then its improvement can be an ideal project. More evolved organizations use RTY (Rolled Throughput Yield) as a metric which is also a good place to demonstrate Continuous Improvement.
However, most organizations have a simpler measure of success for quality – Defect Rate (% Defective). While there’s nothing wrong with this metric, is a bit holistic and hence factors leading to inefficiencies escape unnoticed with this metric. Nonetheless, it is good starting point for Continuous Improvement projects.
Reliability Data/Warranty data: Field failures are sometimes grave. It can cost you a lot and, the overall cost of ownership for customers might increase esp if the warranty is denied or the product is under breakdown. In broader terms, the principle of warranty is to institute accountability in the event of an untimely failure of an item or the inability of the item to perform its intended function. Experts consider reliability data analysis as a quality measure over time. This reliability analysis is done to analyze whether your product will survive for the time defined by the company in the normal conditions. Improving the reliability of a product can work both ways – organizations can lower its operational cost and provide longer warranty and customers would experience break down less often.
Process Performance Data: If your organization has a well-defined and structured reporting mechanism for process performance metrics, such as a dashboard or scorecard, then it would be a very good source to identify opportunities for continuous improvement projects. As leadership teams are consumers of such reports, such opportunities can easily gain sponsorship as well.
Competitive Benchmarking: Benchmarking is a continuous process of comparing your firm’s or company’s practice to those of the competitors or say most successful competitors. In certain cases, you might not be doing well. For example, having control over the delivery time to the customers. Then this can be taken as a project for improvement in our company. So, to generalize, competitive benchmarking results can also be a good source for Continuous Improvement projects.
Business Plans/Strategies: Gap between strategic plan and reality can be the cause of concern for leadership. Sometimes such problems may be because of supporting processes. They can hinder new business plans or strategies. Such process improvement opportunities are also a good source for projects, provided they are scoped well with well-defined objectives & goals.
Employee Feedback: While customers don’t see your process but only experience its outcomes, employees have an end to end visibility. They experience problems as customers and can associate inward aspects of such poor experience. Many organizations, pilot their products with employees, because employees are pseudo customers. If you can establish a structured process through which employees are encouraged to share their experience and enable them to take up such opportunities as Continuous Improvement or Lean Six Sigma projects, there’s nothing like it.
All the above can serve as a good source for Continuous Improvement or Lean Six Sigma projects.


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Canopus Business Management Group

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Read Nilakanta Srinivasan‘s answer to What kind of job opportunities are there for lean six sigma green belt certification in pharma/healthcare industry? on AQuora


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Read Nilakanta Srinivasan‘s answer to Are Design Thinking and Six Sigma mutually exclusive? on Quora


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