The underlying theme in lean thinking is to produce more or do more with fewer resources while giving the end customer exactly what he or she wants. This means focusing on each product and its value stream. To do this, organizations must be ready to ask and understand which activities truly create value and which activities are wasteful. The most important thing to remember is that lean is not simply about eliminating waste—it is about eliminating waste and enhancing value.
Value, in the context of lean, is defined as something for which the customer is willing to pay. Value-adding activities transform materials and information into something a customer wants. Non-value-adding activities consume resources and do not directly contribute to the end result desired by the customer. Waste, therefore, is defined as anything that does not add value from the customer’s perspective. Examples of process wastes include defective products, overproduction, inventories, excess motion, unnecessary processing steps, unnecessary transportation, waiting, and excessive meetings.
Taken from an appliance industry perspective, defective products can be found and managed in product development processes, suppliers’ processes, manufacturing processes, and physical distribution of the product. Defects at any point throughout this cycle are wasteful and do not meet the intended value for the end users of the appliance.
Furthermore, a product may be designed, produced and distributed according to planned specifications but deemed to be wasteful if the “voice of the customer” was not considered or interpreted properly. Such a product simply does not meet consumers’ needs, and the company has expended a considerable amount of time and resources to produce an appliance that consumers will not buy.
In the product design phase, overproduction occurs when the scope of a new product development is not well-managed and excessive resources are applied. Overproduction may also occur when resources are wasted chasing product features that never reach the marketplace.
Inventories in the manufacturing world correlate to excess materials on hand. In other environments, inventories may refer to poor use of other resources such as people, suppliers and third-party organizations. We need to rationalize what functions are core to our business, focus on those functions, and leave the rest to someone else.
Reductions in excess motion, unnecessary process steps and unnecessary transportation are typically directed at manufacturing processes. Think for a moment about how lean concepts may apply to an appliance product design. A company may collect unnecessary data and spend excessive time and resources with data entry if the systems are incompatible. This may lead to errors and defective data, which may impact product decisions.
Waiting is a classic problem in all aspects of the design, manufacturing and distribution cycle. We spend time waiting for approvals, waiting for materials, waiting for our peers to be available for meetings, waiting for the right information, and waiting for test results. Waiting is the driving force behind the concept of concurrent engineering. By creating a process to flow in a synchronous fashion instead of sequentially, the waiting time for a completed product may be significantly reduced.
Finally, a growing problem in most organizations is excessive meetings. How often do you sit in meetings? What amount of time is required for your meetings? Are the meetings productive? How can lean concepts be applied to meeting management and communication to reduce wasted time and expended resources?
Think about a time when you were involved in creating a new product. Consider the amount of time and resources that went into the design, manufacturing and distribution of the product. Did the extra time and resources add value for the customer and end user? As a consumer or end user, would you be willing to pay extra for this additional time and resources?
Benefits of lean systems include: increased speed and responsiveness to customers through reduced lead-times; improved product quality; reduced costs; improved customer satisfaction; and design, manufacturing and distribution processes as competitive weapons.
Think lean, eliminate waste and enhance value—and watch your company and products prosper.