LEAN

A publication of: The Lean Six Sigma Company

IN
PRACTICE
LEAN in practice

1
Authors

Jan Hein Tempelman

Lean Specialist at The Lean Six Sigma Company.

Rijk Schildmeijer

Master Black Belt and partner at The Lean Six Sigma

Company.

With the cooperation of: Tom Lindsen, Kees Bultink, John Bruns and Kasia
Kaminska
Editor: Mischa van Aalten
Cover design: Nick Heurter, Onlinemarketing.nl
Illustrations: Jan Hein Tempelman

Title: Lean in practice

ISBN: 978-90-821026-1-1
7th print, version June 2023

Published by The Lean Six Sigma Company. All rights reserved. Nothing in
this edition may be multiplied, stored in an automated data file and/or
published in any form or manner, either electronically, mechanically,
through photocopies, recordings or in any other way without the prior
written permission by the publisher.

2
CONTENTS
Introduction ........................................................................... 7
PART 1: BACKGROUND AND PRINCIPLES OF LEAN ........ 9
1 ORIGIN, PHILOSOPHY & METHOD ........................... 11
1.1 The origin of Lean ........................................................................... 11
1.2 The term “Lean” ............................................................................. 12
1.3 Lean as a philosophy ...................................................................... 12

2 LEAN AND OTHER IMPROVEMENT METHODS....... 17

2.1 Six Sigma......................................................................................... 17
2.2 Theory of Constraints ..................................................................... 22

3 THE 5 PRINCIPLES OF WOMACK .............................. 27

3.1 The 5 principles of Womack ........................................................... 27
3.2 Specify value................................................................................... 28
3.2.1 Waste ......................................................................................... 36
3.2.2 Transportation ........................................................................... 37
3.2.3 Inventory .................................................................................... 38
3.2.4 Motion........................................................................................ 40
3.2.5 Waiting ...................................................................................... 41
3.2.6 Overproduction .......................................................................... 42
3.2.7 Process complexity (Over-processing) ....................................... 44
3.2.8 Defects ....................................................................................... 46
3.2.9 7+1 - Talent (Skills)..................................................................... 48
3.3 Identify the Value Stream – Create the Value Stream Map .......... 50
3.4 Create ‘Flow’ .................................................................................. 54
3.5 Let the customer ‘Pull’ value.......................................................... 60
3.6 Pursuit of Perfection ...................................................................... 64

PART 2: THE LEAN TOOLS................................................. 65

4 THE LEAN TOOLS ......................................................... 67
4.1 Value Stream Mapping – VSM ....................................................... 67
3
4.2 Flow ................................................................................................ 81
4.2.1 Takt Time ................................................................................... 82
4.2.2 Balancing processes - Line balancing......................................... 84
4.2.3 Spaghetti Diagram ..................................................................... 87
4.3 Generic Pull system ........................................................................ 90
4.3.1 Process Cycle Efficiency.............................................................. 90
4.3.2 Little’s law – managing work in progress .................................. 92
4.3.3 How do I calculate the WIP cap in a Generic Pull System? ........ 96
4.4 The sea of inventory....................................................................... 98
4.5 Standardised work ......................................................................... 99
4.6 Visual Management ....................................................................... 99
4.7 5S .................................................................................................. 104
4.8 Poka Yoke ..................................................................................... 118
4.9 5 times why .................................................................................. 121
4.10 Kanban.......................................................................................... 124
4.11 Overall Equipment Effectiveness - OEE........................................ 131
4.12 Single Minute Exchange of Dies - SMED ...................................... 131

PART 3: IMPROVING THE PROCESS WITH LEAN ........ 133

5 IMPROVING THE PROCESS WITH LEAN ................ 135
5.1 Introduction ................................................................................. 135
5.2 Ongoing improvement initiatives - Kaizen ................................... 137
5.2.1 Stand-up’s ................................................................................ 139
5.2.2 Standardised work ................................................................... 149
5.2.3 Kaizen events ........................................................................... 150
5.3 Project based initiatives – Executing Lean project ...................... 160
5.3.1 What is an A3? ......................................................................... 161
5.3.2 When do we use an A3?........................................................... 162
5.3.3 What is the value of the A3?.................................................... 163
5.3.4 The 8 steps explained in more detail ....................................... 166
5.3.5 A3 management and data analysis ......................................... 179
5.3.6 A3 management and team composition ................................. 187
5.4 Change management in practice ................................................. 189

4
 5.4.1 What is Change Management? ............................................... 190
5.4.2 Macro process .......................................................................... 193
5.4.3 Meeting .................................................................................... 203
5.4.4 Moment ................................................................................... 207

PART 4: LEAN AS A MANAGEMENT PHILOSOPHY ...... 215

6 Lean philosophy – The Toyota Way ....................... 217
6.1 What is Lean? ............................................................................... 217
6.2 The Toyota Way – J.K. Liker.......................................................... 220
6.2.1 Principle 1: “Base management decisions on long term
philosophy, even at the expense of short term financial goals.” .......... 223
6.2.2 Principle 2: “Create continuous flow to bring problems to the
surface.” ................................................................................................ 228
6.2.3 Principle 3: ‘Use pull systems to avoid overproduction’ .......... 239
6.2.4 Principle 4: Level out workload (Heijunka) .............................. 241
6.2.5 Principle 5: Build a culture of stopping to fix problems, get
quality right the first time ..................................................................... 244
6.2.6 Principle 6: Standardised tasks and processes are the foundation
for continuous improvement and empowerment ................................. 248
6.2.7 Principle 7: Use visual control so no problems are hidden ...... 257
6.2.8 Principle 8: Use only reliable, thoroughly tested technology that
serves the people and the process ........................................................ 259
6.2.9 Principle 9: Grow leaders who thoroughly understand the work,
live the philosophy and teach others .................................................... 262
6.2.10 Principle 10: Develop exceptional people and teams who
follow your company’s philosophy........................................................ 265
6.2.11 Principle 11: Respect, challenge and help your suppliers .... 268
6.2.12 Principle 12: Go and see for yourself to thoroughly understand
the situation (Genchi Genbutchu – Go to the Gemba).......................... 270
6.2.13 Principle 13: Make decisions slowly by consensus, thoroughly
considering all the options and implement quickly .............................. 275
6.2.14 Principle 14: Become a learning organisation by relentless
reflection (Hansei) and continuous improvement (Kaizen)................... 278

5
7 Toyota Kata ................................................................ 283
7.1 Looking for the invisible ............................................................... 283
7.2 The Improvement Kata ................................................................ 286
7.3 Coaching Kata ............................................................................... 294

Lean Terminology ............................................................ 299

Literature in chronological order ................................. 305
Index ................................................................................... 307

6
Introduction

This book is part of the Lean course. This course is a practical course. The
aim of which is to get students working on improvement projects in
everyday practice. Lean is a powerful improvement method that can be
applied to virtually any process. Based on common sense, you identify
waste in processes and are given the tools with which to eliminate that
waste in a structural way.

In the first part, the origin and background of Lean is discussed. Chapter 1
focuses specifically on the origin and philosophy of Lean. In chapter 2, the
relationship between Six Sigma and Theory of Constraints is discussed. In
chapter 3, the 5 principles of Womack are addressed and explained.

In the second part, the various Lean tools are discussed. The use and
application of the tools to eliminate or reduce waste are explained in
greater detail in this part.

In the third part, the Lean philosophy, principles and tools are brought
together in a Lean approach to process-related problems of varying
complexity. We teach you to improve processes with Lean. Stand-ups,
Kaizen events and a Lean project approach are extensively discussed and
explained. Attention is also paid to Change Management.

In the fourth part, Lean as a Management Philosophy is discussed. Here we

learn even more about the way Toyota uses the Lean philosophy and
principles for better management.

After taking the Lean course, you will be able to recognise waste within
organisations and have the tools and knowledge to tackle that waste and
therefore you will realise that a culture of continuous improvement is
more than merely the implementation of the Lean tools. But what is more
important is that you will become as enthusiastic as we are: improving
processes is fun.

7
8
 PART 1: BACKGROUND AND
PRINCIPLES OF LEAN

‘’ We can’t solve problems by using the same kind of thinking we used

when we created them. ‘’

- Albert Einstein

9
10
1 ORIGIN, PHILOSOPHY & METHOD

1.1 The origin of Lean

Lean was not designed on the drawing board. Lean production was the
result of a series of events. After the Second World War, Toyota decided to
focus exclusively on building cars. However, circumstances were difficult,
and the domestic market was very diverse. The trade unions were
powerful (American-style assembly lines were not accepted), the Japanese
economy was exhausted, and Western competitors were determined to
defend their home markets through embargoes and taxes. As a result,
Toyota had to compete without money and without heavy machines.

General Motors and Ford had designed their factories with expensive and
large production lines that processed the metal and other elements of only
1 type of car. North-American car manufacturers had the capital to
purchase several production lines, using production volumes to realise
economies of scale. Toyota had neither. The company was limited in the
number of production lines, which it also had to use to make several car
types.

In 1940, Taiichi Ohno realised that the only way Toyota would be able to
compete in the market was to develop faster convertible production lines
that were able to produce several car types at the same costs as American
cars. A condition for this philosophy was, that converting a production
would take 3 minutes at the utmost. That was putting the bar pretty high,
considering the fact that it often took American manufacturers days to
convert their production lines.

Ten years later, in 1950, Taiichi Ohno's production lines had reached the
level he had in mind. Short conversion times, low inventory levels, high
quality, small batches, etc. This continuous improvement and aiming for
one-piece-flow was later called: the Toyota Production System. The

11
approach to increase the speed and flexibility of Toyota's production lines
resulted in improvement techniques like SMED, Kanban, Poka Yoke, the
Andon chord, Ishikawa, Kaizen, 5S, Value Stream Mapping and many
others. These are the modern Lean tools that companies increasingly use
every day to improve their processes, tools that are the result of attempts
to realize one-piece-flow (see 3.4).

1.2 The term “Lean”

John Krafcik was the first person to use the term 'Lean' in 1988, in his
article: Triumph of the Lean Production System. At the time, Krafcik was
taking part in the International Motor Vehicle Program (IMVP), the aim of
which was to find a way to make the North-American automobile industry
competitive again. The IMVP program was a response to the increasing
competition from Japanese car makers and their high-quality products.
This research, which spanned over a number of years, was described
extensively in the book: The Machine That Changed The World – J.P.
Womack & D.T. Jones.

1.3 Lean as a philosophy

For Toyota, the Toyota Production System (TPS) is a strategic weapon. A

business culture that ensures that every employee looks at his or her own
processes through the customer's eyes. Where do we waste time,
resources and materials for which the customer is not willing to pay? How
can we eliminate this waste together?

As far as Toyota is concerned, this means that Lean is not a Toolbox, but a
way of working, a management philosophy. A set of leading principles in
everything the company does. The force of Toyota is that the company's
management is committed to investing in its employees and will keep
encouraging the culture of continuous improvements. The elimination of

12
waste, flow, pull and mistake proofing are basic principles in the
organisation of the processes.

The following anecdote clarifies a lot

During a visit to Scania, a manager remarked; “At Scania, the grass is very
green”. To which the Lean expert responded: “You know the truth about
green grass? It was covered with a lot of manure and rain the last 20 years.
And you know what? If we don’t pay attention, it will be full of weed before
you know it.”

He added; “we have been working at it for 20 years now, we have achieved
amazing results, but we aren’t even halfway. In fact, we will never be
halfway. Moreover; we will never reach perfection!”

There are 2 ways to look at Lean; (1) Lean as a toolbox for improving
processes and (2) Lean as a management philosophy. The choice that is
made varies per organisation and depends on the organisation's ambition.

Table 1.0
2 ways RESULTS SUSTAINABILITY
1. Lean as a toolbox QUICK LOW
2. Lean as a TAKES A LONG HIGH
management TIME
philosophy

There is nothing wrong with approach 1, as long as it is a conscious choice

on the part of management. It is not wrong to use the Lean toolbox to
solve process-related problems. In many cases, a Lean awareness training
will affect the way employees look and prepares them to recognise and
eliminate the first examples of waste. The process is improved, but the
business culture remains unaffected.

There are many companies that implement Lean, but not always based on
the idea that the business culture needs to change. These companies want
13
Figure 1.0

to make the transformation towards a

Lean organisation and the associated
culture, but are unwilling to make the
necessary effort.

Initially, impressive results will be

realised quickly. However, over time,
people become less enthusiastic and
there are no follow-up results.
Consequently, Lean is perceived as a
hype that comes and goes. Too many fail
to realise that Lean is a management philosophy: Lean is a way of life, not
a crash diet.

“The Toyota Way” – J.K. Liker – the 14 management principles of Toyota

In his book “The Toyota Way”, Jeffrey Liker examines the secret behind
Toyota's success. What are they doing differently? What is it that makes
Toyota so successful at what they do? Liker tries to find answers to these
questions dissecting Lean as a management philosophy, and he finally
arrives at the 4 P's, which he then elaborates into 14 management
principles. In Chapter 6 the 14 principles of Liker will be discussed in more
detail.

Figure 1.1

14
The 14 management principles:

Figure 1.2

As mentioned earlier, many organisations focus on the P of PROCESS,

whilst management needs to pay attention to all four P’s.

15
16
2 LEAN AND OTHER IMPROVEMENT
METHODS

2.1 Six Sigma

Six Sigma was developed in the 1980's by Motorola in response to

problems relating to product quality and customer satisfaction. Six Sigma is
not entirely new, it is a combination of existing quality management
methods, like Deming's Plan-Do-Check-Act, Total Quality Management and
SPC (Statistical Process Control). Motorola integrated these insights into a
process improvement method and called it Six Sigma. Later, it was
adopted, improved and given international fame by General Electric.

The Six Sigma method offers:

▪ Breakthroughs for “unsolvable” problems
▪ Practical and powerful approach with concrete instruments
▪ Practical and powerful approach that focuses on the ‘Voice of the
Customer’
▪ Simultaneous improvement of efficiency and customer
satisfaction
▪ Quick and high ROI (return on investment)

The central thought behind most quality management theories is that '10
to 40 percent of all costs are related directly or indirectly to things that do
not go right the first time (defects)'.

Traditionally, we focus on improving efficiency (where are the costs, how

can that be done more efficiently) and solving problems (how can I correct
a mistake so that customers do not notice). Six Sigma is a method designed
to reveal and avoid the 'Cost of Poor Quality'. The Six Sigma methods focus
on the customer. The (internal or external) customer determines what is
quality.

17
Important building blocks of Six Sigma are:

1. Six Sigma aims for optimal customer satisfaction and maximum profits.

Within Six Sigma, every problem is reduced to its essence. Who is the
customer? What is the problem? What does the customer want? These
necessary questions are often overlooked in everyday practice. A
positive business case is a prerequisite for any Six Sigma initiative.

2. The Six Sigma method is based on the reduction of variation.

“The customer feels variation - Variation is evil”; Jack Welch (former

CEO General Electric).

Products and services have to be provided with a constant quality and

delivery time. Variation in time and quality increases the costs and
reduces customer satisfaction. Six Sigma is about 'doing things right the
first time'. Sigma is the Greek letter (σ) that is used to refer to the
variation (standard deviation) of the products and services being
provided.

3. Six Sigma uses a structured project approach: the DMAIC cycle

The DMAIC cycle is a powerful framework that ensures a phased and

controlled project approach. The DMAIC cycle stands for Define,
Measure, Analyse, Improve and Control. Every phase has standard
deliverables and tools

4. A Six Sigma initiative is supported by a Six Sigma organisation.

Six Sigma is not a magic wand, but requires a different way of working
and a different way of managing. Six Sigma assumes that the

18
 improvement initiatives are led by the company's own people, which is
the only way that an improvement will have a lasting result. Six Sigma
training is an important condition for people to start working with Six
Sigma. One of the pillars is the Six Sigma organisation: an infrastructure
with roles and associated responsibilities designed to truly integrate
this new way of working. Examples of these roles are Champion,
Master Black Belt, Project Sponsor, Black Belt, Green Belt and Yellow
Belts.

5. Decisions are made based on data, not based on feelings.

Six Sigma looks for the fundamental causes of variation in order to

realise lasting improvements. A statistical substantiation of
fundamental causes is the basis for process improvements.

From
“I think that the problem is caused by the composition of the team”
To
“The data show that the composition of the team affects the number
of loading errors”.

Six Sigma is often mentioned in combination with Lean. Originally, Lean

and Six Sigma were seen as two different process improvement methods.
By now, everybody agrees that the two approaches complement one
another.

This is illustrated best by Michael George in his book 'Combining Six Sigma
Quality with Lean Production Speed'. In many Six Sigma projects, Lean
Tools are used in the improve phase. Quality, variation and defects are
clearly Six Sigma elements. Speed and process flow are clearly Lean
elements.

19
Figure 2.0

The statements presented below provide a good picture of the differences

and similarities between Lean and Six Sigma:

‘Lean and Six Sigma are both process improvement methods that focus on
the customer and whose aim it is to maximise profitability’.

'Lean focuses primarily on process speed and eliminating waste. Six Sigma
focuses on reducing variation and the number of defects'.

'Lean is a method that can be started tomorrow and that will yield results
the day after tomorrow. Lean takes the low hanging fruit. Once issues
become more complex and require a more extensive analysis, Six Sigma
starts playing a role'.

20
'Lean emphatically uses the knowledge available on the workplace. Lean
projects involve the entire organisation.' 'Six Sigma often adopts a more
project-oriented approach. Obviously, in the case of Six Sigma projects, the
knowledge that is available on the workplace is used emphatically'.

'Lean provides a direction and starting points for a solution that a process,
workplace or organisation has to meet, examples of which are – 7 types of
waste – flow – pull – 5S – Visual Management'.

'Six Sigma has a solid project improvement approach (DMAIC cycle) and the
organisational infrastructure needed to implement Six Sigma successfully
within an organisation'.

'In the Improve phase of a Six Sigma project, the Lean Toolbox (Lean
methods and techniques) is often used'.

'In a Kaizen event (5-day improvement project – Lean tools) Six Sigma's
DMAIC cycle is used'.

Defects cause variation in the output. Six Sigma focuses especially on a

statistical substantiation of the process variation by looking at the
fundamental causes and by taking steps that ensure that variation is
reduced.

Lean also focuses on preventing additional actions and inventories, and

calls this waste. Lean distinguishes a number of categories that are
discussed later in this book. Lean looks primarily at ways on how to avoid
it, in order to shorten the process and reduce costs.

21
2.2 Theory of Constraints

Another important process improvement methodology related to Lean, is

the ‘Theory Of Constraints’ (TOC). The founder of the TOC is Eliyahu
Goldratt, who became known to a wider audience with his business novel
'The Goal' (1984) in which TOC is explained in a very accessible manner.
Later, he wrote several books about the TOC, for example 'It's not a
coincidence' (in which he applies the TOC to strategic problems) and 'The
Weakest Link'(in which he applies the TOC to project management).

Goldratt describes how the aim of all management should be to make a

profit, now and in the future. In order to do so, the organisation above all
has to manage the throughput.

In his book, he describes how he arrived at the insight while supervising a

group of young boy scouts. He is the supervisor and he has to return to
base camp at 17.00 hrs. He leaves at 9.00 hrs, and at 13.00 hrs he realises
that they have only covered 25% of the distance. He looks at the group of
young boy scouts and sees that they are not moving in an organised
fashion. He wonders why he will not make it on time. Suddenly, he realises
that the arrival time of the entire group is determined by the slowest
person. He looks at the group and sees a small boy scout with a huge
backpack: Herbie is the bottleneck.

Then he realises that the same is true for his company: “everyone is
working hard, a lot of time is spent on punctual customer delivery”. In
many cases this fails. Ultimately the throughput and delivery speed are
determined by the bottleneck.

Dr. Goldratt arrives at a five-stage plan:

1. Identify the bottleneck.

22
This is the activity within the entire value chain that determines (limits) the
throughput and that is the cause of why we as a company are unable to
deliver what the customer wants. In reality, this is not simple.
Temporary inventory, high work pressure and chaos are often an indication
as to who or what is the bottleneck.

In the boy scout example: Herbie is the bottleneck.

2. Do not allow capacity loss at the bottleneck.

Avoid unnecessary delay, for example due to a lack of semi-finished

product.

In the boy scout example: if Herbie stops for 15 minutes to have a drink of
water, the entire group arrives 15 minutes later. If the fastest walker stops
for 15 minutes, he will be able to make up for lost time and the group as a
whole will not arrive 15 minutes later. This means that, for the bottleneck,
there will always have to be a small buffer, to ensure the bottleneck will
not come to a halt.

In the boy scout example: Herbie can only stop if he needs to relieve
himself, he will have to eat and drink while he is walking.

3. Match all processes with the bottleneck

If the bottleneck is running at full capacity, the speed of the limiting factor
also determines the speed of the rest of the process. It is useless to
produce more quickly than the bottleneck, because that will only lead to
additional intermediate inventory and an uneven work pace.
In the example of the scouts: put Herbie at the front of the group and tell
everyone: “whatever you do, stay behind Herbie”

4. Improve the bottleneck

23
Every initiative within the company has to be geared towards improving
the bottleneck, because that is the only way to increase the company's
throughput.
In the example of the scouts: Herbie is carrying a large backpack, so
distribute the contents of the backpack among bigger and stronger scouts.

5. Go back to step 1

Improving (eliminating) the bottleneck automatically creates a new

bottleneck. Start at step 1 to deal with that new bottleneck.

In the example of the scouts: Herbie has an empty backpack, so Herbie

starts walking faster. There is now another boy scout slowing the group
down: a new bottleneck.

The bottlenecks are moments in the process where the throughput is

slowed down, and temporary inventory emerges. In particular in the case
of production processes, this temporary inventory is visible when physical
products start piling up. In the case of services, temporary inventory is not
always visible. It is 'hidden' in the computer in the form of tasks in the
work flow or requests in the e-mail inbox.

The point is not how each individual step can be made as efficient as
possible, but the process as a whole: the throughput.

The way these forces relate to one another can be explained using the
following illustration:

24
 Figure 2.1

The illustration is a schematic representation of a process that begins with

customer demand (to the left – 4 per hour) and ends with the delivery (to
the right – 2 per hour). The process consists of four consecutive steps.

The end-to-end process is able to deliver a maximum of 2 products per

hour (due to the limited capacity of step B). A higher capacity of steps A, C
and D has no effect on the overall output. The I (indicating the total
inventory) will increase by 2 every hour.

A process improvement in steps A, C or D has no effect on the throughput.

It will only result in a higher intermediate inventory (also known as Work-
in-progress or WIP).

If the capacity of B is increased, for example to four items per hour, a new
bottleneck will emerge (step D), which will then become the focus of
improvement. Steps 1 through 5 can be repeated endlessly (continuous
improvement).

The principles of Theory of Constraints can be found in the flow principles

of Lean. Note that Toyota was using the bottleneck as early as 1950 in the
conversion of its production lines (SMED).

25
Examples of bottlenecks are:

• Capacity of machine
• Reliability of machine
• Knowledge of a certain employee
• Throughput time of the approval of the first products of a
production run
• IT program which runs every Friday (1x a week)

26
3 THE 5 PRINCIPLES OF WOMACK

3.1 The 5 principles of Womack

James P. Womack was the research director of the International Motor

Vehicle Program (IMVP) at the Massachusetts Institute of Technology (MIT)
in Cambridge, Massachusetts and the founder and CEO of the Lean
Enterprise Institute.

During his research, he wondered how Toyota was able to produce cars in
half the time it took to produce a Ford, with half the inventory and at a
better quality. At the end of the 1980's, he moved to Japan to study the
Toyota Production System (TPS). When he returned, he wrote 2 books: The
Machine That Changed the World (1990) and Lean Thinking (1996).
Together with his co-author Daniel T. Jones, he introduced ‘LEAN’.

In his book Lean Thinking, he describes the TPS system (Lean) based on 5
principles.

1. Specify Value
2. Identify the value stream
3. Create ‘Flow’
4. Let the customer Pull value
5. Pursuit of perfection

27
3.2 Specify value

For any organisation (and for any process), it is important to deliver added
value. Without added value, an organisation/process has no reason to
exist. A simple enough fact, but sometimes hard to determine in practice.

Who determines the added value? And what is the added value?
Lean is very clear on this point: The customer determines what value is!

The customer can be an external customer (paying customer) or an

internal customer (a next department) – depending on the scope.
Before an organisation can use Lean to improve its processes, it is
important to determine who the customer is and what this customer
expects from the process. This is also known as the Voice Of the Customer
(VOC). Customer value is the starting point of any process improvement.
However, customer value is not static in nature. Customers will adjust their
expectations based on what competitors provide, new (technological)
developments, new legislation or personal changes. That is why it is crucial
to start with customer value.

Using this customer value, Lean takes a critical look at the process from the
following starting point;

“All activities cost time and money, but only a few add value”.

The Lean thinker looks at the process and defines the various activities that
are needed with each step in the process. Every activity is assigned to one
of three categories:

1. CVA: Customer Value Added (often called Value Added)

2. BVA: Business Value Added
3. Waste

28
 Figure 3.1

This distinction is important because it provides the right discussion. Does

this process step add value? Where is the waste located? Can this Business
Value Added step be minimised?

Item 1: Customer value

Lean calls these value-adding activities Customer Value Added (CVA).

Examples of value added activities are: assembling a product, issuing a

quotation, providing a Lean training.

Activities add value if the following questions can be answered in the

affirmative:

1. Does the activity add form of functionality to the product or

service that is wanted by the customer?
2. Does this activity increase competitiveness; faster, cheaper,
better quality, etc.?
3. Is the customer willing to pay for this activity?

29
For many service providers, the share of these activities account for 10% or
less of all the organisation's activities, which may be shocking, but it is also
a great opportunity when we are talking about process improvement.

Item 2: Business Value Added activity

In addition to Customer Value Added (CVA), there are also activities that
do not add customer value, but that are important or necessary to the
company. These activities are known as Business Value Added activities.

Examples of these activities are maintaining an administration, purchasing

materials or services, marketing activities, management authorisation,
quality controls, etc... Activities are Business Value Added when the
following questions can be answered in the affirmative:

1. Does the activity reduce the organisation's (financial) risk?

2. Does the activity support the necessary (financial) reports?
3. Would the delivery of a product or service be hampered if this
activity were to be cancelled?
4. Is the activity mandatory due to legislation and regulations?

The starting point of Lean is to limit these activities to a minimum. There

always has to be a focus on reducing or optimizing the Business Value
Added activities.

Business Value Added activities have also been described as 'Non-value

added but needed'. The activity does not add value to the customer
directly, but is necessary, for instance to comply with legislation and
regulations.

Item 3: Waste

The moment activities do not create value for the customer or for the
organisation, they serve no useful purpose and therefore have to be
considered waste. These are the third type of activities that are
30
categorised in Lean, the Non-Value Added (NVA) activities. Examples of
these kinds of activities are unnecessary transportation or storage, errors
or adjustments, delays, etc. Activities are Non-Value Added if the following
questions can be answered with a negative:

1. If customers knew what we were doing, would they be willing to

pay?
2. Is the activity covered by the criteria of CVA or BVA?

The question that then needs to be answered is: “Is it possible to eliminate
or reduce these activities?”

A Healthcare example

• The time the patient spends waiting in the doctor’s waiting room
does not add value for the patient.
• Looking for the right patient file does not add value.

An example from the service industry

• Processing the ‘applications for a license that have not yet been
scanned’ does not add customer value.
• Removing staples from internal mail does not add customer value
(and nor does stapling internal mail).

The NVA activities (waste) are more common in organisations than we

realise. People cling to them out of habit, without questioning their need.
They are part of what we do! We ignore them, every single day.

31
Surprisingly enough, organisations wanting to improve often spend a great
deal of time organising the customer value added activities as efficiently as
possible, while doing nothing to tackle any waste in the process. In
addition, this focus only yields minor improvement in turnaround
compared to eliminating the Non-Value-Added time, because that
constitutes most of the potential time gain.

An example from the Healthcare industry

• Home care: We set new standards with regards to the washing of

patients (maximum of x minutes per patient) while we ask our
employees to fill out 8 forms on which more than half of the fields
the question arises: “What do we need this for?”

An example from the Service industry

• We have a new and improved quotation registration system which

improves productivity by 12%, whilst we accept the fact that 45%
of the account managers deliver incomplete quotations – which
results in a lot of re-work.

32
Figure 3.1

A lot can be gained by reducing/eliminating the Non-Value-Added

activities. It contributes directly to shortening the process time, making it
possible to deliver more quickly and with less waste. In addition, delivering
more quickly means that many of the activities associated with checking
delivery times or answering questions customers have regarding the
delivery of their product or service are cancelled.

33
 An illustrative example

A department assesses customer requests and decides whether they are

covered by the healthcare policy – For example, can I go to St James’s
Hospital in Antwerp for a nose job?

The manager is pleased with the performance of his department. The CPI
that is used to evaluate his performance (the number of actions per
employee) has improved since he has been in charge of the department.
And the CPI regarding the lead time is easily met, customers have to
receive a written response within 11 days, and every week, their average is
9 days.

The Lean thinker asks; “Which % of your time do you add customer
value?” is met with silence. “What do you mean by customer value?” is
the manager’s response.

The Lean thinker explains that he understands that requests have to be

distributed via internal mail and that the requests have to be processed.
What he meant by customer value is the time between making the
assessment and writing a response to the customer.

“That takes 20 minutes”, answers the manager.

What do you do the other 8 days, 7 hours and 40 minutes, is the Lean
thinker’s next question.
The manager starts to explain the request has to be scanned and
categorised and entered into the CRM system, after 4 days, we send a
thank you letter, telling the customer he will get a response within 7 days.
We get a lot of phone calls from people wanting to know what the status
of their request is.

Lean is about reducing the 8 days, 7 hours and 40 minutes. The manager
focuses on the number of requests per employee.

34
A lean thinker looks at the process and divides it into process steps and
partial activities, and then determines whether or not they add customer
value, business value or no value at all.

Wastes are eliminated, business value is reduced and often steps that add
customer value are 'left alone'.

Figure 3.2

35
 Waste

Taiichi Ohno was the first to mention 'the 7 types of waste'. In Japan, this is
called 'Muda', while in English, it's called 'Waste'. Within the Lean method,
waste occupies a central position. The ideal is to have a process with zero
waste. Everything is aimed towards identifying and eliminating waste.

Lean recognises 7 types of waste:

1. Transportation (of materials)

2. Inventory
3. Motion
4. Waiting
5. Over production
6. Over processing
7. Defects

Figure 3.3

36
 Transportation

“Hello, I am Transportation; packing, moving and storing are my life.

Detours are my roads. Moving stuff from one place to another is what I
love to do. Preferably the same stuff over and over again. I love driving red-
white-and-blue pigs to Italy and returning with salami that will be sold
here. Going there with a full truck and coming back with an empty one isn't
a problem either, as long as I can be on the road. I also love signatures and
checks, because they cause a lot of
transitions in processes and workflow.
And I love it when as many people as
possible take part in a process. From
one to the next and back again, as
many and as often as possible. I
invented job differentiation, allowing
me to move stuff from one department
to the next. If it were up to me,
everything would be on the move all
the time”.

The waste category of transportation is about transporting products,

materials, people and information unnecessarily. A lot of unnecessary
transportation is caused by the way companies are organised based on
specialisms (departments) rather than processes. Unnecessary
transportation takes place, for example, between departments, service
centres, production units, warehouses, etc.

The most commonly used Lean tools to combat 'Transportation' are:

• Spaghetti diagram
• Just in Time
• Flow
• Value Stream Mapping
37
 Inventory

“Hello, I am Inventory. I am everywhere but nobody sees me anymore,

because they are used to me being around. They pick me up and put me
down without giving it a thought. I have been around for so long that
almost nobody remembers that I am special. I am the stack of printing
paper. I am the mailbox with 3,000 e-mails. I am the stacked-up files on
people's desks. I am the basement full of food (which has 'unfortunately'
sometimes passed its shelf-life). I am the work in progress, the work to be
done and the delay. Given half a chance, I make sure I am standing still.
And I also make sure that there
is sufficient inventory of all the
products and raw materials. Of
course, I am thrilled by
overproduction and get along
very well with transportation. I
hate to miss out on the discount
we get by ordering in bulk. I hate
small inventory because I don't
want to have to rely on my
suppliers being able to or
wanting to deliver on time”.

In many cases, inventory is necessary. Waste in terms of inventory is about

unnecessarily keeping an inventory of finished products and raw materials.
It costs money and has to be moved and counted. Having finished products
in stock means that they have been produced but there are no customers
yet. It is possible that they may have to be sold at a discount at the end of
the season.

Waste in terms of inventory can be divided into three categories:

38
 1. Space: the costs involved in renting or buying the space,
maintenance, energy to heat or cool the space, and the costs
involved in writing off materials like storage cabinets and
conveyor belts or forklifts.
2. Interest: the costs that the organisation misses out on by having
to finance the products or parts in storage.
3. Risk: the costs related to the possibility that a product in storage
loses value, can no longer be sold or loses quality while in storage.

Having a large inventory is often caused by the need to work in batches

and realise (sub)optimisation. For instance, at face value, it makes sense to
wait until the truck is completely filled. Or to save the orders that come in
during the week and process them all at once.

An ultimate reduction of waste in inventory is Just-In-Time (JIT), which

involves delivering exactly the right amount at exactly the right time,
avoiding any unnecessary inventory.

The most commonly used Lean tools to combat 'Inventory' are:

• Flow
• Pull
• Kanban
• Just in Time
• Two bin principle

39
 Motion

“Hello, I am Motion. I am the force that ensures that people are nearly
ready to do the actual work, but 'unfortunately' have to look for, look up,
fetch or deliver something first. I prefer it when the difference between
adding actual value and just
moving around is no longer clear
and can no longer be experienced.
I am the photocopier one floor
down. I am the fax machine one
floor up. I am the lack of logic of
having a desk filled with stuff
people rarely use and a storage
room at a distance with the stuff
they do use. I am the chaos in the
tool box or drawer, filing cabinet
or storage room”.

Motion refers to the (unnecessary) moving around of people when they

are looking for materials, tools or documents. This type of waste goes
unnoticed, because it is considered completely normal. Of course, the
printer is placed in a central location, to ensure that the whole floor can
use it, and bringing a document to people on the next floor is also
completely normal, because that's where their office is. However, this kind
of waste takes a lot of time and often is frustrating.

The most commonly used Lean tools to combat 'Motion' are:

• 5S
• Standardised Work
• Spaghetti Diagram

40
 Waiting

“Hello, I am Waiting. I stay behind because something is unclear, broken,

needs to be authorised or checked. I also have to wait because I am often
early. The next stage in the process is busy doing other things, so I just wait
where I am. Often, I feel like I am trapped and have to wait for someone to
come and set me free. And even if I am not doing anything, thanks to me,
things take long and longer, and people start feeling powerless and
dissatisfied, and I create extra work through recall, searching and
complaints. I can tell you exactly where the bottlenecks are.”

Waiting is an unconscious type of waste. We continuously wait for a

document, e-mail, approval, delivery, etc., without being aware of it.
Research has shown that we wait for half an hour in our daily lives, not
including the time we have to wait at work! The fact that we have to wait
means that the activities have not been properly coordinated. In a Lean
organisation, the activities of a process are coordinated in such a way that
hardly any waiting is involved. If an employee needs something to move to
the next stage, it is ready the
moment it is needed.

The most commonly used Lean

tools to combat 'Waiting' are:

• Flow
• Pull
• Kanban
• Spaghetti Diagram
• SMED

41
 Overproduction

“Hello, I am Overproduction. As much, as often and as quickly as possible is

my strategy. I am happy whenever I see machines and people working
hard. I love seeing stacks and inventory, they are proof of my effort and of
the fact that I am right. I prefer filled warehouses to people and machines
doing nothing. I don't work for a 'special customer', but for everyone on
this planet. If something is possible, I want it done. More beautiful, more
accurate and more complete. This means my work is never done. I am in a
hurry and, if at all possible, I make as many rounds as possible throughout
a process. I am afraid of broken equipment and machines, because they
slow things down. I am afraid of a shortage of raw materials and worry
that they may not arrive on time. I am afraid that my workers may leave or
get sick, leaving me unable to keep working. My mind is at ease when I see
a large inventory, because that means that there will not be a shortage any
time.”

Overproduction means that more is being produced than the customer

demands (more than necessary or sooner than necessary). Often, this type
of waste is caused by a desire to use production means efficiently and to
work in large batches. Or the need to work ahead when there is nothing
else to do. The thought behind this is that large batches ensure an efficient
use of production resources. It seems nice to repeat the same activity over
a certain period, because it seems to go quicker. Overproduction leads to
other types of waste, like Transportation, Inventory, Motion and Waiting.
As a result, contrary to what seems logical, working in large batches does
not increase efficiency, but in fact makes things less efficient.

Read more about this in the chapter on Flow and SMED (Single Minute
Exchange of Die – Converting machines more quickly).

42
The most commonly used Lean tools to combat 'Overproduction' are:

• Flow
• Pull
• Kanban
• SMED

43
 Process complexity (Over-processing)

“Hello, I am Process Complexity. I love making things as complicated as

possible. Anything that can be done, must be done. I prefer to organise
everything in departments, functions, hierarchies and transitions with
proper protocols. I am especially convinced that as many people as possible
should make as small a contribution as
possible to an infinitely small number of
steps in a process. I hate working in a
standardised way. It's much better when
everyone has their own way of working. If
possible, I make sure that as few people
as possible have any direct contact with
customers. I love having a small front
office and a multi-layered back office.

I invented Call Centres and endless call menu's. Using the terms quality
management and transparency, I manage time and again to set up new
bureaucracies that manage to grow all by themselves. As far as I am
concerned, there's always room for old approaches and stuff. I try to make
sure that it takes new employees forever before they have any idea of what
the process is about. I make sure that large, overly complex and expensive
systems are bought that are hard to understand and move. I love ERP
systems that can do a lot, but that also make the process hard to
understand and that make decisions based on feedback systems rather
than concrete observation.”

Over-processing is a sensitive issue and the cause of many forms of waste.

Often, the argument that is used is “we have always done it like this”. By
looking at the activities from the customer's point of view (Voice of the
Customer), over-processing quickly becomes obvious.

44
We tend to add activities rather than remove them. Processes never
become simpler over time, but always more complex. We add another
additional step or another form to be filled in. Over-processing is often the
result of elements that are added to an existing process. Often, the
additions are the results of having to work around elements in the original
process that do not (always) function optimally. Another example is:
checks that have been added to detect mistakes that were made earlier.
Production tolerances that are narrower than they need to be is also a
form of over-processing.

The most commonly used Lean tools to combat 'Over-processing' are:

• Value Stream Map

• Poka Yoke
• Root Cause Analysis – 5 times Why
• Pareto analysis
• Spaghetti Diagram

45
 Defects

“Hello, I am Defects. I am the force that makes sure that, whenever

possible, everything needs to be done again. It looks okay but 'just needs a
little extra work'. Sloppy data entry, forgotten to get an initial, asking
vague questions, accepting inferior quality material and not providing the
necessary information. As a result, lots of things have to be reworked or
discarded. And …. it keeps everyone
busy.

I am the force who keeps the in-out

way of thinking alive and loves to
translate it into statistics. How
many calls did you handle (who
cares if they have to call back
later!)? How many customers did
you help at the counter (who cares
if you sent them on a wild goose
chase!)? I am the foundation of the
complaints department, which is
often given a beautiful title like
'service department' or even 'quality
department'. I love messy desks that make the Bermuda Triangle look like
an amateur. I hate well-organised spaces with visual aids for the logic of
processes.”

Defects are the largest and clearest example of waste. After the product or
service has encountered all the other types of waste during the course of
the process, it turns out there is something wrong with it. Absolutely not
something that adds Customer Value or Business Value. In everyday
practice, defects are seen as one of the possible risks. They happen and,
because we are so busy, we do not examine what caused them, which is
why defects are often solved through adjustments, temporary

46
improvements or work-arounds to make sure the work keeps going, rather
than looking for the root cause. As a result, the process becomes more and
more complex (over-processing).

Possible Lean tools to combat 'Defects' are:

• Value Stream Mapping

• Root Cause Analysis – 5 times Why – Fish bone
• Pareto diagram
• Poka Yoke
• Multi-skilled operator

47
 7+1 - Talent (Skills)

“Hello, I am Talent. I have a lot of capacities, but that is not what I am used
for. In fact, I do the things that I have always done, and I have never been
asked to take on additional tasks. I won't ask for additional tasks, because I
am being judged on the basis of my existing tasks, so that's what I keep
focusing on. Of course, I could help my colleagues by taking on additional
tasks (temporarily), but they never actually ask me to do so.

I also know a lot. I know exactly why some things keep going wrong or why
some procedures don't work. I can't influence that. I try to make things
easier for myself occasionally by working around a standard. That works
for me, but I keep it to myself. Nobody is interested. I just do my job. In the
past, I've often tried to mention things, but team leaders or managers
usually think they know better. What drives me mad is when staff members
(or outside people) are flown in to improve my work and come up with
solutions that don't (and can't) work.

I make sure that the results are good and as

long as nobody comments on that,
everything's going fine. I would like to take on
additional work, but I won't if it's not
appreciated!”

'Talent' (or not using talent well) was later

added to the seven types of waste.

Is everyone in the right place within the organisation and do we use their
talents enough? Do we ask our employees what is bothering them (waste)
and what they think can be done about it? Often, we leave that to the
team leaders, staff members or external employees, while they are not
aware of the waste in the process.

48
Team leaders and managers are experts in 'solving problems for the
employees'. As a result, many employees 'stop thinking'. Lean calls that
'waste of talent'. In many cases, the brains of the employees are not used
by the company (waste of talent). These are the people who encounter all
kinds of waste daily, are able to come up with solutions and know what
does and does not work.

An important principle in Lean is 'Kaizen' –change for the better – by asking

people in the workplace what is bothering them and what they think the
solution is. More about this later.

49
3.3 Identify the Value Stream – Create the Value
Stream Map

When the customer value has been

defined, in many cases the Value
Stream Map (VSM) will be made. A
VSM is a data-rich process map which
is used to visualise the information
flow, the data flow, the product flow
and degree of process flow. A VSM
provides insight into the entire
production process. It starts with a
customer demand and ends by
meeting that demand.

Many Lean improvement programmes use the VSM. Value Stream

Mapping starts by mapping the current situation (Current State Map).
After analysing that current situation, a VSM is created of the 'ideal'
situation (Future State Map). A plan is then made to move from the
'current' state towards the 'ideal' state.

Figure 3.4

The VSM provides insight into the existing production process and into
possible wastes and redundant steps in the process.

50
 Figure 3.5

The fact that all the players in the process are in one room and inform one
another of their activities creates a mutual understanding for each other’s
situation and, in many cases, leads to improvements.

What are the elements that make the Value Stream Map session
successful?
1. Creating a single reality that is carried by the entire team
2. It is a method that is aimed at improvements
3. It uses visual techniques

Item 1: Creating a single reality that is supported by the entire team

A VSM is always made with the entire team and always starts with an
empty piece of paper – 'Value stream mapping is a paper and pencil tool'.
51
The biggest mistake a Lean
practitioner can make is to create
a VSM behind a computer, to hand
out a printed version at a project
meeting and then discuss it with
the project members.

Often, those types of sessions end

in arguments about the lay-out
rather than the content of the
VSM. A proper VSM always
involves the project team, 'the people who do the actual work'.

The VSM session often lasts a morning or afternoon (or longer) and results
in a shared representation of the actual process. It is supported by
everyone, because it was created in the presence of all the players.

Often, we look at a process from the perspective of our own department,

which in many cases leads to sub-optimisation. A VSM follows a product
across all departments, which produces more of a bird's eye view
compared to that of an individual department or function.

A Value Stream Map is a powerful tool. The fact that all the players in the
entire production process are in one room and together recreate the
production process, identify elements of waste and discuss how they can
be avoided, provides many ideas about how to organise the new process
(future state). The understanding for each other’s situation and the insight
into the entire process ensures that every VSM session adds value.

Item 2: Method aimed at improvement

The VSM is a process modelling technique that is aimed specifically at

making improvements by mapping elements of waste in the production
process. That means that a VSM is not a process description whose aim it is
52
to (1) implement an IT system, (2) create work instructions for new
employees, or (3) provide a description of the process.

Typical elements of a VSM are:

• Process transition points

• Work-in-progress
• Customer Value add, business value add and waste
• Re-work
• Waste
• Process Lead time
• Process times

Item 3: Uses visual techniques

A VSM session is interactive. Because the Value Stream Map is put on the
wall, colours are used and a fixed notation technique, the participants are
given insight into the entire process. This ultimately leads to more and
better solutions that serve the purpose of the entire value stream (no sub-
optimisation) and to accepted solutions by all players in the value stream.

A good VSM is a VSM which has led to an improved process. VSM is not an
end in itself, it’s a means to an end.

A VSM can also be used as (1) a Business planning tool, (2) a

Communication tool and (3) a Change management tool.

How to create a good VSM is discussed in chapter 4.1, which takes a closer
look at the Lean tools.

53
3.4 Create ‘Flow’
What happens when you have to go to the hospital and make an
appointment? You make the appointment in 3 weeks, receive a
confirmation of the appointment, you get on the bus, take a seat in the
waiting room, usually the doctor is running late, you are called in and take
a seat, the doctor discusses your file/complaint with you, you need to have
a blood sample taken and perhaps an X-ray. The blood sample can be
taken the same day, albeit at a different location in the hospital. However,
the X-ray requires another appointment, which means that the entire
process starts all over again.

Clearly, there is no ‘Flow’ here!

There is 'Flow' when all the steps in a production process follow one
another without waiting periods, defects or having to redo things – every
step adds value.

'Flow' is synonymous with a continuous process. We talk of 'Flow' when

the goods, services or materials used in production as it were, flow
through the process, with every step adding value, without there being any
delays between the different steps in the process.

‘The world of batch-and-queue’ (Womack)

'Flow' thinking is not intuitive. We were raised to think in terms of mass

production. Whenever we try to organise processes efficiently, we nearly
always end up with 'specialisation'. We chop the process into smaller bits,
buy large machines, give people specialist tasks, organise those specialist
tasks in departments, appoint managers to lead the departments, who we
then judge based on local efficiency and we start producing large batches.

NB: Specialisation is not a bad thing – often, it is the only way we can work
efficiently.

Specialisation can lead to all kinds of waste that we discussed earlier, for
example:
54
 • Large machines, large batches
• Large inventory of raw materials, work in progress and finished
products
• A lot of transportation of materials and products
• Departments operating within an island culture (often with
conflicting CPI's)
• Defects are often passed on to the next step in the process

An illustrative example

Suppose that 300 letters have to be mailed. There are 4 process steps that
need to be carried out; (1) folding the letter, (2) putting the letter in the
envelope, (3) closing the envelope, and (4) stamping the envelope. How do
you organise the process?

Solution 1: Specialisation: 9 out of 10 times, people give the following

answer, we create a production line: (a) 1 person folds, (b) 1 person puts
them in envelopes, (c) 1 person licks the envelope and (4) 1 person puts the
stamp on the envelope.

Solution 2: Multi-skilled operators - One piece ‘Flow’: Everyone does

everything (say 4 people – give them each 75 letters, envelopes and stamps)

1. The drawback of the solution (specialisation) is that the processes by

definition do not take long, which means people have to wait and there will
be intermediate inventory.

2. Another disadvantage of specialisation is that this process requires more

steps (picking up and putting down again) – specialisation 15 steps, ‘Single
Piece Flow’ has 9 steps.

3. Another disadvantage of Specialisation is that it creates inflexibility. If I

want to do another 50 letters, I need 4 people. In the case of ‘Flow’, you only
need 1 extra person. This effect also applies when there is a drop-in demand.

55
A 'Flow thinker' wonders: (1) Why does it take a municipality 10 weeks to
approve the extension to my house? (2) Why does it take a full week for
the results of my blood test to come back? (3) Why does it take them two
weeks to fix my espresso machine when I am having it repaired?

'Flow' means that process steps are connected without intermediate

inventory. 'Flow' means that process steps are connected that used to
operate independent of each other. When process steps are connected,
teamwork improves, problems become clear immediately, feedback about
hick-ups in the process and the pressure to solve problems increases.

An illustrative example

‘Flow’: If the process is organised in such a way that the book that you order
online is delivered on the same day, there is little margin for error.

No process ’Flow’: If the process is organised in such a way as to guarantee

delivery within 2 weeks, it is not a problem if the inventory doesn’t match, we
have 14 days to fix it.

In which process will the problems come to light more quickly?

In which process is the pressure to solve problems immediately higher?

It has often been said: An important additional advantage of ‘Flow’ is that

problems come to light more quickly. The World of batch and queue makes
people lazy!

What does it matter if the machine is stopped for 3 hours when we have a 6-
week inventory!

One of the additional advantages of 'Flow' is that it makes problems visible

in the process chain. In a production process that is organised according to
the principles of 'Flow', one has to respond to these problems. What does
it matter if production has to be halted for two hours when there is a five-
week inventory in the warehouses? If we organise the production

56
according to the principles of 'Flow', a two-hour halt in one of the
production steps means we might not be able to meet the delivery time of
1 day.

Lean aims for “One Piece 'Flow'” or “Single Piece 'Flow'”, in which all
attention is focused on the production of one product or service – a batch
of 1 (in practice, there is a gradual development towards smaller batches).
If 'Flow' is not possible, minimal buffers are used (supermarkets – see pull).

'Flow' has a number of advantages:

• Lower (intermediate) inventory

• Higher quality (fewer defects) – defects are identified immediately
and may not be passed on to the next step in the process
• Multi-skilled & motivated employees
• Shorter conversion times (SMED)
• Production based on customer demand (Takt time)
• Higher predictability
• Bird's eye view of the process, without complex tracking & tracing
• Higher flexibility, process is easier to adjust
• Less turbulence
• Faster delivery to the customer!
• Improved cash flow because customers can be billed more quickly

Many companies experience problems with the lead time, and in many
cases, analysis shows that this is caused by the 'Flow' being interrupted.
This can be visualised in a Value Stream Map by showing the amount of
work-in-progress between process transition points (see Chapter 2).

Quick processes are cheap! If customers demand a quick delivery, they

often have to pay a premium, based on the assumption that quick
processes are expensive – they require more people! This is a huge
misunderstanding. In many Lean improvement programs, lead time is
often reduced by 50%, along with the work pressure on the employees.
57
The reason is simple, the lead time is reduced because:

• Waste is removed from the processes

• Long processes are expensive to manage

An illustrative example

As an example, we take the ‘permit department’ of a large Dutch

municipality. The lead time of, for example, the application to obtain a
permit to build a dormer is 10 weeks. On average, the department receives
20 applications per week.

On average, the department processes 200 permits at the same time, which
means that each employee has to manage an average of 30 permits. Permits
are often picked up and put down again, there is a lot of set up-time-loss

If we manage to reduce the lead time to 2 weeks, we only have to manage

6 permits.

The latter situation is far less time-consuming!

In our daily work, the 'Flow' is often interrupted.

• e-mails we print out, fetch and read but not respond to

immediately
• While distributing medications, we are interrupted because
colleagues ask us all kinds of questions
• The phone rings while we are making a quotation

Why is 'Flow' important?

58
 • Customer Value – customers want a product and usually they
want it quickly
• Efficiency – a process that is organised according to 'Flow' in many
cases is more efficient (cheaper) than “non-Flow” processes
• Waste comes to light sooner.
• Cash flow – the sooner the requested products are delivered, the
more quickly customers can be billed

Frequently used tools to create 'Flow' are:

• VSM
• Theory of Constraints
• Little's Law – work-in-progress analysis
• Takt time
• Line balancing
• Standardised work
• Single Minute Exchange of Die
• Jidoka (halting the line whenever there is a defect or when the
flow is in danger)
• Heijunka1 – Workload Levelling

1
Heijunka is the Japanese term for 'levelling'. It is a method in which the
products or parts that have to be made (the product mix) is balanced.
59
3.5 Let the customer ‘Pull’ value

Many companies produce based on inventory. The production process is

planned as efficiently as possible. The production orders are planned based
on local efficiency. This is what Lean calls a 'Push production'. The focus is
on the efficiency of the production process. The planning department
makes the planning based on expected demand. It manages the individual
work cells, orders are released as quickly as possible, every work cell is
focused on its own efficiency, in line with the organisation's CPI's (local
efficiency). There is huge intermediate inventory and little coordination
between the various work cells.

Figure 3.6

In a 'Push' organisation, a lot of time is spent on 'managing inventory',

whereas the aim of Lean is to eliminate inventory.

“The more inventory a company has …. the less likely they have what they
need” … Taiichi Ohno

60
Flow is not always possible

Lean initially focusses on 'Flow', but in a number of cases, flow is not

possible. For example, in a supermarket, where the desired delivery time is
shorter than the (at this time the best possible) 'production time'.

If I go to the supermarket to buy peanut butter, the flow cannot start the
second I enter the supermarket, because that would mean I would have to
wait for 2 days, making the production process very expensive. One jar of
peanut butter would cost me € 1,000. -

Lean solves this logistical problem with 'PULL'. It has been said: 'Flow if you
can, Pull when you must'.

How does a “Pull” system work?

As mentioned earlier: 'Flow' is not always possible, sometimes there is a

need for inventory to solve imbalances in the system. A minimal inventory
is maintained, the so-called 'supermarkets'.

The pull system works like the shelves in a supermarket. As soon as a

product is taken off the shelf and scanned at the check-out counter, the
product is ordered from the supplier, making sure that it can be back on
the shelf the next day. This means that inventory is minimal and directly
connected to customer demand. This means we will not analyse the
immediate demand for peanut butter and unleash several scheduling
algorithms. If there is one thing we know for sure – schedules are never
accurate.

The leading principle in a 'Pull' system is: 'EXIT INITIATES START'. Or in

other words: “Our production is not based on expected customer demand,
but on actual customer consumption”.

61
Figure 3.7

Pull system using Kanban (see above)

Step 1: Requested product is supplied from the 'supermarket inventory'.

The 'supermarket' inventory is kept as small as possible (after all, inventory
is waste).

Step 2: At that moment, a signal is sent to the 'previous' part of the

production process. Originally, this was done by sending a kanban (card) to
the production process 'downstream'. Kanban is Japanese for card or
signal.

Step 3: Production starts by replacing the product that was sold. Now
intermediate inventory is required from the previous production cell,
which again leads to a signal to the process downstream.

The leading principle in a 'Pull' system is: 'EXIT INITIATES START'. Or in

other words: “Our production is not based on expected customer demand,
but on actual customer consumption”. In this example, a work cell
produces a partial product when it is required by the next work cell.

62
What are the advantages of PULL?

• Substantial reduction in inventory (both the finished product and

work-in-progress, WIP):
– No inventory of products that may never be sold
– No “fire sale” promotions with large discounts that reduce
profit margins and upset the market
– Reduction of warehouse capacity
– Fewer actions to manage the inventory (counting, moving,
etc.)
– Less capital being tied up
• No rush jobs to process backed-up orders
• No unclear polluted systems and transactions that are on hold

Push is driven by planning, with each work cell focused on its own work.
Pull is driven by actual customer demand. No planning is required, and
intermediate inventory is minimal. In order to set up a proper pull system,
it is crucially important to determine the minimal (intermediate) inventory
(WIP).

Note: Lean does not mean that no planning is involved! Lean does tell us,
however, that planning based on expected customer demand is not always
the best solution, that there are alternatives that make it possible to
reduce inventory in the chain and a production rhythm that is determined
by actual demand.

Frequently used Lean tools to create 'PULL' are:

• Kanban
• Supermarkets, Just in Time
• Visual management
• Two-bin principle
63
3.6 Pursuit of Perfection
“No matter how many times my employees improved the process by
making it Leaner, they would always find more ways to eliminate muda
(waste) by eliminating more waiting time, inventory, effort, space needed
and errors”.2
There is an anecdote that describes Pursuit of Perfection beautifully: “In
the past – when a plane would depart late from the gate, we hoped it
wasn't our fault. Everyone was busy making up excuses to show why
someone else was to blame and not us. Now, we see a delay as an
opportunity to improve our services. The world is changing, we are never
finished, things can always be better”.

Everyone, everyday a little better than yesterday

Kaizen is an important pillar in Lean theory. Kaizen stands for 'change for
the better' (In Japanese, 'Kai' stands for change – 'Zen' stands for better).
In a 'Lean organisation', everyone is busy on a daily basis to improve the
process further (less waste and more customer value). All employees
consider it their task to signal, discuss and eliminate waste together.
Improvement becomes part of everyday work. Frequently used tools to
pursue perfection are:

• Day start – improvement boards

• Visual management, 5S
• Poka Yoke
• Kaizen events, A3 management
• 5 times Why (root cause analysis)

These 'Lean tools' are discussed in detail in the next chapter.

2 “Lean thinking” by James P. Womack and Daniel T. Jones – page 90.

64
PART 2: THE LEAN TOOLS

‘’Quality is not an act, it is a habit’’.

– Aristotle

65
66
4 THE LEAN TOOLS

4.1 Value Stream Mapping – VSM

Various books were written about Value Stream Mapping that all show one
specific methodology. In practice, every Lean expert has an own style. In
this paragraph, we discuss a method that is based on our own extensive
experience. It is a method that is accessible and effective.

In this paragraph, we discuss the following steps that lead to a good Value
Stream3.

Figure 4.0

3 Learning to see, Mike Rother and John Shook.

67
STEP 1: Determine the scope

It is important to determine in advance what process and what level of

detail will be described and what product or service will be discussed. This
may seem easier than it is. In practice, there is still a lot of room for
discussions if this is not determined in advance.

Defining the product family is important to determine which product or

product group will be described.

Clients tend to make the product scope as broad as possible. One large
bank wanted to improve the redemption process. The client was asked
what he meant specifically, did he refer to mortgages or money loans, did
he want to focus on the corporate market or the retail market? His answer
was simply: “Everything”. In practice, this is problematic. The corporate
market and the retail market were served from different departments and
supported by different systems. In fact, the processes were nothing alike.
They are different product families that cannot be captured in a single
VSM.

68
Below you see an example of how the different product families can be
visualised.

Figure 4.1

The SIPOC is a tool that can help describe the process scope of the
product family that has been selected

SIPOC is an abbreviation that stands for Supplier, Input, Process, Output

and Customer. It is a tool designed to outline the process and the entire
playing field. The process is visualised in 5 to 7 main steps. It is a tool that
is used to create a shared understanding of the process and of its
boundaries. In addition, the SIPOC shows which players are involved in the
process (Suppliers and Customers). This provides a good indication for the
participants in the VSM session.

“Where does the process start?” What are the intermediate steps? Does
the Value Stream include the activities of possible suppliers? Involving the
activities of the suppliers increases the changes of improvement. On the
other hand, improving the process becomes a lot more complex, because
any influence of the activities of suppliers is limited.

69
 Figure 4.2

“Where does the process end?” Again, this is about determining the scope.
A broader scope increases both the possibilities and the complexity.
Ultimately, the scope has to match the objective.

Setting up a SIPOC involves the following steps:

1. Process: What are the steps in the process?

2. Output: What is the output of those steps?
3. Customer: In this process, who is the customer?
4. Input: What is needed to generate the output?
5. Supplier: Who supplies the input to the process?

70
STEP 2: Draw the Value Stream

Drawing the Value Stream consists of four elements that each answer part
of the question:

1. What is the 'Voice of the Customer'?

2. What is the main process, what are the process transition points?
3. What are the sub-activities for each of the transition points?
4. Where is the waste, business value and customer value located in
the process?

Figure 4.3

71
Item 1: The 'Voice of the Customer'
It is clear from the SIPOC who the customer(s) of the process is/are.
However, it is important to have a clear idea of what the customers expect
from the process in terms of time frame, costs and quality.

Item 2: The process transition points

A transition point is when a process moves from one department to the

next, or from one person to the next (which can be within the same
department). Time can also lead to a transition point, for instance when
the orders are received in the course of the week and the planning is made
on Friday.

Process transition points are a major source of waste.

Item 3: Sub-activities for each transition point

For each of the transition points, the sub-activities are displayed.

Depending on the scope of the problem being tackled, the level of detail is
determined.

After the overall process has been drawn, it is indicated for all the sub-
activities whether they add customer value or business value or can be
considered waste. This is an important step to make sure that the team has
the right discussion. The aim is to minimise the number of process steps
and to organise the remaining steps in such a way that flow is created.

72
Figure 4.4

STEP 3: Add flow of material & information

A process does not consist of activities alone. Information, systems, forms

and raw materials are used to carry out the activities. These components
are an important part of the process. When it is clear who needs what and
when, the optimal coordination can be determined.

Many Lean projects have to do with time – reducing the lead time. An
important cause of long lead times is 'work-in-progress' (WIP), which

73
makes it clear where time is being wasted. Where the product or service is
put on hold without adding value.

WIP also plays an important role in the Theory of Constraints (TOC).

Inventory before a process step is an important indicator of a possible
bottleneck.

WIP is indicated in volume or in time (time that the work is on hold before
it is picked up). Often, data analysis is needed to unearth this information.

Figure 4.5

74
 An illustrative example

A municipal permit to build a dormer of extension takes 10 weeks. There

are 10 process transitions and 6 different employees are working on it.
Processing a permit for a dormer takes about 12 hours (1½ day) (CVA and
BVA).

The reason that it takes 10 weeks, is because 97% of the time is spent
waiting for the next step. Value is only really added 3% of the time. The
WIP is 9 weeks, 3 days and 4 hours.

By providing insight into the work-in-progress for each transfer point, it

becomes clear where the WIP lies, allowing us to focus on measures
designed to reduce the lead time.

STEP 4: Add process data

To get a clear picture of the process, process data are needed, for
example:

• Process time (how long does the process take)

• Batch size
• Machine up-time
• Machine conversion time
• Number of FTE's
• Number of orders/units per month/week/day and the variation in
the number of orders/units
• Rework % - Defects %

Relevant data depend on the nature of the process, the nature of the
problem and the direction of the solution. Often, it becomes clear during a
VSM session what additional data are required. In many cases, the data

75
have already been collected prior to the VSM session, in which case the
VSM is enriched with the relevant data in a second session.

Figure 4.6

76
STEP 5: Add Process & Lead time

Finally, the lead time of the process is examined, using the process time
(“touch time”), the waiting periods and the lead time. The process time is
the time it takes to carry out one set of activities. The waiting periods
(WIP) is the time a product or service is on hold in between the process
transition points. Altogether, they provide a picture of the total lead time
of one product or service throughout the entire chain of activities.

Figure 4.7

77
VSM – Some practical examples
Figure 4.8

78
Frequently used process information
Table 4.0

Process(ing) Time The time that is required to make one product or

or Cycle Time or deliver one service, the net processing time.
touch time Waiting times and storage are not included, for
example.
PLT The actual time needed to produce and deliver
(Process Lead one product or service, including waiting time.
Time)
Process Cycle PCE is a measure that indicates how efficient a
Efficiency process is measured in production time against
PCE the overall lead time.
Process time (VA) / Lead time (PLT) * 100%
Work in Process WIP is the work that still has to be done. This
(WIP) can be measured across the entire chain or per
department. It is measured in the number of
orders or work requests.
Exit Rate The amount of work that is done per time unit,
measured in the number of services or products
being delivered per time unit.
Little’s Law A quick estimate of the average lead time (PLT)
can be calculated:
Lead time (PLT) = Work in progress (WIP) / Exit
Rate
Available work The net number of working hours per day that is
time available for production or service provisioning
(time present minus breaks, lunch, planned
maintenance)
Takt Time The theoretically available process time per step
for the delivery of a product or service, which
depends on the customer demand in relation to
the available work time.
Available work time / customer demand in that
time

79
 Up-time This is the time that a machine can be used. The
time that a machine is under maintenance or
needs to be changed is called down-time and is
deducted of the total time.
100% - Down-time %
Set-up Time This is the time that is needed to change
C/O (Changeover) between the production of different products.
The C/O is the time from good product to
another good product, during which a setup
took place.

80
4.2 Flow

After the VSM has been created and it is clear where the waste, the
business value and customer value are located. The waste needs to be
removed, the business value reduced and the remaining process steps
have to be organised in such a way that a flow is created. There is 'Flow'
when all the steps in the production process are lined up without waiting
periods, defects or the need to redo things. 'Flow' is synonymous with a
continuous transition, when the goods or materials as it were, flow
through the process. Each step adds value, without having to wait for the
next step in the process. There is no WIP (Work In Progress).

So flow is not about whether all employees are busy all day/the employees
are ‘not standing still’. It’s about the product or service ‘not standing still’,
value is always added.

After the VSM has been created of the existing process, waste has been
removed, the business value added steps have been examined with a
critical eye and are reduced to a minimum, it is time to create flow. The
remaining process steps are 'organised' in such a way as to create flow and
minimise the WIP (Work In Progress).

In order to create flow, we need to understand what the Takt time is and
balance the lines on the basis of Takt time (see next paragraphs).

81
 Takt Time

Takt comes from the German word for beat or pace. The pace with which
we need to produce in order to meet customer demand.

Figure 4.9

An illustrative example

• In mortgage process simulation, the Takt time was 30 seconds:

Takt time = (18 minutes) / (36 applications) = 30 seconds
Every 30 seconds, the customer requests a new quotation. If we want
to create flow, we need to balance the processes at 30 seconds, if a
step takes longer, a queue is created, if it takes less, people have to
wait and idle time is created.

• In the truck factory, each day, 90 trucks are made to meet customer
demand. The available time is 10 hours:
Takt time = (10 hours * 60 minutes) / (90 trucks) = ‘06:40
The amount of work is divided into work packages of 06:40, to make
sure a new truck is completed every 06:40.

82
This means that the speed of the process is determined by customer
demand. This sounds logical, but in practice it rarely happens. Whenever
we have nothing to do, we work ahead to build a “buffer” for future
orders. In other words, we create inventory, one of the 7 types of waste.

An example to clarify

A shift lasts 7½ hours, including a 45-minute lunch break. During a shift,

920 units are ordered. A shift consists of 5 employees.

The Takt time is in this case

(7½ hours * 60 minutes -/- 45 minutes lunch) / (920 units) = 26 sec

This means that every 26 seconds, a new unit will have to be completed.
The Takt time says something about the input and output velocity of the
process. The realisation of that product or service has to be matched to
that Takt time to create flow.
The Takt time indicates ‘after how much time’ a product or service needs
to be completed. This does not mean that it is also produced in that time.
The PLT (Process Lead Time) depends on the number of process transition
points. If there are 10 work cells that have been balanced on Takt time,
the PLT is 10*26 seconds = 260 seconds.

If a process steps takes 50 seconds, we need two employees in the work

cell in question (50sec/26sec=1,92).

The Takt time of a process is the basis for organising the process – the
basis for balancing the process (line balancing).

83
 Balancing processes - Line balancing

Once the Takt time of a process has been calculated, the lines have to be
balanced to match that Takt time. The overall lead time of a process has to
be divided into chunks based on the Takt time.

The example below contains the Takt time and the process times of the
various work cells.
Figure 4.10

Cell 3 is the bottleneck, because its process is 38 seconds, whereas a new

order comes in every 30 seconds, resulting in waiting time – WIP (Work-in-
progress). The initial response of the manager of cell 3 is: “I need more
people!”
Figure 4.11

84
A Lean thinker will balance the lines, for which he needs insight into the
sub-activities of the separate cells. What happens in the individual cells?
Which sub-activities add Customer Value or Business Value and where is
the waste?

By eliminating waste, reducing the business value and balancing the lines,
flow can be realised. However, a great deal of 'idle time' remains, because
most cells stay well below the Takt time, which means that they have
nothing to do for a considerable amount of time. A next improvement
could be to eliminate that waste, minimise the business value and balance
the lines. See the graph below.

Figure 4.12

In theory, this is an ideal situation, but in reality, this process will be very
vulnerable. Six bottlenecks have now been created. If anything happens,
there will be an immediate queue. In practice, this will lead to considerable
waiting time (waste) and the process will be unpredictable. In addition, in
practice, it is impossible to remove all the waste from the process.

The situation presented below is more likely to occur. All the process times
of the work cells are below the Takt time, and there is flow. Every 30
seconds, the work cell will pass on the unfinished product to the next work
85
cell for further processing. As long as customer demand is constant, there
will be no queues. The lead time of this process will be 210 seconds (30
seconds * 7 work cells).

Figure 4.13

Important tools that are used in balancing the process are (1) time study,
(2) Takt time graph and (3) skill matrix.

The balancing techniques apply not only to 'one-piece flow' – small batches
may be needed in between certain steps – but the use of process balancing
tools is ultimately designed to push the process in the direction of 'one-
piece flow'

86
 Spaghetti Diagram4

Why a spaghetti diagram? A spaghetti diagram helps to:

• Gain insight into the inefficiencies in the organisation of a

workplace
• Identify possibilities to reduce Motion and Transport
• Improve communication
• Improve the division of staff and labour.
• Create a safer work environment
• Reduce Defects and waiting time

A spaghetti diagram is a visual analysis of the route of a product, a

document or the employees. Various angles can be selected, depending on
the starting point. The product can be “followed”, for example, when the
analysis focuses on the lead
time of a product. Or the focus
can be on the routing of the
staff, to determine whether or
not the workplace is organized
ergonomically and efficiently
(reduces motion – type of
waste). In addition, it is possible
to look at various products,
documents and employee
routes together to see how
they influence each other.
Figure 4.14

4Source ASQ:
http://www.asqlongisland.org/seminars/2011_01_20_LSS_Tool_The_Spaghetti_Di
agram.pdf
87
The focus is on the physical movement of products or people, in particular
on the logical sequence from a logistical perspective. For that reason, a
workplace is selected as a starting point, with a focus on unnecessary
movements in order to identify waste (Transport, Motion, Process
complexity (Over-processing). It can be a department, warehouse,
operating-theatre or an entire floor.

The spaghetti diagram starts with a schematic representation of the room

under examination. Next, for each movement of the product or person,
the route between start and finish is indicated. The actions that are carried
out at each point along the route are not of primary importance. For each
movement within the time frame in question, a new line is added. When
routes are repeated, the line will become thicker and messier, which is not
a bad thing, because it will provide the desired insight. The messier and
thicker the lines become, the more reason there is to take a critical look at
those lines. The next step is to determine how the workplace can be
organised in such a way as to ensure that the routes are limited to a
minimum and represent a logical order.

The spaghetti diagram can also be used as part of a 5S project (more about
that later). By looking at the movement of the employee, the workplace
can be organised in such a way that minimal movement is required to carry
out the tasks. To that end, the movement of the employees and of the
material are combined in one diagram.

88
To gain new insights, it can also be useful to make various spaghetti
diagrams of the same room at different times of the day or week. It is best
to not just include the route, but every individual movement. Different
colours can be used to distinguish people, products or moments.

Figure 4.15

89
4.3 Generic Pull system
Process Cycle Efficiency

A much-used calculation in Lean projects is the PCE (Process Cycle

Efficiency). The PCE is often used to measure the efficiency of a process.

Figure 4.16

The efficiency of a process is measured by dividing the time that is spent

on customer value added activities by the lead time of the process,
whereby the lead time is calculated as time effectively spent, not including
breaks, for example.

Please note: the PCE of a company with a lead time of 3 days that is open 4
hours a day is better than the PCE of a company that is open 8 hours a day.

90
An example

In a back office of a bank, quotations are made. Making a quotation takes 3

hours, if everything goes right at once. A working day contains 8 hours. The
expected lead time is 3 days. What is the PCE?

Answer:
PCE = CVA / PLT , PCE = 3 hours / 3 days = 3 hours / 24 hours = 12.5%

An illustrative example

Processing a municipal permit for a building extension takes 10 weeks, while

only 9 hours are spent adding value.

The PCE of this process is: PCE = 9 hrs. / 10 wks. = (9 hrs.) / (10*5*8 hrs.) =
2.25%

The remaining time is business value and waste. In this case, it is “waiting” for
the various phases in the process (work in progress).

91
 Little’s law – managing work in progress
A much-used calculation in Lean projects is Little's Law (first described by
Professor John Little in 1952).

Figure 4.17

The Process Lead Time (PLT) of a product/service depends on the Work in

progress (WIP) divided by the Output (number per given period) (Exit
Rate).

An illustrative example

The work in progress is 40 quotations, the back office makes 4 quotations per
day. How long does the customer have to wait for the quotation? What is the
PLT / lead time of this process?

Answer: PLT = WIP / Exit Rate, PLT = 40/4 (per day) = 10 days

The PLT of a process/product/service is therefore directly proportional to

the amount of work in progress, when the exit rate (productivity) remains
the same. If we want to reduce the PLT, we need to get the amount of
work in progress under control (at a constant exit rate).

92
Depending on customer demand, we can calculate the maximum inventory
needed to meet customer demand. We call this the WIP cap.

An illustrative example

Quotation department of a large bank, the customer wants to receive a

quotation within 3 days. The exit rate of the back office is 15 per day. What is
the maximum amount of work in progress for the bank to meet the
customer’s requirement – a lead time of 3 days?

Answer: PLT = WIP / Exit Rate,

3 days = WIP / 15 per day = 45 quotations

There is a relationship between PCE, WIP and PLT. Generally speaking, the
higher the amount of work in progress, the longer the lead time of a
process, and the lower its PCE. The figure below illustrates that
relationship.
Figure 4.18

Normally, the existing WIP level will be considerably higher than the WIP
cap, which is why a plan has to be made to reduce the WIP gradually
towards the WIP cap, in order to solve potential problems.
93
Managing work in progress

To match the desired lead time, we need to 'manage the work in progress',
which means:

1. Determine the customer's desired lead time

2. Calculate the WIP (given a constant exit rate)
3. Measure the work in progress on a daily basis
4. Respond in the way that was agreed on in advance

Item 1: Determine the customer's desired lead time

What is the customer's desired lead time? When is the customer satisfied?

Item 2: Calculate the WIP (given a constant exit rate)

The WIP cap = customer demand * exit rate

Note: this calculation assumes a given exit rate. Another way to reduce the
lead time is to increase the exit rate via a Lean project. When waste is
identified and eliminated in a Value Stream Session, the exit rate will
increase, and the lead time will be reduced as a result. In these
calculations, we assume that, in the short run, the exit rate will remain
constant.

Item 3: Measure the work in progress on a daily basis

Every day, the actual WIP is compared to the WIP cap. This answers the
question: “Will we meet customer demand, will we deliver within the
specified time frame? Is the process under control?”

If the actual WIP > WIP cap, the specified PLT will not be realised.

If the actual WIP < WIP cap, the specified PLT will be realised.

Item 4: Respond in the way that was agreed on in advance

94
Measuring alone will not make us deliver better or more quickly. A so-
called control plan has to be created in advance to answer the question:
“what do we do when the WIP > WIP cap” (and vice versa).

An illustrative example – Managing, based on work in progress

• Espresso repairman: the WIP cap is 16, he will have to have a plan
what to do when he puts espresso machine # 17 on the shelf in
question.
For example, call a student, who comes over at night to make sure the
number of machines ‘to be serviced’ is below 16.

• 2 departments of a back office of a bank measure the WIP twice a day.

If a department is above the WIP cap, it calls in a department that is
below the WIP cap, which provides one person for one day. That way,
both departments meet their SLA’s. The problem with this solution is
that the departments are evaluated on budget and efficiency, and
lending out people does not fit within this concept. The CPI based on
local efficiency opposes this, even though everyone understands that it
is good for the bank as a whole!

95
 How do I calculate the WIP cap in a Generic
Pull System?

Question:

Given the following Information:

A process has an exit rate of 10 units/day, the current WIP is 200 units and
the Value Add Time = 8 hours. It is a 1 shift operation of effectively 8 hours
working time.

If I install a generic pull system?

What should WIP cap (in units) ultimately be, when they aim is to realize a
PCE of 10%?

How much WIP should I let flow from the process, before allowing new
work in the process?

Answer:

Step 1: What is the PLT?

PLT = WIP / Exit rate → PLT = 200 / 10 per day → PLT = 20 days

Step 2: What is the current PCE?

PCE = VA / PLT → PCE = 8 hours / 20 days → PCE = 8 / (20*8) → PCE = 5%

Step 3: What is the PLT if the aim is to realize a PCE of 10%?

PCE = VA / PLT → 10% = 8 hours / PLT →PLT = 80 hours → PLT =
(80/8)=10 days

Step 4: What should the WIP be if the aim is to realize a certain PLT?
PLT = WIP / Exit rate → 10 days = WIP / 10 per day → WIP = 100

96
Step 5: How much WIP should I let flow from the process, before allowing
new work in the process?
Current WIP = 200, WIP cap = 100
200-100 = I should let 100 flow away before allowing new

An illustrative example – Generic Pull

• A quotation department at a large bank has a PLT of 10 days, while it

takes competitors only 3 days. We are too late with our quotations.
To realize 3 days, we need to select at the gate.
• We have determined that quotations of existing customers have a higher
chance of success than those of new customers.
• We decide only to accept requests from existing customers. We make sure
that we process those within 3 days, when there is room (if the WIP < WIP
Cap) we also issue quotations for other customers.

97
4.4 The sea of inventory

Inventory is one of the 7 types of waste. In some cases, inventory is

necessary, for example when a product needs a few hours to dry or mature
or when demand is unpredictable, and the desired delivery time is shorter
than the production time. However, having unnecessary inventory is
waste.

There is however another reason why inventory is not desirable –

inventory masks waste. Think of production process. Between the various
production steps there is inventory. Reason being, that the various steps
do not constantly produce because of different operational problems. To
make sure the sub steps do not ‘dry out’ we speak of intermediate
inventory, making the intermediate inventory the solution as such! The
intermediate inventory hides the real problems.

Figure 4.19

98
4.5 Standardised work

The use of Standard Work as an important Lean Tool is discussed in further

detail in paragraph 5.2.2.

4.6 Visual Management

Visual management plays an important role in Lean management. It is part

of various Lean tools, including 5S, Kanban and improvement boards.

It is well-known that images are very effective and efficient information

carriers. As is often said: “A picture is worth more than a thousand words”.

Visual management is also an important tool for managing processes.

When the Lean manager is in the workplace, he or she wants to be able to
see whether or not the process is under control.

An illustrative example – Do I have everything I need?

In a nursing home, the intake process is not flawless. It has been agreed that
a checklist will be put up in the central room for each new customer. That
way, every employee can see how many new customers there are this week
and what the intake status of each customer is.

Visual management involves 'visualising the process'. Visual management

has to support the process and/or lead to improvements! The visual
information has to support the process, change people's behaviour and set
the improvement cycle in motion.

99
 • Visual management visualises waste (for example, all defective
parts end up in the red box, at the end of the shift, the defects are
analysed and corrected).
• Visual management prevents waste (for example, when the last
pack of printing paper is used, a message is posted on the wall
that new paper needs to be ordered).

• Visual management ensures that the necessary information is

available immediately (for example, work instructions are posted
on the wall, above the workplace).

• Visual management ensures that performance-related

agreements are available to everyone and that current
performance levels are visible to all.

• Visual management ensures that deviations from the standard

way of working are immediately visible (for example, when
someone forgets to hang the hammer back on the wall, this is
immediately visible).

• Visual management increases the involvement of the employees

(for example, measuring the department's performance on a daily
basis and reporting to the various teams within the department
creates involvement and competition).

All this seems clear-cut and doable, but in reality, it turns out to be difficult
to provide the people involved with the right information, in the right
location and at the right time. Often, managers provide their employees
with last month's performance results, and the question is how relevant
that information is to the employees. Will it motivate them to improve?
Does it change their behaviour?

The information has to meet a number of criteria:

100
 • Relevant – people in the workplace have to be able to influence
the results and use the information
• Understandable – 'at a glance' – A picture is worth more than a
thousand words
• Attractive – attractive and colourful
• Timely – real-time … It is impossible to drive a car by looking in the
rear-view mirror!

There are various kinds of information:

• Performance
• Procedures
• Priorities
• Plans (proposals)
• Problems

An illustrative example – Is my process ‘under control’?

A quotation department of an insurance company has an SLA (service level)

of 3 days. The exit rate is 40 quotations per day, the WIP cap is 120
quotations. In other words, if the work in progress is more than 120
quotations, the SLA of 3 days is not met. In the workplace, there is a board
showing the work in process (at 9:00 and 15:00), so everyone can see if the
process is ‘under control’. Twice a day, the team discusses the work in process
and takes steps to ensure it will not structurally exceed 120.

101
 An illustrative example – Do I have everything I need?

An example: an operator in a factory has a tool cart that clearly shows if a

certain tool is missing.

An example: a care institute has an arrangement that says there have to be

at least 5 towels and at the most 15. The towels are stacked and lines are
drawn on the wall to visualize when the upper or lower limit has been
reached.

Figure 4.20

Figure 4.22

Figure 4.21

102
Figure 4.23

103
4.7 5S

What is 5S?

Imagine asking any operator how often he searches for the right tool or
the right version of the maintenance plan. Asking a nurse how often she
searches for a thermometer, the right attachment for a wheelchair or how
often certain items she needs are out of stock. We lose a lot of time
searching, more than we think,
often more than 20 minutes a day
(that's 5% of our working day). This
also applies to home; imagine if
you want to prune the hedge, wash
your car or light the barbecue. How
much time do you lose because
you cannot find all the necessities
in one go? In a home situation this
is not very important, but in a
Figuur 4.24
working environment this leads to
serious loss of productivity or
unnecessary stress during an already busy working day. In addition, you
are often the only one working at home with the tools. But at work you are
working in teams. This requires a workplace organization that allows
everyone to work with the same set of tools and they do not waste time
searching.

5S is a step-by-step approach to ensure that waste caused by a poorly

designed workplace is eliminated.

104
 Figure 4.25

The purpose of this step-by-step approach is to ensure that only the

materials and machinery needed are present in the workplace. It also
ensures that the workplace is clean and safe and that all the necessary
materials and machinery are permanently in place and in stock. It should
be immediately visible when materials are missing. And because it is
immediately visible, you can address the problem to your team members if
something is not in the right place and ensure that the workplace remains
organized.

The steps of 5S are, (1) Sort, (2) Set, (3) Shine, (4) Standardize and (5)
Sustain.

What are the advantages of 5S?

• Clean and safe working environment

• Less waste
• Less space required
• Improved self-discipline
• Employee satisfaction increases

105
Often 5S is seen as a prerequisite for a culture of continuous improvement.
If we don't have the discipline to hang the hammer back on the shadow
board after use? If we can't explain that 5 seconds now, could possibly
prevent 5 minutes of searching in the future? How can we expect to build a
culture of continuous improvement? How can we think that we will be able
to achieve flow in our production process?

The advantage of starting with 5S in the workplace is that the results are
seen by every employee. The principle is simple and clear to everyone - 'it
can't fail'. Every employee is involved in this way. This is why 5S is often
used as one of the first initiatives in a LSS implementation.

Safeguarding 5S initiatives is not so easy

Culture: The long-term success of the 5S initiatives is determined by the

involvement of the employees or, in other words, by the mindset of the
employees. It is therefore of great importance that 5S becomes something
'from and by the employees'. The safeguarding of the 5S agreements is
part of the daily work routine. It has to be part of their work.

Structure: The improvement board can play an important role here. If 5S is

part of the daily improvement board/stand up agenda, it will slowly creep
into the 'genes of the employees'. It becomes routine, part of their work.
Findings are fed back during the daily standups and agreements are made
to further improve 5S in the department.

Management: It is often said that the workplace is a translation of

management behavior. Management needs to understand how much
waste there is on the shop floor due to the workplace layout. Management
should make a conscious decision to choose 5S and show in word and deed
that it is important.

106
Ultimately, 5S can only 'hold its own' if management is committed to 5S
and understands that a waste-free workplace is a prerequisite for all other
future improvements. The mindset of managers must also change. They
will have to guard the culture. For example, include 5S in the annual plans
and personal development discussions. Or by conducting 5S audits on a
weekly basis (accompanying the team leader on the shop floor).

Step 1: Sort

We are often on the shop floor and

complain that there is a lack of space
or that a lot of time is spent looking
for materials. This is a reason to start
5S.

Sort (step 1)' ensures that the only

things present in the workplace are
those things necessary to carry out the
work. With 'things' we mean
materials, machines, furniture,
Figure 4.26
information etc.

Let's have a look at our kitchen. For example, if I open the 'pan drawer', ask
yourself the following questions:

o Do I need all these? Every week? Every month?

o Can I find the pan I'm looking for within 1 second?
o Do I have to put 3 pans to the side before I have the one I am
looking for?

At home this is less of a problem but if this happens at work, several times
a day, by several people, it will distract us from what is important and is at
the expense of the time we can spend on activities that deliver customer

107
value. We are not in the workplace to search, we are in the workplace to
deliver customer value.

Simply put: a certain item (1) may be necessary, (2) may not be necessary,
or (3) we hesitate and dare not throw it away. If the item is not needed, we
throw it away. If the item is needed, then this item remains available at the
workplace. If in doubt, we give the item a so-called 'red tag' and the item is
'stored' separately until someone realizes that the item is still needed.

Is a particular item needed? What to do?

Yes Remains available on the shop floor
N0 Item is thrown away
Maybe Item receives a 'red tag' and the material in question is
quarantined.

After step 1, we have a workplace where only materials and machines that
are necessary are present and we have a separate location where we have
the items 'quarantined'.

Throwing away is not easy for

everyone, everyone has the
characteristics of a 'little
hamster'. Make good agreements
about throwing the items away.
For example, about whether
items can be taken by staff and
how this will be distributed. You
could also gift useful material to a
charity.

108
 An example to illustrate

In a nursing home the bathroom is full of wheelchairs. When a client is

taking a bath, 6 wheelchairs have to be taken out first. After the client has
taken a bath, the wheelchairs have to be moved back into the bathroom.

This process takes place several times a day. If we walk further down the
corridor, we come across several wheelchairs in various rooms and we also
see clients sitting in wheelchairs.

If we count the wheelchairs present in the department, we find that we have

10 wheelchairs 'too many'. The wheelchairs take up valuable space, get in
the way all day, are moved several times a day without any use, and have to
be inspected and maintained every year.

Besides all this, the wheelchairs have been purchased. 10 wheelchairs *

€600 = €6,000 while there is no budget for the faltering label printer - which
causes multiple irritations per day (waste)!

Tips 'Step 1':

• Make it clear to the employees why 5S is a solution to their

problem. This can be done through a 5S training, a 5S simulation
or by visiting a shop floor where 5S has been applied.
• Define in advance the conditions for when an item will be
quarantined
• Take photos of the current situation so that we can see the
improvements.
• Let the employees carry out step 1 by themselves.
• Designate a separate area (away from the shop floor) as a
'quarantine area.

109
 • Involve the responsible colleagues who are in charge of the
material and can decide whether something should or should not
be removed.
• Provide disposal facilities for material that can be thrown away,
e.g. a container.
• You can empty the entire area and only put back the items that
are needed.

Step 2: Set in Order

The second step within 5S is 'set in order'. The result of this step is that all
materials and machines are given a logical fixed location, so that at a
glance it can be seen whether everything is present and that it is
immediately clear if
something is missing or
not at the fixed
location. The location of
the item is determined
by the process. What is
convenient for the
operator? Where is the
item needed? How can
waste (movement) be
minimized? Figure 4.27

After this step it is also clear how the stock will be replenished. If these are
items that are purchased/re-ordered, such as print paper, bandages or
screws for example, then in step 2 attention is also paid to the ordering
process.

110
 After step 2, the print paper has
a fixed place. It is instantly clear
if it is not in the right place, it is
immediately visible when an
additional order needs to be
placed and it is visible whether
the ordering process has already
been initiated.

Figure 4.28

If everything has a permanent location, it is important that the employees

also return the materials here after use. This eliminates the time we spend
searching for materials. Visual management helps to stimulate the
required behavior.

Visual management is often used. This could be lines on the floor, shadow
boards, but also a 'Spaghetti diagram', 'Two bin principle' or 'Kanban
cards'. Note: these tools must serve a purpose, they should direct
employees’ behavior in the right direction. These tools are not a goal as
such.

Tips 'Step 2': Set in order

• For all materials, determine a fixed location, for example:

o Directly needed - on the body
o Every ½ hour needed - within 3 meters
o needed 5 times a day - within 10 meters
o Required every day - within 25 meters
• Design shade boards, decide how to make up shortfalls
• Together with the people, determine where the materials should be.
• Provide tools to move racks and shelves.
• Try to keep the floor as free as possible so that the floor can be
cleaned.
• Document layout, appointments etc.

111
Step 3: Shine

We all work better in a clean environment where everything has a fixed

place. A clean workplace also encourages us to keep it clean and to replace
items in the correct place.

An example to illustrate

A chef in a '5 star restaurant' is busy all evening keeping the kitchen well
organized, nice and clean. The chef knows that he can never serve all the
guests on time if it's a mess in the kitchen. Even when he's busy; cleaning up
the kitchen always has priority!

Maintenance: A frequently mentioned advantage of step 3 'Cleaning' is

maintenance:

• For example, maintenance of machines is needed less often if the

machines are cleaned properly and regularly. Think of computers in a
dirty and dusty warehouse.
• Furthermore, if a machine leaks oil on a dirty black floor, it will not be
noticed for months.

An example to illustrate

When Steve Jobs returned to Apple, he immediately instructed the

production directors to paint the floors white.

Tips 'step 3': Shine

- Contact the cleaning department and ask if they can include the room in
their cleaning schedule. Rooms are often completely full before the 5S
initiative, as a result this cluttered room is skipped by the cleaning
department.

112
Step 4: Standardize

If we don't standardize and ensure that everyone sticks to the standards,

the 5S initiatives will slip. Old habits die hard (plan - do - check - FORGET).
After a few months the shop floor will be back to the way it was.

In step 4 we need to make sure everyone knows what is required of them.

• Standards are clear to everyone

• Deviations from the standard are visualized and discussed
• Arrangements have been made about self-auditing (within our own
team)
• 5S and 5S audits are part of the daily routine

Figure 4.29
Tips for Step 4: Standardize

• Make sure that 5S is part of daily work

• Allow 5S to be part of the daily stand-ups
• Make the audit results visual and discuss them during the stand-ups

113
Step 5: Sustain (Stimulate).

Ensure that 5S is not a one-off action but that the 5S standards are further
improved. Management plays a crucial role in 'Step 5: Sustain. It is often
said that the workplace is a translation of management behavior.
Management needs to understand how much waste there is in the
workplace due to the design of the workplace. Management should
consciously show the importance of 5S, in word and deed.

Ultimately, 5S can only 'hold its ground' if management is committed to 5S

and understands that a waste-free workplace is a prerequisite for all other
improvements to come. The mindset of managers must also change. They
will have to guard the culture. For example, including 5S in the annual
plans and personal development discussions.

This implies that management must be involved in the weekly 5S self-

audits, by taking part in weekly audits. Management should witness the
state and the discipline on the shop floor. And therefore, show that he/she
considers 5S to be an important part of the daily routine.

Tips for step 5: Stimulate

• Manager performs a 5S audit once a week together with their

employee(s)/ middle management
• Arrange periodic audits - analyze the audit results
• Share the visible results of the periodic audits by means of visual
management
• Make sure that departments audit each other (cross departmental
learning)
• Integrate audit results into team performance agreements
• Current standards are the basis for further improvements

114
Why is 5S so difficult?

The steps in 5S are clear and understandable for everyone. Then why is it
so difficult to apply? Why can I clean up my shed once and install a shadow
board? But why is it so difficult to continue to keep my shed tidy so that
when I have to do a job to do, I don't have to look for a hammer and nails?

Just like all improvement efforts, organizing the workplace takes time. We
are often busy with our work, but we don't take the time to organize our
workplace together to benefit from it in the longer term. The difficulty lies
in taking time together and going through these steps, this requires
leadership.

As people we often choose for the short-term solution, even though we

know that in the long term we will run into problems. I am not prepared to
take 5 seconds to hang the hammer on the shadow board right now, while
I realize that this might prevent 5 minutes of searching in the future. In
some extremes you can also relate this to smoking, drinking and using
sugar; we know it's bad for our health, but we do it anyway!

This makes one thing clear, no 5S without step 4 and 5! No 5S without

leadership in word and deed (exemplary behavior)'.

How do I start with 5S? How do I implement 5S?

There are many ways to start with 5S. There is not one right plan. The plan
is not a goal, it is a mean. The right plan is the plan that leads to the
desired result. However, we can provide some tips and guidelines. These
are described below. We challenge you to make your own plan for your
department/organization.

115
As mentioned before, it is important to have the following in mind before
you start. No 5S without step 4 and 5! No 5S without leadership in words
and deeds!

Before you start renting a waste container, buying coloured tape and
training your employees in 5S, you will need to make sure that the
management is 'on board'.

Then you decide where you want to start. You can do this by explaining to
the managers and the team leaders about 5S and asking them who wants
to start with the 5S activities.

Planning

• Secure management commitment.

• Setting 1- to 3-year targets.
• Create a 1 year plan.
• Inform middle management and determine together in which
department you will start.

Preparation 5S event

• Schedule an implementation date

• Invite the participants to '5S training
o Explain the 5S theory and do a 5S simulation
o Visit the workplace with the participants and have them take
pictures of the current situation.
o Determine together with the employees in which zone you
will start and when you will start
o Determine together the purpose of 5S

• Make sure that all necessary materials and people are present on the
5S day.

116
• Inform other employees what 5S is and when it's going to happen

Execute 5S event

• Determine the zone you're going to 5S

• Distribute the tasks
• 12:00 1st joint inspection
• 15:00 2nd joint inspection
• Make a plan of how you're going to design steps 4 and 5
• Create an SOP (work instruction) on how to standardize and maintain
the current way of working (for the employees, the team leader and
the manager).
• Make agreements on how and when you will involve the other
employees in the department

Safeguard your 5S initiative

Before proceeding with other departments, you could use the first one as
an example to ‘set the standard’. This workplace should be perfect. This
will be the standard and reference workplace for the 5S initiatives to come.

This is not easy to accomplish; it requires improvements to be made. It

requires several PDCA cycles. Make sure you realize this by means of audits
and stimulating further improvement of the workplace (steps 4 and 5).
Now you are ready for the next 5S workplaces!

Ooh ... 5S in the office? 5S in a digital environment?

Of course, in the office we also regularly search for the stapler. In the office
we are also looking for the correct version of the latest word documents.

117
4.8 Poka Yoke

Quality checks do not add customer value! The customer expects the
product to be right the first time. Whenever a defective product is
produced, the standard reaction is often (1) an additional check, or (2) an
additional form. We rarely go back to the root cause and come up with a
solution to make sure it cannot ever happen again.

Poka Yoke stands for mistake proofing. A 'poka' is an unintended mistake,

and 'yoke' means to prevent. That means it is not about discovering an
unintended mistake or correcting an unintended mistake in time to
prevent the customer from seeing it – that is what we call firefighting.

The later in the process the mistake is discovered, the more expensive it
will be to fix it, which means it is a good thing to detect mistakes at the
source. However, the best option is to make sure the mistake will never be
repeated – Poka Yoke – mistake proofing.

A Poka Yoke solution requires a paradigm shift from detection to

prevention. Can we not improve things so that things never go wrong
again?

The approach is as follows:

• What is the defect? Describe the defect.

• What causes the defect? Go look.
• Analyse the process that is causing the defect.
• What is the root cause of the defect?
• Come up with and implement a Poka Yoke.

118
 An illustrative example

Recently, a pharmaceutical supplier has installed a WIFI network for

external parties. Although every employee was given the password, people
regularly ask about the code. How can we prevent this from happening?

The Poka Yoke is: print the WIFI password on the badges that were made
on arrival.

In the prison system, a system called video-sentencing is sometimes used.

The inmate does not have to be transported to the court, in a number of
cases, video conferencing can be used. However, considerable time was
wasted because the inmate was not positioned correctly in relation to the
camera. This also caused a great deal of irritation. How can we prevent this
from happening ever again?

The Poka Yoke is: nail the chairs to the floor.

A distinction is made between 3 kinds of Poka Yoke:

Figure 4.30
119
Tools that are often used with Poka Yoke are:

• Process Mapping
• 5 times Why
• Go to the Gemba
• Cause and Effect Diagram (Fishbone – Six Sigma)
• FMEA (Six Sigma)

120
4.9 5 times why

Processes nearly always become more complex over time, because

organisations grow and processes change, but the main reason is that our
response to problems/incidents is incorrect. We do not tackle the root
cause of the problem.

Often, we add another check, an additional form or an additional item on a

form. Any solution that is not based on the root cause amounts to dealing
with symptoms. We reach for solutions, which is often a core competence
of managers. The customers know nothing of the incident and everyone
does their best to make things 'run smoothly'. In many cases, only the
symptoms are dealt with. But the problems return.

Figure 4.31

The next page contains a practical example. By reading the problem and
the root causes (the outer ring) out loud, you will trip over the solutions. A
Root Cause Analysis (5 times Why) takes about one morning or afternoon
and is conducted with a group of experts. 75% of the time is spent on the

121
Root Cause Analysis and 25% on brainstorming about the solutions and
prioritising them using a Benefit-Effort matrix.

An illustrative example

Problem: Debris is falling down

Why is debris Building is eroding
falling down?

Why is the Building is cleaned twice a week – the

building eroding? combination of detergent and exhaust fumes
It is not happening causes erosion.
to other buildings?

Why is the There are a lot of pigeons who defecate on the

building cleaned building.
twice a week?

Why are there that They are attracted by the spiders (is what the
many pigeons? expert says).

Why are there that They are attracted by the moths.

many spiders?

Why are there that Because the building’s owners are the first to
many moths? turn on the lights – initially to draw attention to
the monument.

122
 In many cases, there is no one-on-one relationship. In many cases, there
are many causes, in which case a mind map can be used to visualise the
analysis, to ensure that the analysis is clear and understood by the
participants.

Figure 4.32

123
4.10 Kanban

One of the better known Lean Tools is the Kanban. Kanban literally means:
signal (card), and that is exactly the idea: using a simple tool that everyone
understands to make sure that a signal is transmitted. In this case, the
signal to order raw materials/parts. The kanban indicates that the part in
question needs to be ordered. The card usually also contains the quantity,
the order number, the supplier, a bar code, etc.

In many warehouses, we see that the Kanban tool is used in everyday

practice. On the shelf, there is a card which appears when an article is
picked up when a shortage is imminent. In everyday life, we see the same
principle being used with cigarette rolling papers, with a coloured paper
indicated there are only 10 papers left, signalling the user to go out and
buy new cigarette papers.

In the banking world, the same principle used to be applied to

chequebooks: 10 cards before the end, there would be a form that people
could use to order a new chequebook. In supermarkets, whenever a cash
roll is about to run out, it is
indicated with a purple bar on the
paper.

Figure 4.33

124
Also, in supermarkets, the ordering process is organised using an
automated kanban system: whenever a product is sold and scanned, it is
automatically deducted from the inventory. Once the inventory falls below
a predefined level, the product is ordered automatically to replace the
products that have been sold. This means that it is no longer necessary to
count and log the inventory every day and to place the orders at night. This
used to be standard practice in inventory management, but thanks to
computers and the kanban principle, that kind of waste is now a practically
thing of the past.

Figure 4.34

Two-bin

A special and often used form of Kanban is the two-bin. This two-bin
literally means: 2 barrels and this is exactly the idea behind this principle.
In practice, what happens is this:
• In the workplace, there are two bins, each containing 10 items of
a given part.
• When the first bin is empty, the employees use the second bin.
• The first (empty) bin is placed in a certain location, to indicate that
a new bin with the parts in question has to be brought in from the
warehouse.
• The supply to the warehouse works the same .

125
Needless to say, this will only work if the new bin can be brought in from
the warehouse more quickly than the bin being used in production is
emptied. If that is not the case, three or four bins can be used. Another
prerequisite is that the warehouse does NOT deliver parts before they get
a signal. This is what makes a true kanban: “nothing moves without a
signal’

Kanban calculations

People often want to know what the right level of inventory is, finding the
right balance between parts being out of stock and carrying too much
inventory. Both situations cost money.

There are many methods that can be used to calculate the right balance,
one of which is discussed below.

To calculate the optimum inventory, we need some information:

• The actual demand for/usage of the (finished) product in

question.
• Variation in the demand/usage (how much fluctuation is there?).

Let's assume we are dealing with a finished product that we supply to

customers and that we replenish every day (at night). When demand (over
a given period) is more or less known, we can calculate as follows:

In this example, we know that the average demand (in that period) is 100
items per day, and we also know – based on past measurements – what
the standard deviation is. Often, the distribution of demand will be normal,
which means that it sometimes a little below or above average, and
occasionally a lot below or above average.

126
The demand measurements are as follows: 98, 98, 61, 84, 103, 96, 88, 115,
113, 75, 141, 120, 121, 101, 87, 114, 71, 125, 111, 92, 99, 82, 88, 86, 134,
74, 135, 106, 111, 79.

Demand can now be visualised as follows. Based on 30 measurements

from a comparable period, we calculate that the average is 100 and that
the standard deviation is 20.

Figure 4.35

Histogram of Usage
Normal

6 Mean 100,3
StDev 20,20
N 30
5

4
Frequency

0
60 80 100 120 140
Usage

If we restock the inventory to 100 items each night, we have enough to

meet customer demand the next day in 50% of all cases (after all, demand
can be plotted symmetrically around 100). If we use the characteristics of
the normal distribution (more about this in the textbook about Six Sigma),
we know that, if we restock the inventory to 100 + 20 (average + 1
standard deviation) each night, we will have enough in 50% + 34% of all
cases, which is considerably better, but for many companies still not good
enough. If we restock to 100 + (2*20), we will have enough in 97.5% of all
cases.

127
These figures can be deduced from the characteristics of the normal
distribution, which are represented in the figure below:

Figure 4.36

If, for example, the inventory is at average + 1 standard deviation, we have

enough for all cases where demand is 100 or below (i.e. 50%), as well as
for all cases where demand is between 100 and 120, which, as the figure
above indicates, is 68%/2 = 34%.

We can now also calculate how often inventory will be too low if we
restock to 100+(3*20): in that case, we have enough in 50%+(99.7%/2) of
all cases, which means that inventory will only be too low in 0.15% of all
cases.

128
Restocking to the average + 1 standard deviation (120 in the example
above) is called a service factor 1, 140 is called a service factor 2 and 160 is
called a service factor 3. Intermediate values can be calculated using a
table for the normal distribution, which can be found in the Six Sigma
textbook.

Other considerations in determining the optimal inventory

In addition to the above, in which case we calculated the optimal daily

inventory, there are other considerations that play a role.

Suppose we apply the same principle to our own use of a raw material, we
can determine in a similar way what the right (raw material) inventory is to
reduce the risk of shortage (Note: this does mean making the inventory “as
small as possible”, because that is likely to be unnecessarily expensive).

If we know that we use 100 units a day, and the standard deviation is again
20, we could decide to restock to 160 units, which will be enough in
99.85% of all cases.

However, if the supplier does not deliver every day, but every other day,
we need to restock to 260 units (twice the average use plus three times
the standard deviation).

If the supplier comes around every three days, we need to restock to 360
(three times the average use plus three times the standard deviation).

If we are not sure when the supplier will deliver our order, we need to
increase our inventory to cover for the uncertainty. If the interval between
order and delivery can be up to four days, we need an inventory of 460
units (four times the average use plus three times the standard deviation).

129
We can use the following formula to cover any uncertainty:

Safety Stock = Standard deviation x Service Factor x (PLT)0.7

The service factor is the above-mentioned 1, 2 or 3 (the desired standard

deviations) and the PLT is the Process Lead Time from order to delivery. As
expected, it is not necessary to include an entire standard deviation in the
inventory, because demand will often also be below average (in 50% of all
cases), which is why the power of 0.7 is included.

In addition to the buffer inventory, we need to include the inventory that is

needed to cover the days until delivery takes place, so when that takes 3
days, the buffer needs to include three times 100 units, which is the
average daily use.

More information

Finally, the well-known Camp formula helps to calculate the optimal order
size. This is not something we will discuss in this book. Information on this
subject can be found on the Internet. Note that, in calculating the optimal
order size, practical considerations are often equally important as
theoretical ones: it is often not possible to order specific quantities (for
instance because of transportation costs).

130
4.11 Overall Equipment Effectiveness - OEE

The use of OEE as an important Lean Tool is discussed in further detail in

paragraph 6.2.2.2.

4.12 Single Minute Exchange of Dies - SMED

The use of SMED as an important Lean Tool is discussed in further detail in

paragraph 6.2.2.1.

131
132
 PART 3: IMPROVING THE
PROCESS WITH LEAN

‘’ In Lean thinking, life will get tougher for a while – at least until you learn
how to continuously improve your processes. ‘’

- Jeffrey K. Liker

133
134
5 IMPROVING THE PROCESS WITH LEAN

5.1 Introduction

In everyday practice, we often hear managers say the following: “All day, I
am struggling to keep things going.”. Managers and team leaders spend a
lot of their time solving problems. Often, solutions are chosen that do not
tackle the (root) cause, but that only work as a plaster. An extra check, and
extra form or extra inventory.

In the previous chapters, the theory and tools of Lean were explained. The
tools are just a means to an end! Lean is about creating customer value by
eliminating waste. Providing customers what they want, when they want
it.

In this final part, the tools are brought together in a practical approach to
improvement. You will learn how to improve your processes using Lean.

In this approach, we make a distinction between:

• Ongoing initiatives – small steps - Kaizen
• Project based initiatives – bigger steps

Which approach is the most suitable depends on the complexity of the

problem, the availability of the project members and your own preference.
The figure below shows how the various improvement methods and the
complexity are connected.

135
 Figure 5.0

In the next chapter, we discuss how you can start using Kaizen. Here, there
are various different approaches as well, depending on the nature and
complexity of the problem. In chapter 3, we addressed the introduction of
a Lean project. Six Sigma is discussed separately in the Six Sigma textbook
that is part of the Six Sigma training programme.

136
5.2 Ongoing improvement initiatives - Kaizen

When the first signs of improvement are becoming clear, there is a risk of
people becoming complacent and going back to their old behaviour. An
important principle of Lean is 'Continuous improvement', things can always
be done better! This principle is captured in the Japanese term 'Kaizen',
which stands for 'small changes' (kai) 'for the better' (zen). In the West, we
translate Kaizen as 'continuous improvement'. Kaizen is not about large
innovations, merging departments, outsourcing services or new IT systems.
Not that those projects are wrong, they just have nothing to do with
Kaizen. Kaizen stands for small change for the better.

Do not underestimate the effect of 10 small steps!

Kaizen is about realising continuous improvement of a service by the

people who do the work. They are the experts when it comes to waste,
because they come across it every day. We need to teach employees in the
workplace to recognise waste in their daily activities.

Figure 5.1

137
Recognising waste

It is not simple. When you have been doing what you are doing for years, it
is hard to see it as waste. Teaching employees to recognise waste is an
important element of Kaizen. Recognising waste and understanding the
cause is the most difficult part. The solution will follow naturally.

As Johan Cruijff once said: “You will only see it, when you get it”.

Making it part of the daily routine

When we want to change continuously, Kaizen has to become a part of our

daily routine. The Lean toolbox provides two options for this, which will be
discussed in the following paragraphs:

• Stand-ups (daily and weekly stand-ups – improvement boards)

• Standardised work
• Kaizen events

138
 Stand-up’s

The most frequently used tool to realise Kaizen (continuous improvement)

is the Stand-up, also known as 'Kaizening', ‘daily stand-up’, weekly stand-
up’, ‘daily production meeting’ or 'Improvement board sessions'.

A stand-up is a fixed moment in time when employees examine the

performance of the team together, signalling and discussing waste and
turning it into a concrete improvement.

Figure 5.2

Fixed moment in time

A stand-up takes place at a fixed moment in time – it needs to be a part of

the daily routine in the workplace, like planning, writing quotations and

139
loading trucks. The rule is that time is set aside every day for
improvements. The quicker the response, the better’.

It is the general rule in hospitals that we start the shift with a ‘day start’
and end the shift with an ‘evaluation’. During the day meeting start we
look forward. What do we do today? Where do we expect difficulties?
Where can we help each other? We also focus on securing previously
made agreements/improvements. The evaluation takes place at the end of
the shift. This is when we evaluate the agreements made during the day
start meeting, discuss team goals, share wastes and discuss the to-do list.

There are also departments that start with a day start meeting where the
team goals and wastes are discussed. During the weekly improvement
board sessions, the waste is translated into action.

The team members evaluate the team performance together

Stand-ups are clearly a team effort – 'Together we know more than on our
own'. During the stand-up, we evaluate the team performance indicators
(TPI's). How did we score today? A TPI is formulated by the team itself and
can be influenced by the team. The TPI’s must contribute to the goal of the
department and therefore the goal of the organisation as a whole. This to
ensure daily achievements which contribute to the strategy of the
organisation are monitored in all departments of the organisation.

Usually, there are 2 or 3 TPI's. Do not be afraid to replace an existing TPI

with a new one if the old one no longer helps to signal waste / when
targets have been met for a while / when the process is 'under control'.

Example of a good TPI: No overtime

This TPI can be influenced by the team and causes waste. When we see
that it happened three times today, we can take steps to ensure it will not

140
happen again tomorrow. The TPI is located within the team's circle of
influence.

Example of a bad TPI: turnover speed of patients on the cardiology

departments (number of beds that are occupied)

This TPI depends on so many factors that it cannot possibly be used to

measure team performance. In addition, it is not influenced directly by the
behaviour of the team members. It is not within their circle of influence.
However, it is a good departmental TPI to measure monthly and break this
down to various causes (Pareto-analysis). When looking at the various
causes, we can come up with KPI’s which can be influenced by the team
and which contribute to the organisational goal, ‘lowering the bed-
occupancy’.

Turning waste into improvements

Improvement is about recognising and eliminating waste. Because a daily

Kaizen lasts about 15 minutes, it is not possible (nor is it the intention) to
solve every kind of waste within that time frame. The rule is that the TPI's
are discussed, waste is identified and improvements are started. The
employees (1) identify the waste together, outside of the Kaizen, (2)
identify the root cause and (3) formulate the improvements. The progress
of these improvements is monitored via the improvement board (which
also secures the PDCA cycle).

If it turns out that an improvement cannot be realised within a given time

frame, because it is more complex than was originally thought, A3
management may provide the solution, which allows for a more structured
approach to the problem, and the progress of which can also be discussed
during the daily stand-up.

141
It is also possible that recurring issues involve more than one department,
which means that they cannot be solved by one department alone and
require a broader collaboration. The department could discuss the issue
with the other department, by bringing this up during the stand-up of the
other department (by for instance a completed A3). When it fails to resolve
the waste (for whatever reason) it is important to apply layering within the
stand-up structure

An illustrative example

In a large regional hospital in the south of Holland a stand-up structure

was implemented where all operational departments (level 1) have daily
day start and evaluation meetings. When there is an issue which goes
beyond the department, a team member will be instructed to discuss this
with the appropriate department. When this does not work, an escalation
procedure is set up.

The team will bring up the issue at the daily stand-up at level 2. This is
where the department managers are to discuss the issues which go
beyond a single department.

There is also a level 3 stand-up where the board of directors discuss issues
which cannot be resolved at level 2.

Below you will see some examples of improvement boards that are used
during a stand-up.

142
 Figure 5.3

Everyone understands the concept of signalling waste on a daily basis and

everyone understands why that is useful. However, there are many
managers, team leaders and employees who are reluctant to start working
with stand-ups. They fear that when it comes to discussing problems
openly in a group setting to begin with, it will lead to a situation where all
people do is blame each other.

However, in practice, it turns out that those fears are unnecessary, that
stand-ups never end in acrimony. And should this happen, it is something
positive. If we do not discuss it, this does not mean there is no
dissatisfaction. It is there, but under the surface.

In all cases, they actually increase employee involvement and satisfaction.

“Finally, our voices are heard, we operate more like a team and we learn
from others”, is something that is often heard.

Securing the improvements – Improvement cards

It is important that the PDCA cycle is completed. When, during a stand-up,

we come up with an improvement which effects our way of working, we
need to make sure that this new way of working is applied by everyone.
For this reason, a standard part of the stand-up is ‘securing the
improvements’. This will be promoted in a so called ‘improvement card’.

143
The improvement card will be placed on the improvement board until this
is no longer necessary (the improvement is secured). The improvement
card will then be kept in an ‘improvement map’ to document the
improvement and make it traceable in case of, for instance, ISO audits.

Figure 5.4

Lay-out of an improvement board

There is no standard lay-out. The best lay-out is the lay-out that leads to an
improved process, improved cooperation and an improved level of
customer satisfaction. There are however elements which often reoccur on
an improvement board.

These items are:

1. What is the Agenda and which rules of play do we apply?

2. Week performance - TPI’s?
3. Check in – did you have a good working day?
144
 4. Did you encounter any problems? Wastes?
5. What are the ongoing improvement actions?
6. Securing? Which improvement actions should we monitor?
7. Which ongoing projects need explanation?
8. Are there any department transcending issues?
9. What is the month performance? KPI Trend?

Figure 5.5

The agenda of a stand-up

There is no standard agenda. The best agenda is the agenda which leads to
a structured, efficient and effective stand-up. I know of, for instance,
teams which have a stand-up 3 times a week and they cover different
items on different days. They discuss the ongoing actions once a week and

145
the ongoing projects once a month. Every team will have to come to their
ideal agenda by trial and error. And even then, this will most likely change
again after a certain period.

An example of an agenda could be:

Mon Tue Wed Thu Fri 1x per

month
1 Check in x x x x x
2 TPI’s x x x x x
3 Waste x x x x x
4 Ongoing actions x
5 Securement x
6 Ongoing projects x
7 Month x
performance

It is important that the agenda is followed (see standard work). It helps to

actually display the agenda and make this part of the standard lay-out
(visual management).

Discussing the waste

Process improvement is (1) daily measurement of your success, (2)

signalling and discussing the wastes and (3) make agreements to make
sure the wastes do not reoccur.

Signalling waste is an important first step. By introducing daily stand-ups,

we ensure waste is discussed immediately with the team and resolved.

How do you facilitate that process?

Here we use so called A6’s. When an employee identifies a waste, they

immediately fill out an A6.

146
 Figure 5.6

The facilitator must ensure the TPI’s, the wastes and the actions remain
the groups responsibility and not take over. There are certain golden rules
which help to realise this, being:

• Rotating presidency
• Involve the team:
o Never read out the introduced waste, let the submitter
explain the waste
o Ask whether waste is clear to everyone?
o Ask whether the waste is recognised and whether this is a
regular occurrence? Or an incident?
o Ask whether anyone has a solution in mind
• Try to get to a point of action as soon as possible, the problem does
not need to be resolved during the stand-up
• Whoever gets the action, will note this action down him/herself
• The A6’s must be filled out ‘neat/clear’ (be strict)
• The submitter is not by default the action holder. You can (if needed)
make it a rule that nobody can take on more than 3 actions at once.
• Appoint a ‘time keeper’

147
When the wastes are being discussed, the discussion can turn
unstructured. People don’t listen to one another and the content shifts
from left to right. Having a fixed way of getting to root of the waste can be
a tremendous help:

Questions 1: Can you elaborate on the waste?

Question 2: Is the waste clear to everyone?
Question 3: Is it incidental or do we need to take action?
Question 4: Will we solve this ourselves? Or is it department transcending?
Question 5: What is the root cause?
Question 6: Do we have a solution or what will be the next point of action?

This standard way of asking question will provide clarity and the efficiency
and quality of the discussion will improve.

Tools that are often used in relation to stand-ups are:

• 7 types of waste
• 5 times Why
• A3 management (an A3 is used to document the road from
problem to solution)
• Poka Yoke

148
 Standardised work

Toyota has seen the permanent solutions of problems and the

improvement of stabile processes as one of the biggest competitive
advantages for some time. This way the brainpower of the whole
organisation is used. Improving in the hearts of all employees.

IMPROVING HAS BECOME A STRATEGIC WEAPON FOR TOYOTA

The first step is standard work, so we do not waste time firefighting and
free up time to improve.

When asking 10 employees about how they execute their daily tasks, you
will more than likely receive 10 different answers. This has two negative
effects:

1. The process is not predictable in terms of time, quality and safety

(there is variation)
2. The process is not suitable as a base for process improvement
3. Automatisms are not developed within the team which results in
a lot of time spent ‘firefighting’

Within Lean, standardisation is an important principle. It is a concept that

is often misunderstood. “Standardised work means that everyone does the
same work, so that we work more efficiently”. However, standardised work
goes much further, it is a crucial element of Kaizen (continuous
improvement).

Chapter 6 elaborates further on this.

149
 Kaizen events

In any project that lasts 3 to 5 months, there is considerable waste (over-

processing, overproduction, waiting and defects). Just think of any project
and how much of the time the project members actually add customer
value to the project, which in many cases is no more than 16 hours per
project member. The rest of the time they spend waiting between
meetings, plan project meetings in completely filled up agendas, arrange
meeting locations, set up the agenda, write minutes, compile a list of
activities. All without adding customer value!

A Kaizen event is Lean's answer to a project that lasts 3 to 5 months. Can

we remove the business value and waste and create continuous customer
value? In short: PROJECT FLOW!

Figure 5.7

150
A Kaizen event is a project that takes 3 to 5 days, which starts with the
problem and ends with the implementation of solutions. Kaizen is an
organised use of common sense to reduce costs, secure quality, reduce
delivery time or increase customer satisfaction.

The Japanese term for a Kaizen event is 'Kaikaku' (radical change). General
Electric calls it a Workout, and it is often referred to as a 'Blitz'.

A Kaizen event is characterized by:

• Kaizen Event itself that lasts 3 to 5 days

• 100% dedicated resources
• Includes implementation
• Project with a limited scope
• Problem is urgent
• Solution is not yet known

This means not all projects can be done by means of a kaizen event. If
the projects are more complex, the environment is more complex,
extensive data analysis is needed and/or the solution requires a longer
throughput time, the DMAIC approach of Six Sigma is often chosen

Figure 5.8
151
Preparation

The problem owner (sponsor) alerts people to the problem. The Kaizen
leader is responsible for the preparation. Often, the preparation starts by
filling out the A3 (problem description, scope, current situation, goal and
team set-up). In addition, a number of practical issues have to be arranged:
inviting team members, arranging Kaizen room, collecting data, arranging
sponsor for the kick-off. Get departments involved that you expect to be
part the solution (for example, the Risk Department has to approve the
new method, facility services will play a role in the (potential) 5S solution).

At the end of the preparation an appointment is made with the sponsor

(process owner) who will approve problem description, scope and
objective

Kaizen event

All the roles within the process that is to be improved are represented in
the Kaizen event and they are 100% available during the Kaizen event. The
problem owner performs the kick-off, in which he or she explains what the
problem is and when the Kaizen event can be considered a success (goal).

During the Kaizen event, the problem owner is kept up to speed and can
be used as an 'escalation level', whenever the team encounters internal
barriers. At the end of the Kaizen event, the solution is handed over to the
problem owner and he or she will then act as facilitator and ensure that
the activities are carried out.

Below is a possible planning of a 5-day Kaizen event. The motto of a Kaizen

event is 'action – now'. This means that the Kaizen leader has to make sure
that things keep moving.

152
Figure 5.9

The result of a Kaizen event is:

• The to-be process

• Plan of action – ready and worked out
• Implementation plan – ready and worked out
• Communication plan – ready and worked out
• A list with unfinished items that can be realised in the next 20
days
• Go-live date approved by management and middle-management

Follow-up – 20 days

The aim of the Kaizen event is to include (possible preparation for)

implementation. The implementation plan has been made, the activities
have been followed up to allow the organisation to proceed with the
implementation within a number of weeks. In a number of cases, not all
the activities will have been worked out and there are still some 'loose

153
ends', which are presented to the management in the closing presentation,
divided among the team members and worked out in the days following
the Kaizen. The Kaizen leader is responsible for following up and pursuing
these activities. Any activities that cannot be completed within this follow-
up period of 20 days are beyond the scope of the project and can perhaps
be the subject of a next Kaizen event.

Whether or not the goal of the Kaizen event will be realised depends on a
number of factors:

• Scope
• The number of days that is reserved for the Kaizen event
• The process experts involved in the Kaizen event
• The facilitating role of the Kaizen leader
• The facilitating role of the sponsor

Kaizen Tips

Management There can only be an improvement project

commitment when there is a problem that is recognised
as such by management.

Uncertainty A Kaizen event is accompanied by

uncertainty; (1) You never know what
the solution will be and (2) you do not
know how the event will go. The result
depends on the quality and commitment
of the participant and on the way the
Kaizen leader leads the Kaizen event.
This means that a good preparation is
crucial. However, chances are things will
go differently than you expected. Be
prepared to change the agenda when

154
 the situation demands it. Do your first 2
Kaizen events together with an
experienced Kaizen leader.

Trust Trust the method and the Lean tools

that you apply. The tools that are used
most often in Kaizen events are Value
Stream Mapping, 5 times Why, visual
management and 5S.

Scope Make sure the scope does not expand. It

monitoring is better to have a successful Kaizen that
finishes ahead of schedule than to
broaden the scope and not have enough
time.

IT Experience teaches us that managers

adjustments and employees often blame IT for any
problems in the process. Often, that is a
diversion designed to keep them from
looking at their own shortcomings. In
addition, if often takes more than 20
days to implement IT adjustments.

Momentum Maintain a good momentum in the

Kaizen event, do not lose the
participants, make sure that everyone is
involved and says what they have to say.

Go to the Make sure to check out the workplace

Gemba (Gemba’s) before you begin with the VSM
(Value Stream Map) and to verify the VSM.

155
 80/20 rule Select only solutions that genuinely
contribute to the goal of the Kaizen event.
Watch out for personal agendas. Make a
‘Benefit-Effort matrix’ in which the
potential solutions are assessed on
‘contribution to Kaizen goal’ and
‘complexity of implementation’ (Benefit
and Effort) and use the matrix to select the
best solution.

Tools that are often used during Kaizen events are:

• Value stream mapping

• Voice of the Customer / Voice of the process
• Spaghetti diagram
• 5 times Why? Pareto diagram
• Process Lead Time / Takt time calculation / Little's Law
• Skill matrix
• SMED
• Brainstorming
• Benefit-Effort matrix

Solutions that are often found are rework limitation, Flow, Kanban, 5S and
WIP management (WIP cap).

2-day kaizen event

Practical experience teaches us that in many organisations it is ‘impossible’

to free up employees for 5 days. This is why we often choose a different
strategy when executing a kaizen event, where we spread the 3 to 5 days
out over several weeks.
156
 Figure 5.10

Daily structure

For a 2-day kaizen event we use a fixed routine, which roughly consists of:

• Day 1: Map out current situation (including wastes and possible

solutions)
• Day 2: Define solutions, develop plan of action and document de
kaizen (A3)

157
 Figure 5.11
55.125.1120

Follow-up

From experience we can say that the speed and dynamic of a kaizen event
can lead to extraordinary results. After the kaizen event everyone returns
to their own work process. Danger is, not finding the time to follow-up on
ongoing actions!

The solution is organising a 1-day event about 2 weeks after the kaizen
event where we discuss the progress from 9:00 to 10:00 hrs and spend the
rest of the day on ongoing points of action. The follow-up day ends with a
meeting with the sponsor and a determined go-live date.

158
Division of roles

The involvement of the sponsor is very important. The kaizen event leader
must make clear during the preparations what is expected of the sponsor
and vice versa.

Figure 5.12

159
5.3 Project based initiatives – Executing Lean
project

During a Lean implementation, it is also possible not to opt for a Kaizen

event to implement an improvement, but to go for a 3 to 5-month project.
This may be the case for various reasons: (1) there is nobody available to
lead a Kaizen event, (2) it is practically impossible to free all the resources
completely for 5 days, (3) the project is too complex to solve within a time
frame of 5 days (for example, it would require IT resources).

In practice, there are 2 possible project methods:

• A3 management
• Six Sigma's DMAIC cycle

The DMAIC cycle is a powerful framework that ensures a phased and

controlled project approach. DMAIC stands for Define, Measure, Analyse,
Improve and Control. Every phase has standard deliverables and tools. The
DMAIC cycle is not discussed in this book, we refer you to our Six Sigma
training course and the accompanying textbook, “Six Sigma in practice”.

160
 What is an A3?

The name “A3” refers to the internationally standardised paper format of

420mm by 297mm. Within Toyota however, A3 has more meaning than
just that. It stands for the method used to ‘solve’ problems. For instance
problems that are too big to discuss and solve during a stand-up, but ‘too
small’ to tackle with a DMAIC project and relating project structure.

The A3 method is an 8-step plan to get from problem to implemented

solution in a structured way.

It is ‘a visual demonstration of the journey the improver made to get to the

solution’. It visualises the thoughts of the improver. From problem to the
implemented solution.

Figure 5.13

The name ‘A3’ was chosen because the elaboration of a problem to a

realised solution is displayed on one piece of paper. The method hereby
forces you to formulate short and concise and distinguish between main

161
and subsidiary issues. “If it cannot fit onto one A3, the improver does not
fully understand the problem”. An additional advantage is one single A3 is
easier to communicate than a 30 page document.

The A3 is a “living document”. During the search for the right solution
reports are being made. An A3 visualises the improvement approach, the
search, the thoughts of the improver at that time. Once you know more,
the A3 is adapted.

When do we use an A3?

The trigger of an A3 is usually a problem which surfaces more than once

which needs a structural solution. If a problem cannot be solved by one
small action or phone call, the A3 method is chosen.

Possible subjects considered for starting up an A3 project are

• On an employees first day of employment he/she does not have

access to a computer, the right programs, login codes, in-house
training, etc.
• The hand-over from the A&E department to the Acute Admissions
Department is not running smoothly. They have to investigate a
lot and agreements are not being met.

The need to start an A3 could come from various directions. Examples are:

1. Daily stand-ups
2. Monthly management meetings
3. Complaints analysis
4. ….

162
More and more often we see that the A3 thought (everything on one piece
of paper) is applied to display department plans. In this chapter the A3 as
‘project management report’ is being discussed.

What is the value of the A3?

Frequently mentioned advantages of the A3 are:

1. It forces the improver to follow fixed steps

2. The project sponsor is able to follow the progress better
3. The project sponsor is able to coach the improver better
4. Recording the use of a uniform way of solving problems within the
organisation

Advantage 1: The A3 forces the improver to follow fixed steps.

An often made mistake by improvers is that start searching for solution to

early in the project. Especially at the start of the project, the focus should
be on ‘asking questions’. At the start of the A3 project the improver is the
researcher and only later in the project his/her role turns into solver and
advocate of the chosen solution.

The step-by-step plan ensure a good understanding of the problem to the

improver, knowing how the process is performing at the moment
(measuring the baseline), setting a goal, searching for reasons why the goal
is not met (root causes), selecting the right solution, measuring whether
the chosen solution will have results and thinks about whether the chosen
solution needs adaptations (improvements).

163
Figure 5.14

The above figure displays the 8 steps of an A3 and the relation to the PDCA
method. The 8 steps makes sure the improver does not go into solutions
but asks the right questions. Especially at the start of the project.

Advantage 2: The project sponsor is capable of monitoring the progress

better.

The A3 can be used to monitor the progress of the improvement project.

The A3 is a living document which means the A3 displays the current state
of the improvement project. This is why the A3 is very suitable as a
progress document.

Beware: the emphasis of management is not on monitoring the progress.

The most important task of a manager is to make sure that the improver
follows the right steps, see advantage 3.

Beware: the 8 steps suggest that there is a fixed order. This turns out the
different in practice. During the project you become much wiser, you start
164
understanding the problem/process more and more. This often means that
earlier written findings are outdated, less important or even incorrect. This
has an impact on the A3. It changes constantly, it is a living document.

Advantage 3: The project sponsor is capable of coaching the improver

better.

Here, the manager has a coaching role by making the employee follow the
A3 route-plan and discuss the A3 with the employee. It is all about asking
questions, coaching and learning and not about telling and giving orders.
Do be able to do this, it is important to understand how the improver
thinks, which actions were taken and what he/she has learned. The A3 is a
visualisation of the train of thought of the improver and therefore suitable
to serve as a basis for the coaching.

Advantage 4: Unequivocal way within the organisation to solve problems

An important goal of the A3 is, that the problems are tackled at the core.
By a broad introduction of the A3 method, the basis is laid for a different
way of thinking, with more depth. The method results in an organisational
way of learning and it becomes part of the daily tasks. At Toyota,
employees sometimes create several A3’s a day and during meetings no
decisions are made without a developed A3.

The A3 makes sure that everyone within an organisation look at the

specific problem through the same glasses. This prevents endless
discussions about ‘preconceived opinions’ which often result in confusion
and indecisiveness.

When everyone within the organisation solves problems the same way,
following the same 8 steps, it results in clarity and better communication.

165
 The 8 steps explained in more detail

The correct execution of a project is a skill about which a lot can be said.
The DMAIC step-by-step plan and corresponding method and toolbox
provide an extensive look into the kitchen of ‘good project management’.
For more information I would like to refer you to the Six Sigma training and
corresponding course materials.

In this chapter we limit ourselves to A3 management. The structure of an

A3 is used to solve problems with a limited complexity and limited lead
time (a few days to weeks).

In this chapter you will learn the theory of A3 management. A3

management is a skill which is acquired best by getting a lot of practical
experience.

Step 1: Define the problem

In this step the following matters are mentioned:

1. Describe the process in main lines

2. What is the long term goal of the process?
3. What is the problem?
4. Make clear how solving the problem contributes to the long term
goal of the process
5. What is the scope of this A3? Procedural and organisational!

Ad.1: Describe the process in main lines

In most cases we want to solve a process problem. Make it clear in step 1

what the process looks like in main lines. What is the trigger of the
process? What are the main steps? What is the output (result) of the
process? Who are part of the process? An often used method to create a

166
high level process description is a SIPOC (see chapter 4.1). A SIPOC is not
part of the A3, but is used to gain insight.

Ad.2: What is the long term goal of the process?

Before we start solving the problem, we want to understand what the long
term goal is for the specific process, the department or the organisation.
This, to clearly link the problem on which we will work to this long term
goal. If it seems like we are struggling to do this, we should ask ourselves
whether we are working on the right project. If you are not able to link
your project to the long term goal. It will stand in your way later on during
the project.

Ad.3: What is the problem?

Many organisations spend a lot of time searching for the solution. How
many times is the following questions asked; “What exactly is the problem,
what do we actually want to solve”? There is a widely carried adage in
‘process improvement land’ which ways: “A correct problem description is
50% of your project work”.

What is your problem? This seems to be a simple question , but in practice

it is proven time and time again how hard it is to answer this question.
Make sure you do not mix up your problems, symptoms, causes and
solutions.

A mistake that is often made, is that the problem is being described in

terms of a solution. This is dangerous because you are not looking for the
root cause and therefore might choose the wrong solution or close your
eyes to better solutions.

Example: The problem is, that the employees on an assembly line do not
follow the standard work procedures.

167
Another mistake often made is that the problem description is a
description of a symptom which by itself does not clarify the problem.

Example: The monthly closure takes 3 weeks

To create a good problem description, a lot of the time more research is

needed. Talk to people on the work floor, ask the question why there is a
problem. Ask about the negative results of the problem.

Advice: Note down the first thing that comes to mind and add to the
following sentence; this is a problem because…’ The matters mentioned are
a description of the problem and make it clear to everyone why it is
important to make time to solve this problem.

A third problem that often occurs, is that the improver starts looking for a
problem himself without realising that he/she is not the client. He/she is
the improver.

Ad.4: Make clear how solving the problem contributes to the long term
goal of the process

A project requires a lot of time and attention of several people within the
organisation. You have to sell your project as such. Otherwise people are
not willing to spend time on ‘your’ project. A good problem definition
helps you with your ‘internal sales process’.

We don’t want to improve what we can (!), we want to improve what we

must. Therefore we need a clear image of the long term goal of the
process and make it clear how solving the problem contributes to the long
term goal. Do note that solving the problem does not have to ensure
reaching our goal! Solving the problem does ensure getting one step closer
to the long term goal. More on this in Part 4 of this book, Toyota Kata.

168
Ad.5: What is the scope of this A3? Procedural and organisational!

Every project manager knows that a good scope description is a must for a
good project. It prevents insecurity and uncertainty later on in your
project.

Make clear where the process starts and where it ends. What is in scope
and do describe what is not in scope. Hereby think of what product family
is in scope (see chapter 4.1 for further explanation). Project sponsors
especially have the tendency to make the project scope large. The danger
is that the occurring complexity has a crippling effect and ultimately does
not lead to the desired results.

As a general rule: Rather 2 well defined projects on which you can focus
and take what you have learnt in one project to the second project.

Stakeholder management

Stakeholders are interested parties in the execution and/or result of the

project. Thy are not closely
involved in the project, but
are influenced by it. This often
results in the fact that they
can influence the progress of
the project. To handle this
adequately and keep these
forces under control, a
stakeholder analysis can be
done at the start.

The stakeholder analysis is created at the start of the project, but requires
constant attention during the project. In step ‘implementation’ the
169
stakeholder analysis will be executed a second time. Here, the focus is on
the chosen solution. How do the stakeholders look at this?

The stakeholder analysis mainly serves to get a clear image of whether

certain people involved require extra attention to get them motivated or
keep them on board.

The stakeholder analysis, which is a subjective estimation of possible

resistance from stakeholders, is needed to work on the acceptance of the
result.

Below you will see an example of a stakeholder analysis.

Figure 5.16

A stakeholder analysis provides insight into the following points:

• Inventory of those involved

• Understand ‘through which glasses’ those involved look at the
project
• Understand what the needs are of those involved
• Understand what the current attitude is towards the (possible)
change

170
 • Determine what the desired attitude is towards the (possible)
change
• Document the actions required to get the attitude to the right
level

Risk analysis

Risks are involved to every project, but also every solution. A good
improver has his/her eyes on these risks from an early stage and will have
taken measures to mitigate these. Risk analysis take place continuously
throughout the project.

For example in step 1:

• Is my problem not too large or complex to handle?

• Do I have sufficient skills within my team?
• Do we actually have a problem?
• It is management really suffering?
• Is the manager a leader?
• Are the employees suffering?
• Will I have enough time to execute the project?
• …..

For instance in step 6: Implementation

• Does my solution conflict with laws and regulations?

• Does my solution conflict with internal Risk & Compliance
procedures?
• Is my solution realistic in terms of time and necessary
investments?
• What does the solution mean to the safety of the employees?
• What could go wrong in the new process?
• How can further improve the solution?
• “The entire process is set aside, it effects 6 departments and 200
people!”

171
Step 2: What is the current situation?

Make sure you understand the full context of the problem and determine
the difference between the current situation and the long term goal.

Measure how the process is performing at the moment

People often communicate based on underlying assumptions. These

assumptions are often not explicitly named, but are leading to what is said
and how people think. This is often the cause of inefficient communication.
Measuring how it is going at the moment can take some of these
uncertainties away. It forces people to look at the facts instead of hiding
behind opinions.

Measuring properly is an art. Measuring numbers properly and

interpreting them properly often requires detailed knowledge of the
process. Six Sigma is a method which puts a lot of focus on this. In the final
paragraph of this chapter we will further explore ‘measuring’.

Go and have a look on the work floor, listen to the people on the work floor
and create a VSM together.

Make sure you understand how the process works now; what is the
process like. There are many questions which could help you gain insight:

Where does the problem arise from (point of cause)? Who are the involved
employees and/or departments? Who does what? Which systems and
forms are being used? What logic is behind the decisions made within the
process? What are the standard work agreements? Are these agreements
followed? What bothers people? Is the flow being interrupted? Where is
the working stock? Is there a limiting factor and is this limiting factor a
bottleneck?

172
Step 3: What is the goal (next target)

The more specific you describe the goal (next target), the bigger the
chance of actually seeing the points of attention and reaching the desired
situation. More on this in Part 4 of this book, Toyota Kata.

What are you trying to achieve? This seems a simple question, but in
practice it is proven time and time again how hard it is to answer this
question. A goal is a specifically described condition of the output (result)
of a specific process.

A few tips:

• Create a operational definition of what you are trying to improve.

What are we talking about? E.g. What is absenteeism? Where
exactly does the lead time start? Are these measurement points in
systems? Do you measure this in hours or days?
• Describe the goal SMART (specific, measurable, acceptable,
realistic and time constrained).

Step 4: Root causes

The most often made mistake in ‘process improvement land’ is spending

too much time on thinking about solutions and too little time on ‘properly’
comprehending the problem. In many cases we have already thought of a
solution before starting the project.

The emphasis of the 8 steps is on ‘truly understanding’ the problem. Go

and see for yourself, analyse the process and the way the process is
performing (step 1 and 2). Then determine a concrete gal (step 3) and then
analyse the root causes of the problem (step 4),

If you don’t know the solution, you don’t truly understand the problem.

173
The root cause of your problem is leading to the measures you will be
taking in order to solve the problem/reach your goal. The chosen measures
should remove the root causes if not the problem will return.

If an improver doubts the chosen solution, he will always ask the question;
“To which root cause is this measure the solution?”.

The focus of your project lies at step 1 (problem description) through to

step 4 (root cause analysis).This is where the uncertainty is, the thinking,
where you spend most time.

There are also several root causes. Make sure you have a good idea on
which root causes you should ‘tackle’ to reach your goal.

1. What are the possible root causes?

2. What are the most important root causes?
3. Which root causes are within my control?
4. Which root causes should I remove to reach my goal?

It is possible you have to measure again at this phase. How often does a
(root) cause occur? Is it an important root cause or should I keep
searching?

Step 5: Measures

In step 5 we speak of measures. We don’t yet know whether these

measures make sure we reach our goal. Only once we know that (step 7),
we can talk about solutions. In practice these often gets mixed up.

This step follows after the root cause analysis (step 4). The measures you
will be taking must remove the most important root causes. Make sure you
have a clear image of which measures need removing to reach your goal.
174
 1. What are the possible measures (solutions)?
2. How do the possible measures contribute to the goal?
3. What is the impact/feasibility of the possible measures?
4. Which measures will I choose to realise my goal?

It is also possible that there are several competitive measures/solution

directions. There are various working methods for this, like the Criteria
Decision Matrix or a Pugh Matrix. For an explanation on these tools I would
like to refer you to the Six Sigma training and the corresponding course
materials.

Brainstorm techniques are also of great value during step 5, the search for
measures. It stimulates the creativity of the participants of the brainstorm
session and offers the possibility to build on the ideas of others. By
encouraging people to name every single idea that comes to mind, a large
amount of ideas are developed in a very short time. During a proper
brainstorm session they do not judge and everyone is encourages to
generate as many ideas as possible. Because all participants are part of the
solution, it creates ownership of the chosen solution.

Brainstorm versions Description

Analogies What is Coolblue doing so well? What can we learn
from this?
Channel We are looking at the traffic problem. There are
various solution directions, like public transport,
work from home, intelligent cars and systems, tax
measures, road adaptations.
Let’s first concentrate on ‘public transport’.
Anti-solution What would we have to do to make the day
start/stand-up fail?
Brain writing Everyone writes down 5 ideas, we then pass these
on and the following person builds on these ideas.

175
There are several tips with regards to organising a brainstorm:

• Prepare the session so you have ‘ammunition’ should the

brainstorm ‘get stuck’
• Clearly indicate the goal of the brainstorm
• Allow individuals to complete their thoughts individually and to
formulate these
• Be short when formulating an idea
• First go for quantity, then for reality and quality
• Attention span for a brainstorm is 7 minutes
• Don’t judge during the brainstorm, the crazier, the better
• Build on existing ideas
• Organise, categorise and evaluate after the brainstorm session

Step 6: Implementation (plan)

The chosen measures have to be translated into actions. What do we have

to do to test the chosen measures and to look whether the goals will be
met.

Step 6 consists of several steps/ Not every step is applicable in every A3

project.

1. Implementation plan
2. Determine go-live date
3. A possible pilot of the chosen solutions
4. Inform the departments and employees involved (communication
plan)
5. Take the necessary actions to be able to implement/do a pilot
6. Train the new working method
7. How will we secure the new process?
8. Guide the implementation

176
Step 7: Evaluate the result and the process

This step can be compared to the ‘Check phase’ in the PDCA cycle. This
step has 2 important goals:

1. How is the new process performing? Will we meet our goal?

2. Is the new process running smoothly? Do we need to make any
adaptations?

Ad.1: Have we met our goal? Has the problem been solved? These are
often results of measurements of the project goal. More about this later in
this chapter.

Ad.2: Is the new process running smoothly? Do we have to adapt any work
procedures, have we come across any matters we had not foreseen?

Is the new process working or can we prove the new processes with the
knowledge we have now?

This ‘project evaluation’, this improvement battle, is an explicit part of the

step-by-step plan (and therefore the project). In practice this part is often
forgotten or purposely ignored by the improver. The PDCA cycle is not
finished, Plan-Do-Forget, instead of Plan-Do-Check-Act.

Step 8: Standardise the new process and celebrate the result

The measures that were taken are working. We can now actually speak of
solutions instead of measures!

This phase focusses on standardising the new process, making sure the
variation disappears from the process. In short, make the new process
routine.

177
Make sure the process is secured. What do we need to measure and at
which frequency to make sure the goal is constantly met. Hereby you could
think of the following solution directions:

1. Can we facilitate the securing process by formulating a TPI which

can be discussed daily?
2. Can we make the new process part of our daily stand-up?
3. Can we use the stand-up to improve the new processes?
4. What can/must a manager do on a daily basis to secure the
process?

The above mentioned matters are displayed in a control plan. For

explanation on this and other tools I would like to refer you to the Six
Sigma training and corresponding course materials.

178
 A3 management and data analysis

The absence of facts (data) leaves space for (1) excuses, (2) insecurities, (3)
wrong assumptions, (4) wrong conclusions and (5) indecisiveness.

We can talk about facts and we can talk about feelings and opinions. But to
prevent miscommunication, we must always realise what we are talking
about.

People often communicate based on underlying assumptions. These

assumptions. These assumptions are often not explicitly named, but are
leading to what is said and how people think. This is often the cause of
inefficient communication. Measuring how it is going at the moment can
take some of these uncertainties away. It forces people to look at the facts
instead of hiding behind opinions.

Data analysis plays a part in various phases.

St e p 2 : An a lysis of t h e cu r r e nt sit u a t ion

• Do I actually have a problem?
• How big is my problem?
St e p 7 : W h a t sh ou ld I m e a su r e
• Has my solution worked?
• HI reached my goal?
• What must I measure to be able to
adjust?
St e p 3 : D e t e r m ining m y goa l
• What is a realistic doel?
• Have I ever reached my goal?
St e p 4 : D e t e r m in in g t he m ost im por t a n t r oot ca use s
• How often does …… occur?
• Is there a difference in the output of various operators?
• ……

Figure 5.16

179
Determining the baseline performance

An important step in an A3 project is determining how the process is

performing, the baseline performance. The determination of this baseline
performance serves 4 goals:

• Determining how the process is performing

• Making sure there is actually a problem
• Providing direction to determine the goal
• As a null- measurement to determine whether the measures have
led to an improved process

Visual management plays an important part within Lean, also at data

analysis. We often use visual analysis to determine the baseline
performance.

The three most often used ways of graphically displaying the baseline
performance are:

1. Histogram
2. Time series Plot
3. Pareto Chart

Ad.1: Histogram

Say: We have an agreement with the customer (SLA) that the service term
of an Expresso machine is two weeks. We will measure the process and use
the available data of the last 100 services. The result of the measurement
is, that the average service term is 9 days. What conclusion could we now
come to? What does this say about the process? Are we meeting the
customer wishes of 2 weeks?

Averages don’t say a lot, when we wish to assess the current performance
of a process we need average and spread.

180
Based on the average, I don’t know whether sometimes we can do it in 2
days or whether a customer sometimes has to wait 3 weeks?

A histogram provides insight into the average performance but also in the
spread of the performance. Below you will find an example of a histogram.

Figure 5.17

A histogram gives answers to the following questions:

• What is the average process performance?

• How about the spread?
• What is the highest value?
• What is the lowest value?
• Are there any exceptions?
• Where is the central tendency?

Ad.2: Time Series Plot

A histogram does not only display the average performance, but also the
spread. However, a histogram does not provide any insight into the spread
over time.
181
In many cases this is the reason for a A3 project. Examples are, the lead
time increases, or the amount of complaints increases.

A ‘time series plot’ provides insight into the performance over time. The
figure below shows that the lead time of service of expresso machines
goes up over time.

Figure 5.18

Time series plots provides an answer to the following questions:

• Can we signal a trend? Is the lead time going up?

• Is there any variation throughout the year?

Ad.3: Pareto diagram

In principle, 20% of the causes are responsible for 80% of the effects. This
is called the Pareto principle.

A Pareto diagram is used to order factors to importance (the extend in

which they occur). This diagram is often used to analyse complaints or to
182
find the causes of defects. Below you will find an example of such a Pareto
diagram.

Figure 5.19

A Pareto diagram provides answers to the following questions (in case of

complaints):

1. What type of complaints are there?

2. Which types of complaints are received most often?
3. Which 20% of type of complaints cause 80% of the total amount
of complaints?
4. Which types of complaints demand our special attention?

What a Pareto diagram does NOT show is, (1) what the average amount of
complaints is per week, (2) what the spread is of the amount of complaints
per week or (3) whether the amount of complaints increases per week
(negative trend).

Histograms, time series, box-plots, etc. can be created by using statistical

software like Minitab (the Excel for Lean Six Sigma Black Belts). Nowadays
however, they can also be created in Excel.
183
To be able to measure figures properly and to interpret these, detailed
knowledge of the process is often necessary. Properly measuring is an art.
Six Sigma is a method which pays a lot of attention to this data analysis. I
would therefore like to refer to the Lean Six Sigma Black Belt training and
the corresponding training book.

Samples

Taking samples, is an method used often to collect relevant data. A lot of

data is available in systems, but it could be that the data you need is not
yet available. How would it then be possible to determine your baseline
performance?

It is not necessary to measure the entire population. In many cases it will

be sufficient to take a sample to get to a statement about the entire
population. This way you can determine your baseline performance.

Population

Sample

Figure 5.20

It is possible, the results of a sample differ from reality. It is important to

be cautious here. Differences between the outcomes of a sample and
reality could be caused by 2 things:

1. Coincidental defect
2. Systematic defect

184
Ad.1: Random sampling error

There is always a chance that the values of a sample are not a

representational display of reality. It is possible certain values are over- or
underrepresented. In other words, there are relatively a lot of extreme or
a-typical observations present. You can reduce the chances of this
happening by increasing the sample size (making it larger).

How large should a sample be? This is not an easy question to answer. The
sample size depends on various matters. In practice, the rule of thumb is to
work with 30 measuring points. Should you want to say something about
the baseline performance, a sample size of 30 measuring points is
sufficient in most cases.

Ad.2: Systematic sampling error

It could also be the case that the lay-out (design) of the sample is not
chosen correctly.

For instance: Over the last 4 weeks we have measured the loading defects
of the trucks, by intensively checking the first 10 trucks every Monday.

Here, we have not included to variation time over the year and over the
days of the week. We have only measured to first 10 trucks on that given
day. We have not included the truck that were loaded at the end of the
working day, the evening or overnight. It is therefore possible/likely the
result of the sample differs from reality.

There are various methods to reduce this chance to a minimum. In practice

we have to think hard about which data we collect and how we do this.

Tips for taking sample

185
 Design • Measure over a longer period to include
variation over time
• Think of systematic defects
• Is your process ‘in control’ or is something
particular happening during the sample (e.g.
end of the year when the working pressure is
very high)
• Think of the rule of thumb regarding 30
measurements

Preparation • Involve the employees on the work floor

• Do a pilot (sample) over a shorter period and
learn from the findings
• Should there be any assessment issues (like
type of complaints), make definitions of the
various types

Execution • If possible, take a sample of historic data (go

through dossiers)
• Do it yourself, you will learn a lot about the
process
• Monitor in the beginning of the sample every
day, so you can adjust on time

In practice it unfortunately happens quite often that the data retrieved (for
instance over a period of 4 weeks) appears to be wrong, the procedure
was unclear or we forgot to include certain data.

186
 A3 management and team composition

The outcome of your project is determined to a great extend by the human

factor. Who do you invite for a value stream or 5x? session.

In practice you have to take the following 4 matters into consideration

with regards to the team composition:

1. Stakeholders
2. Necessary knowledge
3. Supporters and opponents
4. Team roles

Ad.1: Stakeholders

Who are part of the process? Are all departments represented? Are all the
roles within the departments represented? To be able to answer these
questions, you have to know how the process currently works. Ask the
process experts, go to the work floor. The SIPOC can also provide you with
a good idea of whether you have invited all stakeholders. Hereby, think of
suppliers (S) and customers (C) of the process.

Ad.2: Necessary knowledge

You mainly need the people who execute the process. They know where
the waste is, they know where the working stock is. The problems are
caused on the work floor, the root causes are hidden on the work floor and
the possible solutions have already been discussed quite often. Make use
of the knowledge on the work floor.

Ad.3: Supporters and opponents

You are often inclined to invite friends or colleagues of whom you know
they agree with you or support changes. Try and find a good mixture of

187
supporters and opponents. Opponents can be used to test the workability
of the solution and improve it. If you make the possible opponents part of
the solution, chances are they will become supporters.

When composing a team, also think of the implementation. Who do you

need to make sure the implementation goes well? Who speaks the loudest
over coffee? Who does the department listen to? Who is the informal
leader? If you can involve these people in the solution, chances are they
can be of service during the implementation.

Ad.4: Team roles

Entire books have been filled with regards to team composition, e.g. Belbin
and Management Drives. In practice you would mainly focus on the 3 items
we just discussed. In this book we will not discuss the theories on team
composition any further.

188
5.4 Change management in practice

When looking at the question why Lean Six Sigma projects or Lean Six
Sigma implementations fail, the answer in 9 out of 10 cases is that
somewhere during the execution of the project
we failed to get the support of the people within
the organisation. Sometimes the project was not
important enough, sometimes the people were
not willing to accept the solution. You often see
that a solution was implemented, however, after
completion of the project the organisation falls
back into their old habits. In short, the project
worked on a practical level, however a few
things went wrong the Change Management
level.

The found solution could be extremely good, however then the people
involved are not owners of the solution, their behaviour won’t change and
the expected results won’t be reached.

Change Management is an extensive discipline. In this book we discuss

some practical insights and methods which help you deal with resistance.
Should you be interested in exploring this further, I would like to refer you
to our 2-day Change Management training and our book “Change
Management in Practice”.

189
 What is Change Management ?

Who is in favour of Me! Me!

People generally don’t hate
Me!
the change? changes, but they hate being
changed. If we want to manage
change processes effectively, we
need to learn how to get others
Good! He! along in the implementation of
Who wants to go He!
first?
She!
the changes.

Figure 5.21

Change Management is the art of openly taking people along in the

changes and making them comfortable doing so.

The importance of Change management is becoming more and more clear.

An often heard and accepted way of displaying this importance is the
formula: E = Q * A:

• E = The effect of the change initiative

• Q = The quality of the solution
• A = Acceptance by those involved

Figure 5.22

190
The quality of the solution (Q) is most often not the problem, the Lean
tools described in this book work. Think of TOC, VSM, Kanban, 5S,
managing working stock, etc. The result of the improvement is mainly
determined by the acceptance of the solution by the people who will have
to work differently (A). Has the need to change been made clear and is the
need being shared? Has the solution any effect on the daily working
routines? Does it solve their specific problems? Have they been part of the
solution? Or has the solution solely been announced? Have those that
‘have to change’ the necessary skills?

In many cases we focus on the problem, the root cause and the solution (K)
and relatively little attention is paid to the acceptance by the employees
(A). The formula E = Q * A teaches us that we need to divide our attention
better. A brilliant solution (Q=9) combined with a low acceptance by
employees (A=3) only delivers ‘27’ (E=Q*A / 27=9*3). Perhaps it would
have been better to choose another improvement idea which is carried by
the employees. For instance E=Q*A / 56=7*8.

A good improver will weigh the balance during the project, during a VSM
session, during the daily stand-up or during a kaizen event. He will
constantly wonder whether the suggested idea will be carried by the
group. Will this work? Do we have to come up with something different?
The process improver will not push his own personal preference at all cost,
because he thinks this is the best idea. He will realise that acceptance is
just as important to the success of the project.

Many of the current Change Management insights are based on the

general principle, E=Q*A.

In our book “Change Management in Practice”, we look at Change

Management from the following 3 time dimensions:

1. Macro process – Long term, duration of the project or the

implementation of the LSS programme
2. Meeting proces – Within several days/hours
191
 3. The Moment – In the moment

This summary: “Change Management = M3”, comes from Gross. After years
of experience with Change Management in practice, he summarised it very
briefly like this. “Change Management equals M-cube”.

3
Change management = M

M – Macro process M – (Project) Meeting M – Moment

• Organisational change • Effective meetings • Resistance is there!
• New process • Effective teams • How to deal with it?

Long term Short term Moment

• Lead time of the project • Duration of the meeting • Personal (1/1) contact
• Lead time of the programme • Duration of the project • In a group, during VSM session,
stand-up ….

Figure 5.23

192
 Macro process

The Macro Process – The process over the long term. This is the period
needed to reach the goal. At a Lean Six Sigma project, this is the duration
of the project, including the hand-over to the process owner and the
embedding of the new behaviour within the organisation. At a Lean Six
Sigma Programme, where we aim to implement the improvement method
and the way of thinking within the organisation, the longer term means the
entire period planned to do this. This could be a few years.

There are various change modules available which could help you
successfully implement a LSS project or programme (think of the 8 step
plan by Kotter). We discuss the model used by and developed by General
Electric in 1987, which takes ‘7 phases of change’ as a starting point. In our
book ‘Change Management in Practice’ we cover this extensively. We will
limit ourselves to the main lines.

7 phases of change
Create a Mobilizing Making
Leading Shaping a Implement Monitorin
shared commit- Change
change vision change g progress
need ment Last

Figure 5.24

The above figure insinuates that the 7 phases are consecutive phases in a
change trajectory. In reality the phases run through one another and
besides one another. Think, for instance, of ‘Phase 1’: Lead the change’.
This is the thing you do, making sure the change / project is carried and led
by a manager. Often a manager from the department, the so-called project
owner. He/She will have to lead/carry the change during the entire change
trajectory. From this viewpoint, you could also look at this model as the 7
elements of change.

193
 Phase 1: Lead the change

The first phase revolves around the question: ‘Is there someone within the
organisation, with the right management profile, who will take ownership
of the change’?

Every change requires leadership. This leadership could come from

anywhere within the organisation to start with, but will eventually have to
be carries by top management. Leadership manifests in various matters,
like:

• Insight that change is necessary

• The courage to set the change in motion
• The skills to ‘sell’ the change
• The willingness to commit to the change
• The skills to implement the change

For a project, this could be the process owner, for instance a manager of
the customer service department. For a continuous improvement
programme, this would have to be someone from the top of the
organisation.

What do we see if this ‘leader’ is missing?

• Project/programme is moving slowly, no progress

• There is no money available
• Other projects are more important
• There is no focus, resources are hard to realise, workshops are
cancelled
• The ‘changer’ feels ‘lonely’, there is no help, no sparring partner

As a ‘changer’, you need to ask yourself the following questions:

194
 • Is there an owner of the change, a so called sponsor?
• Are you involving the sponsor sufficiently?
• Is the sponsor actively asking for the status?
• Is the sponsor actively involved?
• In what way does the sponsor show that the project/programme
is important to him/her?
• Does the sponsor take on his leadership role when things become
hard or when you need him/her to?

Phase 2: Create a shared need

Is the need urgent enough to beat the resistance?

When there is no urgent need for the change, it ultimately doesn’t happen
or it will at least not run smoothly (E=Q*A). Ideally, the need can be
translated into personal advantage, because this is when people will start
showing the desired behaviour.

What will happen when there is no urgent need?

• The ‘changer’ feels ‘burdened with…’

• The first workshops are characterised by indecisiveness, if people
show up to start with
• ‘Low energy level’

As ‘changer’ you need to ask yourself the following questions:

• Is there an urgent need?

• Is it worded in such a way that everyone within the organisation
understands the message?
• Is it worded in such a way that it speak to the imagination of
everyone within the organisation?
• Can the need be supported with facts and data?

195
 • Are we working on an important problem? Or are there other,
more important problems to be solved?

If we translate this phase to a LSS project, an A3 project or a kaizen event,

this would mean the following, (1) we have a good problem description, (2)
the problem statement meets the strategy of the organisation, (3) the
measurement of the current situation shows the size of the problem, (4)
the employees are also troubled by the problem.

Phase 3: Develop a shared vision

Obviously people want to change, as long as we agree with the direction

and understand and recognise the advantages of the change. The primary
question at this phase is: “Is the desired outcome of the change clear and
do people feel involved?”

There is one ‘but’. A vision without a step-by-step plan is a dream, or

should we say disaster. Employees don’t believe in fairy-tales, they must
trust that there is a good outcome.

What would happen when there is no shared and carried vision?

• Flying start which lack a clear sense of direction

• Doubts over the next step
• ‘Changer’ is ‘searching’
• People are confused

As a ‘changer’ you need to ask yourself the following questions:

• Has a vision been formulated?

• Can the vision be communicated in a quick and simple way?

196
• Are the stakeholders involved in the realisation of this vision?
• Can I place myself in the outcome of the vision?
• Does it appeal to me and does it stimulate the imagination?
• Describe the vision in such a way, that the people who read it can
imagine the path towards it?
• Does the vision spark discussions and debate about the feasibility and
consequences?

Phase 4: Mobilise involvement

Once there is a vision, it does not mean everyone stands behind it. In
general you could say that; ‘If people are involved in the realisation of the
vision (or solution), they will accept the vision (or solution)’. This is the
reason why improvement boards and kaizen events are so motivating.

To inform large groups of people sending is sufficient (one-way traffic). To

create involvement, sending is not sufficient, it is mostly about ‘listening’
and ‘responding to what you are hearing’. Two-way traffic is necessary to
create support. This is where it often goes wrong. You do not create support
by telling others what they need to be doing, you create support by listening
and showing that you act upon the doubts put on the table.

We often hear the following complaints by management and ‘changers’,

“We did communicate it, didn’t we?” We apply four rules, (1)
‘Communicating once is not communicating’, (2) communicating is not the
same as sending, (3) Several moments, several forms, one-way
communication and two-way communication and (4) start communication
as soon as possible, even when you think you have nothing concrete to
communicate about (yet).

197
There are several causes why people ‘don’t want it’; (1) they don’t agree
with the direction, (3) they are doubting the good intentions, (3) they are
afraid of their own position or (4) they doubt whether they have the skills
to display the desired new behaviour.

The above reasons vary per person and per employee group
(department/function). This means you have to think about who you have
in front of you and adapt your story (accents) as such.

Make clear that it is not the case that people have failed in the past or did
things wrong. Stay clear of pointing fingers. Make it clear that the people
did their work well in the past, but things can be done better and you need
their help to do so.

An important factor here is middle management. They are the link

between the work floor and management. Make sure middle management
understands the vision, carries it and accepts it. Make sure middle
management is involved in the realisation of the vision and the way there.
In general it would be good if middle management handles the
communication to the work floor. Facilitate middle management optimally
in carrying out the message to the employees on the work floor. Make sure
the feedback loop is set up. Has the message been understood? What was
the response to the message? Do we need to make adjustments? Is extra
communication needed?

In this context, a stakeholder analysis is an important tool. The stakeholder

analysis has already been discussed.

What would happen when there is no support?

• Trust in the vision, solution and/or the ‘changer’

• Resistance
• People do not ‘have time’
• Nothing happens by itself...
• Everything is an effort and takes long

198
Aa a ‘changer’ you need to ask yourself the following questions:

• Do we know who the parties involved and the stakeholders are of our
project?
• Do we know how they stand with regards to the changes?
• What would we need to do to influence this position?
• Are employees and managers informed on the (1) progress and of the
(2) steps to be taken next?
• Re the employees and managers involved in the realisation of the
solution? Or the way there?
• Do the employees and managers feel like we also take the
disadvantages and possible risks of the desired solution into account?

Phase 5: Implement the change

The previous phases are mostly focussed on the acceptance of the change.
This phase is based on the implementation of the phase.

Pay attention to the ‘unhappy employees, talk to them’, but don’t forget
the ‘happy employees’. They also deserve attention. Rewarding good
behaviour is often more efficient than punishing bad behaviour.

A carried implementation plan is a requirement.

TIP: Create, if you can, the implementation plan with the people who need
to execute it or are part of the implementation plan. People don’t mind
change, they just don’t want to be changed.

TIP: Monitor the progress during the day-/week starts.

199
As a ‘changer’ you need to ask yourself the following questions:

• What are the concrete changes?

• What effect do the changes have on the process and the employees
who act this process out (employees and managers)?
• Is there an implementation plan? Have the stakeholders been involved
and have they been properly informed?
• Will this plan be executed in a project-based manner?
• Is it clear what is fixed and what can be adapted by users if need be?
• Has the decision making process been established? Who does what
and who has responsibilities over what?
• Are there sufficient resources and has a budget been set?
• Are the involved employees and managers been trained/well
prepared?
• Have the new work instructions (standard work – SOP’s) been
described well?
• Has there been a pilot and did this have the desired result?
• Has the business case been approved?
• …

What would happen when there is no well carried implementation plan?

• You would be pulling and dragging ……

• Nobody would get up to help you …..
• All kinds of reasons would be given as to why it did not go according to
plan
• …

200
 Phase 6: Measure the improvement

The Check and Act phase of PDCA are the phases in which the energy
drains from the project. Often this is why projects do not deliver the
desired result. To make sure we don’t fall back, to make sure the
improvement lasts, we must measure the progress. Measuring, analysing
and guiding to make sure we secure the improvement/improved process.

Here, the day start and week start can also be a great tool to measure
frequently and short-cycle and to discover if you have to do something
before it’s too late. If you want to change people’s behaviour, you will
need to keep the feedback loop as short as possible.

Starting point is, ‘Measuring daily to change behaviour, measuring monthly

to see whether the daily activities are successful’.

As a ‘changer’ you need to ask yourself the following questions:

• Are the right parameters being measured?

• Is the focus on output, ultimate goal of the process (y)?
• Are we also measuring the sub processes (x’s), which should lead to a
desired output (y’s)?
• Are the results used for feedback to the people who do the work and
to guide the daily activities?
• Are the results visible through reports, day start boards or
improvement boards?

What would happen when we don’t measure what we are doing?

• Falling back into old habits

• Change is not lasting
• Grist to the mill to the detractors

201
 Phase 7: Making change last

Here we are talking about two questions with a different perspective:

1. Will the project after completion of the improvement be pursued and

carried by the Process owner?
2. Will the behavioural changes we are looking for (e.g. continuous
improvement), pursued by the people who do the work?

During all phases of the project the process owner needs to be involved.
The process owner also needs time to get used to the new process. When
the process owner does not make the new process his own during the
project, the project will not be successfully pursued after completion of the
project. Through hard work by the improver, the new process will be
successfully implemented, but once he/she leaves, the process will fall
back into its own habits.

As a ‘changer’ you need to ask yourself the following questions:

• Are the KPI’s (output process – y’s) of the new process part of the
monthly performance meeting with management?
• Are you present during the first weeks to discuss the progress and
adapt if it is needed?
• Is standard work/work coaching been implemented to secure the new
standards and improve continuously?

What will happen if we don’t assess how it is going?

• Relapse into old habits

• Change doesn’t stick
• Frustration and uncertainty with the employees
• Grist to the mill for the critics

202
 Meeting

The meeting with the Lean Six Sigma team or with a management
commission is of great importance to achieve the changes. In almost every
organisation the meeting is the primary means for information transfer
and management. This is where the course is being determined. The way
in which the meeting is led has a great effect on the effectiveness of a
meeting and the possible realisation of changes.

3
Change management = M

M – Macro process M – (Project) Meeting M – Moment

• Organisational change • Effective meetings • Resistance is there!
• New process • Effective teams • How to deal with it?

Long term Short term Moment

• Lead time of the project • Duration of the meeting • Personal (1/1) contact
• Lead time of the programme • Duration of the project • In a group, during VSM session,
stand-up ….

Figure 5.25

Leading a meeting as if it is ‘running itself’ is a necessary skills of a good

improver. Such a meeting has the following characteristics:

• We have a clear and common goal

• We listen to each other, everyone has their say
• We treat each other with respect
• There is a certain logic and order

203
In this case we often speak of the DRPI model.

Figure 5.26

Let’s discuss the above by using an example. We have had a VSM session
and came to the conclusion that there are two mutually exclusive possible
solutions. There is no unanimity/majority for one of the two solution
directions..

The ‘changer’ wants to get to a decision and prepares the meeting.

GOAL – The goal of the meeting is to get to a decision/choice of the new

process – will we choose A or B?

ROLES – I will lead the meeting and will make sure I provide feedback on
the agreements we have made. You are the process specialists and you will
need to get to a decision.

PROCESS – We will do this in 4 steps (clear agenda):

204
 • Determining the decision criteria
• Determining the scores per decision criteria for options A and B
• Risk assessment for options A and B
• Making a joint decision

INTERPERSONAL (project)
Let’s set up the following project agreements:
• Everyone is prepared
• Actions will be pursued
• Minutes of meeting 2 days after meeting at most

INTERPERSONAL (meeting)
Let’s set up the following meeting agreements:
• We listen to each other
• We let each other speak
• We will try to ask question instead of ‘yes, but…’

For more details on this, I would like to refer you to our training ‘Change
management in practice’ and the corresponding training book.

205
WIIFM – What’s In It For Me?

To realise a commitment we often provide presentations for large groups

of people. The ‘changer’ is happy to get some ‘talk time’ and tell his ‘story’.
Every human being will always ask himself, “what’s in it for me?”. The
biggest mistake you could make is the specific change story not connecting
with the audience.

Figure 5.27

206
 Moment

The moment and meeting often go together. Typical moments you could
think of are e.g.:

• Discussions or disagreements
• A team member mentally or physically “leaving” the meeting
• Someone is not being heard or is being ignored
• The group is not really sure what they are doing anymore
• Etc.

Should such a moment arise, we have to deal with this straight away. It is
therefore important that we understand in which phase of the change that
person currently is. This, so the ‘changer’ can make the right intervention
to prevent a colleague ‘leaving’ or them having the feeling they are not
‘being heard’.

Resistance is part of it!

During an improvement project you will always be

confronted with resistance. There is no way around it.
Crucial question is: How do we deal with resistance?
In this case we use the ideas of Annemarie Mars, as
described in her book, ‘How do you get them along?’
Her 4 phases of change are based on the model of
Voorendonk (1998).

Figure 5.28

The ultimate goal of every improver is the new process being carried by
the employees who do the work and by the process owners. The ultimate

207
goal is the involved parties committing to the new process (the solution).
For a commitment, 4 ingredients are needed:

1. I understand
2. I can do it
3. I will take responsibility – ‘say yes’
4. I will do it – ‘do yes’

PS: The 7 phases of change offer a lot of leads to positively influence the
above mentioned matters.

Before a person commits himself (do yes) to the solution, he/she will go
through several phases , like displayed below:

Figure 5.29
Each person will go through these 4 phases when he/she is confronted
with change. The same actually applies to criticism and feedback!
The phases can differ in time from person to person and they can differ in
time depending on the change.

These 4 phases can be recognised during a meeting where improvement

boards are being introduced, or a VSM session, a 2-day kaizen event or
during a change trajectory of several months.

208
Phase 1: Denial
To start with the person will deny the fact that there will be changes.
He/she doesn’t listen or thinks that it will ‘blow over’, ‘it doesn’t effect me
or my department’.

During this phase there is need for clear, frequent communication through
various channels?
• Why is the change necessary?
• What is our shared vision?
• What is the effect on employees?

Phase 2: Resistance

There will always be resistance, there is no way around it. Once the
employee realises there are really going to be some changes, he/she will
enter the next phase. He/she will resist the proposed changes to start with.
People will be angry and uncertain and use their creativity to voice why
this is not a good idea (yes, but).

Resistance is a necessary step on the road to commitment

To an improver it is important to realise that resistance does not mean that

‘someone doesn’t want it’. To effectively deal with resistance, you have to
see that resistance is a necessary step on the road to commitment (a
successful and secured implementation of the new process).

There are several causes for resistance, for example:

1. Doubts about the change/solution

2. Incomplete information
3. Uncertainty about his/her own position
4. Previous experience with the ‘changer’ or changes
5. No trust in the ‘changer’
6. ….

209
An often made mistake is that the ‘changer’ thinks for the person
concerned. The ‘changer’ tries to convince this person with rational
arguments. This, whilst this person is not open to this. He/she is angry and
insecure (emotion) and therefore not open to rational arguments. The
discussion turns into a repetition of statements and they don’t listen to
each other.

TIP: The ‘changer’ will have to realise that this person is in the resistance
phase and will need to have some understanding. He will have to listen
instead of sending. He will have to show understanding for the thoughts
and feelings of the person concerned and will need to show that he is
taking this serious.

TIP: The ‘changer’ will need to realise that time is his best friend, This
means that commitment takes time. Take that time and don’t be pushed
into a yes or no discussion. Show understanding and come back to it at a
later stage.

TIP: The ‘changer’ will need to realise that time is his best friend, This
means that commitment takes time.. Don’t steer away from resistance.
Embrace it…. this speeds up the road to commitment.

Figure 5.30

210
TIP: Beware of the fact that there are many causes for resistance and you
won’t get everything ‘on the table’. You will often hear arguments like, ‘we
don’t have time’, whilst the real reason stays hidden. The true cause
remains ‘under the table’. Examples of this could be; distrust of the
manager and unresolved conflict situations from the past.

Ask for advice. Ask questions instead of repeating your statements. Make
sure the person concerned starts rationalising why he is so against t. This
way, you make sure he moves faster towards the next phase, so called
‘self-reflection’’.

TIP: Be aware of the fact that everyone looks at the truth from a different
perspective. This perspective determines him idea of the truth and this is
leading in the behaviour he displays, the questions he has or the position
with regards to the change.

A lot of miscommunication is caused by the fact that we don’t realise this.

We call this ‘perspective filters’ These filters are formed by for instance the
upbringing, education, the role someone has within an organisation or the
goals he/she is responsible for.

Here we also give the following advice, ‘listen more – send less’. Pay
attention to the views of the other person. It could be, you missed
something!

Phase 3: Self-examination

During this phase the ‘thinking’ starts. In Lean transformations training is

used the speed up/shape this phase.

“Maybe it’s a good idea after all?”

“There are actually quite a few customers that complain about the PLT”
“Maybe I could actually do something about this?”

211
Question arise from the employees (pull). Substantive arguments are
exchanged about the details of the solution. Rationally explain the details
behind the solution. Simulate the solution. Ask for advice? Would this
work?

Phase 4: Commitment

As previously said, the ultimate goal of every improver is to have the new
process carried by the employees who do the work and by the process
owners. The ultimate goal is that all parties involved commit themselves to
the new process (the solution).

Commitment requires 4 ingredients:

1. I understand
2. I can do it
3. I take responsibility – say yes
4. I will do it – do yes

When the employees are in this phase they will, for instance, offer help,
express their concerns regarding the planning or risks or about their own
skills.

TIP: Involve the employees when and where you can. Use the knowledge
on the work floor, that’s where the solution is improved and the
implementation made easier. Turn the employees into ‘parts of the
solution’. Examples are:

• Make the planning together

• Ask about possible risks
• Let the employees create the work instructions themselves
• Train the employees

212
213
214
 PART 4: LEAN AS A
MANAGEMENT PHILOSOPHY

“In many cases Lean implementations are not successful

on the long run. The reason is that most companies have focussed too
heavily on applying the Lean tools, without understanding Lean as an entire
system - the lean culture“.

(J.K. Liker)

215
216
6 Lean philosophy – The Toyota Way

6.1 What is Lean?

There are 2 ways of looking at Lean; (1) Lean as a toolbox to improve

processes and (2) Lean as a management philosophy. The chosen route
depends on the ambition of the organisation.

Figure 6.1

There is nothing wrong with approach 1, as long as the organisation choses

this route deliberately. There is nothing wrong with using the Lean toolbox
as a way of solving process problems. In many cases a Lean awareness
training will have an immediate effect on the way one looks at the
employees and they will be ready to recognise and eliminate the first
wastes. The process will be improved whilst the company culture remains
untouched.

There are quite a few companies that implement Lean, but after a year
look back with disappointed and conclude it did not bring them what they
217
had hoped for. At the start considerable results and realised quite quickly.
However, after a while the enthusiasm fades away and the follow-up
results remain absent. As a result, Lean is seen as a management hype that
comes and goes. The fact that Lean is a management philosophy is often
underestimated: Lean is a way of life, not a crash diet.

Figure 6.2

The reason is that most companies have focussed too heavily on applying
Lean tools, without understanding Lean as an entire system - the lean
culture. (J.K. Liker)

These companies wish to make the transformation towards a Lean

organisation with the associated culture, but do not want to make the
necessary effort.

For Toyota the Toyota Production System is a strategic weapon. A

company culture which ensures all employees look at the processes
through the eyes of the customer. Where do we waste time, resources and
materials which the customer does not want to pay for? How can we
eliminate these wastes together?
218
There is not just one single definition of Lean, but there are consistencies
in the characteristics of Lean:
• By continuous improvement and adapting ourselves, we deliver a
good product or service to the customers – customer value
• Improvement is embedded in the management style, in who and what
we are – management philosophy
• Improvement is part of our job – of every employee/every day –
continuous improvement
• Every disturbance is seen as an educational moment - learning
organisation

For Toyota this means that Lean is not a toolbox, but a way of working, a
management philosophy. This has an immediate effect of the role of the
manager. The power of Toyota is, that management is committed to
investing in their employees and that they will continuously stimulate the
culture of continuous improvement. Chapter 6 is dedicated to the 14
principles that are a determining factor to managers that wish to make the
transformation into a ‘Lean organisation’ and wish to secure this for the
long-term.

The following anecdote clarifies

At a company research into Scania one of the managers made the following
remark: “The grass at Scania is very green”. To which the Lean expert
responded: “Do you know what the thing is with green grass? A lot of
manure and rain has covered it over the last 20 years, and you know? If we
slack in our attention, the grass will be full of weeds.”

He then added: “We have been going for 20 years. We have achieved
amazing results but are not even halfway yet. In fact; we will never achieve
perfection”.

219
6.2 The Toyota Way – J.K. Liker

“The Toyota Way” – J.K. Liker – the 14 management principles of Toyota

In his book, Jeffrey Liker investigates “The Toyota

Way”, the secret behind Toyota’s success. What do
they do differently? What makes Toyota so successful?
Liker attempts to find an answer to these questions by
unravelling Lean as a management philosophy and
ultimately, he comes to the 4 P’s which he translates
into 14 management principles. In chapter 6 Liker’s 14 principles will be
discussed further.

Figure 6.3

220
1. Challenge

Everyone needs an ambitious goal to learn and to grow as a person (and as

an organisation). Only by continuously creating challenges, we challenge
ourselves and get the most out of ourselves.

2. Respect and teamwork

Only when we listen to each other, try to understand each other, take
responsibilities and respect each other, we can improve continuously.

The above is relevant to everything and everyone – suppliers, customers,

team-members, managers, employees, etc.

3. Kaizen

Kaizen stands for ‘small change’ (‘kai’) ‘for the better’ (zen). In the West we
translate Kaizen as ‘continuous improvement’ (continuous improvement is
a commonly heard slogan).

Many innovative projects also assure improvements. Examples are new IT

systems or automatic scanning with RFID. There are also a lot of projects
which are organisational changes, like merging departments.

Such projects have nothing to do with Kaizen. These are often

improvements thought of and implemented by the people doing the work.
Improvement of existing processes.

‘Do not underestimate the effect of 10 small steps!’

221
 The following anecdote clarifies

At a large hospital we trained some physicians. We spoke about stand-ups

(improvement boards) and 5S. Some frustration emerged within the group.
“We are talking about walking an extra 50 meters or looking for hoist slings,
what’s going on? Don’t you think we have bigger issues within this hospital?
Obviously, we also need to address these larger issues (projects), however
we also need to pay attention to the smaller wastes which influence every
day practice of the nurses and which take time away from the patients
(customer value).

‘Do not underestimate the effect of many small steps!’

We calculated: We have 25 departments, if we spend time every week on

implementing 5 small improvements, this means 125 a week, 500 a month,
6000 a year.

4. Genchi Genbutsu – Go and See

Genchi Genbutsu means ‘the actual place’, ‘shop floor’, ‘the place where
customer value is added’.

Within Lean there is a lot of respect for the work floor. This is where it all
happens! On the work floor, knowledge is available which is needed to
improve the quality. On the work floor, the knowledge is available which is
needed to remove wastes from the process. On the work floor the
solutions to our problems are hidden.

The Lean manager spends a lot of his/her available time teaching

employees to recognise waste and to resolve them. To get to the root
cause of process problems (first hand).

222
 Principle 1: “Base management decisions on
long term philosophy, even at the expense of
short term financial goals.”

The leading management principle in the West is ‘maximising share-

holders value’. Each policy decision is held against this measuring tool. For
instance, an investment (improvement proposition) is made at a positive
Return on Investment %, keeping in account a Weighted Average Cost of
Capital of for instance 5%.

In other words: We will invest in a new planning system worth €700.000 if

we can earn back the investment, taking into account a minimal return of
8%. Share-holders are basically saying, if you cannot turn my €1,000.- into
€1,080.- within one year, I’d rather not invest.

The fact that this way of thinking, this way of managing, this type of
leadership has a negative side to it, was proven within the last 8 years
(worldwide crises of 2008). In extremes this leads to short term decisions
driven by business cases, set up in Excel by financial experts.

Share-holders value does not inspire, does not provide direction, does not
get the best out of the employees. It does not ensure the combining of
energy and creativity in a direction which is right for the company, its
employees and the environment in a 10, 20 or even 50-year time period.

The first principle states that there needs to be a long-term goal for the
organisation, translated at department level and even process level. These
long-term goals are leading in all management decision, even at the cost of
short-term financial sacrifices.

223
Figure 6.4

Figure 6.4 shows a manager being confronted all kinds of possible

improvement ideas. How do you determine what to act on and what not?
When you use the principle ‘maximising share-holders value’ as a leading
principle, you make a business case for all possible improvements and
make a decision based on the ROI (or worse; the manager with the loudest
mouth decides).

A downside to this approach is, that you are letting the short-term ROI be
leading, without taking the long-term vision of the company into account.
When the long-term vision of the company is clear and you have been able
to translate this into long-term departmental goals or even the process
goals, these long-term goals become leading in the choice of which wastes
you should tackle and which improvement ideas you wish you realise. You
might end up making different choices

What inspires more? What provides direction? Which long-term vision

ensures resources and creativity being applied in a correct manner?

Option 1:

224
In 2020 we want a market share of 14%, a turnover of 56 billion euro’s and
a return of 11% for our share-holders.

Option 2:

We want to contribute to the wellbeing of society. This means that around

the year 2030, we want to produce cars which purify the air: exhaust
fumes should be cleaner than the outside air.

Figure 6.5

Once the long-term vision is clear and has been translated to all
departments of the organisation it will be clear which path should be
taken. Which projects are worthwhile and which improvement-ideas
during a kaizen event are worth exploring.

Do ROI, WACC and business cases not play any role at Toyota?

Of course business cases play a role within Lean, just another role. There is
a subtle difference. A business case is not decisive in the path that should
be taken. The long-term vison is decisive in determining the path that

225
should be taken, the business case shows whether the way in which we
want to realise this vision, is the correct way.

In other words: Should an improvement idea have a negative business

case, it does not mean the idea will not go ahead. It means we have to go
back to the drawing board and come up with an alternative which realises
the long-term vision which does have a positive business case.

Too often we observe in the field that visions are labelled as impossible,
because the way the vision would be realised is not realistic. For instance,
the chosen solution costs too much money. A negative business case is not
a ‘stop sign’, it is a sign that we have to model our vision/improvement
idea in a different way. A way which fits within the current financial rules
we have established together.

The 1st principle touches on the core value ‘Challenge’. People need
challenges to learn, to get the most out of themselves and the team.

A practical example

It is not surprising Toyota was the first to bring Hybrid cars to the
market. The competition thought there was no money in it
(ROI/shareholder value). This while Toyota has had the ambition to
produce cleaner cars since 1970.

Only when governments started subsidising cleaner cars (there was a

positive business case now) the competition started developing
electric and hybrid cars.

226
This principle also works in a smaller scope. Think of a department that
starts working with Lean. There is so much to improve! With a little help
the wastes will become visible immediately. Which wastes will you tackle
first? What will you spend your time on? Principle 1 tells us it would be
better (1) to determine the long-term goals for the department, (2)
translate these to measurable KPI’s, (3) then define the wastes which are
between the now and the long-term goals and (4) devote the available
time, resources and budget to eliminate these wastes.

Companies that have got to grips with this principle will not ask: “which
improvements CAN we implement?”, but: “which improvements SHOULD
we implement?”.

What does this mean to a Lean manager?

Example:

• Do all ‘value streams’ have a clear Long Term (LT) goal (ultimate goal)?
• Are these LT goals known to the employees?
• Have actions been defined to translate this LT goal into short term (1
year) goals?
• Are these short term (1 year) goals known to all employees?
• Have actions been defined to realise these short-term goals (1 year) by
means of A3’s, kaizen events or DMAIC projects?
• Are the short-term goals being monitored and discussed daily with the
responsible teams?
• ………

227
 Principle 2: “Create continuous flow to bring
problems to the surface.”

A traditional manager walks through the department and looks around to

see if everyone is busy, checking whether everyone is at work. When he
notices that there is room, he will search for possibilities to do the same
work with a smaller work force.

A Lean manager is mainly focussed on FLOW. Where is the FLOW

interrupted? Where is the intermediate stock (WIP)? Where do things not
go right the first time? What do the employees run into? Where is the
waste?

One Piece Flow is a goal of every Lean manager, not necessarily to realise.
Flow is goal to aim for! To give direction to the actions that need to be
taken.

1. Because a lack of flow goes hand in hand with longer lead times
(see ‘Little’s Law’)
2. To make wastes more visible because they otherwise stay hidden

Ad. 1: Because a lack of flow extends the lead time.

A product or service which is not moving, is waiting. A lack of flow always

results in stock (WIP) and for that reason extra waiting times for the
customer. If the WIP and corresponding lead time go up, the need for
registering and managing the WIP becomes greater. This causes extra
waste within the process.

228
 A practical example

Scanning department within a council – as part of digital work.

On the scanning department a queue occurred through various reasons, the
flow was interrupted, the WIP grew to 2 weeks production. This lead to the
following wastes.

• Various operational departments at the council started calling the

scanning department.
• The need to register the WIP arose quickly
• An ‘urgent procedure’ was called to life
• The WIP became a KPI and a monthly item at the management meeting.

The time the above wastes took up obviously went at the expense of time
adding customer value (scanning documents).

Ad. 2: To make wastes more visible which would otherwise stay hidden
(The Sea of inventory).

A practical example - Toyota

At the assembly line of the engine blocks at Toyota the work with a kanban
size of 6 blocks. When during a longer period all KPI’s remained stable and
the process was under control, the team decided to reduce the Kanban to 5
blocks. This made all sorts of problems visible which made clear where wastes
were still hidden within the process.

229
 A practical example

A production company has a minimal batch size of 3 days production. This

causes large intermediate stock. When we looked at the possibility of
reducing the batch size it was pointed out that this would be impossible due
to the fact that the quality control department needs 3 hours to test the first
products before the entire production run can be released. To a Lean thinker
this is not a Stop sign! It is a good reason to investigate why the testing takes
3 hours and what the possibilities are to reduce this long throughput time to
an acceptable level (for instance 15 minutes).

Relevant Lean Tools used:

1. Line balancing (time studies)

2. Multi skilled operator
3. Process Cycle Efficiency (PCE)
4. Single Minutes Exchange of Dies (SMED)
5. Overall Equipment Effectiveness (OEE)
6. Levelling out workload (Heijunka)

Levelling out workload (Heijunka)

If we want to realise flow, if we want to balance the lines, we need a

certain amount of constant delivery of workload. This does not exist in the
field. There are weeks where we receive 50 permit applications and weeks
where we receive only 10 permit applications. To achieve flow within this
production process, we would need to spread the workload over the
weeks. Look at principle 4 ‘Level out workload’ as well.

230
What does this mean to the Lean manager?

Examples:

• Is Flow an important starting point when formulating the long-

term goals of the Value Streams?
• Is there a clear perception of where the flow in the Value Streams
is being interrupted and what the causes are?
• Do the employees realise this?
• Have appropriate measures been taken to realise the throughput
time goals of the Value Stream by for instance (1) establishing
WIP caps, (2) establishing pull systems?
• The Lean manager strives for smaller batches
• Is it clear when there is ‘batch behaviour’?
• Have initiatives been defined to reduce batches?
• Is it clear where production lines are not yet balanced?
• …..

231
 Single minute exchange of dies - SMED

When Shigeo Shingo, working at Toyota, was trying to organise production

processes in a smart way, by eliminating the 7 types of waste, he
encountered the following:

Before every series of parts, for instance right doors, the machine that was
used to produce the parts needed to be converted. Basically, such a
machine is a large metal press that shapes metal into what will be a door
under enormous pressure, using a mould or “Die”. In his attempts to
eliminate waste, Shigeo Shingo was forced to choose between two evils:
he could either reduce set-up time per part, in which case he needed to
produce large batches to even out the downtime, or he could reduce
inventory, which meant he had to produce smaller batches, because
inventory costs money, time and raw materials (nowadays we would say
that a large inventory reduces the cash flow).

Stubborn as he was, he refused to accept that he had to make a choice, but

he was determined to avoid having both evils at the same time: no large
inventory and no lost time due to set-ups. Maintaining a large inventory
often hides the problem of long set-up times.

There was only one option left: reducing the set-up times – which until
then was considered unthinkable. Normally, converting a press (for
example from left door to right door) would take up hours on an entire
day. He ordered his employees to do it within 10 minutes (“single minute
exchange of dies”).

When his engineers told him it could not be done, he told them: “Don't tell
me it can't be done, tell me what you need to make it happen”. The
engineers went to work and they came up with lots of possible
improvements, providing there was a willingness to invest in the
production equipment and tools.

232
Through incremental improvements and investments, the engineers came
up with a number of clever solutions: an extra crane to prepare the mould
for the next series, faster connections, creating moulds from smaller parts
that were easier to handle, automated tools instead of manually operated
tools, etc.

Shigeo Shingo later used the same approach for other machines and
created a standard protocol to shorten set-up times.

The SMED protocol

1. Take a critical look at the current situation (usually: film the entire
current conversion process and look at it through the eyes of the 7
types of waste).
2. Distinguish between what can be prepared in advance (externals) and
what can only be done when the production line has stopped
(internals).
3. Convert as many internals as possible to externals (for instance,
heating up machine parts next to the production line, so that they do
not have to heat up after the machine has started).
4. Streamline the remaining internals to speed them up (less waste).
Think of smarter, faster tools and fewer bolts than before.
5. Streamline the externals, so that it will take even less time to prepare
them (the externals take place while the production machine is still
running).
6. Document the new procedure and turn it into a good and clear script
for the employees doing the set-up.
7. Repeat the entire process. New things are added all the time to speed
up the process further.

233
Figure 6.6

A good example is a Formula 1 pits-stop. When you bring your car to a

dealer for repair, you lose your car for a day, while at Kwik-Fit, you can
wait until they're done, and with a Formula 1 car, it will take a mere few
seconds. This is also an example of a set-up (every second counts). Over
the years, it has dropped from dozens of seconds to just a few seconds for
changing tires, filling the gas tank and replacing some parts.

234
 Overall Equipment Effectiveness – OEE

OEE is the abbreviation of Overall Equipment Effectiveness. The source of

this tool is Toyota, or rather the part of Toyota that was known as Nippon
Denso in the 1960's. OEE is intended especially as a Gap analysis tool, with
the ultimate aim of improving the speed and/or quality of a production
machine. For many Lean companies, OEE is a CPI that is used to look for
opportunities to improve a machine – or group of machines. Other
companies also sometimes use OEE as a standalone tool to improve the
efficiency of their equipment.

OEE comes from the TPM (Total Production Management) school that can
be seen as the basis for what we now call Lean. In production companies
which have been involved in continuous improvement/Lean for a long
time, like Heineken and Corus, it is still often called TPM.

An advance warning regarding the use of OEE

• OEE should not been seen as the universal CPI for machine
effectiveness, but more as a tool to assess the effectiveness of a
machine. Comparing different machines using OEE may be
overshooting the mark.
For example, this will be the case when comparing the OEE for a high-
volume, simple bulk product and low margin machine with a low volume,
high-end and high margin machine.

• In addition, the OEE can deteriorate by shortening the cycle time of a

process step, which means that the machine is used in a less time-
efficient way, which affects the OEE, even though the output may be
the same or even higher. This has to do with the fact that OEE is based
on time measurement rather than output.

235
OEE systematics

OEE is a unit that is calculated by multiplying three factors. The three

factors are availability, performance (or speed) and quality. The calculation
is expressed in the number of hours, not output volume.

Step 1: Determine the Loading time

The loading time is the planned time of a machine – the time a machine is
planned to be in production.

Step 2: Determine the Availability (A)

Next, you measure how much of the loading time the machine has actually
been in production, by deducting time spent on set-ups and machine
breakdowns. The result is the availability in terms of hours.

That availability is divided by the loading time, resulting in the Availability

as a fraction or percentage (A).

Step 3: Determine the Performance (P)

Next, you asses what the output would have been if the machine had run
on maximum availability (full-time). You look at what the actual output is.
The difference is caused by speed losses and idling.

The difference is deducted from the maximum, which leaves the

Performance. By dividing the Performance by the maximum possible
performance, the relative performance is expressed as a fraction or
percentage (P).

236
Step 4: Determine the Quality (factor) (Q)

Next, the same is done with Quality. How many first-rate products could
have been produced and how much of that has been lost due to scrap and
quality checks. Again, the result is a fraction (maximum –
losses)/maximum), yielding the Quality (factor) as a fraction or percentage
(Q).

Step 5: Calculate the OEE

The OEE can now be calculated: A * P * Q = OEE.

Figure 6.7

The found value is monitored as KPI over time and used to compare the
machine concerned to other similar machines.

237
Obviously a low value for this KPI will lead to improvement actions, which
will focus on the relatively lowest of the 3 values A, P and Q.

The losses of the three categories which have been identified are often
divided as follows, although every company can determine which of them
fall into what category. Short interruptions are often categorised under
availability, but in other cases under performance.

Figure 6.8

238
 Principle 3: ‘Use pull systems to avoid
overproduction’

“Flow if possible, Pull when needed” (Taiichi Ohno).

Flow is the aim of a Lean manager. Ideally all production steps seamlessly
complement each other so no intermediate stock is formed. In many cases
(One Piece Flow) Flow is not possible for various reasons. See the examples
below:

1. Irregular demand
2. Take a jar of peanut butter at the supermarket. The supply time of
the supermarket is longer than the desired delivery time of the
customer.
3. The supplier is not reliable
4. The supplier could possibly deliver each product every single day,
however the price for this does is much higher than a small
Kanban stock

The solution would be to still work with intermediate stock. Pull systems
will guard the fact that we do start stacking up too much stock. Read the
previous chapter on Pull and Kanban systems on this.

“The more inventory a company has, the less likely they have what they
need”. (Taiichi Ohno).

Examples of relevant Lean Tools are:

1. Kanban
2. Two bin principle
3. Visual management
4. Heijunka

239
What does this mean to the Lean manager?

Examples:

• Have pull systems been established in places within the value

streams where flow is not possible or not yet possible?
• Is the aim to reduce the current pull stock so new wastes will
become clear?
• Is the aim to reduce the current pull stock to get closer to
achieving flow? A step towards the ultimate goal.
• ……….

240
 Principle 4: Level out workload (Heijunka)

Aiming for Flow and using Pull Systems to maintain a minimal stock works
best when customer demand remains sufficiently stabile. In reality many
products and services have to many fluctuations in respect to customer
demand. Heijunka is the principle used to answer this.

When a company has to produce 400 pieces one week and only 40 the
next, and they are aiming to achieve Flow, employees would have to work
overtime the first week and in week 2 they will have nothing to do from
Wednesday. This imbalance causes major strain on the process, but also on
the employees.

Imbalance = Mura

Figure 6.9

Heijunka ensures a constant production flow. Heijunka ensures

predictability for employees and suppliers.

Heijunka consists of two parts:

241
 1) Order-levelling
Take all orders from an upcoming period and divide these in equal
portions per day/period

2) Product-mix levelling
Make every product every day/period

Heijunka then ensures stability within the unpredictable context of

customer demand. At first sight Heijunka appears to impair your customer
flexibility – the delivery time for some orders will be longer. Heijunka does
ensure however that you can always deliver what you promise. Customers
will be happy when you promise impossible deadlines, but when that
deadline is not met your customers will not be satisfied and all kinds of
wastes will sneak into the process (for instance, calling customers to
change the delivery date, urgent orders, urgent transports, etc.).

Figure 6.10

242
What does this mean to the Lean manager?

Examples:

• Does the Lean manager know where there is irregular workload?

Irregular pressure on people and machinery?
• Are there any initiatives to solve these wastes (Mura and Muri)?
• Is the workload actively being ‘levelled’?
• Can we offer every product or service every day/period over the
entire value stream?
• …….

243
 Principle 5: Build a culture of stopping to fix
problems, get quality right the first time

The main goal of Jidoka is simple: producing free of defects. Producing free
of defects in an important part of Lean, because defective products or
services, in many cases, lead to extra actions during the cause of the
production process.

JIDOKA - Build in quality

Machine - Build in quality: Many machines have automatic detection

systems when something goes wrong or when products are being
produced which do not meet the specifications. The machine then stops
automatically to minimise the number of defective products and prevent
the machine getting stuck. The operator is then forced to have a look and
see what the problem is and he will have to consciously take further
action.

Process – Build in quality: This means that there are process agreements
have been made in case something goes wrong or might go wrong.
Improvement starts with recognising there is a problem...

Problems have to be brought to the surface to be able to realise

improvements. Problems offer us the opportunity to better ourselves. For
this reason, employees need to be re-educated to not hide the problems,
but to be happy when they are discovered. In extremes: problems have to
be “celebrated”.

This new way of ‘celebrating problems’ is not that evident in our western
culture. Employees often try to solve problems with a quick fix, therefore
not delaying the process. They even conceal them, because they do not
want to be seen as being difficult. Teaching them that it is better to halt
the process completely to structurally approach the problem to prevent

244
future problems, is quite a challenge. This goes against our ‘western
nature, our western culture’.

Another approach to this principle is - ‘solve small problems immediately

before they become big problems’.

Andon – empowerment of the workforce

Andon stands for (light) signal in Japanese. When something happens,

which is not 100% good or conform the standard, employees pull on an
andon cord. The team-leader comes over and analyses the situation with
the employee. It is then determined if/when follow-up action is needed.
Toyota has the capacity to handle 150 andon calls a day in a department of
50 employees.

The most dangerous kind of waste is the waste we do not recognise.

(Shigeo Shingo).

All employees are ‘obliged’ to pull the cord – an obligation towards the
organisation, the customers and the colleagues. A fault which is discovered
by one employee will prevent another employee running into the same
fault. An important condition to this principle is a safe work environment
and time to handle these andon calls.

A ‘daily stand-up’ is actually a way to respond to the andon thought,

without halting the process.

How does this work at Scania?

An employee notices that the takttime of 6:40 might not be met within his
work cell. He does not wait and see. He pulls the cord and the siren above
his work cell lights up as a sign to the team leader that his assistance is
needed. The team leader rushes to the concerning work cell and together
with the employee he assesses the situation. First, the team leader will try
245
to fix the problem immediately within the takttime so the production flow
is not interrupted. Then, he will determine the follow up action needed to
prevent this situation from arising again. Only if really needed, the
production line will be halted to solve the problem and then the line can
be started up again.

When the production line is halted it does not immediately shut down the
entire plant. Only part of the production line will be halted. Reserve buffers
(stock) will be placed in several strategic places to cover a possible hick-up
of a few minutes.

A practical example

A Japanese manager is being shown around the Toyota plant in America. The
production manager proudly tells him that the cord was not pulled at all this
week. To which the Japanese manager frowned his eyebrows and said:
“What problem are you trying to hide?”.

The underlying through to this remark is:

• Either the objectives are not sufficiently defined anymore, the current
objectives do not display any waste anymore!
• Or worse; the employees (or the manager) are hiding the problems

Could this also work in the service industry?

At first it will lead to a lot of ‘pushing and pulling’. But eventually it is the
only way forward. During a kaizen event at a bank a back-office employee
said that their account managers and agents provided them with the
wrong or incomplete information in 55% of all cases, which lead to extra
delays in the process. To the manager this came as a complete surprise.
The line was never halted! We had ignored the problems for years and
worked around them. With waste and frustration as a result.

246
What does this mean to the Lean manager?

Examples:

• Is a lot of time being spent on ‘problem solving’?

• When problems occur? Are they being reported? Is the working
atmosphere safe enough?
• Is this then being discussed within the team and are measures being
taken to ensure this does not happen again?
• Have Poka Yoke solutions been implemented within the process?
• Have Andon light or similar indicators been set up to indicate there is
an ‘unwanted/non-standard situation’?
• Does the team leader consider is his task to come into action when the
process does not take place according to the set standards during the
day?
• Has the team leader set aside time in his daily schedule to analyse
‘non-standard situations’ and come up with measures (PDCA) to
ensure these do not happen again?
• ……….

247
 Principle 6: Standardised tasks and
processes are the foundation for continuous
improvement and empowerment

Toyota has recognised that permanently solving problems and improving

stabile processes are some of their biggest competitive advantages of their
company for a long time. It uses the brainpower of the entire organisation.
Improvements in the hearts of all employees. IMPROVEMENT HAS
BECOME A STRATEGIC WEAPON FOR TOYOTA.

The first step is standard work, so we do not spend time fire-fighting and
free up time for improvement.

If we ask 10 employees how they carry out their task, we will probably get
10 different answers. This has various drawbacks:

1 The process is unpredictable in terms of time, quality and safety

2 The process does not provide a good basis for process improvement
3 Automatisms are not developed within the team, which means a lot of
time is being spent ‘fire-fighting’
4 Abnormalities and wastes are ‘rather/preferably’ hidden

Standardisation is an important principle within Lean. It is often

misinterpreted. “A standard way of working means everyone does the
same job so we do it efficiently”. The working standard is not static, it
constantly moves. The working standard is the, at that time with the
current knowledge, best way of executing a working process. Standard
work goes even further. It is a crucial part of Kaizen (continuous
improvement).

248
Item 2: No basis for process improvement

When every employee works differently, he/she will experience different

wastes. Their solution might not be relevant to others. This is no basis for
continuous improvement., it is no basis to look for improvements together.
There is no common departure point. Within Lean, improvements are
realized by identifying waste and solving it together. If we encounter
different waste because we work in a different way, chances are that
employees will not be talking about the same things and that the eventual
improved process will be a new version of the 10 process versions that
already exist. :

We have an improved road map from Rome to Paris. However, not every
car starts from Rome.

The Lean triangle

Standard work involves ‘looking together for the best way (waste-free) to
carry out a given task, to create a broad consensus (everybody), to adhere
to this approach (always) and to visualise deviations’. Standard work is
supported by visual management.
Figure 6.12

249
Deviations become immediately visible. Everybody experiences the same
deviations. These are necessary conditions to implement continuous
improvement (Kaizen).

Another advantage of standardised work is that it allows us to respond

more adequately to deviations. A standard way of working creates calm
and regularity necessary to be able to respond adequately to deviations.

Figure 6.13

250
Work coaching – role of the manager

Within standard work an important role is reserved for the manager.

Management has to ‘guard’ that standards are being followed, deviations
become visible and that the entire team looks for a better standard.

Standardised work uses the PDCA cycle (Plan-Do-Check-Act). We

implement a new way of working, which is how we will be working, we
recognise where things go wrong and make the necessary adjustments.

A practical example

The process ‘incoming goods’ in a large warehouse consists of 12 standard

working procedures (SOP – standard operating procedure). The team
leader of ‘incoming goods’ picks 1 process out of the 12. He looks to see
who will be executing this process today and starts the work coaching. He
assesses whether the employees are fully informed on the standard work
process, checks whether they understand why they have to follow certain
procedures, asks about the exceptions, checks whether there are any
wastes within the process and enquires about the best practices of the
employee involved. Deviations and improvement suggestions are noted on
the improvement board and will be discussed with the entire team the
following day.

Once there is a consensus on the adjustment of the standard way of

working (SOP), this will be adapted by the employees and the following
days this will receive extra attention during the improvement board
sessions to make sure the new standard is being followed.

This way, Standard work is part of the daily work and is the basis for
continuous improvement within the department!

251
Advantages and starting points

Frequently mentioned advantages of Standardised work:

• Improved safety, predictable quality and time
• Basis for Kaizen (employees have the same frame of reference)
• Basis for training new employees
• Creates “Calm” needed to “respond to” unexpected events

Starting points for standardised work:

• Make the employees understand why the standard way is better

and necessary
• Get the employees involved
• Go to the Gemba – take a look on the shop floor
• Do work coaching
• Also look at the details
• Focus on “non-value-added activities”
• Leave nothing to chance
• Document the new standardised way of working
• Pay attention to continuity and training

Implementing standard work

Implementing standard work within your team, department and

organisation is not something that can be done quickly. There are several
standard steps that need to be taken:

1. Determining the process house

2. Determining the KPI’s per process
3. Recording your process standards (SOP’s per process)
4. Assessing the standards, making the process performance visible
5. Make agreements on the standard response

252
Ad. 1: Determining the process house

This step should answer the question: “Which processes are there within
my department”. A tried method to answer this question is to compose a
process house. You will look for a hierarchy as such, a cluster of processes.

Below you will find an example of a care home. It is a fact that each
process (e.g. the distribution of medication) consists of various partial
processes (e.g. recording and ordering stock).

Figure 6.14

Composing the process house might seem easy, but it is not. In the field
there is a lot of discussion about this. Discussions are good, because it
provides and better and more complete look. ‘What do we actually do all
day?’

253
 A practical example

A team leader, responsible for the waste flow within a large hospital
is convinced of the fact that he only had 1 process, ‘processing
waste’. When we looked at his process house, we realised he actually
had 23 processes.

One of which was for example, ‘offering containers for repair’.

Ad. 2: Determining KPI’s per process

KPI stands for Key Performance Indicator. A performance indicator should

measure whether you are delivering customer value, whether you meet
the customers wishes (and possibly rules and regulations).

A good KPI for a process should meet various conditions:

• The KPI has an immediate effect on customer satisfaction

• The KPI has a target goal or target value

• The KPI points out wastes

• The KPI can be influenced by the employees

• The KPI must start an improvement action (you must be able to

adjust)

Ad.3: Recording your process standards – Standard Operating Procedure

Once the process house has been composed, it is important to determine

which SOP you will create first. In the field the most important process or
the process which has the most problems will be outlined first (80-20 rule).

254
Experiment with the lay-out of the SOP, do the work coaching and assess
whether the chosen lay-out and detail level are sufficient enough to
conduct an effective work coaching. Only then proceed to the next process
descriptions. Apply the principle of ‘Single Piece Flow’, do not work in
batches! There is the chance that, after you composed all SOP’s and start
the work coaching, the lay-out does not work sufficiently, which means
you have to start all over again.

Every single process needs to be described and supported with visual

techniques (Think of lines in a warehouse, colour coding, etc.).

Here are a few tips for a good SOP:

• Accessibility - The SOP is available to everybody and visible in the

workplace
• Clear– The SOP has a standard lay-out, is substantially comprehensible
and where possible text is replaced by pictures/pictograms
• Specific – Describe the 80% but also describe the deviations, describe
what often goes wrong and what the standard response to this is. Bear
in mind that the SOP is used by the manager during work coaching.
• By the employees and for the employees – The SOP is composed,
assessed and tested by the employee, the people who do the actual
work.
• Easy to adjust – Make sure the SOP’s have been composed in a
common format so they are easy to adjust.

Ad. 4: Assessing the standards, making the process performance visible

The SOP’s should not be stored on the K drive where nobody will see it
(apart from when an auditor visits). Make sure Standard work becomes
part of the daily routine. Think of the previously described example (work
coaching – every day 1 work instruction is assessed with the employee that
executes that process on that specific day).

255
Ensure standards are being supported by various visual techniques. This
ensures guiding the employees’ behaviour in the right direction – the
agreed working standard.

Ad. 5: Make agreements on the standard response?

Once we have agreed on standards, we need to stick to them. Make

agreements with the team on how to make the process performance and
process deviations visible and how to discuss these.

We will have to confront each other when the standard is not being
followed. This turns out to be quite difficult in the field. Here it also starts
with management. They will have to set the right example.

What does this mean to the Lean manager?

Examples

• Have the work processes been described by the employees?

• Are these work processes available on the work floor?
• Are the work processes supported with visual techniques?
• Does everyone carry out these work processes in the same way?
• If employees do not follow the standard way of work … are they
confronted by colleagues or by management?
• Do employees work towards further improving the standards by
for instance discussing wastes and ideas during the daily stand-
ups on a daily basis?
• Are team leaders actively busy with work coaching? Every day?
Every week? Or only when an audit takes place?
• ………

256
 Principle 7: Use visual control so no
problems are hidden

Visual management has been extensively discussed in Chapter 4. Below

you will find the most important elements.

Visual management plays an important part in Lean management. It comes

back in each and every Lean tool, examples are 5S, Kanban, improvement
boards, SOP’s, etc...

It is known that images are very effective and efficient information

carriers. It is often said that ‘one picture says more than a thousand
words’. Visual management is also an important tool for the management
of processes. When a Lean manager walks onto the work floor, he/she
wants to see that the process is ‘under control’.

An illustrative example – Do I have all I need?

In a care institution the housing process does not run smoothly. It has been
agreed that a checklist will be hung up in the central area for every new client
so all employees can see how many new clients there are that week and it
also states the progress of the housing process per client.

Visual management is also often used in the securing process. It makes the
process visible. The visual information has to support the process, it has to
change behaviour and start up an improvement cycle.

Choosing to implement visual management should be preferred over

writing procedures. Pictures and images should also be preferred over
written words.

257
What does this mean to the team manager?

Examples:

• Is the process supported by visual techniques?

• Can defects in the process be prevented by visual techniques?
• Has 5S been implemented on the work floor?
• …….

258
 Principle 8: Use only reliable, thoroughly
tested technology that serves the people and
the process

IT has given us so much over the last decennia. IT has been one of the most
important drivers of the economic growth over the past 50 years.

It is remarkable to see that at Toyota many things are managed manually.

When witnessing this, your first thought is: ‘this could easily be
automated!’. Toyota is cautious when it comes to IT. In many cases they
will not be pioneers. There are several reasons for this:

1. (Too) often, promises of new systems are not realised and a

disproportionate amount of time and attention is lost on the IT
environment
2. A lot of knowledge of the system is taken over by the systems logic
3. The complexity of many IT environments leads to adjustments being
time-consuming and complex
4. IT solutions ensure less time is being spent on communicating with
each other, like inventory (WIP), IT takes care of ‘walls’ between
departments
5. The more flow and pull there is in the process, the less need there is
for supporting the process with IT systems (think of inventory systems,
planning systems, etc)
6. We have now developed an automatism which tells us that IT is the
solution to all process problems
7. By ‘blaming IT’, the attention is diverted and stops us from critically
looking at our own process
8. As a consequence, wastes and business value activities remain intact
or could even become automated

259
The last few items I would like to clarify in a practical example.

An illustrative example (items 4, 5, 6 and 7)

A council wishes to improve the lead time of building permits. The current 8
weeks would become 3 weeks. During the kick-off with the permit
department and other departments involved in the permit process,
resistance became evident very quickly:

• “Then we will need more people!”

• “Then all IT systems will have to be adapted!

The interesting thing was, that after a kaizen event and a 2-week pilot, the
permits were in the post within a maximum of 2 weeks. We had removed the
wastes from the process and organised a daily status meeting with all parties
involved where the work was divided, clarified and progress monitored
(visual board in the main corridor). Some standard letters were adapted, but
no major IT adaptations were needed.

The WIP had gone down dramatically, there was flow within the process. The
WIP went from 100 down to 20. The need for recording all kinds of details,
like status, of a building permit in a system went down.

Obviously, there are all kinds of IT solutions which would remove wastes
from the process, improve the insight into a process and for that reason
make a positive contribution to the efficiency of the process, but…

• Realise that you do not have an automated decision tree planted

in your head (paradigm) which causes us to automatically think of
automation when thinking about process improvement.
• Putting the focus on IT adaptations causes us not to look critically
at our own performance anymore
• Realise that IT solutions can also reduce the versatility of the
process

260
 An illustrative example

We introduced a very simple, visual kanban system in a doctors’ surgery to

manage the inventory.

When a doctor from another surgery saw this, he was left is awe: “Last year
I invested in a very expensive barcode scanning system, one year later and it
is far from ideal. It actually added to my workload!”

Improve the process first and then we look at IT solutions!

What does this mean to the Lean manager?

Examples:

• Do the IT systems contribute to the employees executing their

tasks efficiently and without waste?
• When thinking of solutions, do we not think too much in an “IT
must solve everything’ - mode?

261
 Principle 9: Grow leaders who thoroughly
understand the work, live the philosophy
and teach others

The view of mankind of Lean is that (1) employees need a challenge to

achieve maximum performance, (2) employees try their hardest and want
to learn, (3) a problem is not a human mistake, but a defect in the system
and (4) together we can improve the process.

Ad.3: Problems in the process are always system defects

When something goes wrong, it is not the fault of the person involved. If it
was, the response would be to hold the employee accountable and take
disciplinary action. This releases you of the duty of undertaking action, it
does not remove the ground cause of your problem.

A Lean thinker realises that any other employee would more than likely
have made the same mistake! It is a defect in the system! Maybe we have
not adequately educated the staff, maybe we have not sufficiently tested
the process knowledge (SOP’s) (work coaching), maybe we have not used
sufficient visual aids in the process, maybe we have not a Poka Yoke
process. Such a view on the world leads to a critical analysis of the problem
and the process. This measure improves the chances of removing the
ground cause and ensuring continuous improvement

Grow leaders

What stands out at Toyota is the fact that managers come from within the
company and not from outside, which is what usually happens at other
companies. Less managers are drawn in from outside. The most important
goal of every Lean leader is to educate new Lean Leaders!

262
An added bonus of this principle is the fact that it provides a stabile course.
You do now have a constant flow of managers coming in from other
companies, saying, “Let’s change things”. What they mean is: “At my
former employer we done things in a certain way, which I also want to do
here!”

Who thoroughly understand the work

Too often, decisions are being taken from behind a desk. Many wastes in
the true process will not appear on an Excel sheet of in a chart. Lean
leaders know the process, apply work coaching, periodically actually work
in the process and every day make an appearance on the work floor (go to
the work floor, more later).

At Toyota people do not work their way up that quickly. The next step in
their career is often a step side-ways to gain a broader view of the
complete process, the total value stream.

Live the philosophy and teach others

The Lean manager lets the 14 principles be a determining factor in ‘all’ he

does. An important task of the Lean manager is to educate others on the
14 principles.

Figure 6.15

263
What does this mean to the Lean manager?

Examples:

• Do we have enough experience in the Lean method to be a good

coach to others?
o Are we confident/adequate in the Lean tools?
o Have we done any A3 projects ourselves? Have we lead
any improvement board sessions?
o Have we implemented 5S ourselves?
• Are we active in educating future leaders?
• Are we actively coaching employees in ‘continuous
improvement’?
• Are we not thinking too much in solutions? Do we actually follow
the 8 steps in A3?
• Do employees look at me when something needs to be done?
• Do we let the employees learn on their own (grow) or do we tell
other what to do?
• Do we blame people when there are process problems or do we
look at the process itself?
• ……….

264
 Principle 10: Develop exceptional people
and teams who follow your company’s
philosophy

For Toyota, the Toyota Production System (TPS = Lean) is a strategic

weapon. A company culture which ensures every employee looking at their
own processes through the eyes of the customer. Where do we waste
time, resources and material for which the customer is not willing to pay?
How can we help one another eliminate these wastes? You could say that
the ultimate goal of Lean is, to create an ‘army of process improvers’.

Figure 6.16

265
Employee development and team development go hand in hand. Teams
develop when the individuals in the team develop (and vice versa). The
team spirit is buried deeply within the Lean culture. Together we know
more than individually!

As previously explained, a lot of investment will be on employees and

teams. Within the Lean methodology, they stand at the basis of good
processes, satisfied customers and profitable products. They must ensure
the right to exist in the long-term.

Ultimately, machines are replaceable and drop in value over time

(depreciations). The necessary knowledge and skills are within the
employee, they will actually go up in value over time.

Figure 6.17

An illustrative example

Scania calls its employees to the production line – MIP’s. This stands for Most
Important People, because they are the ones that add customer value. The
group leaders (management) most important task is to ensure the MIP’s can
do their work without any waste.

Scania puts the organisational pyramid upside down.

266
What does this mean to the Lean manager?

Examples:

• Do we have enough experience in the Lean methodology to coach

others?
o Are we confident/adequate in the Lean tools?
o Have we done any A3 projects ourselves? Have we lead
any improvement board sessions?
o Have we implemented 5S ourselves?
• Are you actively educating your employees?
• Are we actively busy coaching employees in ‘continuous
improvement’?
• Are we not thinking too much in solutions? Do we actually follow
the 8 steps in A3?
• Do employees look at me when something needs to be done?
• Do we let the employees learn on their own (grow) or do we tell
other what to do?
• Do we blame people when there are process problems or do we
look at the process itself?
• ……….

Principles 9 and 10 have similar implications for the Lean leader.

267
 Principle 11: Respect, challenge and help
your suppliers

Respecting, challenging and helping your suppliers (this can also be

internal suppliers) are important requirements to being successful in the
process chain (value stream). Only focussing on your own department,
your own company, is not a winning formula. The Value stream thought
relies greatly on the ‘1+1=3 thought’!

This means suppliers are part of the complete value stream and should
also be treated this way. This also entails asking you suppliers which
stimulate the complete process flow for performances (friendly demand).
And also trying to realise these together.

Toyota asks quite a lot from her suppliers. Toyota also deals with the
performances of the suppliers. At the same time Toyota is also willing to
help realise the requested goals. Regularly helping ‘lean team’ suppliers
improve their internal processes. This creates a partnership where respect,
challenge and help take a central place. A good combination to build a long
and productive relationship on.

The principle around Heijunka also pays a lot of attention to the

advantages for the suppliers. They enjoy the benefits of a stabile purchase
process. This also reinforces the negotiation position with the supplier.

268
What does this mean to the Lean Manager?

Examples:

• Do we treat the suppliers as externals or as part of our value

stream?
• Are suppliers actively involved in the improvement initiatives (e.g.
flow and pull projects)?
• Are we actively helping suppliers in realising the goals we set for
them?
• …….

269
 Principle 12: Go and see for yourself to
thoroughly understand the situation
(Genchi Genbutchu – Go to the Gemba)

Our brains are trained to fill in the gaps.

We all have assumptions and think that it is the truth. Decisions are often
made based on these assumptions, which lead to wrong solutions or
decisions. Always Go and See for yourself!
(Taiichi Ohno)

Genchi Genbutchu is a very important principle within Lean. Genchi

Genbutchu means ‘the actual place’, ‘shop floor’ or ‘the place where
customer value is added’.

Within Lean there is great respect for the work floor. This is where it all
happens! On the work floor you will find the knowledge needed to
improve the quality, on the work floor you will find the knowledge needed
to remove waste from the process. On the work floor you will find the
hidden solutions to our problem.

As a manager you are responsible of making sure your employees can do

their work free of waste. From behind your desk (staring at an excel
spreadsheet) you will not notice the wastes. You will only see them by
actually looking on the work floor. It is perceived is disrespectful when you
do not pay any attention to the ‘Gemba’.

As a manager you are responsible for the quality. If you ask for first-time-
right from your employees, but only respond to quality issues when they
are displayed in monthly charts (already been done), what kind of signal
are you sending?

From behind a spreadsheet you will not see ‘small problems’ in your
process. It is perceived as disrespectful when you do not pay attention to
this as a manager. Prevent small problems becoming big problems by
270
noticing them on time. It’s the small problems that show us ‘the way
forward. When we do not pay any attention to these small problems, we
deny ourselves the chance to learn and can’t make the first step towards
perfection. This can only be done by actually being on the work floor
(often).

‘The gemba is a reflection of management”.

(Taiichi Ohno)

Utilize the brainpower of the people who wrestle the problems on a daily
basis! Don’t think about it yourself! The discussion with employees are
learning moments for management and employees.

Too often problems are discussed during meetings. This is where they are
explained, discussed and this is where those involved look for a solution.
All this, without even once looking at the actual problem up close. All those
involved have an “idea” on what it is about, but in reality those ideas are
always far spread. Every brain has its own interpretation of a fact.

The closer to the source the solution was thought of, the better the
solution.
The closer to the source the solution was thought of, the greater the
chance of a successful implementation and securement.

By not paying any attention to the small problems on the work floor, the
small problems become big problems. ‘Solving big problems, requires big
solutions’. As a result of this, improvement often goes hand in hand with
technological tools. Innovation! Intermittently improving.

Feelings are important, we do however support these with figures, only

then they will be facts. Always go to the work floor to support
assumptions. For instance, during Kaizen events, work coaching, 5S audits,
etc...

Gemba walk
271
The ‘Gemba walk’ is an important management tool. A Gemba Walk is
much more than being present on the work floor and asking how things
are going. This is pointless and seldom leads to valuable observations,
learning moments and permanent improvements.

The purpose of a Gemba Walk is:

• Evolving employees in recognising waste

• Evolving employees in recognising the negative effects of waste
on the organisation
• Making better decisions
• Identifying root causes
• Developing Lean leadership skills

Gemba walk in practice

Plan the Gemba Walks and prepare them well. Do not pointlessly visit the
work floor. Do not confuse the Gemba Walk with ‘showing your face on
the work floor’. This is called socialising, and there is nothing wrong with
this, but it is not a Gemba Walk.

Points of attention for a good preparation:

• Determine the scope and goal of the Gemba Walk

• Look if there are any KPI’s (data) available which display the
performance of the process
• Determine your strategy (work coaching, 5S audit, waste walk
etc.)
• Follow-up on the discussions/actions from the last Gemba Walk

272
The Gemba Walk

Stay clear of the matter of guilt. Employees are often scared they will be
blamed. Ensure a safe atmosphere where employees can voice their
problems and answer honestly. Ensure employees are able to voice their
ideas and are able to disagree with observations and conclusions of the
managers and each other.

Points of attention for a good Gemba Walk:

• Introduce yourself, the purpose and the scope

• Listen instead of talking
• Ensure a safe atmosphere and show respect
• Look at the process, not at the people, stay clear of the matter of
guilt
• Look for Muda (waste), Mura (unevenness) and Muri
(overburden)
• First ‘the What, then the Why’
• Look for the root cause
• Don’t just say what needs to happen, manage by asking questions
• Investigate the root causes together and discover possible
solutions together
• Conclude the Gemba Walk well, make clear to the employees
what is expected (de-brief)

De-briefing the Gemba Walk consists of a joint part and an individual part.
The joint part consists of (together with the employees) summing up what
we have learnt and the actions that need to be taken. The individual part
consists of self-reflection. What was the effect of my behaviour on my
employees? Did I really listen or did I spend most of my time talking? Did I
really try to ‘understand’ or was I busy ‘solving the problem’?

273
Do these Gemba Walks on a regular basis, even when there are no “fires to
put out”. This will enhance the trust in the Gemba Walks and shows that
management understands that there is something to be learned at all
times on the work floor.

What does this mean to the Lean manager?

Examples:

• How much time do you spend on the work floor every day?
• Do you take decisions based on previous experience, based on a
gut feeling, based on ‘direct reports’ of others? Or do you always
have a look on the work floor?
• Do you actively ask employees what bothers them or do you
assess assumptions which played a part in the decision process?
• Do you mainly manage based on Excel reports or do you manage
based on what you actually see?
• Do you stimulate your employees (management) to spend more
time on the work floor?
• Do you actively involve the knowledge on the work floor in
improvement projects and business decisions?
• …….

274
 Principle 13: Make decisions slowly by
consensus, thoroughly considering all the
options and implement quickly

Make decisions slowly

An important similarity in every process improvement methodology is the

relation between the time spent understanding the problem and the time
spent thinking about the solution and implementing the solution. The
emphasis is in ‘truly understanding’ problems, go and see for yourself,
analyse how the process performs and analyse what the root cause to this
problem is. When you do not know the solution, you do not truly
understand the problem enough.

Beware of assumptions, listen, ask questions, look for the root cause (5
times ?), go and look on the work floor, make a value stream, etc...

By consensus

When a consensus has not yet been reached or when someone disagrees it
could mean ‘others do not understand’! But it could also be a sign of you
making assumptions or you are not seeing the entire picture. Looking for
consensus is also supporting your idea! This will probably improve the
solution even more and carried better during the implementation. The
Japanese call this Nemawashi, ‘going around the roots’. After an analogy
about preparing a tree that needs to be transplanted. First the soil needs
to be loosened around the roots to be able to prepare the soil. This
process takes place before the decision has been taken. Nemawashi
(building consensus) is something totally different to convincing people of
the solution. E.g.: in Western society consensus is often confused with
democracy. There is a vote within a team and most votes count which is
then called a consensus decision. However, this is actually a democratic
decision. Consensus means, the minority had its say and then decide to go
275
along with the proposition. It could be a case of the minority not wanting
it/or being able to. In that case further talks are necessary.

Implement quickly

When the root cause is clear, the solution will come forward. You have
ensured a consensus (before the decision was taken). Looking for
consensus automatically leads to an accepted solution which is carried
broadly within the organisation. Now it is time to announce the solution,
create an implementation plan and start the implementation.

A known comparison is

Where E = Effect of the solution, Q = Quality of the solution and A =

Acceptance (the acceptance of the solution).

This formula points out to us that acceptance plays a more important role
than the quality of the solution. A brilliant idea that is not accepted
(consensus) by those who have to execute it, will never reach its full
potential. As long as employees are not truly convinced of a solution you
will have to keep working on the consensus.

What does this mean to the Lean manager?

Examples:

• Are you actively busy teaching your employees to think in (1)

problem, (2) root cause, (3) solution?
• Do you always follow this path?
• Are decisions being taken without an explicit analysis of the root
causes?
276
• Do you actively ask your employees what the root causes are of
the proposed solution, when they come forward with
improvement ideas?
• What is the relation in terms of time between (1) looking for a
solution and (2) figuring out the problem?
• Are small improvements being delayed because they are part of
bigger projects? In other words, do we pass on valuable learning
opportunities.
• Are small improvements being delayed because, according to
those responsible for the implementation, they are not yet ideal?
• Are some changes being pushed through without involving all
players in the value stream?
• Do we see the informing of stakeholders on the new way of
working as a way of getting them on board or do we see this as a
chance to improve the proposed solution even better?
• ………

277
 Principle 14: Become a learning
organisation by relentless reflection
(Hansei) and continuous improvement
(Kaizen)

Continuous Improvement (kaizen)

For Toyota, the Toyota Production System (TPS = Lean) is a strategic

weapon. A company culture which ensures every employee looking at their
own processes through the eyes of their customers. Where do we waste
time, resources and material which the customer is not willing to pay for?
How can we eliminate these wastes together? You could say the ultimate
goal of Lean is to turn the employees into an ‘army of process improvers’.

Figure 6.18
278
Learning organisation

The development of the employees is the key to satisfied customers and

therefore long-term growth and profitability. How can we teach employees
that they are part of process improvement initiatives (kaizen events, 5s,
daily starts, etc.)?

The Lean manager is responsible for creating a learning environment for

his/her employees. Learning by improving processes! This means:

• The Lean manager is a good process improver

• The Lean manager is a coach to the employees, not an ‘all-
knowing speaker’
• The Lean manager creates time and space to improve
• There must be a safe atmosphere. ‘You are allowed to make
mistakes, as long as you learn from them!’

Figure 6.19

279
We are creating exceptional people who are continuously improving the
processes and who love to make great cars, whom our customers love.

Relentless reflection (Hansei)

An important condition to continuous improvement is (1) constant

evaluation of your own performances as an individual and as a team and
(2) be open to ideas of others. Lean calls this Hansai.

To continuously improve a certain amount of modesty, humility, curiosity

and inquisitiveness are needed.

E.G.: During an interview a Belgian top chef with a 3-star restaurant was
asked what made his restaurant score so well. His answer: “Asking yourself
this question every day; “What can be done better, and make the meals
better than the day before”. Beautiful to see how Hansei and Kaizen form
the basis here, when striving for perfection.

What does this mean to the Lean manager?

Examples:

• Does every employee spend time every day on improving?

• Do you have a standard operating procedure for your work as a
manager?
• Do you see improvement as an important possibility to change
your employees?
• Are you present at the day-starts and improvement board
sessions?
• Do you see standard work, day-starts, 5S as an additional task or it
this an essential part of your working day?
• Do you coach your employees daily on improvement?
• ……

280
281
282
7 Toyota Kata

7.1 Looking for the invisible

When walking across the work floor we will see the ‘5S lines’, kanban
systems, heijunka boards, stand-up’s and andon lights. In short, all Lean
tools in action. What you don’t see is how these tools have come about,
how they work integrated with each other and how it is that the Lean
philosophy (continuous improvement) is practised here daily and does not
die down after 3 months, a year or several years.

You see the tools, but what you don’t see is: “How the managers think and
how the managers behave”. This is the missing link for ‘sustainable and
successful Lean’.

The book “Toyota Kata” by Mike Rother has

changed this. In his own words, he looked for ‘The
Invisible’, which was also the working title to his
book, which was later called - ‘Toyota Kata”.

You see the tools, but what you don’t see is how
the process improver/Lean manager thinks and
behaves. When you ask them: ”How do you get to
a solution, how do you coach and how do you get to these great results”,
they often don’t know how to answer this. The behaviour which is the
basis for management decisions is hard to see, inexplicable.

283
Figure 7.1

What you see is a Kanban system, what you don’t see is how they got to
the current process organisation:

1 That the department has a goal, which is FLOW

2 That the department knows very well what the current situation is and
why there is no flow at the moment
3 That the knowledge on the work floor is being used to get closer to the
next step in improving the flow
4 That the measures are being evaluated and that lessons are learnt
effects of those measures (PDCA)
5 That it starts at 1 again

What you don’t see is the part that the automatic thinking routines play,
which are at the base to make the above possible. Mike Rother and his
team looked for these automatic thinking routines. They call this the
‘Improvement Kata’ and the ‘Coaching Kata’.

Improvement Kata
Toyota sees continuous adaptations and improvements of stabile
processes as the most important competitive advantage. All employees of
Toyota must possess these skills – this is the Improvement Kata. The
Improvement Kata follows certain pre-determined steps.

284
Coaching Kata
De Improvement Kata has to be taught. This is the task of the manager.
Developing the employee, teaching the Improvement Kata and the
guidance during the execution of the Improvement Kata is called the
Coaching Kata.

In this context Mike Rother talks about ‘The 20th century Lean’ and ‘The
21th century Lean’.

The 20th century Lean The 21th century Lean

Periodic Daily
Focus on Lean tools Focus on management behaviour
Lean staff (Middle) Managers
Eliminating waste ‘Strategic objectives decide what
‘What can we improve’ we need to improve’

285
7.2 The Improvement Kata

The term ‘Kata’ comes from martial arts. A ‘Kata’ is an individual style
exercise of a series of pre-determined movements, executed against 4 to 8
imaginary opponents who attack from various directions.

The Improvement Kata can be seen as a series of pre-defined steps which

have to be taken to get from the current situation to the ultimate
situation. It is about the HOW (how will we get there) and not
the WHAT (what are we going to improve).

In this context the Improvement Kata is compared to a dance.

These are also pre-determined steps which need practice,
under the guidance of a dance teacher. As long as it takes you
to execute the dance passes flawlessly (in your own way), without thinking.

Improvement is always linked to insecurity. You have a problem, you just

don’t know how to solve it. The Improvement Kata provides the improver
with security on how to get to the right decision (the HOW). It is a road
map to manoeuvre through unknown terrain. In that sense it offers
security – just like the improver you have faith in HOW to get to an
improvement process even though you do not yet know WHAT you will do
– which solution you will choose.

It is actually a standard way of dealing with a changing environment. Mike

Rother sees the Improvement Kata a ‘A way to navigate through unclear
territory’. This provides the improver with a sense of security so he can
deal with the insecurity. You do not need to know the solution, follow the
steps and you will eventually end up at your goal situation.

286
Figure 7.2

The Improvement Kata consists of several pre-determined steps:

1 Define a Vision (True North)

2 Discover the ‘Current Condition’
3 Determine the ‘Next Target Condition’
4 Identify the ‘Obstacles’ and use PDCA to reach your goal

Figure 7.3

287
Step 1: Define a Vision (True North)

This step also touches on the first principle of The Toyota Way: “Base
management decisions on long term philosophy, even at the expense of
short term financial goals”.

It is important the improvement initiative is seen as a step towards

bringing us closer to our vision. Otherwise we are at risk of spending
money and time on improvements which do not bring us any closer to our
goal. We will then be wasting valuable resources (money, time and
creativity). Then, removing (non-directional) waste from the process
becomes our goal!

The finish line keeps shifting when we get near the finish.

A Vision does not need to be feasible, it mostly has to provide direction –

provide direction to our next step. There will be a time where the Vision is
within reach and this is the time to review the Vision. We have to define a
more ambitious goal to provide us with a new direction, to activate our
creativity and ambition to get the most out of ourselves.

Step 2: Uncover the ‘Current Condition’

The second step is mapping out the current situation. When you know
what your performance is at the moment with regards to the Vision, you
can determine your improvement target(next target).

Step 3: Determine the ‘Next Target Condition’

The Vision has been described, the current situation is known, now we can
determine a target situation (The Next Target Condition).

A ‘Next Target’ must meet the following requirements:

1. A step towards the ‘Vision’

2. The ‘next target’ is beyond the current ability

288
 3. A quantitative and qualitative description of the process

The more specific the image we have of the ‘Next Target Condition’
(desired situation), the easier it will be to identify the ‘Hurdles’ and the
greater the chance we will get there.

It is important that the process improver recognises that the road towards
the ‘Target Condition’ is unknown. This means the road is difficult to plan,
only the next step can be planned. This provides calm! It does not matter
that you do not know where it is going. This is actually inherent to
improvement. It is the way it is. As long as you stick to the principles: go to
the gemba, look for the root causes and use the knowledge on the work
floor. You do not have to come up with the solution yourself, you do this
together with the people on the work floor (improvement team). When
you truly understand the problem (root causes), the solution will ‘reveal’
itself.

The more specific the image we have of the ‘Next Target Condition’
(desired situation), the easier it will be to identify the ‘Hurdles’ and the
greater the chance we will get there.

• Without a well described ‘Next target condition’ improving is

brainstorming about what is possible.

• Without a ‘Next Target Condition’ we tend to create a short-term

cost/benefit analysis for a decision.

• Without a well described ‘Next Target Condition’, ‘Hurdles’ are

seen as reasons not to do it. Whilst these should be seen as the
subject of further analysis.

• Ultimately each process should have a target condition.

289
Step 4: Identify the Obstacles and use PDCA to reach your goal

The Vision is described, the current situation is known, the ‘The Next
Target Condition’ has been determined, now the ‘Obstacles’ become
visible.

1. A list will be made of all ‘Obstacles’ that stand between the

current situation and the target situation.
2. We determine what will be the first ‘Obstacle’ to be tackled.
3. Use PDCA to reach your goal.

An illustrative example

During a Lean training at a large medical lab (they handle 3000 vials of
blood on a daily basis) we did an exercise. We sent the participants to the
work floor and asked them to thoroughly look at the process and write down
any wastes.

The participants returned full of enthusiasm and shared the wastes they had
discovered.

Afterwards we have defined a Vision for the medical lab together and an
appropriate Next Target Condition. With this Next Target Condition in the
back of their minds they discovered other wastes (Hurdles). By tackling these
wastes, the came one step closer to the Vision.

An important part of the Improvement Kata is the thought of manoeuvring

towards your target condition in small steps. Not large projects, but
continuously taking small steps towards the target condition. The duration
of a PDCA cycle to tackle an obstacle should be as short as possible, ideally
1 day. Why wait until tomorrow if you can learn something today?

290
Plan Do Check Act to reach your goal – Testing above talking.

All inventions/innovations are the result of experimenting, learning,

experimenting again, learning again until the ‘eureka’ moment arises. The
success of Toyota was not reached by perfect decisions or a perfectly
planned process. The success was reached by continuously taking small
steps in the right direction. The route is determined by all these small
PDCA learning cycles. You can adapt to a continuously changing situation
on your way to your goal...

When the discussion starts heading towards things like “I think that ….” or
“I believe that ……”, stop talking and start testing on the work floor. A
hypothesis can only be tested by experimentation, not by talking/thinking.

Because the target condition is just beyond the current abilities, we will
have to find our way by doing small experiments. This is a scientific way of
formulating a hypothesis, assessing the hypothesis and drawing conclusion
from the assessments. This procedure is summarised in the well-known
Plan-Do-Check-Act-cycle of Dr. W. Edwards Deming.

Plan – Formulate the hypothesis and

define your expectations

Do – Test the hypothesis and collect the

desired data

Check – Check whether the results

match the expectations

Act – Implement the new process if the

experiment delivered the desired
results, otherwise the new obstacle and
Figure 7.4 next experiment are defined (PLAN).

291
Go and See - Toyota has accepted the PDCA cycle as management cycle
and later added the ‘Go and See’.

An experiment (PDCA cycle) never fail. The true results can however differ
from your expectations. If the hypothesis holds up, you have confirmed
your expectations, what you already knew. If the results are different to
what you expected, you have learnt something! A predicted result does
not offer any new insights, an unpredicted result does.

Another way of visualising the 4 steps is displayed below.

Figure 7.5.

So PDCA is part of the Improvement KATA. The power of this method is

that you do not become paralysed by everything that needs to be done or
has to be improved. You identify the obstacles and choose which obstacle
you will tackle first. This will make follow-up actions clear and doable. This
causes motion instead of paralysis and whilst taking these small steps, we
learn! In the field we apply this daily. For instance, in a large hospital
where a department manager wishes to start daily stand-ups (continuous
improvement).

292
Department manager wishes to start stand-ups

A large hospital has the ambition to start daily stand-ups (continuous

improvement). The department manager has been trained by us and is familiar
with the concept. When asked the question “when do you start”? she changed
colour. She indicates that she can’t say and that she has no idea on how to
handle this. This is the moment to help them by means of the Improvement
Kata.

1. First, we formulate the Vision, “What should the department look like
when we continuously improve”
2. Then we discuss the current situation
3. We map out the obstacles, things like:
• I do not have any TPI’s
• My employees to not know what Lean is
• When will I do it? Daily? What time?
• I have not envisaged a lay-out of the board yet?
4. Which will be the first 2 obstacles you will work on?
5. What will you do to tackle these obstacles?

The interesting thing about this approach is that you make a seemingly
undoable problem small take the first steps, start leaning from these first steps
which makes the following steps easier.
We agree I return the following week to see what has been learnt (then we
start the coaching Kata).

293
7.3 Coaching Kata

We concluded the last chapter with principle 14: “Become a learning

organisation by relentless reflection (Hansei) and continuous improvement
(Kaizen)”.

The interesting thing about this principle is, that it links three concepts:

Figure 7.6

A learning organisation is the ultimate goal of Toyota. A learning

organisation means the following to Toyota: Developing employees
through constant reflection (Hansei) and continuous improvement. This is
seen as the main task of management. It is often said by Lean managers:
“We are in the people business”.

A certain type of leader fits into this. When you want your employees to
learn, you should not tell them what to do, because this turns them into
‘followers who stop thinking’. When you want your employees to learn,
you will have to make them think, stimulate experimentation and mistakes
should be allowed as long as we learn from these mistakes by daily
reflection (Hansei).

Figure 7.7

294
A Lean Leader is constantly busy developing his/her employees by setting
the conditions of a continuous improvement organisation and by helping
and guiding the employees.

For many managers, coaching is ‘against their nature’. Naturally leaders

are ‘bosses’. From the start they have been used to taking a step forward,
that has always been their ‘winning formula’. They determined the
composition of the teams/groups at school, they determined where
everyone went on a Saturday night. They have always been busy
determining and creating followers. This behaviour took them where they
are now. Take the lead and make sure people do what you tell them to do,
that’s how you become successful.

Managers often TAKE the lead, whilst in their job description is clearly
states; GIVING leadership.

Coaching Kata
The Improvement Kata must be taught. This is the task of the manager.
The development of the employees. Teaching the Improvement Kata and
the guidance during the implementation of the Improvement Kata is called
the Coaching Kata.

The Coaching Kata focusses on the ‘How’,

• Ensures a ‘good’ execution of the Improvement Kata

• Asks procedure questions
• Provides direction – no answers
• Stimulates continuous learning

Coaching Kata is the main task of the Lean manager

The main task of the Lean manager is educating the Improvement Kata.
The goal is to turn every employee into a good process improver – create a

295
culture of continuous improvement! Because this is the only way to be
successful on the long-term as a company.

So, the main task is not chasing results. This a short-term strategy which
stands in the way of the continuous learning of the employees. As a
manager you have to always keep the following thought in mind: “if I am
no longer there tomorrow, will my team be able to go on without me?”.

When the manager fixes the problem, the problem is gone, but the
organisation is none the wiser! The manager has then passed on the
opportunity to develop the organisation. When the manager is a coach
who teaches the employee and helps to solve the problem, then the
problem is solved and the organisation has been lifted to a higher level.

Executing the Improvement and Coaching Kata has many parallels with
(top)sport:

• When you wish to become a good improver (improvement Kata)

you will have to look for a good coach (Epke Zonderland (Dutch
gymnast) needs a coach to become better)
• You have to have a good command of the Improvement Kata to
be able to be a good coach (if you have not been a great
footballer, it is hard to be a great football coach)
• You cannot teach someone to play golf by showing them 3,000
times. He/she will hve to do it him-/herself, make mistakes and
learn

Mike Rother emphasises in his book ‘Toyota Kata’ that the experiments
(PDCA) have to be as short as possible, why postpone until next week
when you can experiment tomorrow – can learn? This also has
consequences for the coaching sessions, which will have to be short, but
frequent. Getting together monthly is not coaching, that’s holding
accountable! Ideally you should plan a coaching session after each
experiment to ensure the PDCA cycle being executed correctly – that
people learn.

296
If we want to learn from experiments, we have to have a clear image of the
cause-effect’ relation. Otherwise we might learn the wrong thing. This
means we stimulate ‘Single Factor Experiments’. Change 1 variable,
describe your expectations, analyse the cause-effect relation and learn! If
you change several variables it is hard to draw conclusions. You take the
risk of learning less or maybe even drawing the wrong conclusions.

The coach helps the improver (employee) execute the Improvement Kata
well. This means they therefore share the responsibility for the result of
the improvement initiative. ‘They are both in the same boat’.

Coaching behaviour:

1. Lead by asking questions (not by answering)

2. Stimulate data analysis – ‘Show me the data’
3. Stimulate Go to the Gemba – Go and have a look yourself – even
as a coach
4. Stimulate single factor experiments (PDCA with 1 variable)
5. Confine yourself to the following step
6. Sometimes you, as a coach, determine the following step
(guidance)
7. Do not draw conclusions too quickly
8. Focus on the process, not on people/ ‘mistakes’ of people
9. Relate the ‘facts’ to ‘standard work’
10. Focus on the process, the waste and the root cause, not on the
improvement measure
11. Lead the improver towards the root cause
12. Stimulate testing improvement ideas and improve the
improvement ideas
13. Never solve it yourself – even if you know the answer!

297
The five questions

The temptation to think of the solution yourself is great. To go along with

the thoughts of the person you are coaching.

Every ‘starting coach’ has the five questions in their pocket on a piece of
plastic-covered paper. By continuously asking these questions you force
yourself to remain at a distance and you force yourself to remain at
process level. You are preventing yourself from ‘diving too far into the
content’. To get properly acquainted with this, the coach also needs a
coach!

Figure 7.8

298
Lean Terminology

5S: This refers to the five Japanese words seiri, seiton, seison, seiketsu and
shitsuke. They represent guidelines to organise the workplace in such a
way that a visually managed Lean production becomes possible. The
emphasis is on keeping the workplace tidy, organized and clean.

5 Why's or Why-Why-Why: Method of analysis that looks for the root

cause of a problem by repeatedly asking why.

A3 management: One of the Lean management tools is the A3

management process. Managers in training (deshi's) are challenged by a
more experienced coach (sensei) to approach a problem they have been
given in a scientific way. The workplace (Gemba) serves as an objective
source of information. The analysis of the deshi is summarized in an A3
report, which is continually being rewritten. That creates a kind of
travelogue, from the description of the problem to the solutions that have
been found, and from the 'countermeasures' that have been suggested to
their implementation. At the end of the journey, not only will the problem
have been solved, but the manager involved will have also become a
better problem-solver!

Andon: A system (that originally consisted of a cord that was pulled)

designed to alert managers, mechanics and/or other operators of a quality
or processing problem. In theory, this may even lead to shutting down the
production line, although that is not the goal, of course. The signals are
seen above all as an opportunity to improve things, which means they seen
as a positive sign. No problem is a problem, is what they say at Toyota,
because that means that either the bar has not been raised high enough or
people are afraid to report problems.

299
Cellular manufacturing: Production method in which everything that is
needed (people, material, machines) to make a product or product
category (product family) is present in a production cell. In a sense, it is an
alternative to flow manufacturing. Production in cells often turns out to be
a good solution in companies producing for specific customers.

Flow manufacturing: In this case, all the machines are placed as much as
possible in the order of production. The aim is to move the products
through the factory in as smooth and regular a flow as possible, while
keeping the batch size per processing element as small as possible. This
increases the value flow and reduces waiting and transportation time.

One-piece flow: Producing and moving one item of a product at a time.

Go to the Gemba: Gemba is the Japanese word for 'the place where it
happens', which is the workplace! It is important for Lean managers to visit
the workplace as frequently as possible (Go and See, Grasp the Situation)
to see what problems there are, what improvements can be made and
how they can help their employees to do their jobs as best as possible.

Heijunka or Levelling: The aim of Lean manufacturing is to produce

according to the sequence of customer orders as much as possible, but
transferring all the highs and lows in customer demand to the workplace
tends to disrupt the flow too much. Heijunka or Levelling refers to
techniques to level the order flow. At a Kanban level, this can be done, for
example, by not passing on Kanban signals directly, but via a so-called
Heijunka box. Often, Heijunka comes down to producing according to a
fixed pattern (fixed number of products in a fixed order).

300
Jidoka: An automated form of quality control that ensures that production
is halted in case of problems and ensuring defects are not passed on to the
next step in the process.

Just-in-time (JIT) production: Indicates that production only takes place

when there is an actual order, to prevent overproduction and inventory.

Kanban: Japanese word for 'sign'. Kanban is a method designed to apply

JIT to the production chain, to ensure that unfinished products are made
just-in-time. Components are only produced when they are requested with
a certain ‘sign’. As a rule, these are notes saying: “I have used up the
component, please deliver new ones”. Nowadays, Kanban systems can also
be electronic. The application of Kanban reduces the inventory of
components to a fixed maximum per article.

Kaizen: The continuous and incremental improvement of the value stream

(not at random points, but towards True North).

Kaizen event is a 3 to 5-day full-time improvement session, from problem

to implementation.

Kaikaku stands for a quick change, also known as a Kaizen event.

Makigami is a version of VSM designed specifically to analyse and improve

administrative processes.

Muda is the Japanese word for waste. In Lean, there are 7 types of waste
(deadly wastes).

Muri is waste that is caused by overburdening people and machines

(possibly due to large fluctuations in demand).

Mura is waste as a result of unevenness, for instance when more inventory

is required to respond to unexpected demand.

301
Poka yoke: Japanese for 'simple, mistake-proof'. The goal is to reduce the
chance of defects in business processes as much as possible. At Omron, for
instance, employees are supported by light and sound signals.

SMED: Stands or Single Minute Exchange of Dies. SMED was invented by

Toyota's Shigeo Shingo, who stated that the moulds of car bodies had to be
replaceable within 10 minutes. Later, the concept of 'SMED' was
broadened to the reduction of machine set-up times to allow for a
demand-driven production (smaller batches).

Takt time: The heartbeat of a Lean production system. It depends on

demand. For instance, when there is a demand for 240 items per day and
there is an 8-hour workday, the time reserved to manufacture a single item
is 480 minutes/240 = 2 minutes. In practice, the actual cycle time will be
shorter, otherwise every interruption would lead to delivery problems.

True North: The goal of Lean is not to improve just anything, but only that
which increases Customer Value. That is what the term True North refers
to. A (usually utopian) example of True North: creating a One-Piece Flow
without intermediate inventory!

Value Stream Mapping (VSM): Material and information streams are

visualised, with the objective of mapping when value is being added to
products and/or services and when that is not the case. The latter is waste
that may be removed from the process.

The Spaghetti Diagram is an addition to the VSM, in which the (often

inefficient) route of a product is mapped.

Visual Management: Organising the workplace in such a way, insight in the

entire process is provided at a glance: which processes function as
intended, which inventory is as it is supposed to be and which are not. This
allows managers and employees to intervene (in a timely manner) in case
of anomalies. This reduces the number of defects and provides focus to
improvement initiatives. One of the tools that is used in Visual
302
Management is Andon, a light signal indicating that there is a problem at a
certain work station.

303
304
Literature in chronological order

Year of publication Book title Author

1984 The Goal Eliyahu Goldratt
1985 Revolution in Shigeo Shingo
Manufacturing: The
SMED system
1986 Kaizen Masaaki Imai
1986 Zero Quality Control: Shigeo Shingo
Source Inspection and
the Poka-Yoke System
1988 Triumph of the Lean John Krafcik
Production System
(Article)
1988 Toyota Production Taiichi Ohno
System: Beyond
Large-scale
Production
1990 The Machine That James Womack,
Changed The World Daniel Jones
1996 Lean Thinking James Womack,
Daniel Jones
1997 Gemba Kaizen Masaaki Imai
1999 Six Sigma: The Mikel Harry
Breakthrough
Management Strategy
Revolutionizing the
World's Top
Corporations

1999 Learning to See Mike Rother, John

Shook and Jim
Womack
2000 The Six Sigma Way Peter S. Pande,
Robert P. Neuman,
Roland R Cavanagh
2002 The Toyota Way Jeffrey K. Liker

305
 2002 Lean Six Sigma Michael L. George
2003 The Six Sigma Thomas Pyzdek, Paul
Handbook Keller
2003 Lean Six Sigma for Michael L George
service industry
2005 The Toyota Way Jeffrey K. Liker, David
Fieldbook Meier
2006 Six Sigma for Financial Rowland Hayler,
service industry Michael D. Nichols

2007 Kaizen and the art of Shigeo Shingo, Jeffrey

creative Thinking K. Liker
2007 Toyota Talent Jeffrey K. Liker, David
Meier
2008 Managing to Learn John Shook
2008 Toyota Culture Jeffrey K. Liker,
Michael Hoseus
2009 Toyota Kata Mike Rother
2011 The Toyota Way to Jeffrey K. Liker, Gary
Lean Leadership L. Convis, Jim
Meskimen
2011 The Toyota Way to Jeffrey K. Liker, James
continuous K. Franz
Improvement
2011 Gemba Walks Jim Womack, John
Shook
2012 The Spirit of Kaizen Robert Maurer
2012 Taiichi Ohno’s Taiichi Ohno
Workplace
Management
2013 Lean in Practice Jan-Hein Tempelman,
Rijk W. Schildmeijer
2013 Six Sigma in practice Rijk W. Schildmeijer,
Paul F.M.C.
Suijkerbuijk

306
Index
14 Management principles ............................................................................. 220
5 principles of Womack.................................................................................... 27
5 times why .................................................................................................. 121
5S 104
7 Phases of change ........................................................................................ 193
8-step plan.................................................................................................... 161
A3161
Andon .......................................................................................................... 245
Availability .................................................................................................... 236
Baseline performance .................................................................................... 180
Batches .......................................................................................................... 54
Blitz .............................................................................................................. 151
Bottleneck ...................................................................................................... 22
Brainstorm .................................................................................................... 175
Build in quality .............................................................................................. 244
Business Value Added ...................................................................................... 28
Challenge...................................................................................................... 221
Change Management..................................................................................... 190
Coaching Kata ............................................................................................... 294
Commitment................................................................................................. 212
Current Condition .......................................................................................... 288
Current situation ........................................................................................... 172
Customer value ............................................................................................... 29
Daily stand-up ............................................................................................... 139
Data analysis ................................................................................................. 179
Defects ........................................................................................................... 46
DMAIC ............................................................................................................ 18
E = Q * A ................................................................................................ 190, 276
Flow ............................................................................................................... 54
Gemba ......................................................................................................... 270
Genchi Genbutsu ........................................................................................... 222
Go and see for yourself .................................................................................. 173
Goldratt .......................................................................................................... 22
Hansei .......................................................................................................... 278

307
Heijunka ................................................................................................ 230, 241
Histogram ..................................................................................................... 180
Improvement board sessions.......................................................................... 139
Improvement cards ....................................................................................... 143
Improvement Kata......................................................................................... 286
Inventory ........................................................................................................ 38
Jeffrey Liker .................................................................................................. 220
Jidoka ........................................................................................................... 244
Kaikaku......................................................................................................... 151
Kaizen ............................................................................................137, 221, 278
Kaizen events ................................................................................................ 150
Kanban ......................................................................................................... 124
Krafcik ............................................................................................................ 12
Lay-out of an improvement board................................................................... 144
Lean as a management philosophy ................................................................. 217
Learning to see................................................................................................ 67
Line balancing ................................................................................................. 84
Little’s law ...................................................................................................... 92
M3 ................................................................................................................ 192
Makigami...................................................................................................... 301
Michael George ............................................................................................... 19
MIT ................................................................................................................ 27
Moment ....................................................................................................... 207
Motion ........................................................................................................... 40
Mura ............................................................................................................ 301
Muri ............................................................................................................. 301
Next Target Condition .................................................................................... 288
Non-Value Added ............................................................................................ 31
OEE .............................................................................................................. 235
Ohno .............................................................................................................. 11
One Piece Flow.............................................................................................. 228
Overall Equipment Effectiveness ..................................................................... 235
Over-processing .............................................................................................. 44
Overproduction ............................................................................................... 42
Pareto diagram ............................................................................................. 182
PDCA ............................................................................................................ 290
Perfection ....................................................................................................... 64

308
Performance ................................................................................................. 236
Plan Do Check Act.......................................................................................... 291
Poka Yoke ..................................................................................................... 118
Problem........................................................................................................ 167
Process Cycle Efficiency.................................................................................... 90
Pull..........................................................................................................60, 239
Push ............................................................................................................... 60
Quality ......................................................................................................... 237
Resistance ............................................................................................. 207, 209
Respect and teamwork .................................................................................. 221
Risk analysis .................................................................................................. 171
Root Cause Analysis ....................................................................................... 121
Root causes .................................................................................................. 173
Rother ............................................................................................................ 67
Safety Stock .................................................................................................. 130
Sample size ................................................................................................... 185
Samples ........................................................................................................ 184
Scope ........................................................................................................... 169
Sea of inventory .............................................................................................. 98
Service factor ................................................................................................ 130
Shared vision................................................................................................. 196
Shook ............................................................................................................. 67
Shop floor ..................................................................................................... 222
Single Minute Exchange of Dies ...................................................................... 232
SIPOC ............................................................................................................. 69
Six Sigma ........................................................................................................ 17
Skills ............................................................................................................... 48
SMED ............................................................ See: Single Minute Exchange of Dies
SOP ................................................................ See: Standard Operating Procedure
Spaghetti Diagram ........................................................................................... 87
Specify Value .................................................................................................. 27
Stakeholder management .............................................................................. 169
Stakeholders ................................................................................................. 187
standard deviation......................................................................................... 127
Standard Operating Procedure ....................................................................... 254
Standard work............................................................................................... 248
Standardised work......................................................................................... 149

309
Stand-up’s .................................................................................................... 139
Statistical Process Control ................................................................................ 17
Supermarket ................................................................................................... 61
Takt Time........................................................................................................ 82
Talent ............................................................................................................. 48
Team composition ......................................................................................... 187
Team roles .................................................................................................... 188
The Toyota Way ............................................................................................ 220
Theory Of Constraints ...................................................................................... 22
Time Series Plot............................................................................................. 181
Toyota............................................................................................................ 11
Toyota Kata................................................................................................... 283
Toyota Production System................................................................................ 12
TPI ............................................................................................................... 140
TPS ................................................................................................................. 12
Transportation ................................................................................................ 37
True North .................................................................................................... 287
Two-bin ........................................................................................................ 125
Ultimate goal ................................................................................................ 227
Value Stream Map ........................................................................................... 50
Value Stream Mapping..................................................................................... 67
Visual control ................................................................................................ 257
Visual Management ......................................................................................... 99
VSM ............................................................................................................... 50
Waiting........................................................................................................... 41
Waste............................................................................................................. 30
What’s In It For Me ........................................................................................ 206
WIP ................................................................................................................ 81
WIP cap .................................................................................................... 93, 96
Womack ................................................................................................... 12, 27
Work In Progress ............................................................................................. 81
Workout ....................................................................................................... 151

310
 A publication of:

LEAN
The Lean Six Sigma Company provides training, coaching and implementation The Lean Six Sigma Company

LEAN IN PRACTICE
support in the field of Lean and Six Sigma. We assist and coach organizations
as well as individuals to achieve their ambition to improve processes utilizing
Lean Six Sigma methodologies. Training courses are organized on an
“in-company” basis as well as “open enrollment”.

Our courses are directed at facilitating the practical application of Lean Six
Sigma. That is why we have tested our course content and curriculum against
the industry standards that best reflect our focus on practical application

IN
and quality.

Our course content meets the internationally recognized standards set forth
by the ASQ and has been certified according to the independent Lean Six

PRACTICE
Sigma industry standards as described in the ISO 18404 and ISO 13053.

Every year the Lean Six Sigma Company trains hundreds of Lean Six Sigma
professionals, also providing them with active coaching in project execution.

In addition The Lean Six Sigma Company supports many organizations with
the implementation of Lean Six Sigma thus enabling these organizations to
realize their ambitions aimed at improving process capability.

Visiting address Postal address

The Lean Six Sigma Company The Lean Six Sigma Company
Van Nelleweg 1 P.O. Box 13428
3044 BC ROTTERDAM 3004 HK ROTTERDAM
The Netherlands The Netherlands

T: +31 (0)10 22 22 860

W: www.theleansixsigmacompany.com
E: [email protected] Post HBO ISO 9001

13721 - Lean_Omslagen UK_NW.indd 1 29-04-21 15:27