The Lean Philosophy: It’s About “Time”

The Lean Philosophy: It’s About “Time”

Let’s revisit two age-old adages: “Time is money” “Take the time to do it right” Put these two together and you get to the age-old manufacturing belief that the higher the quality, the higher the cost. You must do things faster to reduce cost, but the faster you do it the higher the chance that a mistake will be made. The slower you do it the less chance of a mistake, but the cost will increase. And this was accepted…

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Do We Need to Re-Think How We Think?

Do We Need to Re-Think How We Think?

In my previous post, I covered the “what” that underlies a “production system” (“production” is not “manufacturing”, but “manufacturing” can be “production”) and emphasized that it is the people and their thinking, the “who”, that makes the system function. Now the challenge is to uncover “how” that thinking, and “what” kind of thinking, can make the production system not just function, but function well. And a well-functioning production system is one that provides value to the customer. The system and…

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Who Does the Thinking Around Here Anyway?

Who Does the Thinking Around Here Anyway?

Up to this point in my blog, I have tried to build a basic foundation for understanding “where” Lean comes from, “what” Lean is, “how” Lean works, and hopefully begin to generate some understanding of “why” Lean works. If we don’t have a very good grasp of all of these concepts, we will have a very hard time tackling the next, and probably most important, key component of a successful Lean transformation. And that key component is: “who” makes Lean…

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ROI versus the P&L: The Difference between Efficiency and Effectiveness

ROI versus the P&L: The Difference between Efficiency and Effectiveness

In my previous post, I concentrated on the river body of our Lean River System (the balance sheet) to illustrate that there are costs there that play a very significant role in the performance of any enterprise. That inventory and Working Capital are listed on the financial statement as “assets” tends to divert attention from the fact that these entities represent real costs to the business – sunk costs. When Ohno talked about “cutting costs”, he was referring to both…

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The Lean River System – Part 4: ROI and the River

The Lean River System – Part 4: ROI and the River

Now back to the river system analogy. If you haven’t yet done so, I recommend you at least read The Lean River System – Part 3 before proceeding further. But it would be best if you read Part 1 and Part 2 also. Here is ROI (Return on Investment) again: ROI = Earnings/Total Investment = (Sales – Cost of Sales)/(Working Capital + Permanent Investment) The numerator of ROI (earnings) represents the net input and output of the river system. Earnings…

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The Lean River System – Part 3: A Financial Model

The Lean River System – Part 3: A Financial Model

Now that we have identified that a “river system” is a very good model for helping us conceptualize and understand what a “Lean system” looks and behaves like, how do we begin to quantify this concept in terms of some group of measurables? What can we measure to determine if we are making real progress in our efforts for a Lean transformation? What can we use to help us make good decisions? Since most of us are in, or firmly…

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The Lean River System – Part 2: And the TPS House

The Lean River System – Part 2: And the TPS House

At this time I would like to delve a little deeper into the use of Ohno’s river system to model the inner workings of Lean/TPS. I will start by going back to the TPS House. (If you have not already done so, I suggest you read the three part “What is Lean” series at the beginning of this blog). Here is the basic TPS House once again. Familiarize yourself with the various components of the roof, pillars, floor and base….

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The Lean River System – Part 1: What is It?

The Lean River System – Part 1: What is It?

Let’s go back, once again, to the basic foundation of the Lean/TPS system: Thus the underlying principle behind TPS/Lean is the systemic creation of the shortest possible lead time for the continuous flow of materials and information in order to generate the highest quality and lowest cost. Over the years I have noticed that the idea of “flow” in a processing environment (any system that contains discrete process steps to produce products or services) is harder to grasp for some…

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What is Waste? – Part 3: The 3M’s – All are Important but One is Special

What is Waste? – Part 3: The 3M’s – All are Important but One is Special

In “What is Waste? – Part 2” I covered the concepts of Muda, Muri and Mura (the 3M’s): where do they come from and what do they mean? Muda encompasses total “waste” and, based on my analysis, was meant to refer to the term for “heat” (Q) in the first law of thermodynamics by the Toyota engineers. And Muda is the product of two components, Muri and Mura, which refer to the two thermodynamic parameters that constitute “Heat” (Q); “temperature”…

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What is Waste? – Part 2: Where Did Muda, Muri and Mura Come From?

What is Waste? – Part 2: Where Did Muda, Muri and Mura Come From?

In the last post “What is Waste – Part 1: Why Waste Energy?” we covered the origin and meaning of “waste” in the Toyota Production System and I made some assumptions as to the thinking of the Toyota engineers (including Ohno) when they came up with the idea of “waste” and “work”. I even brought in the ideas and principles of “thermodynamics” to explain their thinking and rational. Let’s dig a little deeper! (But you may want to review that…

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