Companies decide to use the skills of outside consultants for a number of reasons. Below is a list of common Lean questions that Gembutsu is asked by companies considering embarking on their own lean journey.
- What is the Goal of Lean Manufacturing?
- My company is not a mass producer making a high volume of end products. Is Lean still applicable to us?
- What is the difference between the Toyota Production System and Lean Manufacturing?
- What exactly is 'Kaizen' and what is a “kaizen workshop”?
- What are the benefits of Lean and how long will it take to see results?
- What changes can employees expect as a result of a Lean transformation?
- What change in duties or responsibility can managers expect as a result of a Lean transformation?
- If Lean will ultimately require less people, what happens to freed-up personnel?
- What is a Lean Promotions Office (LPO)?
- Where does Six Sigma fit in with Lean (and vice versa)?
- What next steps should I take if I would like to move forward with Lean? What is Gembutsu's process?
1. What is the Goal of Lean Manufacturing?
The goal of Lean manufacturing is the reduction of lead-time from order to cash through the elimination of waste from all business processes.
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2. My company is not a mass producer making a high volume of end products. Is Lean still applicable to us?
All business processes have value added and non-value added components. This holds true whether the process is located at a mass-producing manufacturer, within a job shop, or at a service oriented company such as a health care institution. The lean practitioner’s challenge is to appropriately apply the tools and philosophies of the Toyota Production System (TPS) in order to identify and eliminate these non-values added activities so that overall lead-time is reduced.
Gembutsu has worked with a wide range of companies from fortune 50 global corporations to small job shops. In each case, our goal is to learn the fundamentals and key performance indicators of the current business in order to determine the implementation approach that will result in the most significant improvement to the bottom line.
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3. What is the difference between the Toyota Production System and Lean Manufacturing?
This question comes up quite often. For all practical purposes, the two terms mean the same thing. The term “Lean Manufacturing” was coined by James Womac and Daniel Jones in their 1990 book The Machine That Changed The World to describe the phenomenal success that Japanese manufacturers were having in global markets. Since the Toyota Motor Company was the most successful of these Japanese companies to explain the Japanese manufacturing philosophy with their supply base and strategic partners, the term "Toyota Production System, or TPS, was born. Regardless of what it is called, the goal is always to eliminate waste from processes in order to reduce total lead-time.
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4. What exactly is 'Kaizen' and what is a “kaizen workshop”?
Kaizen is a Japanese word which roughly translates to continuous improvement. In the context of Lean manufacturing, kaizen is understood to signify small, incremental, yet frequent improvements to a process. Lean philosophy states that instead of making large changes that may require significant amounts of investment and risk, the kaizen mindset aims to make process improvements without 1) adding people to the process, 2) adding space to the process, and 3) without spending any money to implement the change (this last one is usually the hardest for companies follow).
Gembutsu's approach towards teaching the adoption of the kaizen mindset is by completing so-called kaizen workshops. These are 3-5-day focused efforts by a cross-functional team that focus on implementing changes within a production area. Tasked with a specific objective and scope agreed upon by upper management, the kaizen team must meet all of its objectives by the end of the workshop. The Gembutsu representative's role is to act as teacher to not only achieve savings by the end of the week, but also to ensure that sufficient knowledge-transfer is taking place.
The figure below shows how small incremental improvements can have a large positive impact over time. The pie chart represents a typical process having value-added and non-value added elements. The kaizen activity aims at reducing this non-value added portion of a process. We see that after each kaizen workshop the process is more and more efficient (has less and less non-value added activities). Download as a PowerPoint file.
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5. What are the benefits of Lean and how long will it take to see results?
The kaizen team should expect to see measurable improvement and bottom line impact following each weekly kaizen event. Typical results of a kaizen event include:
Hard Savings (direct P&L impact)During the lean assessment phase of a potential engagement (see question 10), Gembutsu identifies specific savings targets to be accomplished during a company's lean transformation. In most cases, these are annual targets. Each kaizen workshop must bring the company closer to this goal.
• Inventory (working capital) reductions of +75%.
• Cycle time reductions of 50% - 90%.
• Delivery lead-time reductions of 75%.
• Productivity increases of 15% - 35% per year.
• Defect reductions of 50% per year, with zero defects performance possible.
Soft Savings (usually less immediate direct impact)
• Space savings up to 50%.
• On-time delivery improvements of 99+%.
• Improvement in employee survey results.
Gembutsu guarantees delivery of the financial results agreed upon during this assessment. These are regularly monitored throughout the engagement.
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6. What changes can employees expect as a result of a Lean transformation?
One of the goals of Lean is to move decision making closest to the customer, or in other words, as close as possible to the physical product or service, since this is what the customer receives. Since the individual operator is the closest human to the product, the goal becomes to move decision making to this level. Consequently, the first and immediate change that employees notice is that they have more significant input in the production methods of their work area. This empowerment often motivates team members to accomplish unexpected level of performance both for their own development as well as the company's productivity gains.
Naturally, employee empowerment is much more comprehensive than management simply stating that moving forward employees will be empowered. It involves setting guidelines and boundaries, rolling out the process in a deliberate and well communicated manner, and making adjustments when appropriate. Gembutsu works with upper management to ensure that this cultural shift towards lean does not jeopardize company morale or productivity.
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7. What change in duties or responsibility can managers expect as a result of a Lean transformation?
While empowering employees will certainly drive quality, cost and delivery improvement ideas, it will also task managers to remove organizational barriers in order to implement these ideas. The speed and agility with which these inquiries are answered will directly affect the success of the lean program.
Gembutsu works hand-in-hand with the company's management team to provide guidance and feedback regarding how to most effectively communicate direction and execute the necessary support.
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8. If Lean will ultimately require less people, what happens to freed-up personnel?
In order to receive involvement from employees, it is crucial that they have no fear of job loss following a kaizen activity. In practice, this means that if a post-kaizen process requires less employees, the freed-up personnel should not be let go, but re-deployed elsewhere in the company.
Having said this, it is fully understood that to obtain credit for a cost reduction, the company must operate with a net headcount reduction. This is usually solved by not replacing employees during normal attrition (retirements, voluntary leaving, promotions, etc…) or by not renewing temporary / part-time worker contracts. In most all cases, this practice which is communicated up-front during the kick-off communication of lean implementation, is acceptable to both managers and shop floor personnel.
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9. What is a Lean Promotions Office (LPO)?
In order to systematically implement lean principles within company, it is very helpful for a single individual be tasked with leading the lean implementation program on a full-time basis. This experienced manager heads a so-called Lean Promotions Office and is tasked with responsibilities such as:
• Function as leader for the company's lean implementation
Act as a liaison between Gembutsu and the client to ensure efficient knowledge-transfer.
• Participates in all Gembutsu-lead kaizen events
• The first person trained to manage kaizen events and is expected to lead their own kaizen events
• With management buy-in and support, set the implementation plan and ensure its execution.
• Is responsible for developing and executing a company-wide Lean training plan
• Is responsible for ensuring that kaizen events are lead by other in the company (production managers and supervisors, engineers, etc...)
• Acts as liaison between the shop floor and management. Ensures that Lean goals align with the company's strategic direction and objectives
• Measures savings from accomplished from each kaizen workshop and communicates these with accounting
10. Where does Six Sigma fit in with Lean (and vice versa)?
In general, six sigma focuses on the value added elements of a process by reducing variation, and therefore defects, from the process. In contrast, the emphasis of lean is on eliminating waste from non-value added activities. The 7 wastes are overproduction, defects, unnecessary motion, inventory, space, transportation and waiting time.
Gembutsu's view is that lean and six sigma can work well together. Our approach is to "reduce lead-time through the elimination of waste" and we use any relevant tools that accomplish this objective.
11. What next steps should I take if I would like to move forward with Lean? What is Gembutsu's process?
Companies wishing to further understand the results that Gembutsu can achieve at their location should request an introductory conference call. The objective of this call is to answer any preliminary questions that your company may have regarding the implementation process. It also provides us with an opportunity to become more familiar with your company's history and culture. During the call, Gembutsu will present 1) the major elements of lean theory, 2) the typical implementation process and 3) key points of Gembutsu's differentiation. Key managers are invited to participate on the call as appropriate for your evaluation process.
Following the call, if both parties see a potential fit, the next step is to schedule an on-site visit during which Gembutsu completes a Lean assessment. This detailed evaluation, carried out over several days, will measure your company's current practices as well as allow Gembutsu to better understand the business' unique drivers and challenges. The deliverable from the assessment is a specific lean implementation proposal which is presented either in person or via conference call directly following the visit.
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We hope that this information was helpful. Please contact us for more information.