Lean Management: faster, more efficient, but above all eliminates waste!

In more than 75 years, Toyota has grown from a small division of a Japanese weaving company to one of the most dominant and trusted automotive brands in the world. This success is no accident. It was crafted through high-quality design, continuous innovation, and audacious moves!

This Japanese giant is famous for its use of low-cost automation, thanks to the Toyota Production System (TPS), known as "Lean manufacturing". Lean Manufacturing helped this company shape the automotive industry and made Toyota the success story it is today. 

But, is the methodology still relevant today? How can lean manufacturing be applicable in today's world?

Lean Management is a work organization method aimed at improving productivity and performance within organizations. This system originated from the Japanese company Toyota. Lean manufacturing is a system used in Toyota Motor Corporation's vehicle production. It is a production system based on the philosophy of achieving the complete elimination of waste in the pursuit of the most efficient methods. It is sometimes referred to as "Toyota Production System (TPS)" or "Just In Time System (JIT)" and has become well known and studied around the world.

The Origin of Lean Management

At the beginning of the 20th century, Sakichi Toyoda, the father of the system, worked in the textile industry. He invented a motorized loom with a specialized mechanism designed to stop if the thread broke. The mechanism later became a basis for Jidoka (automation with human fabrication). 

In 1929, Sakichi Toyoda's son, Kiichiro Toyoda, went to the United States to study the automotive industry. He intended to imitate Ford's mass production system (mass production) at Toyota Motor Company, but at that time Japan was suffering from greatly reduced demand for vehicles. Kiichiro developed the Just-in-time system, a system focused on increasing production capacity and meticulously reducing waste.

Later, Jidoka and Just-in-time became the two main pillars of Toyota Production System.

Lean management tools

There are several types of Lean tools that are meant to help organizations eliminate waste, increase efficiency, and get the most out of resources. 

Let’s explore the basics of lean management tools:

Kaizen

Kaizen is a Japanese term meaning "change for the better" or "continuous improvement". Created in Japan after World War II, it was a system used to help with post-war reconstruction. 

Traditionally the ideas behind kaizen are based on five principles: teamwork, improving morale, self-discipline, quality, and suggestions for improvement. These principles have led to three major results: good housekeeping, waste elimination, and standardization. The idea is to make this philosophy anchored in the culture of a company so that it becomes natural for the employees.

Over time, it has evolved into a corporate philosophy that emphasizes the gradual improvement of productivity by involving all employees and making the operational process more efficient. It is a part of the Lean tool that aims for continuous improvement in areas such as quality of technology, processes, productivity, corporate culture, and safety.

Just-in-Time

In the manufacturing sector, Just-in-Time (JIT) is a workflow-centric methodology for reducing flow times within production, and reaction times for suppliers and customers. Concretely, it uses an inventory management method based on a synchronized collaboration with suppliers to ensure that raw materials arrive exactly when production should begin, but not sooner. The goal is to have the minimum inventory available to meet demand. This system helps organizations increase productivity while reducing costs.

Car manufacturers are among the sectors that have been able to utilize the JIT inventory system perfectly. These industries operate with low inventory levels and rely on their supply chains to deliver parts on time when needed. They triggered the parts order for the assembly line only after the receipt of a car order.

The five S

5S is a system for organizing workspaces to carry out operations efficiently, effectively, and safely. The principle of this system is to put everything back in its place and keep the workstation clean, to allow each operator to work more easily, without wasting time, and to avoid any risk of injury.

The term 5S comes from the following five Japanese words: Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. The English translation represents the 5 fundamentals of work efficiency: 

• Sort: determine what should be present and remove unnecessary items from each work area (tools, materials, spare parts, furniture, equipment, etc.)
• Set in Order: figure out which layouts make the most sense, suggest the best sorting strategies, customize each unique work area to maximize efficiency.
• Shine: cleaning the work area after each shift (sweeping, mopping, dusting, wiping surfaces), this also involves planning and carrying out regular maintenance of equipment and machinery before major breakdowns occur.
• Standardize: systematize the previous 3 S's and turn them into habits. Recording improvements, assigning regular tasks, creating schedules, and posting instructions so they can be applied more easily and become routines.
• Sustain: perform the ongoing work of maintaining these procedures and ensuring that each step is repeated. Update them as necessary to ensure continuous improvement. It aims to ensure the proper functioning of 5S and the involvement of all members of the organization 

The Five Whys: Root Cause Analysis Tool

5 Whys technique was developed by Sakichi Toyoda in the 1930s., and has become one of the most quality-focused management system tools around the world. 

Root cause analysis using the 5 whys is an essential tool in manufacturing. It allows users to dig deep enough to truly uncover the root causes of nonconformities, failure, noncompliance, non-quality, etc., and to eliminate them in a consistent and efficient manner. The method is quite simple: the user continually asks the question "why?" (Usually five times or less) to gradually remove the superficial layers. The method also excels when used in a participatory way, working with those directly affected, going to the scene of the problem to better understand it. 

Taiichi Ohno, the industrial engineer playing a major role in the development of the Toyota Productions System explains:

   The basis of Toyota’s scientific approach is to ask why five times whenever we find a problem … By repeating why five times, the nature of the problem as well as its solution becomes clear. 

The root cause of the problem is discovered when the question "why" no longer produces useful answers. From there, an appropriate corrective action/countermeasure or process change should then become obvious.

Lean Management and industry 4.0

Lean principles have long been used in manufacturing to increase efficiency and reduce waste, and have allowed a company like Toyota to thrive over time. Adding digital technologies to lean can take a business into another dimension. Indeed, Industry 4.0 technologies are transforming lean processes to move businesses forward.

Let’s explore the most effective digital solution in Lean manufacturing:

Supply on demand or supply 4.0

The term industry 4.0 refers to the digital transformation (digitalization, automation, data exchange, etc) of manufacturing/production and related industries. An integrated software runs millions of data from sensors and other electronics to connect more closely with suppliers, aid the planning process, improve sourcing, actively manage supplier risk, and boost collaboration.

The digital supply chain is based on an efficient integration and management of suppliers of raw materials, semifinished products, and parts. Companies that have successfully transitioned to digital are able to cut costs and speed up delivery throughout the supply chain as it becomes increasingly automated.

Robotics and smart warehousing

The digitalization of the warehouse implies inbound logistics, meaning: the steps to order, receive, store, transport, and manage incoming supplies, materials, and other goods into a company. In other words, when trucks are on their way to the warehouse, the electronic onboard recorders (EOBRs) will communicate their position and arrival time to the intelligent warehouse management system, which will choose and prepare a docking slot, optimizing just-in-time operation. 

These days, many retailers and manufacturers are tracking their products using RFID, or radio-frequency identification tags. RFID tags come in the form of paper-based labels outfitted with a simple antenna and memory chip transmitting information to a radio-frequency reader about the identity, state, or location of a given product. The management system will automatically allot storage space for the delivery, and assign the appropriate autonomous equipment to move the goods to the right locations.

3D printing for spare parts 

A major issue in manufacturing is related to the management of spare parts, the demand is highly erratic, almost impossible to predict. More than half of all orders shipped in a warehouse are one-time requests for spare parts. As a result, a lot of manufacturers maintain huge inventories of parts.

3D printing is the process of making three-dimensional solid objects from a digital file. It allows organizations to manufacture spare parts as needed on-site when demand is high or critical. This type of printer only needs digital modeling software, blueprint and specifications of each part, and the materials needed to produce it. A 3D laser scanner can scan any existing parts to collect specifications and automatically translate them into code readable by printers. This tool significantly reduces spare parts inventories and associated costs.

Toyota has revolutionized the automotive industry with the introduction of Lean Manufacturing. The company has significantly evolved during its 75 years of existence, so has the TPS. Innovative technologies such as IoT, 3D printing and others have disrupted the production process of manufacturers. But lean manufacturing is more relevant than ever. Everything Toyota does today is still infused with lean principles, they managed to successfully adapt the Lean philosophy to modern technology.

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