Lean Operations
Applying ‘lean principles’ is arguably the best route to excellence in today’s business world. The roots of Lean are found within Toyotas highly Influential ‘production system’ and are now being applied in companies around the world.

The term ‘Lean Conversion’ is used to describe a lean business transformation with spectacular gains. Increases in Productivity & Working Capital of 50-70% are considered normal within two years. Crucially benefits begin to flow within weeks. With these great numbers also comes a permanent shift in culture.

Value Stream First
Business gets paid for adding value. Your ‘Value Stream’ is all the things you do to create value. Each ‘step’ is some combination of, Capital, Material, and Labor, so improving the value stream produces cost reduction and business growth opportunities. Lean Conversions change Value Streams to eliminate activities that do not “add value”. A move to ‘Cellular working’ is a typical first step. Resources are placed in the sequence and layout the value itself would choose if it designed the business. The result is faster flow eliminating, distances, hand-offs, and delays. A now shorter cash cycle together with reductions in space required releases capital. ‘Pull’ triggered work is often a second step i.e. only starting work when a downstream customer is ready and signals. This eliminates wasted product & effort to increase productivity. Lean conversions are usually guided as ‘DIY lean’ has a high failure rate. Common mistakes are doing “lean improvements” without a ‘Value Stream map’ or ‘Productivity’ baseline resulting is unconnected islands of improvement. This is known as “kamikaze kaizen”!

DIARY OF A CONVERSION – A UK SITE OF ‘U.S.OWNED’ HOUSEHOLD NAME
“Our production was traditional each departments fed the other to a schedule. Things were stored, moved, and then waited for a process to happen. Somehow things got to assembly and were shipped. We controlled via meetings, and lists.”

“In October 2001. Our Operations Manager told us we were going “Lean” and totally change our business. He assured us we would be following many successful conversions. Our response was…why change? It isn’t broken so why fix it?”

Seeing the Flow
“A Value Stream Mapping event was led by Simpler Consulting, who would help us through our conversion. This ‘current state’ map, opened eyes and minds! Almost all our steps were non-value-adding. We were shown how this happened due to the traditional ‘departmentalised’ layout we shared with 99.9% of ‘normal’ companies. Luckily there were also some value added steps so a ‘lean’ map and conversion plan was created. The plan listed areas where teams, helped by Simpler, would change our business piece-by- piece.”

MAJOR CHANGES
1) Pull Systems – Work triggered by pull signals. (Now extends to suppliers).
2) One-Piece-Flow Cells with ‘Standard Work’ - Before the goal was run the equipment all the time. Now we run processes only as required by the product and demand. Standard work drives productivity.
3) 6S and Visual Control Housekeeping and visual controls with simple, ‘real time’, measures.
4) Machine set-up reduction Dealing with variation without batching.
5) In process Quality Controls Ensuring quality at source
6) TPM Ultra reliable equipment
7) Actual demand paced output Standard work scenarios for demand variations.

INVOLVEMENT – THE KEY TO CULTURE CHANGE
We started at one event per month growing to four. Each has a cycle: - preparation, event, then holding the gains. Early focus was on manufacturing, but the path has widened to areas that support those who add value. Newsletters, team briefs and info boards have been used to communicate activity.

Nicholas G. Middleton
Managing Director – Simpler (Europe) Ltd
nick@simpler.com