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Thursday, 29 November 2012

What is LEAN?


Lean manufacturing defines the value of a product or a service from a customer point of view. Customers don’t mind how hard you work or what technology you used to create the product or service you are selling to them. They will evaluate your product or service by looking at how well it fulfills their requirements.  Customers don’t need to pay for the quality defects you have removed from your production lines. Nor do they need to pay for the huge overhead costs you incur back at your facility. They will pay for the fulfillment of their requirements using the product or service you provide. In Lean, a good quality product should be cheaper, because the cost of producing a good quality product with no defects will be lower than the cost of producing a low quality product with all the associated quality checks and replacement of defective goods. What do you see as a waste in your organisation?  It may be products with defects, bundles of waste paper, a light turned on unnecessarily, or even waiting for your manager to sign a piece of paper. These are examples of waste, but do they account for the 70% - 95% of the resources wasted in your organisation?  No.  Each and every organisation wastes up to 95% of their resources, while most commonly this value exceeds 70%.  Even the best lean manufacturers waste up to 30% of their resources. So it is obvious that there are serious wastes that are hidden or yet to be discovered in your organisation. Lean always refers to removing waste, not minimising.  Each problem in the system has a cause.  There may be more than one root cause for a problem. One root cause can contribute to more than one problem. For example, if you have frequent machine breakdowns, the root cause for this might be low skilled maintenance staff.  So how do you overcome this problem?  Should you dismiss the maintenance staff?  No, you should NOT simply get rid of people.  You have to improve their skills with training and teaching.  Of course, if you cannot improve one person’s skills then you may wish to think about transferring that person to another department or changing their job role.  Lean does not support dismissing people.

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