is a management style that promotes reducing waste through the
elimination of non-value added activities (streamlining
operations), eliminating work in process and inventory, and
increasing productive flexibility and speed of employees and
activities in a process include any step that: (1) customers are
not willing to pay for, (2) do not change the product or service,
(3) contain errors, defects, or omissions, (4) require preparation
or setup, (5) involve control or inspection, (6) involve
over-production, special processing and inventory, or (6) involve
waiting and delays.
activities include steps that customers are willing pay for
because they positively change the product or service in the view
of the customer.
Added/Non-Value Added (VA/NVA) flowcharts
are used to identify non-value added steps in a process for
possible elimination or modification, thereby reducing the
complexity of a process.
refers to the number of products or services, or their
variants, offered by an organization. This is a different
definition of complexity that described in the VA/NVA definition.
in process (WIP)
are the “things” in a process that are not yet finished,
for example, computers not yet assembled, documents not yet filed,
e-mails needing a response, customer complaints awaiting a
is the cycle time for a “thing” to be processed from the time
a customer places an order until the time the customer receives
is used to estimate the average lead time for the “things” in
= (Average amount of WIP per period of time)/(Average completion
rate per period of time).
other words, the average lead time is the average length of time a
“thing” waits to be completed in a process.
is the proportion of a process’ steps that are value added
steps, as oppose to non-value added steps. Process cycle
efficiency is computed as follows:
= (Average value added time for a “thing”)/(Average total
lead time for a “thing”).
refers to the reduction of WIP and the increase in
speed (shorter average lead times) created by applying lean
management in your organization.
a relatively new business term
that describes all the value added and non-value added process
steps and decisions necessary to move a product or service from
supplier to customer. These steps include design and redesign, raw
material flows, sub-component flows, information flows, production
and service flows, and people flows, to name a few steps.
stream map is a critical tool for identifying the gaps
between the current state of a value stream and its desired future
state. Additionally, it provides a list of the projects necessary
to realize the future ideal state.
is the person directly responsible for a
product family as it moves through its entire value stream.
0: The Law of the Market
– Customer CTQs, ROIC (Return on Invested Capital), and NPV (Net
Present Value) are the highest priorities in a Lean/Six Sigma
effort. The law of the market is called the 0th law
because it is the base on which the other laws are built.
future stream of benefits and costs converted into equivalent
values today. This is done by assigning monetary values to
benefits and costs, discounting future benefits and costs using an
appropriate discount rate, and subtracting the sum total of
discounted costs from the sum total of discounted benefits.
measure for determining the effectiveness of a company’s
management team and how well a company uses the money invested in
its operations. Computed using the following formula: ROIC = (Net
Operating Profits after Taxes)/(Invested Capital).
1: The Law of Flexibility
- The velocity of any process is
proportional to the flexibility of the process. The First Law of
Lean/Six Sigma explains that process velocity, batch size, and
workstation turnover are all interrelated. If team members change
one of the above three variables, then they will effect the other
two variables. Maximum flexibility is directly related to minimum
= (Customer demand rate per period of time)*(Minimum workstation
turn over per period of time).
So, team members must decrease workstation turn over time to
decrease batch size! That is how team members increase the
flexibility of the process.
2: The Law of Focus
– Twenty percent of the activities
in a process cause 80% of the delay. This is called the Pareto
Principle. “Time traps”
are the steps in a process that add delay time. Team members use
the Pareto Principle to prioritize time traps for attention in
Lean/Six Sigma projects.
3: The Law of Velocity - The velocity of any process is
inversely proportional to the amount of work in process (WIP).
Little’s Law shows that we can speed up a process (decrease the
average lead time) by either increasing the average completion
rate per period of time, decreasing the average amount of WIP per
period of time, or both. The critical insight is that we can speed
up a process (cut average lead time) by decreasing average WIP!
Lean management is very helpful in decreasing WIP.
4: Complexity - Complexity
is a Lean/Six Sigma term that refers to the number of products or
services, or their variants, offered by an organization. The
complexity of the service or product offering adds more non-value costs and WIP than either poor quality (low process sigma) or slow
speed (un-lean) process problems.
is a value stream in which an upstream
process only makes what a downstream process needs, when it needs
it. There is no (or little) inventory.
the pace at which every step in the process must produce one unit
of output to meet customer demand per time period, for example,
is the point of entry of the customer’s order
into the lean value stream. In
other words, the pacemaker process is the process in the lean
value stream that is directly controlled by the customer’s
order. The pacemaker
process sets the “pace” for all processes upstream of it in
the lean value stream. All
output from the pacemaker process flows directly to the customer.
There are no pull systems (definition below) or supermarkets
(definition below) downstream of the pacemaker process. The lead
time for the output of a lean value stream process using a
supermarket pull system is the difference between “the time the
customer order is received by the pacemaker process” and “the
time finished output is placed in the supermarket before the
a section of a value stream that can be improved independently
of all other sections. Basically, breaking a value stream into
loops makes it possible for team members to conduct small and
sequential implementations on the sections (loops) of a
future-state value stream, instead of one massive implementation
of an entire future-state value stream.
includes the material, information and people flows
between the customer and the pacemaker process. Remember, the
pacemaker process is at the extreme end of the value stream and
sets the takt time for the entire value stream.
includes the material, information, and people flows
between suppliers and the most upstream processing loop in the
include all the continuous flow processing steps
between the pacemaker loop and the supplier loop. Each continuous
flow processing loop begins after the supermarket from the
processing loop before it and ends with it own supermarket.
is the individual that is responsible for the
optimization and management of a loop within a value stream.
refers to a process with a batch size equal to one.
Each unit passes immediately from step to step without any
waiting time in between steps.
Processes with a batch size of one and no waiting between
the steps in the process is the “holy grail” of production and
is an inventory facility
that is used if continuous flow does not extend upstream in a
process; in other words, if batching is necessary, then
supermarkets are used to regulate process flows.
initiates production/service in a given step in a
process using a request from the next downstream step in the
is a preprinted card that is used to send a message to a supplier
department to produce or process “x” units of product for a
supermarket, or to send a message to customer department to
withdraw “x” units of product from a supermarket. Kanban
systems control the flow of material, information and people in a
value stream. They
are used to keep the demand for material, information or people at
a constant rate. This prevents the need for overproduction and
inventory to deal with a variable demand rate for a product.
is an instruction to a supermarket that customer
process B is withdrawing “x” units from supplying process
is an instruction to supplying process A from its
supermarket to produce “x” more units for the supermarket.
is a batching location for products that can
be drawn on to meet customer’s orders.
is the number of finished parts that can be placed in one finished
is calculated by multiplying takt time by pack size.
Productive Maintenance (TPM)
is a theory useful for maintaining plants and equipment with total
involvement from all employees. Its objectives are to dramatically
increase production and employee morale by: (1) decreasing waste,
(2) reducing costs, (3) decreasing batch sizes, (4) increasing
production velocity, and (5) increasing quality (conforming
occurs when employees are reactive to equipment failure and
effectuate repairs only after a failure has occurred on a piece of
equipment. Frequently, breakdown maintenance requires a
maintenance prioritization system. These systems frequently are in
effective due to worker abuse. The nature of the abuse is caused
by a worker rating a needed repair as critical, when it is not, to
get breakdown maintenance attention quickly.
is a routine and scheduled process of maintenance (cleaning,
inspection, oiling and re-tightening) of plant and equipment. It
is used to ensure the proper functioning of plant and equipment
and to decrease the incidence of failure of plant and equipment by
preventing entropy (deterioration). Entropy (deterioration) can be
stopped or reversed through a program of periodic inspection or
equipment condition diagnosis. There are two types of preventative
maintenance: periodic maintenance and predictive maintenance.
is a process that redesigns equipment, and component parts, so
that employees can reliably perform preventive maintenance.
is a process of designing new equipment so that it is robust
against critical failure modes.
(autonomous maintenance) is a method for employees to
take care of small maintenance tasks in their work areas,
consequently, freeing up time of skilled maintenance employees for
more value-added maintenance tasks. The operators are responsible
for upkeep of their equipment.
is a method for promoting small improvements on a continual
basis throughout an organization. A kaizen is a short lived
project lasting no more than 4 or 5 days, for example, using quick
changeover methods to dramatically reduce set up time in an
operation. It is the
opposite of breakthrough improvements. Kaizen requires no or
promotes trouble free plants and equipment. There are four types
of PM. They were discussed earlier: (1) preventive maintenance,
(2) breakdown maintenance, (3) corrective maintenance, and (4)
maintenance prevention. Planned Maintenance is a proactive
process, as opposed to reactive process.
promotes customer satisfaction through the delivery of products
and services that surpass customer specifications. This is
accomplished by creating conditions for plants and equipment that
decrease performance variation around the desired nominal levels
for each piece of equipment. Quality maintenance activities are
accomplished when employees use the PDSA cycle in respect to
is a technique that team members can use
to analyze, and then reduce: (1) the time it takes to setup
equipment (including tools and dies) and people (for example,
shift to shift setup for cashiers in a supermarket), (2) the
resources required for a changeover, and (3) the materials
necessary for a changeover. It creates the opportunity in a value
stream to effectively and efficiently institute small batch sizes,
or even one-piece flows.
(pronounced POH-kah YOH-kay) is Japanese for mistake-proofing
devices. These devices are used to prevent the causes of defects
and/or defective output (called errors), or to inexpensively
inspect each item that is produced to determine whether it is
conforming or defective. A poka-yoke device is any mechanism that
prevents a mistake from being made or makes the mistake obvious at
form a system for tidying up and maintaining a process. Each of
the Ss is discussed below.
means throwing away unnecessary
"Things" and putting necessary “Things” in order, that is, organizing
“things” using specific rules. Once an employee has
internalized the rules for organizing “things,” he or she will
quickly be throwing away unnecessary "things" and be able to find the things
means tidily putting “things” in their proper place which is
determined with seiri. Putting things away requires following two
rules: (1) deciding where things belong and (2) deciding how
things should be put away. Follow the put-away rules to leave
things where they can be quickly and properly found next time they
is an attitude that considers a dirty and untidy work place
intolerable. There are three broad levels of cleaning. First,
there is the overall cleaning of everything. Secondly, there is
the cleaning of specific items, tools, machines and workplaces.
Thirdly, there is the cleaning at the detail level, getting to
grime in screw threads, corners and crevices.
is visual management. Visual management leverages location,
distance, shape, brightness, color, and contrast so that something
stands out when we are looking for it. Visual controls include
work instructions, hazard warnings, indicators of where things are
kept, equipment and tool designations, cautions and reminders, and
plans and indicators of what happens when. Whenever people need
reminding, a visual control should be there to help them.
draws together the other four Ss ensuring they are used properly.
People make mistakes, forget, and do things incorrectly. We also
get stuck in habits which are not helpful with our work. Habits
are, however, very useful things, and if we can align them with
the work disciplines of the 5Ss, we can forge them into a complete