LEAN Production: the method that made Toyota the most valuable car brand in the World

An introduction for the elimination of non-productive processes through the TIM WOOD identification.

Why are the industry-leading companies interested in the Lean Production system? First of all, one must understand what exactly is Lean and why do this Japanese methodology make your work more productive.

The Lean production system is also known as the Toyota Production System (TPS) [1]. As you may guess, the name comes from its origins in the Toyota Motor Corporation. You may have missed this, but Toyota was declared the most valuable automotive company in 2017 [2] according to Forbes. Back to the origins, Toyota corporation learned directly from the Ford production line in Detroit. However, they did not copy the exact same method for the mass production but originated their own production system based on the continuous improvement of the production processes. The system is credited to Taiichi Ohno [3], and actually, most agile methodologies, used especially for software production nowadays, have been inspired by the TPS. The term Lean came later in the eighties, from the hand of John Krafcik. [4]

Even when the benefits of mass production are clear for certain products and markets, not every kind of production fits the paradigm. However, there is a simple and useful strategy to match the correct process with your product: the Product-Process Matrix.

Product-Process Matrix

On the top of the matrix, we have the different types of products. They can go from highly customized products with high variation between units, to highly standardized and non-variant units of the same product line. The more standardized, the easier will be to produce big quantities of products.

On the left, we have the production process. It can be a job shop, it is a jumbled flow in which specialists analyze and manufacture unique products from certain specifications. On the other hand, the continuous flow process makes the product endure different operations on the same automatized line so that all the products are manufactured with very similar characteristics. We can see here a simple trade-off between flexibility and efficiency [5] on the production.

Ford mass production line

The matrix relates processes and products, showing that the most productive combinations lay on the diagonal points. Any other pair of process-product will be wasting resources or lacking the capability to ensure the desired volume. That is why the Lean method starts with ensuring that both your product and production process are matching adequately.

However, there is much more than that. The core of Lean is based on several strategies that we will be discussing in this article and the followings. One of the most important is the reduction of waste.

The TIM WOOD waste reduction method

TIM WOOD is not any Lean guru, nor the creator of any influential company. It is actually an acronym [6] devised for you to remember the Seven Wastes identified by the Lean system:

Transportation
Inventory
Motion
Waiting
Over-processing
Overproduction
Defects

It seems to be out of the question that wastes should be eliminated, but what exactly is a waste? Lean identifies as a waste anything that is not contributing to creating value for the final product. It is, anything unproductive. It can be applied to traditional production, but also for services.

Transportation waste

We understand this waste as the unnecessary displacement of materials or persons within a process. Any movement without an output which generates value is considered a waste.

This is actually a very common waste when you must send your stock or work-in-progress products to temporary storages, or your factory layout is not optimized so that the materials and other components must be transported between different processing points. Actually, changing the current layout is one of the most common ways of eliminating transportation wastes. If your workers must endure a total of one transportation hour every day during their work time, there might be something wrong with the location of their tasks.

Of course, any necessary or unnecessary transportation involve risks: damages or delays. This will affect directly the product quality, so even when producing or acquiring parts from other countries may have benefits in terms of labor or flexibility, the transportation must be carefully considered.

Inventory

Inventory is sometimes a must for the company. The production requires raw materials, manufactured components or COTS that will be used for adding value to the finished product. In addition to that, the stock provides flexibility and adaptability to the customer requirements. If you have your finished goods in storage, you can send them as fast as possible and your sales service will be more valuable.

However, this is one of the most surprising facts with Lean: inventory is sometimes a symptom of problems in the process. We will learn it from the popular ship metaphor.

The inventory problem. The water is hiding rocks under the ship.

Imagine your company is a ship. You do not know it, but there are dangerous rocks under the sea level, so your ship will only be safe as long as the water makes you float over the rocks. It means that you are completely dependent on the water level, and the low tide may be fatal for your ship. In addition to that, you will never know if there are new rocks in the water you will sail in the future, and how deep from the sea level they are.

As you can see from the image, the water is the inventory of your company, and the rocks are problems, hidden by the water. Problems hidden by the inventory may be defective delivers, supplier problems, communication problems, or untrained workers among others. These problems should be detected and solved, which equals to the rocks being erased so that your ship can navigate with lower tides.

Motion

Motion waste is somehow related to the transportation waste. However, in this case the waste is produced by movements within a process.

It is also very affected by the production layout, the equipment used for the production and the training of the workers. Because of that, focusing on the actions required for the workers in every process and how do they use their tools is a good way to reduce motion wastes.

Waiting

One of the most common wastes for many industries. It is produced when people or machines wait for the completion of a work cycle, without investing their time in adding value to the product. For example, waiting for materials to arrive, waiting for maintenance or replacement of equipment, or waiting for a process to finish. A very common case is the software compilation time or computer simulations.

Software compilers are often source of waiting wastes.

There are also ways to reduce waiting. For example, planning the necessary waiting times to fill the idle time with other tasks, so that workers are not blocked until the end of the process. Also, machines processings should be automated so that they can perform their operations without supervision, using built-in checks and reports.

Over-Processing

I have to admit it, this is one of my favorites. People tend to think of Lean as a quality-oriented process in which everything is double checked and revised. And many people think that any quality process is always positive to the production. False.

Over-processing means investing resources in goals not required by the customers. Of course, that is unproductive.

Quality checks must help the production, not slow it. Requirements must be adjusted to the customer’s expectations, and not to the technological limitations of our industry. Any operation must be oriented to add value to the product, and adding new features is not considered a value if it is not of interest for the customer.

Overproduction

Producing is always apparently good. It is productive. However, producing too much involves strategical risks. Excessive quantities of products or stock fabricated too early will create inventory wastes. Instead of that, the production time and labor can be used for adding value to the product and the company. For example, improving the processes or reaching new customers.

The production must be limited with a clear horizon: the demands of the customer. Nothing more should be generated, nor earlier than that.

Defects

Defects on your deliverable products are one dangerous waste. It can not only affect your reputation but also produce severe delays and warranty costs.

Reworks and adjustments of the products or the equipment are unproductive processes since they are not adding real value to the final product. The source of the problem must be analyzed and solved, instead of putting efforts into repairing what should be already correct.

Conclusions

Every industry has its own characteristics, but the Lean methodology provides general guidelines to improve any production or service in terms of productivity and scalability of the business.

The identification of wastes is crucial for the later reduction of them. By eliminating wastes, the resources required for your activity will be reduced, boosting the potential growth of your company. The TIM WOOD identification help us to differentiate up to seven types of wastes, which should be particularized for every case of study.

In the next articles, we will be expanding the knowledge about Lean, explaining the three M’s, the process flow and how to maintain a continuous improvement.

Innovation is always spinning forward. Just like a Drill.

References

[1] Lean.org. (2018). lean.org — Lean Enterprise Institute | Lean Production | Lean Manufacturing | LEI | Lean Services. [online] Available at: https://www.lean.org/ [Accessed 14 Jun. 2018].

[2] Forbes.com. (2017). [online] Available at: https://www.forbes.com/pictures/591c87fc31358e03e5593101/8-toyota/#7780733e1bc6 [Accessed 14 Jun. 2018].

[3] CORPORATION., T. (n.d.). Toyota Global Site | The origin of the Toyota Production System. [online] Toyota Motor Corporation Global Website. Available at: http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/origin_of_the_toyota_production_system.html [Accessed 14 Jun. 2018].

[4] Graban, M. (2010). Who Coined the Term “Lean”? And Where is He Today? — Lean Blog. [online] Lean Blog. Available at: https://www.leanblog.org/2010/08/who-coined-the-term-lean-and-where-is-he-today/ [Accessed 14 Jun. 2018].

[5] ToughNickel. (2017). TIMWOOD: The 7 Seven Wastes of Lean Manufacturing. [online] Available at: https://toughnickel.com/business/Seven-Wastes [Accessed 14 Jun. 2018].

[6] Adler, P., Goldoftas, B. and Levine, D. (1999). Flexibility Versus Efficiency? A Case Study of Model Changeovers in the Toyota Production System. Organization Science, 10(1), pp.43–68.

[7] ToughNickel. (2017). TIMWOOD: The 7 Seven Wastes of Lean Manufacturing. [online] Available at: https://toughnickel.com/business/Seven-Wastes [Accessed 14 Jun. 2018].