Lean Lexicon

Explanation of key Lean concepts

On this page we explain the most important Lean terms. If you want a handy reference book, we recommend that you buy the book Lean Lexicon (EN) or Lean Lexicon (EN).

Copyright Lean Management institute & Lean Enterprise Institute
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The variables that influence a production system to produce value for customers. The first three are resources; the fourth is how the resources are used.

In a Lean system, the four M's stand for:

  1. Material - no defects or shortages.
  2. Machine - no malfunctions, defects or unplanned interruptions.
  3. Human - good work routines, necessary skills, punctuality and no unannounced absences.
  4. Method - standardized processes, maintenance and management.

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Five related terms beginning with an S sound that describe workplace activities related to being visually in control and Lean production. The five - Japanese - terms read: 

  1. Seiri (Separate): Separate the items you need from items you don't - tools, parts, materials, paperwork - and get rid of everything you don't need.
  2. Seiton (SCHIKKEN): Order the remaining neatly - a place for everything, and everything in its place.
  3. Seiso (CLEAN): clean and inspect.
  4. Seiketsu (STANDARDIZING): Cleanliness resulting from regular practice of the first three S's.
  5. Shitsuke (STANDING): Discipline, to perform the first four S's.


The 5S are often translated in English as Sort, Straighten, Shine, Standardize and Sustain; in Dutch they are translated as Separate, Arrange, Clean, Standardize and Maintain. Some Lean practitioners add a sixth S of Safety: establish safety procedures and introduce them in the workplace and office. 

Toyota, however, has traditionally worked with only 4S: 

1. Sifting (Seiri): Go through everything in the workplace, separating and eliminating what is not needed. 

2. Sort (Seiton): Arrange the items needed in a neat and user-friendly way. 

3. Clean Sweep (Seiso): Clean and inspect the work area, equipment and tools. 

4. Spic and span (Seiketsu): The order and cleanliness that result from disciplined execution of the first three S's. 

The last S - Shitsuke (Sustain) - is omitted because it becomes redundant within Toyota's system of daily, weekly and monthly audits to check standardized work. Whether 4, 5 or 6 S are used, the main point is that efforts are systematic and essential for Lean production. 5S is not a stand-alone program that can be pulled out separately. 

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5× making

The habit of repeatedly asking yourself the enabling question as soon as you encounter a problem. That way you get beyond the visible symptoms and get to the root causes of a problem. 

Taiichi Ohno illustrates the operation of 5×waardoor using this example about a machine that no longer works (Ohno 1988, p. 17): 

1. What caused the machine to stop? It was overcharged and the fuse blew. 

2. What caused it to be overloaded? The bearing was not lubricated well enough. 

3. What caused the bearing not to be lubricated? The lube pump was not pumping properly. 

4. What caused the lube oil pump not to pump properly? The shaft of the pump was worn and rattled. 

5. What caused the shaft to wear out? There was no filter on it, so metal shavings got into it.... 

Managers who do not ask themselves the making question several times only replace the fuse or pump, after which the error reoccurs. The number five is arbitrary. It's more about continuing to ask until you get to the root cause and can eliminate it. 

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7 forms of waste

Taiichi Ohno created a categorization of the seven main forms of waste commonly found in mass production: 

  1. Overproduction: producing more than what the next customer or process actually needs. This is the worst form of waste because it fuels the other six. 
  2. Waiting: operators who have nothing to do when machines are running, equipment is malfunctioning, needed parts are not coming in and so on.
  3. Transfer: unnecessary movement of parts and products, such as through a warehouse from one machining step to the next machining step when the second step could also take place immediately after the first step.
  4. Machining: performing unnecessary or incorrect machining steps, often due to poor design of machinery or products.
  5. Stock: having more than the minimum stocks necessary for a precisely controlled pull system.
  6. Movement: operators making movements that are burdensome or unnecessary, such as searching for parts, tools, documents and so on.
  7. Correction: inspection, repairs and outages.
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A-B control

A way of regulating the working relationships between two machines or operations to prevent overproduction and ensure balanced use of resources. 

In the illustration, both machines and the conveyor belt will start running only when three conditions are met: machine A is full, the conveyor belt contains the standard amount of work in progress (in this case, one piece), and machine B is empty. When those conditions are met, all three parts start moving. They then wait until the conditions are met again. 

A-B control
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A method first used by Toyota to get the problem, analysis, remedial actions and action plan onto one large sheet of paper (A3 size), often including visual illustrations. At Toyota, A3s are now a standard method for summarizing problem resolution, status reports and planning activities such as value stream mapping.

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ABC production analysis

Segmenting parts numbers into groups based on demand. Lean thinkers use this analysis to determine how many and which products to stock. 

A-items go fast, C-items go slow and B-items are in between. Examples of C-items are rare color combinations or constructions, special versions and replacement parts. 

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Amplification of demand

The tendency in any multi-step process that customer demand in an earlier, upstream process is more erratic (i.e., experiences more demand variation) than actual production or demand in the next, downstream process. This is also called the Forrester effect (after Jay Forrester of the Massachusetts Institute of Technology, who was the first to mathematically characterize this phenomenon in the 1950s), the pendulum effect or the whiplash effect

The two main causes of amplification of demand at the time orders are received upstream in the value stream are:

  1. the number of decision moments at which orders can be adjusted
  2. delays while orders wait to be processed and move forward (such as waiting for the weekly run of an MRP system)

The longer the delays, the greater the amplification. This is because more work is then done on the basis of forecasts (which become less accurate the further into the future the forecasts are) and more adjustments are made to orders (by system algorithms that add extra numbers for certainty). 

To minimize amplification of demand, Lean thinkers try to use levelized pull systems with frequent off-take at each stage of the value stream for production and delivery instructions. 

The graph shows a typical situation where the variation in demand on the customer side of the value stream (Alpha) is modest, about +/- 3% per month. But as orders through Beta and Gamma move upstream through the value stream, they become highly erratic; ultimately, the orders Gamma sends to its commodity supplier fluctuate by +/- 35% per month. 

Such a graph is an excellent way to make companies more aware of the degree of amplification present in a production system. If demand amplification could be fully captured, the variation in orders at any point within this value stream would be +/- 3%, a percentage that reflects the true variation in end customer demand. 

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A visual management tool that allows the status of processes in a given area to be made clear at a glance and deviations to be understood. 

An andon can indicate production status (for example, which machines are in use), an anomaly (such as machine downtime, a quality problem, machining errors, operator-induced slowdowns and material shortages), and necessary actions, such as conversions. An andon can also be used to indicate production status in terms of the number of planned units versus actual output. 

simple andon
simple andon
complex andon
Complex andon

A typical andon, which is the Japanese term for "lamp," is a board with rows of numbers corresponding to workstations or machines. A number lights up when a problem is detected. This is done either by a sensor, which automatically turns on the appropriate light, or by an operator, who pulls a cord or presses a button. The illuminated number requires a quick response from the team leader. Colored lighting on top of machines to indicate problems (red) or normal activity (green) is another type of andon. 

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Labor Linearity

A philosophy for flexible staffing of a production process (especially a cell) in which the number of operators increases or decreases with production volume. In this way, the amount of human effort required per part produced can be almost linear as the volume changes. Toyota calls this concept a "flexible labor line. 

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Automatic line stop

A means of shutting down a production process at the moment a defect or problem occurs. 

In the case of an automatic line, sensors and switches should usually be installed here that automatically stop the line as soon as a deviation is detected. In the case of a manually operated line, a stopping system is often installed at a fixed position. Operators then have the option of pulling a cord above their heads or pressing a button that stops the process at the end of a work cycle if the detected problem cannot be fixed during the cycle. 

These examples illustrate the jidoka principle, which prevents defects from moving to the next process step, and prevents the production of a series of defective items. Mass producers, on the contrary, will try to avoid stops as much as possible to achieve high utilization of their equipment, even when known defects occur repeatedly and require repair work at the end of the process. 

automatic line stop
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Basic stability

The presence of the necessary capacity, availability and flexibility in terms of the 4 M's: people, machines, materials and methods. If this basic stability is absent from a process, then improvements cannot be implemented or sustained. 

A process that possesses basic stability is capable (able to reliably produce good parts, but not yet capable of Jidoka at every step), available (can produce when needed and according to the rhythm of the branch time) and flexible (able to convert after a few items, but not yet talking about every-product-else-interval (EPEx)). 

Basic stability is necessary for effective Just-in-Time (JIT) production. This often involves an implementation cycle of basic stability - flow - branch time - pull - heijunka. The cycle is repeated as many times as necessary. 

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A way of working in the mass production of goods, in which large numbers of items (batches) are processed and - regardless of whether they are actually needed - are transferred to the next process, where they enter a queue (queue). 

batch-and-queue production
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Operating multiple machines

Directing operators to operate more than one machine in a process village setup. This requires separating human work from machine work, and it is usually facilitated by equipping the machines with jidoka and an automatic unloading function. 

Operating 1 machine (single machine handling)
Operating 1 machine (single machine handling)
Operating multiple machines (multi machine handling)
Operating multiple machines (multi machine handling)
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Processing time

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Board discussion

Meetings of improvement teams at project boards, in which they update themselves on value stream performance or progress of improvement goals and action plans for the value stream. 

These meetings identify where expected results are not being achieved and who will investigate possible causes and experiment with potential countermeasures. The meetings are usually short and take place standing. 

In healthcare, a board meeting is a quick meeting of a team about a project, shift or patient. A board meeting is held to further discuss points raised during briefings at the beginning of the work day, exchange information, make contingency plans, address concerns
, address conflicts and reallocate resources. For teams, they are tools for adapting to new circumstances. Board meetings typically last up to 30 minutes. 

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An existing production facility usually managed according to mass production guidelines. 

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Useful knowledge

The value created by Lean product development processes. Because almost all imperfect projects are the result of not having the right knowledge in the right place at the right time, Lean companies generally spend proportionately more development time creating and acquiring knowledge and less on creating hardware. 

The knowledge gained is then translated into specific applications, such as design guidelines and trade-off curves, so that it can be reused for other projects. 

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Buffer stock

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A situation in which the production lead time and order turnaround time are shorter than the time the customer is willing to wait for the product. The manufacturer produces entirely based on confirmed orders and not on forecasts. 

This is a situation that Lean thinkers seek to achieve because it allows them to avoid the amplification of demand and waste that inherently result from producing goods based on predictions of customer needs. 

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Directly adjacent locations of processing steps for a product. Parts, documents etcetera can be processed almost in continuous flow, either one at a time or in small batches, which are maintained throughout the entire sequence of processing steps. 

A U-shape is the most common cell shape because it minimizes walking distances and allows operators to perform different tasks. This is an important consideration in Lean production because the number of operators in a cell changes with changes in demand. A U-shape also makes it easier for the first and last steps in the process to be performed by the same operator, contributing to a stable work rate and even flow. 

Many companies use the terms cell and line interchangeably. 

Some people believe that, from the operator's point of view, material should always flow through the cell from right to left, because more people are right-handed and it is more efficient and natural to work from right to left. However, there are also many efficient processes that flow from left to right. It is best to assess which direction is more logical on a case-by-case basis. 

Below is an example of a U-shaped cell:

example of a u-shaped cell
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A method in which the principle of piece handling is applied in a cell where machines automatically unload parts. This allows the operator (or operators) to transfer a part directly from one machine to the next without unloading it first. This saves both time and operations. 

An example: the first machine in a machining sequence automatically unloads a part once its cycle is complete. The operator brings the part to the next machine in the sequence, which has just finished its cycle and also unloaded a part. The operator inserts the new part, starts the machine and brings the unloaded part to the next machine, which has just finished its cycle and unloaded its part. This is how it continues throughout the cell. In Japanese, the term literally means "load-loading. 

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Change agent

The leader of a Lean conversion who possesses the willpower and drive to initiate and sustain fundamental change. The change agent - who often comes from outside the organization - does not have to have detailed knowledge of Lean thinking at the beginning of the conversion.
That knowledge can also come from an Lean expert. But it is imperative that the change agent be prepared to ensure that the knowledge is applied and becomes the new way of thinking. 

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Chief engineer

The term used at Toyota for the program manager who has ultimate responsibility for the development of a product line. Previously, the Japanese term shusa was also used for this. 

The chief engineer leads a small, dedicated team that creates the product concept, develops the business case, guides the technical design of the project, manages the development process, consults with the production engineering and sales/marketing departments, and puts the product into production. 

Chief engineers often possess excellent technical skills, enabling them to lead and coordinate the technical work of engineers, designers and other developers assigned to their project. Their main task is to integrate the work of the development team in such a way as to create a cohesive and compelling vision for the product. However, chief engineers do not directly supervise most developers working on their products. Most members of the development team report to managers within their own functional units (in Toyota's case, for example, the Body Engineering, Drive Train Engineering and Purchasing departments). The organizational structure creates a natural tension between the project leader (who wants to realize his product vision) and the functional units (who know exactly what is and is not possible). 

This creative tension becomes a source of innovation; the project leaders constantly force the organization to enter new territories dictated by market needs, while the functional units try to ensure that the project leaders keep an eye on the technological capabilities of the organization. Also called entrepreneur system designer or deployment leader. 

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Help others develop the problem-solving skills needed to implement Lean tools and principles and to develop a culture of continuous performance improvement. 

In Lean management, a coach will not tell his coachees what to do; that deprives people of ownership of the problem and the opportunity to deal with it themselves. Moreover, the coach realizes that he or she rarely knows as much about the situation as the owner of the problem. 

The coach is the one who, by asking open-ended questions, makes the coachee more aware of what he or she knows and needs to know. The coach encourages the person being coached to question whether his or her ideas and impressions are based on facts. 

The following techniques are supportive of the Lean approach to coaching: 

  • Apply the scientific method of Plan-Do- Check-Act (PDCA) to a coaching cycle. 
  • Asking questions to help the coachee gain clarity about the situation surrounding a problem.
  • Assessing the coachee's problem-solving ability without taking over responsibility for solving the problem.
  • Observe and give feedback without interpreting.
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Continuous flow

Producing and moving one item (or a small and consistent batch of items) at a time through a series of processing steps performed as continuously as possible, each step making exactly what the next step requires.
Continuous flow can be achieved in a variety of ways, ranging from conveyor belts to manual cells. Also called one piece flow, single piece flow and make one, move one .

production in continuous flow
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A facility that sorts and regroups a wide variety of incoming items from different suppliers for outbound delivery to different customers, such as assembly plants, distributors or retailers. A common example of a cross-dock is a facility run by a manufacturer with several plants that wants to gather material from many suppliers in an efficient manner. When a truck with pallets of goods from suppliers arrives at one end of the dock, they are immediately unloaded and taken to different conveyors. There they are loaded onto trucks that travel to the various factories (see illustration). 

A crossdock is not a warehouse because no goods are stored there. Goods are usually loaded from inbound vehicles and moved to lanes for outbound transport in one go. If outbound vehicles leave frequently, it is possible to have the crossdock floor empty every 24 hours.

Below is an example of a crossdock:

example of a crossdock
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Cycle time

The time required to produce a part or complete a process, determined from real measurements. 

Cycle time - related terms involving time:

Processing time 

The time actually spent working on a product (design or production) and the time in which an order is actually processed. Processing time is usually only a small part of production lead time

Effective machine cycle time 

Machine cycle time plus loading and unloading time, plus the result of changeover time divided by the number of items between changeovers. For example, if a machine has a cycle time of 20 seconds, plus a combined load and unload time of 30 seconds, and a changeover time of 30 seconds divided by a minimum batch size of 30, the effective machine cycle time is 20+30+(30/30) or 1 = 51 seconds. 

Machine cycle time 

The time it takes a machine to complete all its operations for one item. 

Non-value-added time 

The time spent on activities that from the customer's perspective have a cost but do not add value. Examples of such activities are warehousing, inspection and repair work. 

Operator cycle time 

The time it takes an operator at a station to complete all his tasks before repeating them again, measured during direct observation. 

Order lead time 

Production lead time plus the time further along in the process to get the product to the customer, including delays
due to processing and taking orders into production, and delays due to customer orders exceeding production capacity. In other words, the time a customer must wait until he has the product in his hands.

CT: How often a part or product is actually completed during a process, determined from observation. Also, the amount of time it takes an operator to complete all tasks before repeating them.

WCT: The amount of time taken by those elements of the work that produce the actual transformations in the product that the customer is willing to pay for.

PDT: De hoeveelheid tijd die er nodig is om één item van begin tot eind een heel proces of een value stream te laten doorlopen. Dit is vast te stellen door te klokken hoe lang een gemarkeerd onderdeel erover doet om van het begin naar het einde te komen. Normaliter geldt: WCT < C/T < PDT

Order-to-cash time

The time that elapses between receipt of an order and when the producer receives payment from the customer. This may be shorter or longer than the order lead time, depending on whether a producer produces to order or delivers from stock, what the payment terms are, etcetera. 

Production lead time (also called throughput time )
The time it takes a product to go through an entire process or value stream from start to finish. At the factory level, this is often referred to as throughput time. This concept can also apply to the amount of time it takes to develop a product from start to finish, or the amount of time it takes for a product to get from raw material all the way to the customer. 

Value time 

The time that those work elements take that actually transform the product the customer is willing to pay for. Usually the value-creating time is shorter than the cycle time, which in turn is shorter than the production lead time

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A one-page measurement tool that includes the few critical end-of-pipe (downstream) and process (upstream) criteria related to a strategy or action plan (see illustration). A leader can use a dashboard to do the Check and Adjust of a Plan, and it provides real-time criteria for real-time feedback. Value stream maps and dashboards are tools that complement each other; using value stream maps, leaders can formulate crucial questions to be answered during the Plan phase of the Plan-Do-Check-Act (PDCA) cycle, while the questions that emerge using dashboards should be answered during the Check and Adjust phase of this cycle.

example of a dashboard
Example of a dashboard
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Collaboration between a customer and a supplier to design both a component and its manufacturing process. 

Usually the customer provides the cost and performance targets and the supplier takes care of the detailed design of the component and the manufacturing process (equipment, layout, quality etcetera). The supplier often stations an engineer at the customer's site to ensure that the component is properly matched to the final product, thus keeping the overall cost as low as possible. 

Design-in is the opposite of work-to-print; here, the supplier is simply given a complete design to develop and produce. 

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Lead time

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Meeting the customer's needs precisely with minimal resources. 

Apparent efficiency versus real efficiency 

Taiichi Ohno illustrated the common confusion between apparent efficiency and real efficiency using an example in which 10 people produce 100 units every day. If output increases to 120 units per day thanks to process improvements, there is an apparent efficiency improvement of 20 percent. But that is only the case if demand also increases by 20 percent. If demand remains stable, then the only way to improve the efficiency of the process is to figure out how to produce the same number of units with less effort and capital.

Total efficiency versus local efficiency 

Toyota also often distinguishes between total efficiency, which looks at the performance of an entire production process or value stream, and local efficiency, which refers to the performance of one point or step within a production process or value stream. Toyota emphasizes that it is more important to achieve the first type of efficiency. 

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Any product any interval (EPEx)

The frequency with which different part numbers are produced in a manufacturing process or system. 

If a machine is converted in such a sequence that each part number made with it is produced again after three days, the EPEx is three days. In general, it is good if the EPEx is as small as possible; then small quantities of each part are produced and inventories within the system are kept to a minimum. However, the EPEx of a machine depends on its changeover times and on the number of part numbers made with that machine. A machine with long changeover times (and large minimum batch sizes) that produces many different part numbers will inevitably have a large EPEx unless the changeover times or the number of different parts can be reduced. 

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Fill-up system

A pull production system in which prior (supplying) processes produce just enough to replace (i.e., replenish) the products used for succeeding (customer) processes. 

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First in, first out (FIFO).

A principle involving a precise production and transfer order: the first part to enter a process or storage location is also the first part to leave that location. (This ensures that stored parts do not become obsolete and that quality problems do not snowball into inventory.) FIFO is a necessary condition for implementing a pull system. 

The FIFO sequence is often maintained using a colored lane or physical channel that can hold a certain amount of inventory. The supplying process fills the lane from the upstream side, while the customer process sources products from the downstream side. If the lane becomes too full, the supplying process must stop producing until the customer removes some of the inventory. In this way, the FIFO lane prevents the supplying process from producing too much, even if that process is not linked to the consuming process via continuous flow or a supermarket. 

Below is an example of a FIFO street with five units in the street:

an example of a FIFO street

FIFO is one way to regulate a pull system between two separate processes when it is not practical to keep an inventory of all possible types of parts in a supermarket. This is the case, for example, when the parts are all unique, have a short shelf life or are very expensive and not needed very often. At that point, the removal of one part in a FIFO lane by the consuming process automatically leads to the production of one additional part by the supplying process. 

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Flow production

The production system that Henry Ford introduced in 1913 at his plant in Highland Park, Michigan. 

Ford wanted to drastically reduce product lead time and human effort through a series of innovations. These included: 

  • Consistently interchangeable parts so that cycle times could remain stable for each operation within a line;
  • The line itself (i.e., the assembly line);
  • Process redesign where machines were arranged in process sequence so that parts flowed quickly and smoothly from one machine to another;
  • And a system for regulating the rate of production that ensured that the production rate of parts manufacturing was in line with the rate of consumption of parts at final assembly.  
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Error-free production

Methods that help operators avoid errors caused by choosing the wrong part, omitting a part, installing a part incorrectly and so on. Also called mistake-proofing, poka-yoke and baka-yoke .

Some common examples of error-free production: 

  • Product designs with physical shapes that make it impossible to install parts the wrong way.
  • Photocells above parts containers to prevent a product from moving to the next step if the operator's hands have not broken the light to grab the necessary parts.
  • A more complex component monitoring system that also uses photocells, but has additional logic built in to ensure that the correct combination of components is selected for the specific product being assembled.

An example of a contact-based error-free manufacturing tool:

An example of a tool for error-free production
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Fulfillment flow

A supply chain that expresses the Lean principles and therefore functions smoothly and as a whole rather than as a group of linked processes. 

The Lean fulfillment flow is constantly focused on reducing lead time by eliminating all non-value-added waste) activities at the suppliers and manufacturers who collectively create a product. This is accomplished through rigorous process discipline, inventory reduction and getting it right the first time. The Lean fulfillment flow follows customer demand; all activities within the supply chain are triggered by pull. The goal of the Lean fulfillment flow is to create the highest value for the customer at the lowest total cost to stakeholders (based on Martichenko and Von Grabe 2008). 

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The Japanese term for "actual place," often used for the workplace or other place where actual value creation takes place. Also spelled genba. 

The term is often used to emphasize that real improvement requires constant attention to the shop floor, in the form of direct observation of the current conditions under which work is performed. Standardized work for a machine operator, for example, cannot be written down from behind an engineer's desk, but must be drafted and adjusted on the gemba. 

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Gemba walk

A management method of identifying the current situation by directly observing and asking questions before taking action. 

Gemba means "real place" in Japanese. Lean thinkers use the term to designate the place where value is created. Japanese companies often combine gemba with the related term "genchi genbutsu" - short for "go and see" - to emphasize the importance of empiricism. 

Because value on its way to the customer travels a horizontal path through a company, a gemba walk is effective, for example, when following one product family, product design or process from start to finish through departments, functions and organizations. This says James Womack, author of Gemba Walks and founder of the Lean Enterprise Institute. 

He recommends convening everyone involved in the process in question to take such a walk together and in the meantime exchange views on the purpose (what problem does this process solve for the customer), the process (how exactly does it work) and the people (are they involved in creating, sustaining and improving the process). Thus, a gemba walk becomes a way of understanding, leading and learning. 

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Genchi genbutsu

The practice at Toyota is to first fully understand the current situation through research and direct observation before taking action. 

For example, a decision-maker investigating a problem will go into the workplace to observe the process they are currently considering and interact with employees to get data confirmed and understand the situation; 

he will not rely purely on system data or on information from others. This habit exists at both the executive and middle management levels. In Japanese, genchi genbutsu means "going to see with one's own eyes," but the literal translation is "actual place and actual thing. 

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Standardized work

Establishing precise procedures for the work of each operator in a production process, based on three elements: 

  1. Branch time, the speed at which products must be made within a process to meet customer demand.
  2. The exact work sequence in which an operator performs tasks within the branch time.
  3. The standard inventory, including units in machines, needed to keep the process running smoothly.

Once standardized work is established and put into practice at workstations, the goal is to make continuous improvements through kaizen. Benefits of standardized work include documenting the current process for all shifts, reducing variability within processes, making it easier to train new operators, and reducing injuries and strain. In addition, standardized work provides a basis for improvement activities. 

Three basic forms are usually used in creating standardized work. By engineers and first-line supervisors, these are used to design the process, and by operators to make improvements to their own work. 

1. Process Capacity Sheet. 

This form is used to calculate the capacity of each machine in a linked set of processes (often a cell) to confirm actual capacity and identify and eliminate bottlenecks. It determines factors such as machine cycle time, turnover frequency and times for manual operations. 

2. Standardized Work Combination Table. 

This form contains the times for manual operations, walking and machine operations for each operator in a series of operations. It contains more detail and is a more precise process design tool than the Operator Balance Chart. The completed chart shows the interactions between operators and machines in a process and allows operators' work content to be recalculated as branch times increase or decrease over time. 

process capacity sheet
Process Capacity Sheet
standardized work combination table
Standardized Work Combination Table

3. Standardized Work Chart. 

This diagram includes the movements of the operators and the location of the material relative to the machine, and the overall process layout. It should show the three elements of standardized work: the current task time (and cycle time) for the task, the work sequence, and the amount of standard stock of work in progress needed to ensure smooth operation. Diagrams for standardized work often hang at workstations as a tool for visual management and kaizen. They are modified and updated as soon as workplace conditions change or improve. 

These forms for standardized work are often used in conjunction with two other forms: the Work Standards Sheet and the Job Instructions Sheet

standardized work chart
Standardized Work Chart

The Work Standards Sheet means various documents that prescribe how the product is to be made according to the design specifications. Often the Work Standards Sheet describes exactly what conditions and requirements must be met to ensure the quality of the product. 

The Job Instruction Sheet - also called a Job Breakdown Sheet or a Job Element Sheet - is used to train new operators. This sheet describes the steps of the job, specifying all the special tricks needed to perform the job safely, as qualitatively as possible and as efficiently as possible. 

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Isolated islands

A suboptimal workflow that prevents people from helping each other; they are isolated islands. The term can also refer to processes outside a cell or assembly line that run according to their own independent rhythms rather than following customer demand. Such islands usually involve a lot of waste, such as in the form of too much inventory. 

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A new production facility where it is possible to introduce Lean working methods in a new culture unencumbered by the inertia of the past. 

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Group leaders

At Toyota, these are the frontline supervisors who usually lead a group of four teams or 20 employees. In Japanese, they are called kumicho

Group leaders' duties include planning production, reporting results, coordinating improvement activities, scheduling days off and manpower, developing team members, testing process changes, and auditing team leaders daily to make sure they in turn have performed their standard work audits of team members. They also conduct weekly 5S audits of their teams' work areas. 

An example of the place of group leaders within a typical responsibility chain:

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Work performed by a machine or person on an item. 

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Way of making continuous improvements by looking back and thinking about how to improve a process or personal shortcoming; the Japanese term for "self-reflection. 

In the Toyota Production System, hansei or reflection meetings are usually held at key milestones and at the end of a project. They are used to identify problems, formulate countermeasures and communicate improvements to the rest of the organization so that the same mistakes are not made again. Thus, along with kaizen and standardized work, hansei is a crucial part of an organization's learning process. It is sometimes compared to the Check phase of the Plan-Do-Check-Act improvement cycle. 

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Leveling the type and amount of production over a fixed period of time, allowing production to efficiently meet customer requirements. 

Batch formation is avoided and inventories, capital costs, manpower and production lead time are minimized throughout the value stream. 

When leveling the quantity of production, imagine that a producer routinely receives orders for 500 items per week, but with considerable variation each day: on Monday an order for 200 items arrives, on Tuesday one for 100, on Wednesday one for 50, on Thursday one for 100 and on Friday one for 

50. To level out production, the producer could ensure that there is a small buffer of finished goods ready for delivery. That way he can adequately respond to Monday's high demand and keep daily production at 100 throughout the week. By keeping a small amount of finished goods in stock at the very end of the value stream, this producer can level the demand for his plant and his suppliers, making more efficient use of his assets throughout the value stream and responding appropriately to customer demand. 

When leveling the type of product (see also illustration page 35), imagine that a company making T-shirts offers models A, B, C and D to the public and that the weekly demand for T-shirts is five of model A, three of model B and two each of models C and D. A mass producer, trying to achieve economies of scale and minimize changeovers, would probably produce these products in the weekly order AAAAABABBBCCDD

A Lean manufacturer, realizing what happens when it sends large, infrequent orders to suppliers, would strive to incorporate the repeating sequence AABCDAABCDAB and make matching improvements to the production system, such as reduction of changeover times. Depending on changing customer orders, this sequence would be adjusted periodically. 

In Japanese, the word heijunka roughly means 'equalization'. 

heijunka by product type
Heijunka by product type. Note: This example does not relate to leveling production quantity.
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Heijunka box

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Reusable knowledge

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Information Flow

The flow of information about customer requirements upstream to where that information is needed to drive each operation.

In mass production companies, information flow usually takes parallel forms: forecasts flowing back from company to company and from plant to plant, schedules flowing back from company to company and from plant to plant, delivery orders by the day (or by the week or by the hour) in which each facility is told
what is to be produced on the next delivery, and accelerated information by which forecasts, schedules and delivery orders are withdrawn to adjust the production system to changing conditions. 

Lean companies are trying to simplify their information flows by creating a single production planning point and setting up pull loops for information. These run upstream in the value stream, that is, always to the previous production point and from that point to the production point before it - all the way to the first production point. 

The illustrations show the different routes for information flows in mass production compared with the simpler flows in Lean production. Lean producers, by the way, still provide forecasts because companies and facilities further away from the customer need advance information to plan capacity, schedule their staff, calculate branch times, account for seasonal variations, introduce new models and so on. However, the daily flow of production information can be compressed into simple pull loops. 

An example of a current state information flow in mass production:

information flow

An example of a future state information flow at Lean production:

information flow
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Built-in quality

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In mass production: control of product quality by specialized inspectors from outside the production process. 

Lean producers place the responsibility for quality assurance with operators and incorporate means of error-free production into the production process. This allows them to detect problems at the source. The process is stopped to identify the cause of an error and to take corrective action so that defects do not have to be noticed and repaired only during later processes. 

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Giving machines and operators the ability to signal when an abnormal situation occurs and stop work immediately. This makes it possible to build quality into any process and separate the tasks of people and machines, allowing for more efficient work. 

Jidoka is one of the two pillars of the Toyota Production System; the other pillar is Just-in-Time. 

Jidoka draws attention to the causes of problems; work is stopped immediately when a problem first occurs. This leads to improvements in processes by eliminating the root causes of defects. 

Jidoka is also sometimes called autonomization , automation with human intelligence. In effect, equipment gains the ability to autonomously distinguish good parts from bad, without the need for an operator to oversee it. This eliminates the need for operators to constantly monitor machines, resulting in great productivity gains by allowing one operator to operate several machines. This is also known as multiprocess handling

The term jidoka dates back to the early 20th century, when Sakichi Toyoda, the founder of the Toyota Group, invented a loom that automatically stopped when the thread broke. Previously, looms produced mountains of defective fabric after a thread broke, so each machine had to be watched by an operator. Thanks to Toyoda's innovation, only one operator was needed to monitor several machines. In Japanese, jidoka is a Toyota-created term pronounced exactly the same (and written almost the same in kanji) as the Japanese term for automation, but with the added connotations of humanity and value creation. 

The evolution to jidoka:

Manually load and watch while machine does its work
Watching while machine does its work
Machine that monitors itself
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A practical workshop where you learn by doing. The term literally means "self-learning" in Japanese. 

The length of jishuken can range from one week to several months. Toyota's Operations Management Consulting Division established the workshop as a means to develop skills and improve level of TPS in a given department. This often involved supplier operational work projects lasting three to four months. Outside Toyota, jishuken came into vogue in the form of the five-day kaizen workshop. However long a jishuken lasts, its purpose is to learn by doing and realize an improvement in work. 

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Just-in-Time (JIT) production

A production system that makes and delivers exactly what is needed, exactly when it is needed, and exactly in the quantity needed. Just-in-Time and jidoka are the two pillars of the Toyota Production System. Just-in-Time is founded on heijunka, and it consists of three elements: the pull system, branch time and continuous flow. 

Just-in-Time seeks the total elimination of all waste to achieve the best possible quality, the lowest possible cost, the minimum use of resources and the shortest possible production and delivery times. Although the principle is simple, it takes discipline to implement it effectively. 

The idea for Just-in-Time dates back to the 1930s and came from Kiichiro Toyoda, the founder of the Toyota Motor Corporation. Taiichi Ohno said his first attempts to put Just-in-Time into practice were from 1949-1950, when he was manager of the machine shop at Toyota's main plant.

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Radical, revolutionary improvement of a value stream to quickly create more value with less waste; sometimes called kakushin. 

An example of kaikaku is moving equipment during a weekend so that products that were previously manufactured and assembled in batches in isolated process dumps are henceforth made in single-piece flow in a compact cell. Another example is rapidly switching from stationary to moving assembly for a large product such as a commercial passenger jet. Also called breakthrough kaizen, to distinguish it from more gradual, step-by-step kaizen. 

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Continuous improvement of an entire value stream or individual process to create more value with less waste. 

There are two levels of kaizen: 

1. System or flow kaizen, which focuses on the entire value stream. This is kaizen for management. 

2. Process kaizen, which focuses on individual processes. This is kaizen for work teams and team leaders. 

Value stream mapping is an excellent tool for identifying a complete value stream and determining where flow and process cues are in place.

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Kaizen promotion office

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Kaizen workshop

A common example is the creation of a continuous flow cell in one week. In this process, a new cell is analyzed, implemented, tested and standardized by a kaizen team that includes experts from staff and consultants as well as operators and line managers. Participants are first introduced to the principles of continuous flow and then go on the gemba to observe the real situation and design the cell. Then the machines are moved and the new cell is tested. After improvements are made, the process is standardized and the kaizen team reports to senior management. 

kaizen workshop
A five-day Kaizen workshop
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Kamishibai plate

A mechanism for visual in-control for performing audits within a process. A kamishibai board makes normal and abnormal conditions clear and quickly identifiable. In addition, it serves to focus management's attention on the gemba. 

The kamishibai board makes the Lean-concept genchi genbutsu - or "go and see" what is really going on - part of management's standardized work. Leaders can read on it when to visit a process and what to audit. The board shows whether or not the necessary audits have taken place, along with the results of those audits and, where appropriate, notes on anomalies and countermeasures. The goal is to take immediate action as soon as something anomalous is detected. 

A triangle next to an activity on the board usually means that a deviation has been signaled and rectified. A cross means that adjustments are needed to rectify an identified deviation from standard. A circle indicates that the correct quality and quantity were produced and the correct standardized work was performed. An empty frame means that no team support has taken place. 

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A kanban is a signaling system that provides authorization and instructions for the production or off-take (transport) of items in a pull system. The term is Japanese for "signal" or "sign. 

Kanban cards are the best-known and most widely used example of such a system. Often they are strips of cardboard, sometimes tucked into clear plastic sleeves, on which information such as the part name and number, external supplier or internal supply process, packaging quantity, storage address and consumer process address is printed. Sometimes the card also has a bar code printed on it for tracking purposes or automatic billing. 

Besides cards, kanban can also be triangular metal plates, colored balls, electronic signs or any other tool that can convey the needed information and prevent erroneous instructions. 

Regardless of form, kanban have two functions in a production process: they instruct processes to make products and they instruct material handlers to move products. The first use is called production kanban (or make-kanban: make- kanban), and the second is called decrease-kanban (or move-kanban: move-kanban). 

Production kanban tell an upstream process what type and quantity of products to make for a downstream process in the value stream. In the simplest case, a kanban chart corresponds to one container of parts, which an upstream process will make for the supermarket before the next downstream process. In the case of large batches - such as when using a forming press with very short cycle times and long changeover times - a signal kanban is used to initiate production when a minimum number of containers is reached. Signal-kanban are often triangular in shape and are therefore often called triangle-kanban

Although a triangle canban is standardly used in Lean production to plan a batch production process, other types of signal canban also exist. Other basic ways to regulate batch operations include pattern production and batch production (lot making). 

In pattern production , a fixed sequence or production pattern is created that is repeated continuously. However, the actual number produced each time in the cycle may be variable and can vary according to the customer's needs. For example, during an eight-hour cycle, parts A through F are always produced. (The complexity of the conversions may determine this sequence). 

The amount of stock in the central market depends on the length of the pattern replenishment cycle; a one-day cycle requires one day's stock in the market, a one-week cycle requires one week's stock. The main disadvantage of pattern production is that the sequence is fixed; you cannot switch from the production of part D to the production of part F. 

In the case of batch production, one creates a batch board, which contains a physical kanban for each container of parts in the system (see illustration below). When material is consumed from the market, the kanban are temporarily removed and returned to the manufacturing process. They appear on a board that shows all the part numbers and has a shaded space reserved for each of the kanban cards in the system.

An example of a batch boardL

batch board

A returned kanban card hung on the shaded space on the board indicates that stock in the market has been consumed; cards not yet returned represent stock still in the market. Once a predefined trigger moment is reached, the production operator knows to start producing a particular product to replenish the material in the market. 

Using a batch board returns information to the production process more often. Such a board indicates what has been consumed and works with smaller quantities than the signal canban. It also provides a visual representation of inventory consumption and draws attention to problems in the central market. However, sometimes many kanban cards are needed, and all those cards must be returned in a timely and faithful manner or the board will not be accurate. Planners and supervisors must have the discipline not to accumulate inventory before it is needed. 

Purchase canban authorize the transfer of parts to a process downstream in the value stream. They often take two forms: interprocess-kanban (for off-take from an internal process) and supplier-kanban (for off-take from an external supplier). 

In their original application around Toyota City, the cards were used for both purposes. However, because Lean production is often staggered, supplier canban for companies at greater distances are now often electronic. 

An example of a production and off-take canban:

Production and off-take kanban must work together to create a pull system: an operator in a downstream process removes the off-take kanban as soon as he uses the first item from a container. This kanban goes into a collection box located near him, and is picked up by a material handler. When the material handler returns to the upstream supermarket, the takeout kanban is attached to a new container of parts, which is then delivered to the downstream process.

When this container was removed from the supermarket, the production kanban on the container was removed and placed in another collection box. The material handler supplying the upstream process gives the kanban to that process. By doing so, he signals that a new container of parts is to be produced. As long as no parts are produced or moved when no kanban appears, a true pull system is maintained. 

There are six rules for effective use of kanban: 

  1. Customer processes order exactly the number of goods indicated on the kanban.
  2. Delivery processes produce exactly the number of goods and in the exact order specified on the kanban.
  3. No item is created or transported without a kanban.
  4. A kanban is always attached to all parts and materials.
  5. Defective parts and incorrect quantities are never sent to the next process.
  6. The number of kanban is carefully reduced to reduce inventories and expose problems.

An example of a signal and decline canban:

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A philosophy for designing and procuring machinery in which small amounts of capacity can be added or taken away as changes in demand occur. Thus, the capital required per part produced can be kept nearly constant (linear). 

In purchasing capacity for an annual output of 100,000 units, a producer may purchase a set of machines, each with an annual capacity of 100,000 units, and place them together in one continuous flow production line (first alternative). But the producer can also purchase ten sets of smaller machines that it installs in ten cells, with each cell having an annual capacity of 10,000 units (second alternative). 

If the forecast of 100,000 units proved exactly correct, one line with a capacity of 100,000 units would be the most capital-efficient solution. But if actual demand differs, the second alternative offers clear advantages: 

  • When demand exceeds 100,000 units, the producer could either add a second line with a capacity of 100,000 units or exactly the number of cells needed, each with a capacity of 10,000 units, to meet the greater demand. By adding cells, the capital investment per unit of output would vary very little as demand changes; it would be almost linear.
  • When actual demand is less than 100,000 units, a bigger problem arises. In the case of the first alternative, it is almost impossible to reduce capacity and maintain efficiency at current levels. The second alternative, however, allows the producer to remove capacity by closing as many cells as needed.
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A kata is originally a fundamental movement within Japanese martial arts, but can also refer to any fundamental form, routine or pattern of behavior. Recognizable patterns of behavior and clear expectations make deviations (problems) easier to recognize and also act as a basis for improvement and for formulating and achieving higher standards. 

Within Lean management, kata refers to two related patterns of behavior: improvement kata and coaching kata

The improvement kata is a repetitive, four-step routine that allows an organization to improve and adapt. This makes continuous improvement through the scientific problem-solving method of Plan, Do, Check and Act (PDCA) a daily habit. The four steps are: 

  1. Establishing a vision or direction
  2. Gaining insight into the current situation
  3. Defining the following target state
  4. Make progress toward your objective (the plan or "P" defined in the first three steps) through rapid, repetitive PDCA cycles that uncover and remove obstacles.

The coaching kata is the routine by which Lean leaders and managers teach the improvement kata to everyone in the organization. The teacher or coach gives the learner procedural guidance - not solutions - that enable the learner to successfully overcome obstacles. (After Rother, 2010, and Shook, 2008.)

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Quality Circle

A small group of employees and their team leader who together identify and analyze problems in their work area and propose solutions. 

Unlike at other companies, especially in the West, at Toyota these kinds of quality circles are integrated into the overarching Total Quality Control system and into the way the shop floor is organized. Toyota quality circles meet two to three times a month for thirty to sixty minutes. 

Management expert Peter Drucker noted that quality circles were widely used in the United States during World War II. They achieved their greatest success in postwar Japan. During the quality movement of the 1970s and 1980s, they were again imported by the United States. Unfortunately, quality circles in American companies were often not embedded in an overall commitment to continuous improvement. These isolated circles disappeared when the craze passed its peak in the late 1980s. 

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LAMDA cycle (Look, Ask, Model, Discuss, Act)

The learning cycle of Lean product and process development that consists of five classes of development activities: 

  1. Look: observe firsthand, or in other words, go see for yourself.
  2. Ask: ask in-depth questions to get to the root of a problem, such as repeatedly asking "why?" questions to identify potential root causes.
  3. Model: predict expected performance using technical analysis, simulations or prototypes.
  4. Discuss: talk about your observations, models and hypotheses with colleagues, mentors and developers of related systems.
  5. Act: test your acquired insights experimentally or otherwise take action to validate what you have learned.

LAMDA aims to foster continuous real learning and deep understanding within the development organization. (Based on Ward and Sobek 2014, page 8.) 

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Lean Thinking and Practice

A five-step thought process that Womack and Jones introduced in 1996 to guide managers through a Lean transformation. The five principles are: 

  1. Specify value for each product family from the end consumer's point of view.
  2. For each product family, identify all steps in the value stream. Where possible, eliminate steps that do not create value.
  3. Ensure that the value-creating steps are performed in rapid succession so that the product finds its way to the customer without hiccups.
  4. Once this flow is established, let customers engage value through the pull principle in the next upstream activity.
  5. Once the value has been specified, the value streams identified, the redundant steps removed and flow and pull introduced, repeat this process over and over again until a state of perfection is reached in which perfect value is created without waste.

(Based on Womack and Jones 2010/2018, pg. 12.) 

In 2007, Womack and Jones simplified the five steps to Purpose, Process and People: 

Purpose: the primary purpose of any organization and the first step in any Lean thought process is the correct specification of the value the customer is looking for in order to solve the customer's problems in a cost-effective manner so that the organization can operate successfully. 

Process: once the goal is specified, one focuses on the process (the value stream) used to achieve this goal. Generally, this is the combined result of three processes: product and process development, execution from order to delivery, and support for the product and the customer during the period the product is used. These primary processes are enabled by a variety of secondary, support processes within the organization and upstream. 

The ideal process is one in which each step (action): 

  • Value is: the customer is willing to pay for the step because it provides value and would protest if the step were omitted;
  • Capable is: he delivers a good result every time;
  • Available is: it can be run at any time it is needed;
  • Adequate is: he possesses the ability to maintain continuous flow in production;
  • Flexible: it can run a series of different products within a product family through a process without batching and delays.

In addition, in the ideal process, the steps are linked by:

  • Flow: the goods or services move immediately from one step to the next without interruptions;
  • Pull: when continuous flow is not possible, each step downstream gets exactly what it needs from the previous step upstream;
  • Leveling: from a pacemaker point, level the execution of the process while continuing to meet customer needs. 

People: once the primary and supporting processes needed to create value for the customer have been identified, someone must be made responsible for each value stream. This value stream manager must coordinate the efforts of everyone involved in a value stream to steadily lead it to the customer and, in the meantime, continually drive performance to the next level. This requires the following:

  • A master plan for the enterprise, often called strategy deployment;
  • Frequent improvement cycles for each process, often conducted using A3 analyses that include value stream maps;
  • Standard work with standard management for every step in every process.
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Lean consumption

The process that complements Lean production. Lean consumption requires streamlining all the activities that must be undertaken to acquire goods and services in such a way that customers receive exactly what they want, when and where they want it, with a minimal investment of time and effort. 

Companies can streamline consumption by following a six-step thought process analogous to the thought process for Lean production: 

Principles of Lean consumption: 

  1. Completely solve the customer's problem by ensuring that all goods and services work, as well as work together.
  2. Don't waste the customer's time.
  3. Deliver exactly what the customer wants.
  4. Deliver what is requested where it is requested.
  5. Deliver what is requested where it is requested at the time it is requested.
  6. Constantly combine solutions with each other to save the customer as much time and effort as possible (bundle a full range of options from a host of organizations).

To apply these concepts, producers and suppliers of goods and services must view consumption not as an isolated decision to buy a specific product, but as a continuous process, a series of activities that combine many goods and services over an extended period of time to solve a problem. 

For example, when a customer buys a computer, his or her goal is not to own a computer but to solve problems such as accessing, processing, storing and transferring information. Buying the computer is not a one-time transaction, but a process of orienting, purchasing, integrating, maintaining, upgrading and finally disposing of the computer. Most likely, the same process is followed for software and peripherals. 

Lean consumption requires a fundamental shift in the way retailers, service providers, manufacturers and suppliers think about the relationship between delivery and consumption, and about the role consumers play in these processes. It also requires collaboration between consumers and suppliers to minimize overall costs and wasted time. 

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Lean consumption and supply maps

A consumption map is a simple diagram of all the steps customers must take to acquire certain goods and services. A delivery map is a similar diagram that incorporates all the steps producers and service companies must take to deliver these goods and services to customers.

In both illustrations, boxes representing individual actions are shown from left to right in process order. The size of each box corresponds to the amount of time required to perform the corresponding action; the shaded parts of the boxes represent the portion of that time that adds value within each step. Other important information, such as total time, value-added time, and at once good, is shown in a box for the total consumption and delivery process. 

To complete the process, the two maps are displayed in parallel - one above the other. In this way, a complete consumption/delivery cycle is depicted. The combined maps can provide insight into the entire process for suppliers so that they can eliminate wasteful activities within the consumption and delivery cycle and develop a win- win collaboration by creating a Leaner version of their consumption and delivery maps. 

An example of a car repair before Lean:

lean consumption and delivery folder

An example of a car repair after Lean:

lean consumption and delivery folder
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Lean delivery

A term that includes Lean production, plus all the other steps required to deliver the desired value from producer to customer. This often involves a number of different organizations. 

Most supply value streams, whether for manufactured goods or for services such as health care or travel, are even more complicated than consumption streams. They take up a lot of suppliers' time and resources and harmonize very poorly with consumption streams, causing customer frustration and a lot of waste. 

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Lean logistics

A pull system with frequent replenishment in small quantities set up between each of the companies and facilities within a value stream. 

Suppose Company A (a retailer) sells directly to the end customer and is supplied by Company B (a producer) through large, irregular deliveries based on a sales forecast. If they applied the rules of Lean logistics, the retailer would have to create a pull signal; the moment small numbers of goods were sold, the producer would be instructed to replenish exactly the number sold. The producer, in turn, should instruct its suppliers to quickly replenish exactly the quantity of goods it has delivered to the retailer, and so the process continues until the beginning of the value stream. 

Lean logistics requires a pull signal (EDI, kanban, web signaling and so on), a leveling tool for each stage of the value stream (heijunka), frequent delivery in small quantities (milk runs linking the retailer to many producers and the producer to many suppliers), and in many cases several cross docks for consolidation of loads within the replenishment loops. 

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Lean management

Lean management is a set of techniques for developing people to understand and take ownership of their own problems, and to use resources to achieve the organization's goals. Lean management involves everyone in an organization in the design of processes to continuously solve problems, improve performance and achieve goals using the least amount of resources possible. 

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Lean management accounting

Also called Lean accounting. Lean management accounting is a restructuring of management accounting and control mechanisms to achieve accurate reporting of the results of improvements that are continually being realized during a Lean transformation. Because most existing accounting systems were developed in the early twentieth century to support large-batch production, these traditional systems often send signals that encourage batch processing and compartmentalized decision-making. 

Lean management accounting has the following objectives: 

  • Provide accurate, timely and understandable information to
    drive the Lean transformation organization-wide, and to support decision making that leads to increased customer value, growth, profitability and cash flow.
  • Support the Lean culture by providing information that is relevant, actionable and enables continuous improvement at every level of the organization.
  • Present financial reporting that fully
    complies with generally accepted accounting principles (such as IFRS), external reporting regulations and internal reporting requirements.
  • Use Lean to purge accounting processes of waste while maintaining tight financial grip.

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Lean company

An ongoing agreement among all companies that make up the value stream for a product family to correctly specify value from the end customer's point of view, eliminate wasteful actions from the value stream, and ensure that those actions that do create value occur in continuous flow according to the customer's pull. Once this task is completed, the collaborating companies must analyze the results and restart the process as long as the product family persists. A method to perform the necessary analysis is described in Womack and Jones 2013. 

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Lean product and process development

A business system aimed at eliminating waste within product and process development by generating and applying actionable knowledge. It is founded on four core concepts: 

  1. Build teams of responsible experts. Organize them around product and process technologies that are central to the organization's competitive advantage. These teams develop actionable knowledge about their respective areas of expertise and produce people who can apply that knowledge, generate new knowledge, and communicate that knowledge effectively to multidisciplinary team members. See also: actionable knowledge.
  2. Support entrepreneur system designers. Put the leadership of development projects in the hands of technically capable and visionary people with an entrepreneurial spirit. They provide integrative knowledge that, combined with the knowledge of expert teams, can lead to innovation of new products and production processes. See also: chief engineer.
  3. Work with set-based concurrent engineering. Avoid choosing a design solution too early by (a) examining several alternatives at once, (b) proactively evaluating the alternatives by jettisoning weak ideas and improving the weak aspects of otherwise strong ideas, (c) applying knowledge from trade-off curves and design guidelines, and (d) not actually choosing a solution or solution path until it is proven feasible.
  4. Ensure cadence, flow and pull: apply principles of Lean production for even introduction of new projects into the development organization, to eliminate waste in information flows and to initiate development activities that meet the needs of specific projects. (Based on Ward and Sobek 2014.) 
lean product and process development
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Lean production

A business system for organizing and managing product development, operational work, suppliers and customer relationships in which, compared to the former mass production system, it takes less human effort, less space, less capital, less material and less time to make products with fewer defects and exactly according to customer requirements. 

Lean production was introduced by Toyota after World War II. Since 1990, Lean production compared to mass production systems typically cost half the human effort, half the production space and capital investment for a given amount of capacity, and a fraction of the development time and lead time, while making a wider variety of products, in smaller quantities and with far fewer defects. (Womack, Jones and Roos 1990, pg. 13.)
The term was first used by John Krafcik, a research assistant at the Massachusetts Institute of Technology. He introduced it in the late 1980s for the International Motor Vehicle Program. 

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Lean promotion office

A resource team for a Lean transformation, often formed from pre-existing groups in industrial engineering, maintenance, facility management and quality improvement. 

This team provides value-stream managers with technical assistance in: 

  • Training in Lean methods
  • Organizing kaizen workshops
  • Measuring Progress
    In addition to people from traditional functions, Lean improvement teams often consist of employees released from previous transformation initiatives who are available to help with kaizen activities.
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Lean startup

A methodology in which ideas for launching companies and products are viewed as hypotheses to be validated by experimenting with them in the marketplace. According to leanstartup.com, the term was first used in September 2008, in a blog post by Eric Ries. In 2011, Ries wrote The Lean Startup

The approach is based on a learning process of rapid, sequential product releases that generate customer feedback. The goal is to increase the likelihood of success without having to use excessive external funding or expensive product launches. The learning process begins with the development of a "minimum viable product"(MVP), which has only those features necessary to make the product useful to early customers. Feedback from these early customers is used to make the decision to either continue on the path taken (for the product or service) or to move to alternative, more valuable uses of the basic idea or technology. This avoids wasting time and resources on developing products that customers do not want, while providing information quickly and with minimal investment about what they do want. 

The philosophies behind the Lean startup and Lean management both emphasize eliminating activities that do not create value for customers. 

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Machine cycle time

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Mass Production

A business system developed at the beginning of the twentieth century to organize and manage product development, production operations, purchasing and customer relations. Its characteristics are: 

  • The design process consists of sequential rather than simultaneous steps.
  • The production process has a rigid hierarchy with functions divided into thinking/planning and doing.
  • The product is brought to the process rather than the other way around.
  • Suppliers work on the basis of their quotes after being selected on unit prices rather than total cost to customer.
  • Materials are delivered infrequently and in large batches.
  • Information is managed through systems that come from above the organization. They dictate each production step as to what should happen next and "push" products to the next process downstream in the value stream.
  • Customers often face push sales because of the need to meet quotas and clear out inventory that was produced based on faulty forecasts.

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Material Flow

The movement of physical items throughout the value stream.
In mass production, products move in large batches to centralized processes. They are propelled at the direction of an overall planning system (see illustration below). In Lean production, process steps for different product families are bundled together in a fixed process sequence whenever possible. This allows small quantities of product to flow directly from step to step as soon as a pull signal is received from the next process downstream and from the end customer.

material flow

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Material Handling

Moving necessary materials through a production process within a facility. 

In a Lean production system, material handling is much more than the delivery of materials. A Lean material handling system can act as the primary means of relaying production instructions. Also, a well-designed system can improve the efficiency of production workers by eliminating wasteful activities such as fetching materials, struggling with items and reaching for materials. 

Fixed times, variable amounts 

In this type of handling system, a material handler travels a standard route through a plant at precisely defined intervals, say every twenty minutes. The amount of material that passes through it each day may vary, but the time interval is fixed. During his predetermined, standard route, the material handler picks up kanban cards showing which materials are to be delivered. He then delivers these materials to production locations. This system is often used in conjunction with a leveling box. The collection intervals in the columns of the box correspond to the time required to complete the standard material handling route. This type of system is often used in assembly operations where a large number of components must be delivered to many different points. It is also called mizusumashi or waterspider conveyance

Fixed quantities at variable times 

This type of handling system uses signals from downstream locations to deliver exactly the materials needed at the right time and in the right quantities. The material handler receives a signal to retrieve material from a prior process when a trigger moment or a predetermined inventory level is reached. Because the material handler picks up a standard quantity of material from the upstream process (such as one tray, one pallet or one load board), the quantity of material is fixed but the timing of the transfer depends on the need. This type of system is often used in factories with storage areas for materials produced in batches because of long changeover times. When the cell or machine has used all the material in the storage area, the material handler receives the signal to replenish the consumed quantity from upstream processes. 

This type of system is often called a call system or a call-parts system

It is less common but possible to use waterspin transport in conjunction with fixed quantities at variable times. In this construction, the material handler moves crisscross from one production process to another, picking up fixed numbers of materials from different processes on a route that changes with time. 

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Milk run

A method of accelerating the flow of materials between different plants by scheduling vehicle routes so that they pick up and deliver materials at many different locations. By having vehicles make frequent stops to pick up and deliver materials at a number of different locations rather than waiting until an entire car is full for direct delivery from one plant to another, it is possible to reduce inventories and response times within a value stream. Milk runs between facilities are similar in concept to material handling routes within facilities (see illustration). 

milk run
milk run
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Any design, schedule or production technology that requires a lot of machinery and long changeover times and requires designs, orders or products to be brought to the technology and wait in a line for machining. 

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Muda, mura, muri

Three terms often used together in the Toyota Production System (also called the three M's) that together describe wasteful operations that should be eliminated. 


Any activity that consumes resources without creating value for the customer. Within this general category, it is useful to distinguish between type one muda, activities that cannot be eliminated immediately, and type two muda, activities that can be quickly eliminated using kaizen. 

An example of type one muda is repair work after defective treatment in a paint booth, which is necessary to obtain a finished product acceptable to the customer. 

Because manufacturers have been searching in vain for decades to find an adequate paint process for fine finishing, this type of muda is unlikely to be eliminated soon. 

Examples of type two muda include multiple movements of products and supplies between steps in a production and assembly process. These steps can be quickly eliminated using a kaizen workshop by housing production equipment and operators in a smooth-running cell. 


Irregularities in an operation, such as erratic scheduling caused not by end consumer demand but by the production system, or an irregular pace of work in an operation that causes operators to rush first and then wait. Irregularities can often be eliminated by managers if they level out and pay careful attention to the pace of work. 


Overloading equipment or operators by making them work faster or harder for an extended period of time than equipment design and/or decent personnel management allows. 

Muda, mura and muri together 

A simple example shows how muda, mura and muri often occur in combination, so that the elimination of one often leads to the elimination of the other two as well. 

Suppose a company needs to transport six tons of material to its customer. One option is to load all six tons onto one truck and make one trip. However, this would be muri because the truck (which is calculated to carry a maximum of three tons) would then be overloaded. This creates the risk of damage and breakdowns, which in turn would lead to muda and mura. 

A second option is to make two trips, one with four tons and the other with two. This would be mura, as having the material arrive at the customer in uneven numbers would lead to congestion at the receiving dock, followed by not enough work. Moreover, this option would lead to muri, due to the truck still being overloaded on one of the trips, and also to muda; the irregular pace of work would be wasteful, due to the customer's employees having to wait. 

A third option is to load two tons on the truck and make three trips. That might not be mura and muri but it would be muda, because the truck would be only partially full each trip. 

The only way to eliminate muda, mura and muri is to load three tons on the truck (the specified capacity) and make two trips. 

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Gain prior acceptance and preliminary approval for a proposal by first evaluating the idea and then the plan with management and stakeholders. This way, you get input, can anticipate resistance and can align the proposed change with other perspectives and priorities in the organization. 

Formal approval follows in a meeting based on the final version vn the proposal. Nemawashi literally means "to prepare the ground for planting. 

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Non-value-creating time

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Leveling sales

An attitude toward customers that assumes that demand is relatively stable for many products but is often disrupted by production and sales systems. 

One example: influenced by monthly and quarterly bonuses for sales personnel, orders often accumulate at the end of the reporting period. And promotional activities, such as service specials at car dealerships, often create peaks and troughs in demand for service parts that have nothing to do with customers' actual requirements. Finally, producing large batches of goods far in advance based on forecasts almost always leads to surpluses of some goods, which must then be sold as special offers that "create" temporary demand. 

In the case of leveling sales, artificial sales peaks -- what Toyota calls "created demand" -- are eliminated by adjusting incentives for sales personnel, eliminating offers, producing in small batches that replenish only what customers have just purchased, and establishing long-term relationships with customers so that future demand can be better predicted and leveled. Any variations in demand that remain after biases in the production and sales system have been overcome are real variations. A true Lean production and sales system must be able to respond appropriately to them. 

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Leveling box

A tool used to level the mix and volume of production by distributing kanban at fixed intervals within a facility. Also called heijunka-box. 

The illustration shows a typical leveling box. Each horizontal row relates to one type of product (one part number). Each vertical column represents identical intervals for rhythmic kanban dispensing. The shift starts at 7:00 a.m. and the interval for kanban dispensing is always twenty minutes. This is the frequency at which the material worker removes kanban from the box and issues it to production processes within the facility. 

leveling box

While the boxes represent the timing of material flow and information flow, the kanban in the boxes each represent one production pitch for one product type. (Pitch is the branch time multiplied by the package size). In the case of product A, the pitch is 20 minutes and there is one kanban in the box for each time interval. For product B, however, the pitch is 10 minutes, so in that case two kanban are in each box. Product C has a pitch of 40 minutes, so there the kanban are located around the box. Products D and E share a production process with a 20-minute pitch and a demand ratio for product D versus product E of 2:1. Therefore, there is a kanban for product D in the first two intervals of the shift and a kanban for product E in the third interval, and so it continues in the same order. 

When the leveling box is used in this way, it consistently levels demand by always working with short units of time (rather than issuing demand for a shift, day or week) and also levels demand by product within the mix (for example, by ensuring that product D and E are produced in a stable ratio and in small batches). 

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In Japanese, obeya simply means "big room. At Toyota, it has become an important project management tool used primarily to promote effective and timely communication in product development. An obeya is a kind of nerve center; there are charts and diagrams that depict program time schedules, milestones and progress to date, and visual information on measures against existing time or technical problems. Project leaders have a desk in the obeya, as do others during certain periods within a program. The obeya should ensure project success and shorten the PDCA cycle. 

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Ohno, Taiichi (1912-1990)

Toyota executive widely known as the principal architect of the Toyota Production System (TPS). Wrote several important books on the TPS. 

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Inventory turnover rate

A way to measure how quickly materials move through a factory or an entire value stream, calculated by dividing the cost of goods by the amount of inventory present at the time. 

Probably the most common method of calculating the turnover rate is by using the annual cost of goods sold (before adding overhead for selling and administrative costs) as the numerator and dividing that by the average amount of inventory present during the year. Thus: 

Using the cost of goods instead of sales revenue captures one source of variation unrelated to the performance of the production system: fluctuations in sales prices due to market conditions. By assuming an annual average of inventories rather than year-end conditions, another source of variation is captured: an artificial drop in inventories at the end of the year as managers try to look good. 

The turnover rate can be calculated for material flows through value streams of any length. When making comparisons, however, remember that the velocity decreases with the length of the value stream, even if performance across the entire value stream is equally 'Lean'. For example, a plant that performs only assembly operations may have a velocity of 100 or more, but if the parts suppliers that supply the assembly plant are included in the calculation, the velocity will often drop to 12 or less. 

And when counting all the way from the first processing of materials - steel, glass, resin and so on - the rate often drops to four or less. This is because the cost of goods sold at the very end of the value stream does not change, while the amount of material in inventories grows steadily as we add more factories to our calculation. 

Turnover rate provides a great metric for a Lean transformation when the focus shifts from the absolute rate at each plant or across the value stream to the increase in turnover rate. If turnover rate is accurately calculated using annual averages of inventory, it can even become that one number that never lies. 

Turnover rate for the U.S. economy:

inventory turnover rate
All manufacturing, excluding finished goods in wholesale and retail. Automotive, excluding finished goods in retail hands. Note: US government does not collect data on cost of goods sold, only on total sales. Therefore, the turnover rate was calculated by dividing total annual sales by average inventories during the year.

Although most companies measure inventory by turnover rate, the workbook Building a Lean Fulfillment Streamuses the Average Days on Hand (ADOH) indicator for this purpose. ADOH represents inventory in the form of the number of days a process can continue to operate by consuming its stored inventory. An advantage of ADOH is that it allows managers to visualize how much inventory they have in relation to the work to be done in a day. For example, if the lead time from order to delivery of a delivered item is four days, but there is an ADOH of twenty, it is clear at a glance that there is five times as much inventory as needed. 

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Setting up a machine (such as a forming press or molding machine) or a series of linked machines (an assembly line or cell) so that they switch from the production of one product or part to another. This involves changing parts, dies, molds, holders, etc. (also called set-up ). The changeover time is the time that elapses between the last item from the process before the changeover and the first good item from the process after the changeover. 

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Conversion time reduction

Reducing the time required to convert a process from the last part of the previous product to the first good part of the next product. 

The six steps in changeover time reduction are: 

  1. Measure the total changeover time in the current situation.
  2. Identify the internal and external elements and calculate the individual times.
  3. Convert as many internal elements into external elements as possible.
  4. Reduce the time for the remaining internal elements.
  5. Reduce the time for the external elements.
  6. Standardize the new procedure. 

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Work in progress (OHW).

Items between machining steps. Within Lean systems, standardized work-in-progress is the minimum number of parts (including units in machines) needed to keep a cell or process running smoothly. 

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Operational availability versus occupancy

Operational availability is the proportion of time a machine is operating properly at the time it is needed, expressed as a percentage. Utilization rate is the proportion of time within a given period (shift, day and so on) that a machine is used to make something. 

Operational availability illustrates the difference between the two terms. The operational availability of the car is the percentage of time the car is operating properly when needed. Utilization is the percentage of time per day the car is actually driven. 

Lean thinkers use the distinction between the two terms to illustrate a pitfall in traditional thinking about efficiency. From a Lean perspective, high utilization rates are not necessarily desirable. Whether utilization is good or bad depends on whether the equipment produces exactly what is needed (good) or overproduces (bad). In contrast, the ideal operational availability is 100 percent, because it indicates how well a machine is operating at the time it is needed. 

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Operator Balance Chart (OBC).

A visual tool used to create continuous flow in a process consisting of several steps and staffed by different operators. In an OBC, the operator's work is divided into work elements and plotted against branch time. Also called an operator loading diagram or a yamazumi board

In an OBC, the vertical columns are used to represent how much work each operator has to do in total relative to the Takt time. The vertical column for each operator is constructed by stacking together small columns representing individual elements of work. 

The height of each element depends on the amount of time required for it. An Operator Balance Chart can aid in the redistribution of work elements among operators. This is essential if one wants to reduce the number of operators needed by reducing the amount of work for each operator almost 

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Operator cycle time

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Storage at point of use

Storage of production parts and materials as close as possible to the operations for which they are needed. 

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Overall Equipment Effectiveness (OEE).

A component of total productive maintenance (TPM) that measures how effectively equipment is being used. 

OEE is calculated using three elements: availability represents losses in downtime due to outages and equipment adjustments as a percentage of scheduled time. Productivity expresses losses in speed - when the process is slower than its intended speed and interruptions last a few seconds. Quality expresses losses due to downtime and repairs as a percentage of total parts processed. 

To calculate OEE, these three elements are multiplied by each other: 

Availability × productivity × quality = OEE 

If availability is 90%, productivity is 95% and quality is 99%, the following percentage emerges: 

0.90 × 0.95 × 0.99 = 84.6% OEE 

OEE typically focuses on what are considered the six biggest losses: breakdowns, turnarounds, short stops, slower speed, downtime and repair work. However, some companies add other elements they consider important to their business. 

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Produce earlier, faster or more than the next process needs. According to Ohno, overproduction is the most serious form of waste because it encourages and masks other forms of waste, such as inventories, defects and unnecessary transportation. An example of overproduction:

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Pacemaker Process

Any process within a value stream that sets the pace for the entire stream. (The pacemaker process should not be confused with a bottleneck process, which holds up processes downstream due to lack of capacity.) 

The pacemaker process is normally located near the customer portion of the value stream, often in the last assembly cell. However, if products are routed from an upstream process to the end in a FIFO sequence, the pacemaker may also be located in this upstream process. 

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Parallel development

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A situation where a process provides pure value, as defined by the customer, without any waste. 

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The amount of time required in a production area to make one container of products. 

The formula for pitch reads: 

Branch time × pack size = pitch 

For example, if the branch time (available production time per day divided by customer demand per day) is 1 minute and the package size is 20 items, then 1 minute×20 items = a 20-minute pitch. 

Together with the use of a leveling box and material handling based on rhythmic removal, pitch helps determine the tact and pace of a plant or process. 

Incidentally, the term pitch is also used to indicate the scope or time frame of one's work. 

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Plan For Every Part (PFEP).

A detailed plan for each component used in a production process. This plan addresses everything relevant to managing the process without errors or waste. A crucial tool within the Toyota Production System. 

A plan includes the part number, characteristics, the number used per day, the exact location where the part will be used, the ordering frequency, the supplier, the package size, the transit time from the supplier, the size and weight of the container and any other pertinent information. The goal is to precisely specify every aspect of the handling and use of each part. (Harris, Harris and Wilson 2020.) 

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Plan, Do, Check, Act (PDCA)

An improvement cycle based on the scientific method: a change in a process is proposed, the change is implemented, the results are measured and appropriate action is taken. The cycle is also called the Deming cycle or the Deming wheel, after W. Edwards Deming, who introduced the concept in Japan in the 1950s. 

The PDCA cycle consists of four stages: 

Plan: identify the objectives for a process and the changes needed to achieve those objectives. 

Do: implement the changes.

Check: evaluate results in terms of performance. 

Act: standardize and stabilize the change or restart the cycle, depending on the results. 


Toyota often uses PDCA, but uses slightly different terminology (grasp the situation or go see):

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Policy deployment

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Preventive maintenance

A method for maintaining machinery and equipment that is considered a precursor to total productive maintenance (TPM). This method involves regularly scheduled checks and overhauls by maintenance personnel to reduce breakdowns and extend the life of machinery. 

At Lean manufacturing processes, production workers have daily responsibilities for basic preventive maintenance, such as checking oil levels, checking the condition of filters and inspecting that nuts and bolts are tight. 

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Identifying and closing the gap between the current and desired situation during a Lean transformation or any other process improvement effort. 

In a Lean management system, everyone is involved in problem solving. Two characteristics are leading here: 

  1. Everything described or asserted during the problem-solving process (the problem itself; the desired situation, the immediate cause, the root cause) must be based on verifiable facts, not assumptions or interpretations. The fact that the burden of proof is on the problem solver is reflected in questions such as "How do you know? Did you go to the gemba first and get first-hand knowledge of the current situation? How do you know there is agreement on your improvement plan?'
  2. Everyone recognizes that problem solving is a process
    that is never finished, which begins rather than ends with the implementation of an improvement plan. A plan is a theory of what will eliminate the cause of the problem, as well as what it will take to implement a countermeasure to that cause. The implementation process is a learning process to figure out what it will actually take to take steps toward the desired situation.

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A series of individual actions that must occur in a specific order to create a design, execute an order or produce a product. 

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Process Village

Grouping activities by type rather than in the order required to design or make a product. 

Traditionally, most organizations created process villages for activities ranging from shop floor grinding to office credit control. Lean organizations are trying to replace process villages with process sequences for product families whenever possible. 

The illustration below shows two classifications of bicycle factories. One involves a process village, while in the other the material flow follows the process sequence. 

process village
Layout process village (above) versus layout process sequence by product family (below)
process sequence
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Process Capacity Sheet

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Product family

A product and its variants that go through similar processing steps and for which common machinery is used just before delivery to the customer. 

Product families are important to Lean thinkers because they provide the unit of analysis for value stream maps, which are defined from the last downstream step. 

Product families can be defined from the perspective of each customer within an entire value stream, ranging from the ultimate customer (the end consumer) to intermediate customers within the production process. 

An example: in a company that produces power tools, a product family could be defined as mid-size power drills that use the same frame and go through the same assembly cell as the final production step before being delivered directly to the end consumer. 

A product family can also be defined as the drive motor and its variants assembled in the same cell just before delivery to the customer, in this case a manufacturer of drills. 

In addition, a product family can be defined as the drive motor stator and its variants that go through the same manufacturing process just before delivery to
the customer, in this case a drive motor manufacturer. 

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Product family matrix

A diagram created by Lean thinkers to identify product families. 

The illustration shows how a company that owns seven product lines from the customer's perspective placed its assembly steps and machinery at the top of a product family matrix. In this way, it quickly found a common pathway for products A, B and C, for which it then created a value stream map as a product family.

product family matrix
Source: Book Learning to See, Mike Rother and John Shook, page 6

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Production Analysis Board

A display, often a large whiteboard, placed next to a process on which actual performance can be read against planned performance. 

The board in the illustration shows the performance of a process from hour to hour, showing both planned and actual production. If production does not match the schedule, the problem is noted and a cause is sought. 

From a process that is regulated by pull signals and not by a pre-established schedule, the numbers required by the next process downstream in the value stream will be recorded, which may differ from the schedule during some shifts or days. The numbers required will be compared with actual production. 

A production analysis board can be an important tool for visual management, especially if a company plans to move to Lean production. However, it is important to realize that a production analysis board is intended as a tool for identifying and solving problems and not, as is often mistakenly thought, as a tool for planning production. It is sometimes called a planning board or progress board , or, better, a problem-solving board

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Production lead time

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Production Planning

Regulating production so that products flow smoothly and quickly to meet customer requirements. 

At Toyota, the Production Planning Department grew to become the most important link in the company: it screwed up the pace of production when there was a backlog and slowed down production when it was ahead. At most mass production companies, this works differently; there, the Production Planning department is responsible for isolated tasks, such as MRP and logistics. 

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Production preparation process

A disciplined method of designing a Lean manufacturing process for a new product or fundamentally revising the manufacturing process for an existing product when the design or customer demands a substantial change. 

A cross-functional 3P team delves into the overall manufacturing process, developing a number of alternatives for each process step and comparing them against Lean criteria. The team then rebuilds the process using simple materials to test its assumptions before ordering the machinery or setting it up in its final configuration. 

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Pull production

A method of regulating production in which downstream activities make known what they need to upstream activities. Pull production aims to prevent overproduction and is one of the three key components of a complete Just-in-Time production system. 

In pull production, a downstream activity (either within the same facility or in a separate facility) provides information to the previous (upstream) activity, often via a kanban map, about what part or material is needed, how much is needed, and when and where it is needed. The upstream supply process in the value stream produces something only when a need is expressed from the downstream customer process. This is the opposite of push production. 

There are three main types of pull production systems: 

Supermarket pull system 

The most basic and most widely used type, also called fill-up, replenishment or type-A pull system. In a supermarket fill-up system, each process has a store - a supermarket - in which there is a certain amount of each product being produced. Each process produces purely to replenish what is consumed from its supermarket. The moment material is withdrawn from the supermarket by the downstream customer process in the value stream, a kanban or other type of information carrier is sent to the upstream supply process to take product. This authorizes the upstream process to replenish what has been consumed. 

Each process is responsible for replenishing its supermarket. In this way, it is relatively easy to manage the shop floor and opportunities for kaizen are relatively easy to see. The disadvantage of a supermarket system is having to have inventory, which is sometimes not feasible if the number of types of parts is large. 

Sequential pull system 

A sequential pull system - also known as a type-B pull system - can be used when there are too many types of parts, not all of which can be stocked in a supermarket. Products are essentially made to order while minimizing inventory for the entire system. 

In a sequential system, the planning department must determine the right mix and numbers of products to be produced. This can be done by placing production canban cards in a heijunka box, often at the beginning of each shift. These production instructions are sent to the first process all the way upstream in the value stream. This is often done in the form of a "sequence list," also called a sequential tablet . Each subsequent process produces purely the items it has been supplied by the previous process, always adhering to FIFO of individual products. 

A sequential system creates pressure to maintain short and predictable lead times. This system is effective only if one understands the pattern of customer orders. If orders are difficult to predict, production lead times must either be very short (shorter than the order lead time) or an adequate store of finished goods must be provided. 

A sequential system can only be maintained with strong management, and improving it on the shop floor can be quite challenging. 

Mixed supermarket and sequential pull system 

Supermarket and sequential pull systems can be used together in a mixed system - also known as a type-C pull system. A mixed system may be in place when an 80/20 rule applies, where a small percentage of part numbers (e.g., 20%) accounts for most (e.g., 80%) of the daily production volume. An analysis is often performed to segment types of parts by volume 

into high (A), medium (B), low (C) and rare orders (D). Type D includes, for example, custom or service parts. For these low-demand items, a special type-D canban can be created that does not represent a specific type of part, but an amount of capacity. Then the production order for the type-D items is determined using the method used by the planning department for types of parts within the sequential pull system. 

With such a mixed system, both supermarket and sequential systems can be applied selectively and reap the benefits of both systems, even in environments where demand is complex and varied. The two systems can be applied side-by-side throughout the value stream, or they can be used for a particular type of part at different locations within that number's individual value stream. 

With a mixed system, it can be more difficult to keep work in balance and to identify abnormal conditions. It can also be more difficult to manage and execute kaizen. Therefore, it takes discipline to make a blended system work well. (Based on Smalley 2017.) 

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Push production

Producing large batches of items as quickly as possible, based on expected demand, after which those items are passed to the next process downstream or stored, regardless of the production rate of the next process. Such a system makes it virtually impossible to achieve the smooth flow of work between one process and another that characterizes Lean production. 

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Quality Assurance (QA).

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Quality function deployment (QFD).

A visual decision-making process for cross-functional product project teams that ensures common understanding of customer needs (the "voice of the customer") and team-wide consensus on the final technical specifications the product must possess to meet those customer needs. 

QFD integrates the perspectives of team members from different disciplines, ensures that their efforts are focused on finding consistent solutions with measurable performance targets for the product, and implements these decisions at every level. Using QFD prevents costly duplication of effort as projects approach their launch. 

An important aspect of QFD is the house of quality diagram. Using this diagram, expressed and unspoken customer needs can be visually identified, translated into actions and designs, and communicated to the entire organization. It also allows customers to prioritize their needs. Suppliers of critical components are often involved in QFD sessions early in the design process. 

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Resident engineer

An engineer of a particular supplier's component sent to Toyota to work with Toyota engineers on development projects or troubleshoot problems; sometimes called a guest engineer. 

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Right-sized tools

Process equipment that is highly capable, easy to maintain (and therefore available for production at all times), quick to convert, easy to move, and designed to add in small amounts of capacity to enable capital and labor linearity. 

Examples of right-sized tools include small washing machines, heat treatment ovens and paint booths that can be arranged in process sequence in cells to facilitate continuous flow. 

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Rhythmic decline

According to a fixed, frequent pace, pass production instructions to work areas and remove completed products from work areas. This workflow can be used to link material flows to information flows. 

In the illustration below, the material handler covers the entire route every twenty minutes. First, he retrieves production instructions (production kanban) from a leveling box. Then he delivers the kanban to a production process, where they are the starting signal to produce goods. 

An example of rhythmic decline in a factory environment:

rhythmic decline

The material handler removes completed goods from the production process and takes them to the supermarket. There the handler retrieves production canban from the collection box, takes them to the leveling box, puts them in, and retrieves the next set of production canban from the appropriate column in the box, then the cycle repeats. Rhythmic removal prevents overproduction and alerts managers quickly -- in this case, within 20 minutes -- if production problems occur. 

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Red label

During 5S, items that are not needed are red-labeled and then removed from the shop floor or from an office. 

Red labels can be attached to tools, equipment and supplies. Labeled items are placed in a storage area, where they are reviewed to see if they can serve other purposes within an establishment or company. Items for which no alternative can be found are discarded. Red labeling helps carry out the first S of 5S: separating needed and unnecessary items. 

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The Japanese term for "teacher. Used by Lean thinkers to designate someone who possesses a wealth of Lean knowledge thanks to years of experience in transformations of the gemba (the place where the work is actually done). The sensei must also be an inspiring teacher who is easy to understand. 

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Sequential pull

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Service Level Agreement (SLA).

An agreement between a customer and a supplier to achieve certain (time-bound) targets as part of a handover. Often such an agreement specifies the time frame within which the handover must occur, and this includes a certain time buffer. For example, "Radiology agrees to a turnaround time of one hour for all requests for standard thoracic radiographs. This means that while some requests may take less than an hour, all requests for standard chest radiographs will be handled within an hour. The actual time of handover can also be specified, such as 'The cleaners will pass on requests for replenishment of supplies daily at three o'clock.' 

A more complex type of agreement is "proceed until halted. Here, someone who must approve the work is informed that the work has begun (e.g., "We are checking patient X's insurance coverage") and the work continues unless that person halts it within a specified time period. (To Worth et al., 2012. p. 71.) 

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Set-based concurrent engineering (SBCE).

A method of designing products and services in which developers consider whole collections of ideas rather than a single idea. To do this, they do the following: 

  • Use trade-off curves and design guidelines to characterize (or describe) different designs known to be feasible, thus focusing the search for designs.
  • Identify and develop several alternatives, and only jettison alternatives if they prove inferior or unfeasible.
  • Design targets as a starting point, then the actual specifications and tolerances surface through analysis and testing.
  • Delay selection of the final design or establish the final specifications only when the team knows enough to make a good decision.
    This method provides important learning opportunities for the organization. It takes less time and, in the long run, less money than typical point-based development systems where a single design solution is chosen early in the development process, often leading to false starts, fixes and failed projects. Moreover, it hardly teaches the organization anything.

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Shingo, Shigeo (1909-1990)

An engineer and consultant whose books and training made important contributions to the spread of the Toyota Production System. From about 1955 to 1980, Shingo trained supervisors and engineers at Toyota in industrial engineering methods. His classes contributed to the establishment of internal kaizen training at Toyota and also at other companies. He also made important contributions to turnaround time reduction, introduced the term Single-Minute Exchange of Die (SMED) and developed steps to analyze turnaround work, especially the distinction between internal and external work. 

The Shingo Prize for Excellence in Manufacturing was established in 1988 by the College of Business at Utah State University to promote awareness of Lean manufacturing concepts and to give recognition to public and private sector companies in the United States, Canada and Mexico that have come far in their implementation of Lean. 

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One of three related Japanese words (shojinka, shoninka, shoryokuka) that are conceptually related but have different meanings. Shojinka means "flexible labor line" and refers to the ability to adjust a line to meet production demands with any number of workers and random changes in demand. It is also sometimes called labor linearity, after the ability of an assembly line to be balanced even at times when production volume fluctuates. 

Shoninka means "labor savings. This term refers to the improvement of work procedures, machinery or equipment, which can free up whole units of labor (people) in a production line consisting of one or more workers. 

Shoryokuka means "labor savings" and refers to partial improvement of manual work by adding small machines or devices to support that work. This results in a small amount of labor being saved, but does not free up an entire person, as in shoninka. (A number of shoryokuka savings added together can result in shoninka savings, however.) 

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A project leader, like the chief engineer in the Toyota product development system. 

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Single minute exchange of die (SMED).

Switching production equipment from one type of part to another as quickly as possible. SMED refers to the goal of reducing changeover times to less than ten minutes. 

Shigeo Shingo's important insights on changeover time reduction, which he developed in the 1950s and 1960s, were that internal changeover operations - which can only be performed when a machine is idle (such as when a mold needs to be changed) - must be separated from external operations that can be performed while the machine is in operation (such as bringing the new mold to the machine). Then, as many internal changeover operations as possible should be turned into external operations. (Shingo 1985.) 

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Six Sigma

A quality standard of only 3.4 defects per million opportunities; 99.9996% good. 

Six Sigma methodologies focus on mathematical and statistical tools to improve the quality of processes that have already been mastered. Its application follows a five-step process: define, measure, analyze, improve and control (Define, Measure, Analyze, Improve, Control). This process is also often referred to as DMAIC. 

Motorola coined the Six Sigma technique in 1986 as a way to achieve the company's improvement goals in manufacturing and support operations. The term refers to the number of standard deviations a point is away from the center point in a bell curve. 

Many Lean thinkers apply Six Sigma techniques to solve intractable quality problems in value-adding processes that have already been mastered and where non-value-adding processes have been eliminated through total value stream analysis. 

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Spaghetti Diagram

A diagram of a product's route through the various steps of a value stream. So called because the routes of products in a mass production organization often resemble a plate of spaghetti. 

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Standard work for leaders

When standard work for leaders, also called "kaizen for management," is combined with the right leadership behaviors, it changes the role of managers: instead of being the primary problem solvers, they become the ones who develop the problem-solving abilities of their employees. 

Because traditional management approaches do not foster a culture of day-to-day problem solving, this shift in the role of management is necessary to develop a new culture and support the operational changes made during a Lean transformation. 

Besides planning activities that are less frequent, standard work for leaders consists of five key tools: gemba walks, reflection meetings, responding to andons, creating accountability and mentoring. 

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Production time lost due to planned or unplanned interruptions. 

Planned downtime includes scheduled interruptions for activities such as board meetings, changeovers to manufacture other products and scheduled maintenance. Unscheduled downtime includes interruptions due to breakdowns, machine modifications, material shortages and absenteeism. 

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Stop system with fixed position

A method of solving problems on assembly lines by stopping the line at the end of the work cycle - that is, at a fixed position - if a problem has been identified that cannot be solved during the work cycle. 

When an operator identifies a problem with parts, tools, material supply, safety conditions and so on, he pulls a cord or presses a button to alert the supervisor. The supervisor assesses the situation and determines if the problem can be resolved before the end of the current work cycle. If the problem can be solved, the supervisor resets the signaling system so the line does not stop. If the problem cannot be fixed within the remaining cycle time, the line is stopped at the end of the work cycle. 

The fixed-position stop system was first used by Toyota to solve three problems: (1) employees were very reluctant to pull the "emergency brake" if by doing so they immediately stopped the entire line, (2) unnecessary stopping of the line 

for fixing minor problems that could be fixed within one work cycle and (3) if the line was stopped mid-cycle instead of at the end, confusion automatically occurred -- plus quality and safety problems -- because tasks had to be restarted mid-cycle. 

The fixed-position stopping system is a jidoka method, which aims to incorporate quality into manual processes on a conveyor belt. 

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Strategy deployment

A management process that aligns an organization's functions and activities both horizontally and vertically with its strategic objectives. As part of this process, a specific plan - usually an annual plan - is developed with precise objectives, actions, timelines, responsibilities and indicators. 

Sample A3 shows the strategy of a director of a finance department to return his company to profitability. The Performance box in the upper left corner shows that the company has not met its revenue and EBIT targets for the past year. It also shows inventory levels, because the director considers them the biggest source of waste in the company, and they are a heavy drain on cash flow. 

The word "red" in the Reflection box indicates that key improvement efforts have not borne fruit over the past year. The Analysis underneath describes the key actions to be taken to meet this year's strategic profitability target. The Action Plan on the right contains the who, what, when, where and how of the strategy. The Follow-up box contains any unresolved concerns and information on how the director will check on progress. 

Strategy deployment, also known by the Japanese term hoshin kanri, can begin as a top-down process the moment an organization initiates a Lean conversion. Once key targets are formulated, however, it should become both a top-down and bottom-up process in which senior managers and project teams dialogue with each other about the resources and time both available and needed to meet the targets. This dialogue is often called catchball (or nemawashi) because ideas are bounced back and forth just like a ball. 

The goal is to match available resources with desirable projects so that only projects that are desirable, important and achievable are approved. (This is intended to avoid what happens in many organizations: one launches a lot of improvement initiatives that are popular in certain parts of the organization but are not completed because there is no agreement among functions and no resources available for them.) 

As an organization moves forward with its Lean transformation and gains experience with policy deployment, the process should become much more bottom-top-bottom, with each part of the organization submitting proposals to senior management to improve performance. A mature Lean organization may call this process "strategy alignment" or "policy management.

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Batch processing

Making and moving one piece at a time. 

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The place where a predetermined standard stock is kept to supply processes downstream in the value stream. 

Supermarkets are normally located near the supply process so that that process keeps in touch with consumption and customer requirements. Each item in a supermarket has a specific location from which a material worker 

engages the exact number of products required by a downstream process. When an item is removed, the material worker takes a signal to make more (such as a kanban card or empty bin) to the delivery process. 

Toyota installed its first supermarket in 1953 in the machine shop of its main plant in Toyota City. Toyota director Taiichi Ohno derived the idea for
the supermarket from photographs of American supermarkets in which goods were placed on shelves in specific locations for customers to take away.

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Takt image

Creating awareness of branch time in parts of a production process where products cannot be delivered and removed according to the frequency of branch time. In a final assembly line, it is easy to consider branch time because the line produces products according to branch time. However, in production cells upstream in the value stream and in common processes, such as forming presses, it can be difficult to represent branch time even though it is the heartbeat of customer demand. 

A branch image can often be created by taking off end products and outputting production signals according to a multiple of branch time proportional to the pack size or transfer size. A cell operating according to a takt time of 

1 minute and forwarding those products by twenty units to the next link in the value stream would thus have a takt image of 20 minutes. While takt image is not as good as branch time, it still helps you figure out within a few minutes whether a process is out of sync with customer demand. 

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Branch time

Available production time divided by customer demand. 

For example, if a factory runs 480 minutes a day and customers want 240 products a day, the branch time is two minutes. And if customers want two new products a month, the branch time is two weeks. The purpose of branch time is to keep production exactly in line with demand. It is the heartbeat of a Lean production system. 

Takt time was first used as a production management tool in the German aircraft industry in the 1930s. (Takt is German for a precise interval of time, like a musical measure.) It was the interval at which aircraft were transferred to the next production station.
The concept was used in many places within Toyota in the 1950s and by the late 1960s was used by Toyota's entire supplier base. Toyota recalculates the branch time for a process every month, with possible adjustments every 10 days. 

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Target cost

The development and production costs that a product must not exceed in order to keep the customer satisfied with the value of the product while the producer realizes an acceptable return on investment. 

Toyota developed target costing for a small group of suppliers with which it had long collaborated. Because there is no market price available when tendering by tender or auction, Toyota and its suppliers set the correct/fair cost (and price) for a delivered item by estimating how much the customer thinks the item is worth. 

It then works backwards from there to eliminate costs (waste) to achieve that price, while maintaining profit margins for Toyota and the supplier.

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Team leader

At Toyota, an hourly paid employee who leads a team of five to eight other employees. Called hancho in Japanese. 

Within the Toyota Production System, team leaders act as the front-line support for employees, who - unlike their counterparts at traditional mass producers - are the focus of improvement activities and have responsibilities in the areas of troubleshooting, quality assurance and basic preventive maintenance. 

Team leaders do not take disciplinary action and do not have fixed production duties. They are familiar with all the tasks their team members perform, so they can relieve employees, fill in in case of absenteeism or step in when employees need assistance or are behind schedule. They deal with problems such as line stops and andon signals and take the lead on kaizen activities. They also conduct daily checks using audit sheets for standardized work to make sure people are following standardized work guidelines and to surface problems. 

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Theory of Constraints (TOC).

A management philosophy and set of tools for organizational change developed by Israeli physicist Dr. Eliyahu Goldratt and made famous through the book The Goal (1986) by Goldratt and Jeff Cox. TOC focuses on profit improvement by managing constraints (constraints): factors that hinder a company from achieving its goals. 

The primary focus is on removing or managing constraints to improve production, while Lean focuses on identifying and eliminating waste to improve the flow of value. Both Lean and TOC focus on improving the entire system rather than individual components. 

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Total Productive Maintenance (TPM).

A set of techniques, first used by Denso in the Toyota Group in Japan, that ensures that each machine in a production process is always capable of performing the tasks expected of it. The word "total" refers to three things. First, it requires the total cooperation of all employees, not only maintenance personnel but also line managers, production engineers, quality experts and operators. Second, it strives for total equipment productivity by focusing on the six main forms of capacity loss that equipment faces: downtime, changeover time, short stops, speed loss, downtime, and rework. Third, it looks at the total life cycle of equipment; maintenance methods, activities and improvements are tailored to where the equipment is in its life cycle. 

Unlike traditional preventive maintenance, which is performed by maintenance personnel, TPM involves operators in routine maintenance, improvement projects and simple repairs. For example, operators perform daily activities such as lubricating, cleaning, tightening and inspecting equipment. 

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Total Quality Control (TQC).

A management approach in which all departments, employees and managers are responsible for continuously improving the quality of products and services so that they meet or exceed customer expectations. 

The TQC methodology uses the Plan-Do-Check-Act (PDCA) cycle to manage processes and, when problems arise, statistical tools to solve those problems. The methodology and tools are often used by employees during kaizen activities and together form an important subsystem of Lean. 

The term "total quality control" was first used in 1957 by quality expert Armand Feigenbaum, who believed that quality control professionals should play a central role in promoting TQC. 

In the 1980s, other experts such as Philip Crosby, Joseph Juran, W. Edwards Deming and Kaoru Ishikawa built on the concept, now known as Total Quality Management. They added new tools and, most importantly, the idea that quality is the responsibility of all employees, managers and senior executives. 

Toyota implemented TQC in the early 1960s and began rolling out the system to suppliers in the late 1960s as well. 

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Total Quality Management (TQM).

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Toyoda, Kiichiro (1894-1952)

The son of Sakichi Toyoda, the founder of the Toyota Group. Under Kiichiro's leadership, Toyota entered the automotive industry in the 1930s. Kiichiro Toyoda believed he could keep the entire manufacturing process supplied if each process simply responded to the precise needs of the next process downstream in the value stream. He called this system Just-in-Time, which became one of the two pillars of the Toyota Production System. 

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Toyoda, Sakichi (1867-1930)

Founder of the Toyota Group, who in the early 20th century invented a self-monitoring system for textile looms that stopped the loom if a thread broke. This innovation made it possible for one operator to control multiple machines and led to the Jidoka concept, which means "automation with human intelligence. It is one of the two pillars of the Toyota Production System. 

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Toyota Production System (TPS).

Production system developed by the Toyota Motor Corporation to achieve the best quality, lowest cost and shortest lead time by eliminating waste. The TPS consists of two pillars, Just-in-Time and Jidoka, and is often illustrated using a house (see illustration). The TPS is maintained and improved through iterations of standardized work and kaizen and follows PDCA, or the scientific method. 

The development of the TPS is attributed to Taiichi Ohno, the head of Production at Toyota in the post-World War II period. Ohno started in machining operations and from there introduced the rest of Toyota to the TPS in the 1950s and 1960s. In the 1960s and 1970s, he also introduced the system to Toyota's suppliers. Outside Japan, its spread began in earnest after the creation of the joint venture between Toyota and General Motors - NUMMI - in California in 1984. 

The concepts of Just-in-Time (JIT) and Jidoka both predate the war. Sakichi Toyoda, the founder of the Toyota Group, invented the concept of Jidoka in the early 20th century by incorporating a system into his automatic looms that ensured that a loom stopped as soon as 

a wire broke. This made significant quality improvements possible and freed up employees' hands to do more value-creating work than just watch machines. Eventually, this simple concept found its way into every machine, every production line and every Toyota operation.

Below is the home of the Toyota Production System:

toyota production system

Kiichiro Toyoda, Sakichi's son and the founder of the Toyota car business, developed the Just-in-Time concept in the 1930s. He decided that there should be no excess inventory at Toyota and that Toyota should strive to level production in cooperation with its suppliers. Under Ohno's leadership, JIT developed into a unique system of material and information flows to combat overproduction. 

The TPS gained worldwide recognition as the model production system after the publication of the book The Machine that Changed the World (1990), the result of five years of research led by the Massachusetts Institute of Technology. The MIT researchers discovered that the TPS was so much more effective and efficient than traditional mass production that it represented a completely new paradigm. They introduced the term Lean manufacturing to describe this radically different approach to production. 

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Trade-off curve

Trade-off curves provide a simple visual representation of the performance limits possible within a given design. They usually characterize the relationship between two or more key parameters that link design decisions to factors of importance to customers, such as the relationship between pipe wall diameter and thickness (design decisions) on the one hand and fluid pressure and velocity (customer requirements) on the other. 

To a trade-off curve belong a picture of the component and/or process, a description of the failure mode (failure mode), an analysis of the cause, possible countermeasures, a graph showing under which conditions the failure mode occurs and a description of the relations between the most important parameters (see illustration page 113). On this basis, design groups create a so-called engineering check sheet on which the main points of the investigation of the trade-off curve are summarized in a compact and efficient way. That summary is used in design reviews.

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Training Within Industry (TWI).

A series of training programs developed during World War II that allowed American companies to hire and train large numbers of new employees to replace those who had to serve in the military. 

TWI consisted of three training programs, collectively called "J programs. 

  • Job Instruction trained supervisors and experienced staff how to train people to do the job with fewer defects, less downtime and repair work, fewer accidents and less damage to instruments and equipment. 
  • Job Methods trained employees to methodically make improvements by making optimal use of people, machines and materials to make larger quantities of quality products in less time.
  • Job Relations (work relations) trained supervisors how to deal with people problems effectively and equitably by gathering and weighing facts, making a decision, taking action and checking results. Although the TWI concepts fell into oblivion in America in the postwar prosperity
    , less profitable Japanese companies, including Toyota, took up the concepts. TWI's Job Instruction program is still the most widely used training tool by Toyota leaders around the world. In the last
    years, the programs are also experiencing a revival in the United States and other countries.

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Tsurube System

A method of maintaining flow between disconnected processes. Such processes may be separated, for example, because a step that takes place outside the line or plant is too expensive or bulky to move. Using a pull-FIFO technique, tsurube ensures that a standard number of parts exit and re-enter the system in sequential order. Tsurube houshiki is the Japanese term for a system for using two buckets to draw water from a well; an empty bucket goes down while a full bucket - attached to the same rope, running through a pulley - comes up.
In the example, where part of a value stream is shown, a tsurube system maintains flow between the main process and heat treatment. Every twenty minutes, a fixed number of items arrive at the heat treatment FIFO street from the FIFO street after operation 20. In addition, every twenty minutes, the same number of items are transported from the heat treatment FIFO street to the FIFO street for the next step, operation 40. The FIFO lanes
adhere to the order of items to be processed. (The solid blue arrows represent the material flow through the operations.) 

Thanks to timed delivery and dispensing, managers know within 20 minutes if there are problems. To improve the system, managers should consider why heat treatment is isolated and how that step can be linked to the system. Stable production processes are a prerequisite for implementing a tsurube system to maintain flow and pull production. 

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Performing multiple operations

Instruct operators to perform more than one operation in a product flow-oriented setup (see illustration). Operators should be trained to operate different types of machines (such as benders AND crimpers AND testers) so they can guide products through cell setups (also called cross-training ). 

This way of working contrasts with the typical mass production approach, where operators are stationed in separate departments - turning or grinding or milling - where they operate only one type of machine and make batches that they transfer to other processes in other departments. 

An example of performing multiple operations. The operator operates different types of machines in a cell:

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Skills Matrix

A training and development schedule for employees showing skills acquired and to be acquired. In the example, employees are listed in the left column and skills are shown at the top. 

The shading indicates the extent to which an employee has mastered the skill in question. The dates in the blank or partially shaded boxes are targets for acquiring the required skills. This tool is especially useful for tracking the progress of employees being trained in the various skills needed to perform multiple operations. 

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Value stream / value stream

Value stream is also called value stream. All actions, both value-creating and non-value-creating, required to take a product from concept to launch (also known as the development value stream) or from order to delivery (also known as the operational value stream). 

This includes activities to process customer information and activities to transform the product on its way to the customer. 

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Value stream improvement

An improvement method based on the scientific approach to problem solving, also known as Plan-Do- Check-Act (PDCA) or Plan-Do-Study-Adjust (PDSA). This method combines the scientific and cultural components necessary to implement and sustain positive change in a specific value stream. 

The PDCA approach corresponds to the three project phases of value stream improvement.

1) Leadership defines the broad need for a project within the organization, the impact of the issue on the organization and the scope of the project. 

2) During a workshop, usually lasting three days, the parties involved in the value stream develop a value stream map, analyze the problems and suggest countermeasures in the form of a future-state map.

3) During the improvement phase, which typically lasts sixty to one hundred and twenty days, the team conducts rapid learning experiments, implements changes to improve the performance of the value stream, and then checks the results. 

In the Lean world, these changes are called "countermeasures" because, unlike "solutions," they do not provide fixed answers but encourage continuous improvement of the process. This methodology also leads to development of a system for managing the performance of the value stream, which enables true continuous improvement.

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Value stream manager

Someone to whom clear responsibility has been assigned for the success of a value stream. The value stream can be defined at the product or company level (including product development) or at the plant or operational level (from raw material to delivery). 

The value stream manager is the architect of the value stream; he identifies value as defined from the customer's perspective and leads the effort to achieve an ever-shorter value-creating flow. 

The value stream manager ensures that the organization focuses on aligning activities and resources with value creation, even if none of the resources (money, assets, people) actually "belong" to the value stream manager. Thus, value stream management involves a distinction between responsibility, which lies with the value stream manager, and control, which lies with the functions and departments that control the resources. The functions must provide the resources needed to realize the vision of the value stream as defined by the value stream manager. The value stream manager leads based on influence, not hierarchical position, and thus can be as effective in a traditional functional organization as in a matrix organization. The latter avoids a common flaw in matrix organizations: the lack of clear responsibilities, authority and effective decision-making. 

The archetype of the role of the value stream manager is Toyota's chief engineer, who has only a minimum of staff and resources under him. 

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Value stream mapping (VSM)

A simple diagram showing each step of the material and information flows required to get a product from order to delivery. 

Value stream maps can be created for different points in time as a way to create awareness of improvement opportunities (see illustrations). A current state map maps the current path from order to delivery. A future state map uses the improvement opportunities identified in the current state map to achieve a higher level of performance at some point in the future. 

In some cases, it may also be useful to create an ideal state map that incorporates the improvement opportunities that could be realized if all known Lean methods were applied, including right-sized tools and value stream compression. 

current state vsm
Current state Value Stream Map
future state vsm
Future state Value Stream Map
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Safety stock

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Packing size

The number of items that a customer (either within a facility or outside) wants packed in a container for transfer and shipment. Note: A pallet or a load board with products may consist of a number of containers. 

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Any activity that consumes resources but does not create value for the customer. Most wasteful activities fall under the heading of muda and can be divided into two types.

Type-I muda does not create value but is unavoidable with today's technologies and production assets. An example is the inspection of welds to ensure they are safe. 

Type-II muda creates no value and can be eliminated immediately. An example is a process with decoupled steps in process villages that can be quickly reconfigured into a cell in which redundant material movements and inventories are no longer needed. 

Most of the activities in the value stream that truly create value in the eyes of the customer constitute only a fraction of the total number of activities. Elimination of the large number of wasteful activities is the greatest potential source of improvement in a company's performance and customer service. 

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Visual management

Making clearly visible all tools, components, production activities and performance indicators of the production system so that the status of the system is clear to all concerned at a glance. 

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Material that (and information that) resides within a value stream between processing steps. 

Physical inventories are usually classified by their position in the value stream and by their purpose. Raw materials, work in progress and finished goods (also called finished goods) are terms used to indicate the position of inventory within the production process. Buffer stocks, safety stocks and supply stocks are terms used to describe the purpose of inventory. Since inventory always has both a position and a purpose (and some inventories have more than one purpose), items can be both finished goods and buffer stocks, for example. Similarly, the same items can be raw materials as well as safety stocks. Some items can even be finished goods, buffer stocks and security stocks at the same time (especially if the value stream between raw materials and finished goods is short). 

The size of buffer and safety stocks will depend on the variability in demand (which determines the need for buffer stock) downstream in the value stream and on the capability of the process (which determines the need for safety stock) upstream in the value stream. According to good Lean practice, one sets the stock for a process and continuously reduces that stock whenever possible, but only after reducing downstream variability and increasing upstream capability. If one reduces inventory without addressing variability or capability, one will only disappoint the customer because the process will then fail to deliver the required products on time. 

To avoid confusion, it is important to carefully define each type of stock. Below are the six types of stock:

Buffer stock

Goods held, usually on the downstream side of a facility or process, to prevent running dry in the event of an abrupt increase in short-term demand exceeding production capacity. 

The terms buffer stock and safety stock are often used interchangeably, leading to confusion. There is an important difference between the two, which can be summarized as follows: buffer stock protects your customer from you (the producer) in the event of an abrupt change in demand; safety stock protects you from incompetence of your upstream processes and of your suppliers. 

End products 

Items that a manufacturing facility has completed and are awaiting delivery. 

Raw materials 

Goods in a production facility that have not yet been processed. 

Safety stock 

Goods held at any point (raw materials, work in progress or finished goods) to prevent downstream customers from running dry due to upstream process capability problems. Also called emergency stock.

Supply stock 

Goods in conveyors on the downstream side of a plant destined for the next delivery. (Their size and frequency usually correspond to that of delivery batches.) Also called cycle stock. 

Work in progress (OHW). 

Items between machining steps within a manufacturing facility. In Lean systems, standardized work-in-progress represents the minimum number of parts (including units in machines) needed to keep a cell or process running smoothly. 

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The inherent value of a product in the eyes of the customer, reflected by its selling price and market demand. 

In most products, value is created by a combination of actions by the producer, some of which produce value in the eyes of the customer and some of which are simply necessary given the current configuration of the design and production process. The goal of 'Lean Thinking' is to eliminate the second group of activities and maintain or improve the first group. 

Value-creating activity 

Any activity that is valuable in the eyes of the customer. A simple test to find out whether an activity and the time required for it are value-creating is to ask
whether the customer would consider a product less valuable if this activity could be omitted without affecting the product. For example, repair work and waiting time will not be readily identified as valuable by customers, but design and manufacturing steps will be. 

Non-value-creating activity 

Any activity that, in the eyes of the customer, adds cost but not value to a product or service. 

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Value time

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True North

The strategic and philosophical vision or goal of an organization. True North is a commitment that can include "hard" business goals, such as revenue and profit, as well as general visionary goals that appeal to the heart.

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Human actions (movements) involved in producing products. These actions can be divided into three categories: 

1. Value-creating: work directly necessary for making products, such as welding, drilling and painting. 

2. Ancillary work: work that operators must perform to make products but that does not create value from the customer's point of view, such as reaching for a tool or clamping a holder. 

3. Waste: work that does not create value and could be omitted, such as walking to retrieve tools or parts that could be placed within easy reach. 

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Work outside the cycle

Operator tasks in processes involving multiple operators that require the operator to interrupt the pace of work or leave the area. 

This occurs, for example, when an operator must retrieve parts from storage locations or move completed items to downstream processes. These tasks should be removed from the standardized work of the operator and placed with support personnel such as material handlers and team leaders, who work outside of the branch-time-based continuous flow. 

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Work elements

The individual steps required to complete a cycle at a workstation; the smallest unit of work that can be transferred to another person. 

By breaking work into elements, waste hidden in an operator's cycle is identified and eliminated. The elements can be distributed in relation to branch time to create continuous flow. For example, in the Operator Balance Chart on page 76, the vertical blocks represent work elements. 

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Yamazumi board

Yamazumi is Japanese for "pile. 

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A Japanese term for rolling out concepts, ideas or policies horizontally within a company. 

For example, suppose a valve was found to be malfunctioning on one of the machines in a factory. Yokoten would then be the process that ensures that all similar valves at the plant and at other relevant sites are examined for the same defect.