Beyond Toyota: How to Root Out Waste and Pursue Perfection
The primary focus of this article written by Womack and Jones is to introduce the concept of “lean thinking.” The methodology comprises of 5 steps aimed at enhancing a company’s operational strategy to rid of waste, which the Japanese termed as “mudu.” These waste are brought on by operational inefficiencies, which are characterized by long processing times, long throughput times and high inventory cost. Womack and Jones went on to explain that the concept is not well understood in western world and that implementation is challenging and time consuming. The benefits, however, are tremendous as exemplified by Toyota, the company responsible for developing and introducing this concept to the world. Womack and Jones then went on to use Lantech, a manufacturer of shrink-wrapping machine, as a prime example of a company who has instituted lean thinking and benefited from it tremendously. With the implementation of lean thinking, Lantech was able to transition out of the batch-and-queue processing technique which introduced waste at many points along the value chain to a free flowing process.
The Five Steps in Implementing Lean System
Briefly, there are five steps involved in implementing a lean system. The first step (step 1) is defining the value precisely from the perspective of the end user in terms of a specific product with specific capabilities offered at a specific price in time. The challenge with this step is that different departments in a production line may have different goals that they want to achieve. These goals are not typically aligned with needs of the customer, thus creating waste. The failure to specify the value prior to applying lean techniques could result to providing the wrong product or service. The second step (step 2) is to identify the entire value stream for each product or product family and eliminate waste. Per the author, there are three activities that make up a value stream and they are product definition, information management and physical transformation. The author went on to say that this exercise will shed light to non-value added activities in the production line.
The third step (step 3) is making the value-creating steps flow. This is the most difficult step in the process of developing lean thinking as the more prevalent “batch-and-queue” thinking is institutionalized in many companies. Furthermore, the concept of no waiting, downtime or scraps within or between steps would require introduction of new types of equipment and technologies and getting rid of large machineries that lend to operating in a batch mode. The fourth step (step 4) is designing and providing what customers want only when they want it. In order to do this, the process must be flexible to allow modifications on the same production line. The last and final step (step 5) is the pursuit of perfection. The process can never be perfect and will always require constant reevaluation and optimization. Because all the steps are linked together, a more precise definition of value will always challenge the value stream to reveal waste in an effort to flow faster.
Lantech of Louisville Kentucky Lantech is a company that manufactures machines used in shrink-wrapping of pallets of goods. Lantech had a monopoly in this business for a long time until they lost a patent infringement suit, opening the doors to other manufacturers. Up until then, Lantech has been producing low quality and high marked up price machines. Losing the lawsuit forced Lantech to reexamine and revolutionize its production process in order to complete with other manufacturers in pricing. Lantech at the time employed a batch-and-queue process, which was plagued with inefficiencies. There was excessive amount of inventory, which was expensive to maintain, lots of energy and resources put on moving intermediate products from one line to the
