First in the executive series "Discovering Lean and Deming". I seek to connect Lean to its original thinking as described by W. Edwards Deming and Taiichi Ohno.

1. Fundamentals of Lean Thinking
Written by
Francisco Pulgar-Vidal, fkiQuality
fpulgarvidal@fkiquality.com
1/19/2014
170 Copyright fkiQualityLLC 2014
1

2. presents the
Executive Education Series
Discovering Lean and Deming
1/19/2014
170 Copyright fkiQualityLLC 2014
2

3. Goal of this presentation:
Describe fundamental
Lean ideas and how
they relate to Deming’s
methods of management.

4. We will cover these topics:
1. History of Lean
2. Structure of TPS thinking
3. Customer focus
4. Operational improvement

5. 1. History of Lean

6. Lean is
what an MIT team
has called
the Toyota Production System.

7. Toyota developed a
Japanese method of
automobile production
with the intent to
“catch up with America”
shortly after the end of WWII.

8. The Toyota system aims to
improve overall efficiency
and
enhance the work environment.

9. The Toyota Production System
is thus
business-centric
and
human-centric.

10. Management focused in
improving both
the business and
the person
is a contribution of
W. Edwards Deming.

11. Deming’s “chain reaction”
links the prosperity of both
business and person.

12. Deming’s “chain reaction”:
Improve
quality
Decrease
costs
Raise
productivity
Decrease
prices
Increase
market share
Stay in
business
Provide
employment
back to start

13. Business prosperity
(increased market share) and
personal prosperity
(employment)
begin with quality.

14. But quality requires
knowledge.

15. How do you get knowledge
about your work?
… about your product?
… about your team?
… about your customers?
… about your suppliers?

16. Are these
sources of knowledge?

17. Gain knowledge by
continuously doing and
with the support of a
sound theory.

18. 2. Structure of TPS thinking

19. The Toyota system aims to
improve overall efficiency
and
enhance the work environment.

20. Those who seek to
implement Lean to
justify layoffs
because of efficiency gains
are not doing Lean.

21. Toyota Production System (TPS)
has two pillars:
a. Just-in-time
b. Autonomation

22. a. Just-in-time:
Is a way to produce
economically when
long production runs
do not reduce the cost of
making an automobile.

23. Just-in-time
occurs when each process
receives an item needed,
at the time it is needed and as
many as needed.

24. In real situations,
this synchronization is
too hard to achieve from
start to end or
“push” production.

25. So just-in-time
reverses the order,
giving the production plan
(desired types of cars)
only to final assembly.
This is “pull” production.

26. So, just-in-time moves
materials by having a later
process pick up needed parts
from an earlier process.

27. The earlier process
makes only
the parts picked up.

28. The communication of
needed parts is achieved via
signals called
“kanban” cards.

29. Task coordination
from end to start
is easier and
produces less waste.

30. Just-in-time
gives Toyota the ability to
make more types of
automobiles than
what is possible with
mass-production.

31. b. Autonomation
Is a way to build
judgment in machines to
prevent making bad parts.

32. Autonomation
endows machines with an
automatic stopping device.

33. A stopped machine alerts the
operator to act.
So operators are not tied to a
machine.
Operators can work on several
machines at the same time.

34. In addition to higher worker
productivity,
autonomation makes abnormal
conditions more visible.
Then abnormalities will get
fixed.

35. Autonomation
gives Toyota the ability to
understand problems better
and
start improving.

36. 3. Customer focus

37. Before 1929 things were
designed, made and sold
(as much as possible).
For example,
all Ford cars were black.

38. In 1929 Walter Shewhart
introduced a
feedback4. Find out
1. Design
what user
the
thinks
product
based
2. Make it,
way of
3. Put it on
test it
the market
internally
making things.

39. For the first time,
customer feedback was
integrated with production.

40. Japanese companies became
good at finding what customers
wanted.

41. Japanese companies became
good at filling needs that
customers did not know they
had.

42. Toyota made
“satisfying customer needs”
its most important value.

43. Satisfying customer needs
became the value
that would lead the growth of
the Toyota business.

44. From this value, Toyota
developed two principles to
guide all decisions:
a. Just-in-time (materials flow)
b. Jidoka (awareness)

45. Values
Principles
Just-in-time
Satisfy
customer needs
Jidoka

46. We already saw how just-intime creates a smooth flow of
materials.

47. Awareness of
operational performance and
abnormal conditions
comes from autonomation and
various techniques for
managing visually.

48. To implement each principle,
Toyota applied or invented
methods and tools.

49. Values
Principles
Methods
Tools
Just-in-time
Kanban
Production
kanban
Jidoka
Visual
management
5S
Satisfy customer
needs

50. Any study of Lean or TPS must
focus on values and principles.
Then a business may develop
its own tools.
Copying from Toyota will not
lead to Lean.

51. 4. Operational improvement

52. Lean is a state of achievement
with constant improvement.
It is not static.
So you cannot say,
“this operation is now lean”.

53. Thinking that Lean
can be “achieved”
is a by-product of
equating Lean with
just its methods and tools.

54. However,
values and principles
can always move a business
toward the future.

55. Managers must focus on values
and principles to create a
positive work atmosphere.

56. A positive work atmosphere
is filled with joy.

57. Joy comes from innovating
product, service and process.
Joy comes from improving
product, service and process.

58. Workers cannot find joy
in a work environment
that does not foster
innovation and improvement.

59. PDSA is a tool for innovation
and improvement.
4. Act
1. Plan
3.
Study
2. Do

60. Toyopet
Plan, do
bomb in the
USA.
First Toyota Corolla in U.S.
Act and try
again, with
success.
Toyota Corolla now
The result of
many PDSA
cycles …

61. References:
•
•
•
Out of the Crisis, by W. Edwards Deming, 1982
This is Lean – Resolving the efficiency paradox, by Niklas Modig & Par Ahlstrom, 2012
Toyota Production System: Beyond Large-Scale Production, by Taiichi Ohno, 1988

62. Next presentations will discuss:
• Concept of a system.
• Constancy of purpose.
• Quality built-in, not inspected.
1/19/2014
170 Copyright fkiQualityLLC 2014
62