Lean metrics

- Many of the principles of lean production go back to Henry Ford in the 1920s who believed that you should eliminate anything that does not provide value. That's the basic premise of Lean. Ford believed in paying attention to the details and that little problems if left unattended ultimately became big problems. Thus, Henry Ford was one of the first proponents of continuously improving your business processes. James Womack and Daniel Jones became famous with their 1990 book on Toyota's lean manufacturing approach. They outlined five key principles of this approach to value. Determine value for the specific product. This is where you determine your performance metrics, identify the value stream for that product. Applying process mapping tools, you can determine the steps that add value to your product and the steps that do not. Make value flow without interruptions. Applying the principles of lean and their problem-solving tools, you eliminate those non-value added steps. Let the customer pull value from the manufacturer. This is the basis of just in time manufacturing that tells you to only produce what is needed to satisfy customer demand. Pursue perfection, and this is the foundation for continuous process improvement. Process mapping is one of the key tools of the lean philosophy. The first step to understanding the process is to draw a picture of that process. In this manner, you can more easily see the flow of activities and you can begin to distinguish value added activities from the others. Only after producing a clear map of the process can you begin to apply the many lean tools available to improve that process. Many of the Lean performance measurements are also metrics of Six Sigma projects. Waste, cycle time, and inventory are good examples. One of the limitations of Lean is that their tools are not based in statistics. So when variability is the cause of the problem, lean project managers will call in a Six Sigma expert for assistance. Nowadays, it really takes an understanding of both Lean and Six Sigma applications when determining how to approach a specific process problem. Most applications of lean have been done in a manufacturing environment, so historically, that is where the experience lies. Metrics include improved customer service in every category, better use of machines and people, reduced inventories, and higher product quality. Lean looks closely at such things as machine layout, setups, highly-trained workers, and on-time delivery methods. Most large and medium-sized companies are well-acquainted with lean principles, but surveys indicate that most small have yet to apply these tools and are often not even familiar with the principles and performance metrics. So there is a lot of opportunity for process improvements in the small business sector. It's important to note that lean principles also apply to service activities and processes. Typical examples might include reducing the time waiting in line at a restaurant or improving delivery service for a transportation company. The principles for lean services are the same as lean manufacturing. When you're launching a lean project, the most important thing to remember is to start with a value stream mapping exercise. This is the foundation for applying more specific lean tools and methods, and this is your first step to success.