The identification of different kinds of waste allows us to start looking at our entire process of creating value. To do that, we use certain principles, and these are called the principles of Lean. We've already talked about value from a customer point of view. So, the first principle of Lean is that value should be customer-focused. The next thing that we do is we look at the process that is used to create value, and this is what we call our value stream. The idea in mapping out this value stream is to figure out what the wasted steps are and to try and eliminate them. Once we've tried to do that, we then try to make sure that we do not, through our decisions, create artificial ways to block the smooth flow of the product. We want our product to flow smoothly through the process and that we do not create artificial barriers that prevent the smooth flow of the products. Next, an important, let's call it an invention of the lean system is this notion of pull, where instead of us trying to make product and waiting for the customer to come, we wait for the customer to come and demand the product from us. So, in this sense, our customer is pulling. Now, when we say customer, we're not talking necessarily of the end user. We're talking about whoever is next in line and whoever it is that we are serving in this value stream. So, if I have to make some part and hand it over to the next person in the manufacturing process, that next person is my customer and I wait for them to ask me for more of the product before I make the product. The idea behind this is that if I don't make and keep product, then my inventory goes down. If my inventory goes down, I do not have any artificial buffers which are preventing the product from flowing smoothly. This will only work if we can create a process that is somehow perfect. What do we mean by perfect? That there is no waste in this particular process. This is called, in Lean, the creation of perfection, the ideal state. What process can we design so that things will move smoothly to the product entirely by pull and there are no wasted steps in this process? So, if you can do that, that is called creating the perfect process or the ideal process. Now, obviously, this is all important and nice in concept. But how do we achieve this? How do we go about taking a process that doesn't quite meet our standards, that's not ideal, where there's a lot of waste, and convert it to a process that is ideal? Now, there are a number of tools that Lean management provides for us. Some of these are somewhat complex, and the others are relatively easy to understand, although maybe difficult in practice. The first tool that is used in Lean management is called value stream mapping. As we talked about the value stream, this process allows us to pictorially represent what's going on in the value stream and allows us to surface where the problems are. This is a somewhat involved exercise, and we'll talk more about it later. Then we have some other tools. There's the 5S, the 5 Whys. There's the process called Kaizen. There's the process of creating manufacturing cells. Then, there's the process of creating standardized work. We'll talk about each one of these in turn. So, the 5S comes from the five things that Lean management requires you to do. They are Japanese words, all of which start in S, which is why we call it the 5S. Now, I'm likely to butcher the Japanese pronunciation of these words. So, we'll use Google Translate to say these words. So, the first one is seiri, which is sorting or organizing. In this step, we look at our workplace and figure out a better way of organizing our workplace. The next step is called seiton. In this case, we try to set in order how things are going to be done in this workplace, how do we simplify access to the different things that we need to do work. Then we come to seiso, which is shine. This means how do we keep our workplace clean. By clean, we don't necessarily mean hygienic or dusting, but organized, how do we keep things in the right place, how do we make sure that our workplace is spotless. Now, people say that you should have a clean desk because a cluttered desk is a sign of a cluttered mind. If that's the case, you should not come to my office and see my desk. But in general, this is true. That if there is clutter, that means there is disorganization. So, having a nice, clean workplace is important. Then there is seiketsu. In this case, now that we've created a neat workplace, we want to standardize this neatness. What do we mean by standardize this neatness? We want to make sure that we can continually have processes that keep the workplace looking neat. So, it's not that at the end of the day, we going to clean up everything. Is that we do everything so that things remain neat and tidy throughout time. Then, finally, we have the shitsuke process, which is basically saying, sustaining the neatness. This requires self-discipline. How do we make sure that whatever we've done and all the effort that we've put in in organizing, in simplifying access, in creating a shiny, new workplace, in standardizing the processes, how do we make sure that this lasts, that soon as we walk away from this, that it's not going to get bad again? So, these are the 5Ss. Again, the ideas are very simple. None of this requires us to have any profound theoretical knowledge, but we do need to follow these steps and make sure that we reorganize everything so that it becomes simple, that it becomes neat, it becomes standardize, it becomes repeatable. The next tool that Lean offers is called the 5 Whys. Now the 5 Whys, when you first hear of it you say, ''Surely this cannot be a serious management tool.'' And yet, it's an extremely powerful but simple tool for what's called root cause analysis. So, whenever you see a problem, you would like to know why this problem occurs. And one way to do that, and you should try this, whenever someone talks about a problem that they are facing, start asking them why. So, if someone comes and says to you, ''My car won't start.'' You ask them, ''Why do you think the car doesn't start?'' And they'll say, ''Well, there's no gas going to the engine.'' Now of course you could go immediately and start investigating whether there is any problem in the fuel system and so on. But before you do that maybe you ask another question and you ask, ''Why is there no gas going to the gas engine?'' And the person might say, ''Oh, that's because there's no gas in the fuel tank.'' So, it wasn't something that I had to go and look at the fuel system, is that there's no gas in the fuel tank. So, the next question is but Why? And the person might tell you, ''I didn't fill the tank.'' You say, ''Oh, why is that?'' And they might say, ''Well, I don't have any money.'' And then you say, ''Well, why don't you have any money? I gave you some money." And maybe this is your child that you're talking to. "I gave you money so that you would have enough money to fill the gas tank.'' And they might say, ''Why don't I have money? Well, because I spent it all on new clothes.'' So, the root cause of this had nothing to do with the car, had nothing to do with the fuel system, it had to do with the fact that the person who's supposed to be responsible for this car was irresponsible with money. So, this seems like a fairly simple example, but you will be surprised at how powerful it is. Asking why several times often leads to people having to think about why things happened. The 5 Whys is a technique that's also used for more in depth analysis of root causes, analysis like the Ishikawa diagrams. Where you have multiple reasons why certain problems might be occurring and the 5 Whys allow us to explore all of those reasons in turn. Then, there is the technique called Kaizen, and Kaizen essentially is a technique whereby we get a group of people who are intimately involved in an activity. Oftentimes, this may be line workers in the manufacturing facility. This might be office workers directly interacting with our customers, and we get a group of these peoples together. Since these are the people who have to do the activity and who do it repeatedly, they're often familiar with why that activity doesn't work as well as we think it should and where the problems might be. This is then where we use the creativity of this group of people who have to do this activity to come up with ways to reduce wasteful activity and to improve the process. This is called Kaizen. Oftentimes, this is only a three to five day effort, so it's not like it's a major a year long project. Although increasingly, Kaizen projects can be longer-term projects. But the idea here is let's look at processes, small bits of the process, and see if we can figure out ways to make things better. Ask the people who do the work and ask them, ''How do you think we should do this better?'' Everyone who comes to work and does their work wants to create value given the right incentives, given the right motivation, given the right appreciation. So, to be able to do that, we do Kaizen activities. Now, when we do Kaizen activities, oftentimes, we have to isolate some part of the process. Now, there are natural groupings of parts that we might be looking at or parts of the process that we may be looking at. And these parts or processes might require a fixed set of resources, might be a small number of machines or might be a small number of people. We construct work cells out of this natural grouping of tasks and products. So, we may have what we call a part family. This might be groups of parts that are similar in terms of their processing requirements and so therefore can be made by the same set of machines or personnel. So, we have part families and machine groups, which we'll look at together. We create a work cell of this machines or personnel, and typically, this work group has either one supervisor or may have one operator for a bunch of different machines. Within this work cell, Lean suggests that we have what's called single piece flow, which means that a part moves from one machine to the other individually. That means we don't create batches of parts. So, we don't necessarily want 50 of the part being done on the first process and then those 50 move on to the second process and then they are processed there, so on so forth. We want single parts as far as possible to flow through this process. So, this is what we call a work cell. Finally, Lean requires what is called standardized work. So, in standardized work, every process step is rigorously documented. We try to understand every bit of the work and we try to document it. We want to make sure that we understand the sequence of tasks steps that are being done in the process. We want to know what is the processing time for each task step. We want to know the cycle times associated with the process. We want to know what tools and equipment might be required. We want to know how much inventory is required to make sure that we can go from one step to the other with the least amount of this inventory. We also want to make sure that everyone understands what their exact role is and what their responsibilities are in this particular process. Now, this seems interesting because if we get down to that level of detail it might even be possible to automate this work, and if it could do that, that takes out some of the variability of human performance from this process. So, standardizing work is an important element in Lean management. It's paradoxical that we are looking for continuous improvement which requires us to generate new ideas and be creative, while at the same time, we're trying to make the process as routine and as mundane as possible. But, the idea here is that creativity and involvement of people in that creative process is a way to improve the process while making the process as simple as possible. So, people still are able to express their creativity, still feel motivated for being part of this process, but when they have to do it on a regular basis, this can be done relatively easy. I'd like to think of this in the following way; I'd like to be able to design a nice shirt for myself. But, the act of wearing the shirt ought to be really simple. So, if I could just take the shirt and wrap it and it just wraps around my body perfectly, that's the ideal process that I could think of. So, is there a way for me to make that happen? I use all my creativity in designing such a shirt. So, that is the idea behind standardized work. So, in summary then, what we've learned in this is that we have a number of different principles that Lean uses and they also give us tools that allow us to take a process and simplify the process and eliminate wasteful steps in the process. The idea is to create a perfect process in which every step is value-adding and there is no waste throughout the process. Now, clearly, this is something that we aspire to. It is not essential that we are going to have this right away. But unless we know what we are aspiring to, how do we know we're getting any closer? And so, the whole continuous improvement idea is to figure out where we need to go and then in slow steps keep improving so that we can get there.
