6 Planning Control - JIT Lean Notes

6 Planning & Control Systems: JIT & Lean
Manual Section 6
Planning & Control Systems:
Just In Time & Lean
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Contents
1. Introduction ........................................................................................................................ 4
2. Japan, Toyota and the origins of JIT & Lean ....................................................................... 4
2.1. Japan’s lack of natural resources ................................................................................ 4
2.2. Reputation for poor quality ........................................................................................ 4
2.3. Early difficulties with computers in Japan .................................................................. 4
2.4. Lifetime employment offered by large companies ..................................................... 5
2.5. Complex ownership structure with ‘keiretsu’ ............................................................. 5
2.6. Some Toyota history ................................................................................................... 6
3. Lean perspectives ............................................................................................................... 7
3.1. The Toyota Production System (TPS) .......................................................................... 8
3.2. Liker’s 14 Toyota Principles ......................................................................................... 9
4. Lean and the role of people ............................................................................................. 10
5. Waste ................................................................................................................................ 11
5.1. Causes of waste, Muda, Mura and Muri ................................................................... 12
5.2. Types of waste........................................................................................................... 12
5.3. Tools to identify and reduce waste ........................................................................... 14
6. Lean process principles..................................................................................................... 16
6.1. Principle 2 - Create continuous process flow to bring problems to the surface ...... 16
6.1.1. One piece flow and uncovering problems............................................................. 16
6.1.2. Takt time ................................................................................................................ 18
6.1.3. Process layouts to improve flow ........................................................................... 18
6.2. Principle 3 - Use pull systems to avoid overproduction ........................................... 19
6.3. Principle 4 - Level out the workload (heijunka) ........................................................ 23
6.3.1. Set-up or change-over time reduction .................................................................. 24
6.3.2. Reducing order or batch sizes ............................................................................... 26
6.3.3. Fixing the production schedule to give stability .................................................... 26
6.3.4. Review your product range ................................................................................... 27
6.3.5. Heijunka for services ............................................................................................. 27
6.4. Principle 5 - Build a culture of stopping to fix problems, to get quality right first time,
build quality in ..................................................................................................................... 28
6.4.1. Jidoka ..................................................................................................................... 28
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6.4.2. Error-proofing and Poka-Yoke ............................................................................... 28

6.4.3. Building quality in, not inspecting quality in ......................................................... 29
6.4.4. Total Quality Management, Kaizen and Six Sigma ................................................ 29
6.4.5. Statistical Process Control ..................................................................................... 29
6.4.6. Total productive maintenance .............................................................................. 30
6.5. Principle 6 - Standardised tasks are the foundation for continuous improvement and
employee empowerment .................................................................................................... 31
6.6. Principle 7 - Use visual control so no problems are hidden...................................... 31
6.7. Principle 8 - Use only reliable, thoroughly tested technology that serves your people
and processes....................................................................................................................... 32
7. Lean Supply and Principle 11 ............................................................................................ 33
7.1. Digital disruption ....................................................................................................... 35
8. Summary ........................................................................................................................... 36
8.1. Advantages of Lean in manufacturing ...................................................................... 36
8.2. Disadvantages of Lean in manufacturing .................................................................. 37
8.3. Conclusion ................................................................................................................. 37
9. Seminar Questions............................................................................................................ 39
References ............................................................................................................................... 40
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1. Introduction
‘Lean’ has become embedded in business vocabulary world-wide and the drive to eliminate
waste is never ending. These notes will look at Toyota, where the Just In Time and Lean
developed, what is involved and consider how these approaches apply in a variety of
environments, not just manufacturing. Today, the term Just-in-Time (JIT) is applied widely
across many different industries. JIT remains an important topic which needs to be fully
appreciated.
2. Japan, Toyota and the origins of JIT & Lean

As JIT & Lean developed in Japan it is important to understand a little about the impact that
the location and culture might have had.
2.1. Japan’s lack of natural resources

Japan is a collection of islands, where space is at a premium with just over 70% of land used
for agriculture and forestry, (Central Intelligence Agency USA, 2018). “Japan has long been
characterized as a nation with virtually no natural resources like oil, natural gas, coal, iron and
copper. More than 125 million people live on land area ranking only 61st in the world in terms
of size.” (The Japan Times, 2012) It was almost immediately apparent that to become a
successful global competitor Japan's success depended greatly on effective and efficient
management of imported raw material. There is also a culture of ‘making every grain of rice
count’ and hence it is easy to see how this translates into waste elimination at work.
2.2. Reputation for poor quality

It might seem difficult to believe now but post World War II Japan had a very poor reputation
for the quality of its manufactured goods and sought help from quality experts, including W.
Edwards Deming and Joseph Juran. The Japanese successfully implemented Deming’s and
Juran’s advice, neglected by the USA, creating the ‘total quality management’ approach.
(American Society for Quality (ASQ), 2018)
2.3. Early difficulties with computers in Japan

In the 1970s Western mass production had concentrated on trying to apply computers to
solve their production problems with Materials Requirements Planning (MRP) systems.
However, it became clear that MRP had a number of shortcomings including the following:
• Time consuming computer runs.

• Fixed and relatively long lead times.
• Large batch sizes.
• Infinite capacity assumed.
• Pushed work onto the factory floor by means of issuing works orders, with no
consideration for the state of production further down the operation sequence.
Nevertheless, it was felt in general that these could be overcome by developing more
powerful computers with greater ability to calculate and manipulate vast quantities of data.
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The Japanese computer industry was not particularly well advanced at this time, struggling
with a far more complex written language with over 2,000 Kanji characters taught in schools
compared to just 26 letters in English, (StackExchange, 2013). This led the Japanese
manufacturers to rely less on computers and more on simpler, manual approaches to
operations management.
2.4. Lifetime employment offered by large companies

In Japan the large employer has traditionally taken on many of the services provided in the
UK by the Government via taxation, such as health care, housing and education. Large
companies, like Toyota have a tradition of life-time employment and a very strong link
between pay levels and age. This has made employment with a large company hugely
beneficial to employees and clearly links their own personal future success to the future
success of the company. It also means that as your employees age your wage bill increases.
To remain competitive Japanese companies need to expand, enabling them to recruit
younger, cheaper workers and keep their average labour costs competitive. With life-time
employment Japanese employers also need to find other roles for employees whose jobs are
replaced by technology. This leads to a focus on long-term growth, rather than short-term
profits.
However, there are negative aspects of lifetime employment. A Japanese journalist in the
early 1980s worked undercover as a temporary worker at Toyota and published a book about
his experiences. He reported how physically hard the work was and the tremendous pressure
on his fellow temporary workers to secure a permanent job (Kamata, 1983).
There is some evidence that this practice of life-time employment is breaking down with
reports of Toyota running adverts intended to attract researchers from companies such as
Fujitsu Ltd. , NEC Corp. and Toshiba Corp., with an advert urging them to switch jobs to Toyota
saying “We want engineers from the Nambu Line area, more than from Silicon Valley” ,
(Fujikawa, 2018). This is typical ‘head-hunting’ behaviour of Western companies, but new for
companies like Toyota.
2.5. Complex ownership structure with ‘keiretsu’

According to Twomey (2018) “the structure of major companies in Japan, known as Keiretsu,
is steeped in tradition and relationships.” There are two types of keiretsu, horizontally
integrated keiretsu has cross shareholding between banks and trading companies, for
example at Mitsubishi. Vertical keiretsu occurs within a horizontal keiretsu and combines
both horizontal and vertical integration, with Toyota being a vertical keiretsu.
“Toyota's success is dependent on suppliers and manufacturers for parts, employees for
production, real estate for dealerships, steel, plastics and electronics suppliers for cars as well
as wholesalers. All ancillary companies operate within the vertical keiretsu of Toyota but are
members of the larger horizontal keiretsu, although much lower on the organizational chart.”
(Twomey, 2018).
Keiretsu provided easy access to capital via the Japanese banks and facilitated closer supply
chain relationships with more efficient information sharing, supporting Lean Supply, which
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will be discussed later. The Japanese banking sector struggled in the 1990s, forcing some
companies to borrow capital from non keiretsu members. Today increased competition from
globalization and new technology may weaken the keiretsu (Twomey, 2018).
2.6. Some Toyota history

In 1950 Toyota had only just recovered from a long industrial strike. Eiji Toyoda, a member of
the family that owned Toyota, mechanical engineer and newly appointed manufacturing
managing director spent 3-months studying operations at the Ford Motor Company’s Rouge
factory in Detroit. According to Womack et al (1990 p. 49) in their famous book about Toyota,
“The machine that changed the world” Toyoda recognised that copying mass production in
Japan would not work but that he thought some ideas would. One idea he is said to have
borrowed from Ford was to encourage employees to make cost-cutting ideas, (Encyclopedia
of World Biography, 2004). It was Eiji Toyoda and his industrial engineer, Taiichi Ohno who
developed ‘The Toyota Production System’, Just-In-Time and Lean production. Ohno claims
they gained a more important insight from visiting a US supermarket than the visit to Ford,
saying:
“The tool used to operate the system is Kanban, an idea I got from American supermarkets…
A supermarket is where a customer can get (1) what is needed, (2) at the time needed, (3) in
the amount needed…the supermarket is a place where we buy according to need… From the
supermarket we got the idea of viewing the earlier process in a production line as a kind of
store.” (Ohno, 1988 pp. 25,26).
There was a third key person responsible for developing the Toyota Production System,
overlooked by Womack et al (1990), an industrial engineer called Shigeo Shingo. He worked
with Toyota (Liker, 2004 p. 120) and was responsible for making many of Ohno’s ideas work.
Shingo developed a range of techniques we will introduce later in the notes, including Poka-
Yoke, Mistake Proofing, SMED, Just in Time Production, and Jidoka.
Taiichi Ohno recognised that that:
• By far the greatest part of a product's manufacturing lead-time is spent waiting in

queues.
• The scheduling, loading and sequencing of a typical batch production plant is complex
to the point of virtual impossibility (even with a computer).
Toyota remained successful until 2002, when it set a target to become the number 1 global
automotive manufacturing company in the world, requiring a growth of 50%, (Gwizdak, et al.,
2010). Earlier we discussed how life-time employment drives the need for expansion. This
resulted in a number of issues, including quality problems with vehicles being recalled for
urgent repair. For example, a problem with airbags inflators occurred in 2010-11 and again in
2016, (Reuters, 2016). In 2016 Toyota fell out of Gartner’s Supply Chain Top 25, being replaced
by BMW, and has not yet returned to the top 25, (Gartner, 2018). However, whilst Toyota’s
supply chain and operational performance may no longer be the best in the automotive
industry they have achieved their goal of being the number 1 global company. In the first 7-
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months of 2018 Toyota had the largest global market share, 10.4%, compared to second place
Volkswagen with 7.8%, (Focus2Move, 2018).
What is not in doubt is the success of the Toyota Production System and the global adoption
of this Lean approach not only in manufacturing but in many other industries. It is interesting
that in the early days of JIT & Lean in the West companies were keen to create their own
name for adopting this approach. For example, when it still made products US company IBM
introduced ‘continuous-flow-manufacture’ at its Havant factory in the UK in 1983, (Bradbury,
1983-84). Today companies simply refer to using JIT and Lean in their operations. So what is
involved in JIT and Lean?
3. Lean perspectives
Slack et al (2016 p. 500) explain Lean from three perspectives:
“Lean is a philosophy of how to run operations” – One definition is: "A philosophy directed
towards the elimination of waste where waste is anything which adds costs but not value to
a product” T. Ohno, Toyota MC, Timings (1993). The aim of JIT has been expressed as
continuously to eliminate waste and delay at every stage from raw material to final customer
and from concept to market. Furthermore, to achieve five zeros ( zero paper, inventory,
downtime, delay, and defects) involves attacking seven wastes (overproducing, waiting,
transporting, inappropriate processing, excess inventory, excessive methods and excessive
scrap). However, Slack, et al (2016 p. 500) believe that it is more than the elimination of waste,
it is also about doing simple things well and ensuring smooth flow as well as striving to
improve continuously to meet the customer’s exact needs. Liker (2004 p. 37) explains that
part of the Toyota Production System long-term philosophy is to recognise that Toyota has a
bigger purpose than making money, it should create value for the customers, society and the
economy. He also stresses the need for every employee to take personal responsibility and
recognise their place in the company’s history and future. This wider view of the company
predates the current similar business themes of Corporate Social Responsibility and the triple
bottom line of economical, societal and environmental sustainability, (triple bottom line
definition from Slaper & Hall (2011)).
“Lean is a method of planning and control” – when Western manufacturers first tried to copy
what Toyota was doing they focussed on the most obvious visible sign of JIT production, the
‘pull’ system using ‘Kanban’ signals to replace what is sold, rather than a ‘push’ approach to
make the planned master production schedule based on forecast demand. Early
implementations often met problems because Western manufacturers failed to recognise
that a number of methods are needed to make Kanban work, including synchronised flow,
level schedules and mixed model production. These methods also have to be combined with
a commitment to attack waste as it is exposed.
“Lean is a set of tools that improve operations performance” – according to Slack, et al (2016
p. 500) the ‘engine room’ of Lean are improvement tools and techniques, such as value-
stream mapping and quality tools such as six sigma.
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3.1. The Toyota Production System (TPS)

The ‘Toyota Production System House diagram brings this together.
Figure 1 - Toyota Production System House, (Liker, 2004 p. 33)
The elements in the house will be explained in these notes against 14 principles. Liker (2004)
studied Toyota for 20 years and identified these 14 principles, grouping them into the 4P
categories, philosophy, process, people/partners and problem solving. The 4P pyramid is
shown in Figure 2. In 2004 based on his experience of working with USA companies he felt
that many companies had only implemented the 2nd P, the Toyota processes, but not the
other 3. He felt that they were therefore unlikely to achieve the same results, (Liker, 2004 pp.
13-14). In the UK we were surprised by the openness of Toyota in Derby to host visits at this
time, even from competitors. Anecdotal comments made by Toyota employees suggested
that they simply did not believe their competitors would be able to copy and catch them up,
hence they were not concerned about them visiting.
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Figure 2 - the 4P model of the Toyota Way, (Liker, 2004 p. 6)
3.2. Liker’s 14 Toyota Principles

The 14 principles are, (Liker, 2004 pp. 39-40):
“Long-term philosophy (Philosophy)
1. Base your management decisions on a long-term philosophy, even at the expense of
short-term financial goals.
The right process will produce the right results (Process)
2. Create continuous process flow to bring problems to the surface
3. Use pull systems to avoid overproduction
4. Level out the workload (heijunka)
5. Build a culture of stopping to fix problems, to get quality right first time
6. Standardised tasks are the foundation for continuous improvement and employee
empowerment
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology that serves your people and processes
Add value to the organisation by developing your people and partners (People and
Partners)
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to
others
10. Develop exceptional people and teams to follow your company’s philosophy
11. Respect your extended network of partners and suppliers by challenging them and helping
them improve
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Continuously solving root problems drives organisational learning (Problem-solving)

12. Go and see for yourself to thoroughly understand the situation (genchi genbutsu)
13. Make decisions slowly by consensus, thoroughly considering all options; implement
decisions quickly
14. Become a learning organisation through relentless reflection (hansen) and continuous
improvement (kaizen)”
The first principle, Lean as a philosophy, has already been discussed. These notes will consider
in detail principles 1 to 8 and principle 11 by looking at Lean Supply, concentrating on the
operations management aspects of Lean and JIT. However, before looking at these aspects
the importance of people in the Lean system and waste will be considered, both aspects
equally applicable regardless of the type of operating environment.
4. Lean and the role of people

The final 6 of the 14 Toyota principles are devoted to developing the people both within the
organisation and within the supply chain. The original Lean advocates emphasised the need
to have ‘respect for people’. The Toyota Production System emphasises team-based
approaches to problem solving, designing mass production operations to provide both job
rotation (doing different tasks of the same type) and job enrichment (varying the type of task
and adding in more decision making & responsibility) and multi-skilling. These have been
expanded by Western writers on Lean, considering its application to non-manufacturing
environments and Slack et al. ( (2016 pp. 504-505) include the following:
Discipline – standardised work. Liker (2004 p. 146) mentions on principle 6 is that standard
processes that capture the organisations’ learning about best practices. Standards are also
vital for safety and quality.
Flexibility – closely linked to multi-skilling and required to move towards one piece flow and
mixed model production, principles 2 and 4, but also helps to develop people.
Equality – unfair and divisive personnel policies should be removed. In UK factories in the
1980s and 1990s there were often different canteens, or restaurants, for different types of
workers, with the lowest level employees given the most basic restaurant service. A very
visual divisive practice. Today the equality of women and ethnic minorities with respect to
pay remains a topic of much debate.
Autonomy – part of job enrichment involves giving people more decision making
responsibility. Principle 5 gives autonomy to people to stop the production line if a quality
problem is encountered.
Development of personnel – at the heart of Toyota principles 9 and 10. A common phrase in
the UK is that ‘the only asset in your company that increases in value walks in on two feet’, it
is your employees. All other assets depreciate in value. With a policy of life-time employment
development of people is even more crucial.
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Quality of Working Life (QWL) – both quality of working life and work-life balance are topical
issues for employers in the UK. The belief is that a higher quality of working life will deliver
more motivated and healthier employees.
Creativity – again it is believed that employees who are given the opportunity to be more
creative at work will be more motivated and the creativity should be focused on improving
current and future processes. There have been different fashions for improvement activities,
starting with basic employee suggestion schemes and improvement activities including
Quality Circles, Kaizen activities, 5Ss and Six Sigma.
Total people involvement – getting everyone to help improve company performance. Toyota
principle 13 is about gaining consensus for decisions.
However, as mentioned before there are negative aspects of Lean and Slack et al (2016 p.
506) suggest Japanese employers have been criticized for neglecting Corporate Social
Responsibility and Quality of Work Life. The removal of inventory as a buffer and a deliberate
policy of exposing problems can lead to a very stressful working environment and a system
that has to tackle higher levels of short-term failure for greater success in the long-term.
5. Waste
In Lean the goal is to reduce the volume and complexity of the non value-adding activities
(NVA) thus making the company leaner and fitter, and more able to respond to customer
demand. Value is normally considered to be everything the customer is willing to pay for, a
definition equally applicable to all operating environments including services, shown in Figure
3.
Figure 3 - Value and non-value adding activities
However, identifying value can be simpler in a manufacturing environment and is traditionally

described as being anything that does not “change the form, fit or function”, (Dennis, 2015 p.
29). This tends to involve the physical process of manufacturing. However, there are activities
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that are essential, such as planning and testing, that even though the customer might not
want to pay for them they are an essential part of ensuring value is delivered to the customer.
These could be defined as necessary waste, (Kanbanize, 2018) but it is not very motivating for
many people in a company to find that their job is defined as a ‘necessary waste’. A classic
service definition of value is the ratio of quality to cost, (Dennis, 2015 p. 29). Looking at the
opposite of value, waste, is this any easier to define?
5.1. Causes of waste, Muda, Mura and Muri

Slack (2016 p. 506) define Muda, Mura and Muri as 3 causes of waste, or the 3-Mu.
Muda: simply anything that does not add value to the customer. Using the traditional 4M
classification, failure by machines, materials or manpower to add value to the system. It could
also be failure to communicate or understand the customer requirements or inefficient use
of resources.
Mura: is a lack of consistency or unevenness. The result of unevenness is that people and
machines can become overloaded.
Muri: “means absurd or unreasonable”, (Slack, et al., 2016 p. 507) and could be excessive
demands on output as a result of poor quality due to the waste of defective goods.
An example of the 3-M is shown below. The 3-M are the causes and they result in different
types of waste.
Figure 4 - Example of the 3-Mu, (Dennis, 2015 p. 36)
5.2. Types of waste

Most people writing about the 7 types of waste attribute them to Taiichi Ohno, for example
Womack & Jones (2003) and Kanbanize (2018).
Waste Production Software Dev Marketing
Task switching,
Moving parts and interruptions,
materials from one Task switching, unnecessary long
Transport place to another interruptions marketing funnel
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Undelivered code. Fully-prepared marketing

Undelivered Undelivered campaigns which stay
Inventory products or parts features unlaunched
Unnecessary meetings,
Unnecessary extra effort to find
Unnecessary meetings, extra information, attending
movement of the effort to find events without clear
Motion worker information agenda
Waiting (often related to

lack of hierarchical
Waiting Waiting Waiting flexibility)
Performing many different

marketing activities
Features nobody without having a clear
Overproduction Too many parts uses vision and strategy
Unnecessary Generating countless

Spending a lot of complex marketing reports
Over- time on a given algorithms solving manually, while they can
processing task simple problems be automated
Wrong brand
Defects Broken parts Bugs Communication
Table 1 explains these and gives examples in three different operating environments. The
acronym TIM WOOD can help to remember them.
Others have added an eighth. For example, Dennis (2015 p. 33), has added ‘knowledge’, and
explains this means disconnects or barriers to communication, although lack of knowledge
might be more apt. The construction industry in the UK has its own version of Lean, ‘Lean
Construction’ and they have added a similar eighth waste but with an easier to understand
name, ‘skills misuse’. This is defined as “the waste of not effectively tapping into the
expertise and knowledge of people”. (O’Connor, et al., 2013 p. 3) Both of these appear to be
attempts at adding something more relevant to a non-manufacturing environment. It will be
interesting to see if an eighth waste proves to be useful additions, or whether like the
different names given to JIT by those outside Toyota in the early days, it will eventually be
dropped.
Waste Production Software Dev Marketing
Task switching,
Moving parts and interruptions,
materials from one Task switching, unnecessary long
Transport place to another interruptions marketing funnel
Undelivered code. Fully-prepared marketing

Undelivered Undelivered campaigns which stay
Inventory products or parts features unlaunched
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Unnecessary meetings,
Unnecessary extra effort to find
Unnecessary meetings, extra information, attending
movement of the effort to find events without clear
Motion worker information agenda
Waiting (often related to

lack of hierarchical
Waiting Waiting Waiting flexibility)
Performing many different

marketing activities
Features nobody without having a clear
Overproduction Too many parts uses vision and strategy
Unnecessary Generating countless

Spending a lot of complex marketing reports
Over- time on a given algorithms solving manually, while they can
processing task simple problems be automated
Wrong brand
Defects Broken parts Bugs Communication
Table 1 - What is value in Lean? (Kanbanize, 2018)
5.3. Tools to identify and reduce waste

Value stream mapping has become on the most widely used tool and has “spread into
knowledge work industries such as software development, IT operations, marketing and many
others”, (Kanbanize, 2018). Slack (2016 p. 509) recommend a 4 step process:
1. Identify which value stream you are going to map, most businesses may have several.
2. Map the ‘current state’ of the process. Typical value stream symbols are shown in Figure
5 from Jacobs & Chase (2018 p. 356) Many software packages include a set of value stream
symbols, including Microsoft’s Visio programme.
3. Diagnose problems and map a ‘future state’ map. The ‘kaizen burst’ (kaizen means
continuous improvement), symbol is used to suggest areas for further improvement.
4. Implement the changes.
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Figure 5 - Value stream mapping symbols, (Jacobs, et al., 2018 p. 356)
We used value stream mapping at the University to review the undergraduate applications
and admission process, supported by an external consultant. The external consultant was able
to use his experience to help us map the process more quickly and simply gathering a group
of supplier and customers of the process to discuss what the problems were and how they
might be solved on a single day was very beneficial. Ongoing working relationships were
improved and non-value adding time was reduced.
Figure 6 shows the current state for an industrial air conditioning installation service.
Throughput time is simple the total time through the process and in this example was 258
hours, whereas the mapping process identified that only 8 hours was value-adding, 3.1%,
(Slack, et al., 2016 p. 509). Estimates of typical value-adding percentages generally range from
1-10%, often quoting 5%, e.g. (Torrani, 2014), giving plenty of scope for improvement.
Lean accounting has been developed by Brian Maskell, who wrote a seminal textbook on
“Performance measurement for world class manufacturing: a model for American
companies”, (Maskell, 1991). Maskell (2018) says “Value streams are the profit centers of a
lean enterprise and all financial analysis should be performed at this level.” Different
management accounting systems were discussed in the Inventory Management section.
The 5 Whys is as simple as it sounds, you keep challenging why a problem has occurred and
repeatedly asking should lead you to the root cause. According to iSixSigma (2018); “The 5
Whys is a technique used in the Analyze phase of the Six Sigma DMAIC (Define, Measure,
Analyze, Improve, Control) methodology”.
Having explained waste, value and tools to identify waste we will now consider the rest of
the Toyota principles.
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Figure 6 - Current state value stream map of an air-conditioning installation service, (Slack, et al., 2016 p. 510)
6. Lean process principles

6 of the Toyota principles relate to Lean processes.
6.1. Principle 2 - Create continuous process flow to bring problems to the surface
The section will consider how one piece flow uncovers problems, explain what Takt time is
and consider process layouts suitable for JIT production. The ideal batch or order size in a
Lean system would be a single unit, or one piece flowing throughout the entire supply chain.
6.1.1. One piece flow and uncovering problems

Liker (2004 p. 87) gives the following quote from Teruyuki Minoura, former President of
Toyota Motor Manufacturing, North America.
“If some problem occurs in one-piece flow manufacturing then the whole production line
stops. In this sense it is a very bad system of manufacturing. But when production stops
everyone is forced to solve the problem immediately. So team members have to think, and
through thinking members grow and become better members and people.”
As well as highlighting the importance Toyota place on team working and developing people
this quote illustrates the priority on long-term improvement, at the expense of short-term
performance. This has been a concept that Western business culture struggled to accept. In
the UK the traditional emphasis has been on short-term profitability and on keeping direct
labour ‘busy’ processing something for the customer. In manufacturing the fact that people
might be making a defective product was overlooked and it as considered more important to
achieve the target for production volume.
The easiest way to understand how moving to one piece flow brings problems to the surface
is to draw the analogy of a ship in a river. The river represents the level of inventory and
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excess capacity in a company and the rocks represent problems. If the river level falls the ship
will run aground on the rocks and the productivity problems will have to be tackled for
production to continue.
Figure 7 - Reducing the level of inventory, (Slack, et al., 2016 p. 503)
Not all companies may be able to achieve one-piece flow and still make a profit. However,
the goal to continuously strive to reduce batch sizes and P time will deliver improvements.
One of the most obvious wastes to tackle is waiting and according to Liker (2004 p. 37) “no
work project should be waiting for someone to work on it”. The first step is to understand the
flow of work projects through a service or the flow of materials through a production system
and only then can you try to improve the rate and eliminate waste. A key tool for this is value-
stream mapping, discussed in Section 5.3.
Another way to understand how Lean approaches synchronized flow is illustrated by Slack et
al (2016 p. 502) in Figure 8. A traditional approach places inventory buffers between the
processes, insulating them from each other. However, this not only introduces a delay,
making the forecasting horizon longer, it hides problems. Section 6.2 will explain how a
Kanban signal can be used to pull production through the stages in b below.
Figure 8 - Traditional (a) and Lean synchronized flow (b), (Slack, et al., 2016 p. 502)
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6.1.2. Takt time

A key measure of one piece flow is the ‘Takt time’. Liker (2004 p. 94) explains that Takt is
German for rhythm or meter and is the rate at which the customer is buying the product. He
gives this numerical example of Takt time.
Takt Time
Working day = 7 hours 20 minutes, or 440 minutes
Working month = 20 days, or 8,800 minutes
Customer demand per month = 17,600 units
Takt time = 8,800 / 17,600 = 30 seconds
True one piece flow produces 1 part every 30 seconds
Figure 9 - Takt time and one piece flow, (Liker, 2004 p. 94)
Hence the Takt time sets the rate for one piece flow.
6.1.3. Process layouts to improve flow

The flow in a mass production assembly line can be easier to see with every stage of assembly
adjacent to the previous stage and the distance the product travels during assembly is
minimised. However, this is only possible if production volume is high enough to justify
dedicated an assembly line to one single product or a small number of very similar products.
As the volume falls and we move to batch production facilities are often grouped by type and
the product or customer spends a long time travelling between different production stages.
Group Technology and Cellular manufacturing both try to create the benefits of mass
production for a larger family of similar components or products, sold in lower volumes.
Identification of such families is made easier by a standard classification and coding system
which is used throughout the company, therefore simplifying production control. This coding
system is usually linked to part numbers. The individual part numbers identify the type of
component, material, etc. so for example, all shafts would start SH 01 (SH for shaft and 01 to
indicate mild steel).
Some Japanese firms place a great deal of importance on the shape and form of the cell as
well as upon its machines and capacity. The so called "U-shape" of the production units is
claimed to improve the relationship between workers, with a greater sense of identity with
some common objectives and goals, as show in Figure 10.
The design of cells must be such that they provide the flexibility of operation to allow product
changes of the kind and frequency needed. Flexibility in operators’ skills improves the
flexibility of the cell so that one worker can operate multiple machines. Fixed routings mean
a part should only be found in one place coming from a single outbound stock point. Inventory
within a cell, between successive stages of production, should be virtually zero. There should
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be opportunity for continuous improvements to be made by the cell members, and they
should be allowed to benefit from such improvements wherever possible. The machines
should be closely packed together to minimize flow distances. The introduction of alarm and
signal systems to highlight potential problems would stop the cell so that the all the operators
could immediately solve the problem, covered under principle 5.
Figure 10 - A sketch of a U-shaped production cell at Sumitomo disc brakes, (Savino, et al., 2015)
Cellular layouts can also be applied successfully to administration areas, for example,
grouping an accountant with finance, customer credit and customer service personnel, may
speed up processing and help in the speedy resolution of problems. The benefits of cellular
layout have long been proven, for example focusing routine operations into a 'fast track' using
cells, handled by designated account administrators, helped to cut throughput time by 60%
at the maintenance contract group at Wang Computers, (Harrison, 1992).
6.2. Principle 3 - Use pull systems to avoid overproduction

The Kanban methods devised by Taiichi Ohno at Toyota were undoubtedly one of the most
influential factors in changing attitudes towards production and inventory control. The basic
philosophy of JIT/Kanban is disarmingly simple. The sale of one unit to the end customer
triggers a ‘pull’ system to replace the unit that has been sold. Parts are not made or supplied
until they are needed for the next stage of production. However, it is still a make-to-stock
system, even if the goal of single piece flow and a batch size of 1 has been achieved. The level
of inventory within the system is thus controlled by the form of the pull instruction.
The Toyota Kanban system uses two cards, or Kanbans, and is known as the "Dual Card"
method. While this approach is well-tested and successful it is easier to understand the
principles behind the Kanban approach by considering the "Single Card" method first.
Consider Figure 11. It can be seen that the Kanban, or production card, cycles between the
Work Centre (WC1 or WC2) and the Outbound Stock Point. The operator at the next
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appropriate Work Centre is under instruction to make parts to pass on to the next stage of
production only when there is a Kanban available. The card can be seen therefore, as an
authorisation to carry on with the next job. In order to make the next product, the operator
needs material or parts from the nearest upstream Work Centre (e.g. WC2 needs parts from
WC1). If those parts are available the operator collects them from the Outbound Stock Point
and returns the Kanban to the upstream work centre thus authorising the production of
replacements for the parts he is using. When he has made the parts required he consigns
them to the (downstream) Stock Point and the Kanban travels with the newly-made
products.
Kanban is a stock replenishment system then, in which all work has to be authorised by the
arrival from downstream of a production card or Kanban.
Figure 11 - Single Card Kanban
Figure 12 - Dual Card Kanban
The Toyota system using a dual card Kanban is similar in principle to the single card system.
The main difference can be seen in Figure 12. First, each Work Centre has both an Inbound
and an Outbound Stock Point. The movement of material from the Inbound Stock Point,
through the Work Centre, to the Outbound Stock Point following exactly the same procedure
as a single card system. The second difference is that the Inbound Stock Point is replenished
from the preceding Outbound Stock Point, the movement between the two requiring
authorisation by a Transport (or conveyance) card. In some respects the transport process
can be seen as simply an alternative form of production operation as far as the stock control
and movement is concerned.
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The two card system is certainly more complicated and requires more storage locations,
though not necessarily more stock. However, it is more appropriate when successive stages
of production are physically remote from each other, or when they are not within sight.
In a "pure" Kanban system the number of cards will set an upper limit to the amount of
inventory between any two successive stages of production. Therefore, the number of
Kanbans directly controls the level of Work In Progress inventory in the system. This makes it
necessary to take decisions about the number of Kanbans that are required by any particular
production unit.
The theoretical number of Kanbans needed can be calculated with the following formula:
D* L (1 +s )
n=
c
Where: n = number of Kanbans
D = Demand per unit time
L = Lead time
s = safety stock
c = capacity of container
This formula begs the question of how much safety stock is required and how many items
should each container hold.
There are two main approaches to answer these questions. In the simplest case the system is
operated with some fairly arbitrary decision being taken initially, based upon existing levels
of inventory perhaps. The number of Kanbans is then reduced and the system is allowed to
run on. If no problems are encountered the number of Kanbans is reduced again, and the
process is continued. At some stage this sequence is likely to uncover one or more of the rocks
in Figure 7, some problem which was being obscured by the level of inventory in the system
will be forced into focus. The entire workforce, managers and workers alike, should then be
drawn into finding some solution to the problem. It is important that these problems should
be solved and not simply hidden or avoided as they will probably reappear. When the problem
has been duly dispatched the whole process starts again, and goes on infinitely.
An alternative approach to the factory floor, "suck it and see" method, is to test the system
in advance by the use of simulation. This does make it possible to anticipate some of the most
likely sources of trouble well before the process is put into effect. The acid test is always on
the factory floor however, as the precise pattern of disturbances due to transient problems,
supplier failures, machine stoppages etc., is virtually impossible to predict.
Both single and dual card Kanban systems require discipline in order to operate successfully.
In particular, the fact that operators are not able to build up their own local buffer against
shortages means that there must be a prompt response to the call for replacement parts and
material. Equally, the system must be simple to operate and there should be no chance of
Page 21
ambiguity over the meaning of the Kanban signals. Many firms using this approach have
adopted some form of colour coding as a means of simplifying material card paths. Other
types of Kanban systems include:
Container system: an empty container signals the need to fill it. The amount of Work In
Progress inventory is then controlled by the numbers of containers. This system works where
containers are specifically designed for parts and no other parts can fit into them. For example
a welding fixture or precision fixture for machining.
Containerless system: in assembly-line environments, operators having their own workbench
areas, put completed units on painted squares, one unit per square. Each painted square
represents a container, the number of painted squares on each operator's bench is calculated
to balance the line flow. The signal to assemble is given by a subsequent operator emptying
the operators square. A container-less system is employed at McDonald's, where an empty
ramp of beef burgers signals the authority to supply.
Verbal, electronic and golf ball systems: the user signals that more is needed by telling the
maker by telephone, electronic message or simply by shouting. A variant is to roll colour-
coded balls (colour refers to part number) down a tube. Liker (2004 p. 110) explains that in
2004 Toyota were moving to electronic Kanban, perhaps having identified the physical
Kanban card as a form of waste and wishing to remove the task of sorting and sending back
the cards.
Finally it is worth pointing out that most companies will use a combination of ‘push’ and ‘pull’
systems, even Toyota. New product design is scheduled with a ‘push’ system and where ‘P
time’ is long, for example shipping Toyota parts from Japan to the USA, a ‘push’ scheduling
system is used, (Liker, 2004 p. 110). Lean or JIT processes are not suitable everywhere. The
suitability of JIT for a range of process choice environments is shown in Figure 13. Those at
the centre of the diagram are prime candidates for JIT manufacturing. Those at the top left or
bottom right will be suitable for selected applications. In the case of job shops, such
applications may include total quality, workforce flexibility and the promotion of flow in
manufacture. It is therefore possible to have JIT and MRP working consecutively in the same
organisation.
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Figure 13 - JIT and choice of Process, (Harrison, 1992)
6.3. Principle 4 - Level out the workload (heijunka)

There would be little point in restricting the flow of work through the various stages of
preparation within a plant, only to see it all pile up at the final stages (i.e., final assembly).
This is what would happen if sufficient output for the long term demand of each product were
to be made in a single batch. In order to avoid this it is necessary to level the production
schedule over some time period. The length of time cannot be specified as some general rule
because of the differences in product complexity and demand patterns, but it is usually of the
order of weeks or months rather than days. The result of this levelling is shown in Figure 14.
Figure 14 - Schedule Levelling - One Run per Month
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Figure 15 - Schedule Levelling - Five Runs per Month
Imagine a company manufacturing two products (Models A and B) with demand for each
running at a steady one hundred units per day. The manufacturing capacity of the plant is in
balance with demand i.e. at two hundred of either model per day. The position shown in
Figure 14 is a production run of each model once a month with finished goods inventory
increasing for ten days and then decreasing for ten days. The average inventory in this case
is five hundred and fifty units (including the safety stock of fifty units). In the case of Figure
15, a ‘mixed model’ approach is taken with each model being produced five times per month
and the average inventory is one hundred and fifty units (including safety stock). The
advantages of the second case are obvious.
6.3.1. Set-up or change-over time reduction

It is immediately apparent that the mixed model production, in Figure 15, can only be
accepted if the changeover time for one model to another is short. Otherwise the loss of
capacity due to frequent changes may mean that the total demand cannot be met. Set-up
time is the time between the last production of part A and the first good production of part
B. It is not complete until the process is producing parts to an acceptable quality. Set-up time
can be eliminated by dedication equipment to one product but often demand is not high
enough to justify dedicating equipment to one product only.
Shigeo Shingo, the industrialist who advised Toyota, made a major break-through when he
recognised that there were two types of operation involved in a set-up; ‘external’, that can
take place when the machine is still running and ‘internal’ that can only take place once the
machine is stopped. The best visual example of set-up reduction is to watch how they change
tyres in a Formula One car race. The current record of 1.9 seconds was set in 2016 by the
Williams team, (Formula1, 2017). The design of the Formula 1 car has been changed to
facilitate such a fast changeover, with one bolt holding the wheel on, the design of the tooling
Page 24
has been greatly simplified and a large team prepare for the tyre change to minimise the time
the car is stopped. More generally, set-up times can be reduced by the following approach:
1. Examine what the set-up is to accomplish
2. Study the existing set-up procedures
3. Do as much external set-up as possible
4. Eliminate as much adjustment time (i.e., the time taken for small, consecutive changes in
machine parameters, e.g., setting the shut height of a high speed press, centering machine
Example of Set-up Reduction
tools, setting a dial by 'eye') as possible.
5. Practice and refine the set-up procedures.
Figure 16 gives a graphical description of the above.
Start 90 minute average
Set Up 90
80
70 Organise, shift internal elements to external
60
50 Modify equipment for fast exchange
40
Introduce operators to ‘one touch’
30
20 Practice and standardise
10
0
May June July Aug Sept Oct
Figure 16 - Example of Set-up Reduction, (Bicheno, 1991)
There will always be some equipment which it is difficult to reduce the set-up on. In such
cases it may be necessary to replace equipment with simpler and more flexible equipment or
in extreme cases duplicate equipment. These are more difficult decisions though, with cost
implications which have to be weighed against the benefits obtained.
The reduction of changeover times does not only involve engineering improvements. It is
more often the case that the time lost due to poor organisation is overlooked, perhaps
because it is underestimated. It has been found in many different industries that the set-up
time can be reduced by around half simply by good preparation. The next tools required for
the job should be brought before they are needed and sited near to the machine. Every tool,
jig, fixture should have its own specified location and should be returned there when not in
use. Records of where tools etc. are located should be kept scrupulously up to date (e.g. in
use, away for maintenance or modification etc.). It is often better to have spare capacity
among setters than to have jobs waiting because of false economies in staffing. The job of
setting can be helped if there is flexibility among the workforce with some operators doing
the more straightforward parts of removing tool sets or of preparation. This will all help to
provide the essential speed in changeovers. The above points are encompassed in the SMED
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(Single Minute Exchange of Die, where Die is another name for a tool) methodology which
has also been very successful in significantly reducing set-up times. This has been taken one
stage further with OTED (One Touch Exchange of Die).
6.3.2. Reducing order or batch sizes

As mentioned earlier the ideal batch size would be one. If we examine the formula to calculate
Economic Order Quantity (EOQ) or Economic Batch Quantity (EBQ), covered in the Inventory
section we see that it is a trade-off between the cost of ordering or setting up and the cost of
holding inventory. We have just discussed how SMED and OTED reduce the set-up time and
therefore the cost of setting up. Similarly working with suppliers in Lean Supply can reduce
the cost of ordering. The Japanese believe that Western manufacturers have underestimated
the cost of holding stock, failing to recognise the size of the lost opportunities that results
from hiding problems with inventory and not fixing problems permanently. Figure 17 shows
how a smaller EOQ/EBQ can now be justified, reducing the inventory waste.
Figure 17 - Impact on EOQ of rising inventory holding costs and falling order costs, (Slack, et al., 2016 p. 451)
6.3.3. Fixing the production schedule to give stability

Perhaps less obviously, but of considerable importance to making Lean processes work is that
the schedule should be fixed for a reasonable length of time ahead. This demands that the
output requirement must be firm over a longer horizon. According to (Watt, 2016) Japanese
automotive manufacturers in the were fixing the schedule with Japanese suppliers supplying
to the UK 3 months in advance to allow for shipping times and 6 weeks in advance for UK
suppliers.
Page 26
The benefits of stability in production remain poorly understood in many UK companies and
instability in production schedules was highlighted as a problem when Concentra’s SupplyVue
visualisation tool was applied in the UK lock manufacturer Lowe and Fletcher, (Trevor-Jones,
2018).
6.3.4. Review your product range

Heijunka requires mixed model production to meet the Takt time for each product, ideally
with daily production of every product. However, most companies do not have uniform
demand for each product in their range and a classic tool to categorise products by demand
is to use ‘Runner, Repeater and Stranger’ analysis, described in the Inventory management
section. Trevor-Jones (2018) explained that in Lowe and Fletcher just 16 of their locks make
up 80% of their production volume but that their total product range was considerably larger
with many repeaters and strangers. ‘Strangers’ are unlikely to need daily production. For
stranger items companies can consider several options:
• Use marketing to increase demand and move the item to a repeater or runner.
• Consider withdrawing the product.
• Consider outsourcing the product to a manufacturer that can make the product for a
lower cost, by specialising in low volume production.
These options illustrate the interrelationship of operations strategies with marketing, product
design and with procurement.
6.3.5. Heijunka for services

Although Liker (2004 p. 123) recognises that levelling a work schedule in a service is not so
easy he recommends two options:
• Make the customer demand fit a level schedule – hairdressers, dentist, opticians and
doctors all use appointment systems and fit us, the customer, into their schedule.
• Create standard times for the service – similar to a ‘cellular approach’ services can
specialise on a smaller, or single, process increasing volume and moving to a standard
process. In the UK medical processes such as breast screening for cancer are dealt with in
a mobile unit travelling around an area, Figure 18. Women in the local area are invited to
attend a breast screening appointment. Insurance companies can standardise their
service by only deal with certain types of customer, for example refusing to insure homes
built using ‘non-standard building’ methods, (Home Protect UK, 2018).
Figure 18 - Mobile breast screening unit, (NHS Lanarkshire, 2018)
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6.4. Principle 5 - Build a culture of stopping to fix problems, to get quality right first
time, build quality in
One of the goals of JIT & Lean is zero defects. We have already explained the philosophy of
allowing the production line to section stop when it hits a rock, or encounters a problem, in
section 6.1.1. Here we will look at the processes Toyota employ to stop production and the
systems you need to put in place to try to ensure you do not have too many quality problems
that continuously stop production.
6.4.1. Jidoka
In Figure 1 one of the two pillars in the Toyota Production System house is Jidoka, which
makes problems visible. There are 2 types of Jidoka. Machine Jidoka detects defects and
automatically stops production, shown in Figure 19. Employees then fix the problem and it
can be referred to as autonomation, “equipment endowed with human intelligence to stop
itself when it has a problem”, (Liker, 2004 p. 129). Where autonomation is not possible Human
Jidoka is needed and people are given that ability to stop production by pushing a button or
pulling a cord. This is known as an ‘andon’ system.
Figure 19 - a Jidoka system, (Lean Enterprise Institute US, 2018)
6.4.2. Error-proofing and Poka-Yoke

Product design specifications traditionally paid little regard to the ease of manufacture. A bad
design might well be impossible to make to an acceptable quality. The JIT philosophy of
producing instantaneously with perfect quality and no waste can be applied to all areas of
design. Design for Manufacture uses multi-disciplined teams and concurrent engineering to
ensure that the product designers work more closely with manufacturing to streamline
production and assembly. For example, Poka Yoke techniques are a form of error proofing
where the design makes it impossible for the operator to make a mistake. The first 3 are
examples of components that can only be assembled one way and blue tag on the petrol cap
means it is no longer possible for drivers to leave their petrol caps at the petrol station, having
forgotten to replace them.
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Figure 20 - Examples of Poka Yoke design
6.4.3. Building quality in, not inspecting quality in

Traditional methods of quality control in manufacturing industry were based upon the idea
that a number of products are made and then the faulty ones are weeded out and discarded.
Some factories refer to a "scrap allowance", which implies that people are authorised to make
a certain amount of scrap. Within Lean this form of waste is totally unacceptable and a ‘right
first time’ mantra is adopted. To begin with, the reduction in stock means that the impact of
faulty parts is far greater, perhaps leading to major hold-ups later in the production process.
In addition, the increased number of set-ups referred to earlier means that the resources used
in making scrap form a greater proportion of the production time. Lean also views inspection
as a waste, albeit necessary sometimes, and attempts to ‘design in quality’, rather than
‘inspect in quality’.
6.4.4. Total Quality Management, Kaizen and Six Sigma

The methods of improving quality within the manufacturing system are a major subject in
themselves and cannot be dealt with fully here. The concept of "Total Quality" is a recognition
that the responsibility for a company's products rests with every employee, whatever their
specific function and is a process of continuous improvement. The Japanese use the term
"Kaizen" to describe the process of gradual process improvement including everybody with
the specific features of an endless drive towards continual improvement and an emphasis on
building quality into the process rather than the product. Finally, “Six Sigma is a disciplined,
data-driven approach and methodology for eliminating defects (driving toward six standard
deviations between the mean and the nearest specification limit) in any process – from
manufacturing to transactional and from product to service.” (iSixSigma, 2018a)
In the West we have standards for a quality management system. “ISO 9001 is the
international standard that specifies requirements for a quality management system (QMS).
Organizations use the standard to demonstrate the ability to consistently provide products
and services that meet customer and regulatory requirements.” (American Society for Quality,
2015) However, it is often said that ISO 9001 does nothing to improve quality, it just ensures
you have a system to measure the current level of quality.
6.4.5. Statistical Process Control

It is unfortunate that "Statistical Process Control" (SPC) first introduced in 1924 by Shewhart,
(Shewhart, 1980), had to wait for Japanese approval before being taken seriously by UK and
US industry. The principle of this approach is founded upon two basic ideas:
• a process which is under control will give rise to a consistent pattern of output.
Page 29
• the output from any process is subject to random variations.

On the basis of these assumptions the output from a process can be charted in order to
monitor the performance of the process. If faulty output is detected it is obviously discarded,
but the important feature of the approach is to regard the output as an indication of the
general well-being of the process. From the data collected it is possible to define first of all
what the process is capable of achieving. This is known not surprisingly as the Process
Capability, and usually indicates:
• whether the process mean is on target.

• whether the process is as consistent as is required.
Figure 21 below, gives an example of a process capability chart. If the two indices used to
show the Process Capability are of an acceptable value then the process is run and its
continuing performance is monitored using Control Charts. If the indices indicate that the
process is not capable of providing the quality of output required then it must be tackled and
modified or improved until it does meet the appropriate standards.
Figure 21 - Reducing Process Variance so that all Parts are in Tolerance, (Ishikawa, 1985)
6.4.6. Total productive maintenance

Quite clearly if inventories are to be reduced then the protection which inter-stage buffers
provide is lost (or at least greatly reduced). This means that the reliability of each unit within
the production system must be very high. One way of working towards this requirement is
the use of Total Productive Maintenance (TPM). Machine maintenance should be owned by
production personnel with maintenance personnel having a responsibility for equipment
effectiveness. Therefore, machine operators should be encouraged to carry out routine
operations, such as lubrication and general housekeeping, so that equipment is protected
Page 30
from intermittent, niggling stoppages between regular services. The actual programme of
TPM requires proper records to be kept of the actions taken at each service, whether it is a
routine or an emergency visit. Recurrent faults should be tackled at source. The goal is that
machine failure is prevented via TPM.
6.5. Principle 6 - Standardised tasks are the foundation for continuous improvement
and employee empowerment
We have already discussed standard times for service processes in section 6.3.5. Synchronized
flow requires predictable, repeatable methods to enable flow and pull systems. In the UK
when Nissan first set up their factory in Sunderland, with the first sale of a car made in the UK
in 1986, a number of television programmes were made recording their recruitment
processes. One of the reasons they chose the North East was because although it had skilled
workers, from industries like ship building, there was no history of car manufacture and no
bad habits. Part of the recruitment process involved applicants completing a production task
and were measured on how closely they followed a set of assembly instructions. This
highlighted the importance that Japanese manufacturers placed on following standard
processes. It is only once a process is stabilized and only random variation remains can you
think about improvement, otherwise you will not be able to identify the root causes of any
problems. Liker explains how standardized tasks facilitate continuous improvement by
quoting Imai and his view that kaizen is not possible until a process is standardized, (Liker,
2004 p. 142).
The other point that we learnt from Japanese manufacturers in the UK in the 1990s was that
they managed when their ‘kaizen’ activities took place. The Japanese realised that any change
causes temporary instability and disruption to the process. In many Western factories this
point was not understood and kaizen activities were carried out on an ongoing basis, causing
much instability to the process. UK manufacturer Rover working with Honda on the Rover 600
model were also surprised to find Honda using batch production. When questioned it was
explained that in Honda’s view it was not possible to adopt a Kanban approach because the
demand pattern was not suitable. The higher volume and stability that batch production
provided ensured a higher level of quality. (Source: Karen Bradbury’s personal experiences
from working in UK industry from 1986 to 1991 and working with the automotive industry
during 1991 to 1997 at WMG.)
6.6. Principle 7 - Use visual control so no problems are hidden

Visibility remains very topical with the use of digital tools to help process and make sense of
large volumes data and turn this into meaningful information, via techniques such as Supply
Chain Control Towers.
However, simple visual indicators to help people know if they are deviating from the standard
have always been at the heart of Lean and JIT. Liker recommends keeping all reports to one
piece of paper, (Liker, 2004 p. 38). Liker goes onto link good housekeeping and its important
role in helping to make problems visible. The housekeeping "five Ss" (Seiri, Seiton, Seisor,
Seiketsu and Shitsuke) have been embedded in many companies and can apply just as to non-
manufacturing environments. The 5Ss describe types of cleanliness and tidiness, refer to
Page 31
Figure 22. The concept forms a logical sequence of progress: improve workplace organisation
by sorting and orderliness, then clean it and keep it clean! The aim is always to develop the
right attitudes and to promote involvement rather than to attempt to impose rules.
Figure 22 - Five Ss
6.7. Principle 8 - Use only reliable, thoroughly tested technology that serves your
people and processes
Key messages from Liker (2004 p. 39) are to use technology to support, not replace people
and that new technology is often unreliable and should therefore be thoroughly tested. We
have discussed the impact that lifetime employment might have had on this view not to
replace people in section 2.4. Considering the use of new technology, Western observers of
Japanese Lean factories observed that they used multiple smaller, simpler machines than a
Western manufacturer. These simpler machines were more reliable and gave a more robust
system, as the process was not reliant on a single large machine. Most people who have
worked in industry will have experienced a disaster with new technology, the most infamous
in the UK are new Government IT systems. One of the most expensive failures is reported as:
“The Ministry of Defence’s secure military network was built to help British troops operate
more effectively around the world. The MoD gave parliament a figure of £2.3 billion, but a
report by MPs has shown that they knew that the project would cost at least £5.8 billion. The
true figure has since risen to at least £7.1 billion.” From ‘Biggest UK Government Project
Failures’, (Software Advisory Service, 2018)
Liker (2004 p. 39) also highlights the fact that you should not choose new technology that will
“conflict with your culture or that might disrupt stability, reliability and predictability”. Having
Page 32
reviewed what is involved in Lean processes we will conclude these notes consider Lean
Supply and principle 11.
7. Lean Supply and Principle 11

Principle 11 is - respect your extended network of partners and suppliers by challenging them
and helping them improve. A company using Lean and JIT techniques needs to work much
closer with its suppliers to establish the long term relations, leading to better quality and on-
time delivery. We considered the role of the ‘keiretsu’ in supplier relationships in section 2.5.
In the Supply Chain Management notes integration was discussed and Table 2 compares Lean
supply to Agile supply and highlights the need for long-term relationships.
Distinguishing attributes Lean supply Agile supply

& characteristics
Marketplace demand Predictable Volatile
Product variety and life cycle Low variety, long life High variety, short life
Profit margins Low High
Purchasing policy Buy materials Assign capacity
Forecasting mechanism Algorithmic Consultative
Logistics focus Eliminate waste Customer & market needs
Logistics planning Stable, fixed periods Instantaneous response
Partnerships Long-term, stable Fluid clusters
Table 2 - Comparison of Lean supply to agile supply, (Harrison, et al., 2014 pp. 263-264)
Ivanov, et al. (2017 p. 270) explains that Taiichi Ohno reduced the number of suppliers that
Toyota needed to form close partnerships with by classifying them into tiers. The tier 1
suppliers took responsible for designing parts to meet Toyota’s specifications making
prototypes and taking responsible for manufacture. Tier 1 suppliers were not in direct
competition with each other and therefore were willing to share information with other tier
1 suppliers. Toyota then asked the tier 1 suppliers to take responsibility for their tier 2
suppliers. These tier 2 suppliers were also encouraged to openly share information as part of
a supplier association. It was ensured that these supplier associations did not contain any
direct competitors. Toyota also outsourced many of its in-house remaining first-tier
manufacturing operations, retaining a small shareholding and encouraging these suppliers to
seek work from Toyota competitors and other industries. This suggests that at the tier 1 level
Toyota appears to have a single sourcing strategy but this was not true of all Japanese
manufacturers.
Early studies of Japanese manufacturers in the UK and the USA identified many ‘single source’
partnerships but failed to identify that these could be selected as a last resort by the Japanese
because of the poor quality of the Western suppliers. Realising they would need to invest
Page 33
significant resources in supplier development to improve the Western suppliers Japanese

companies had to single source. However, in Japan, for example at Mazda for the supply of
car seats dual sourcing was more common. Dual sourcing avoided total dependence on one
company and created some ‘competitive tension’ to drive improvement, (Hines, 1995).
However, because the unique part designs for each customer often required dedicated
research and manufacturing equipment specific to one customer volumes need to be high to
justify dual sourcing. Mazda overcame this partly by single sourcing a unique seat design for
a specific model and awarding the next new model contract to the best performing of their 2
seat manufacturers. However, they still had 2 suppliers with expertise in seat design and
manufacture. If there was a natural disaster, for example an earthquake, the hope was that 1
supplier would be unaffected and could take over far quicker than it would take to find a new
supplier.
These long-term Lean supply relationships require considerable investment in both physical
assets and in the human relationships. Hence having fewer tier 1 relationships to maintain
offers savings and has become the normal practice in Lean supply chains. The trend to pass
responsibility for more manufacture to the lower tiers of the supply chain has also continued
with around 70% of the cost of car being bought from suppliers, (Ivanov, et al., 2017 p. 269).
Another characteristic of Lean Supply is the necessary frequent purchase of parts in small lots,
rather than large batches under traditional practices. The objective is to have the parts
delivered just in time for assembly or processing. As transport is viewed as a waste it is no
surprise to find that tier 1 suppliers normally locate very close to their customer’s factory.
Figure 23 - small deliveries in Lean supply, (Slack, et al., 2016 p. 518)
As Figure 23 shows you also need to adjust your deliveries via the adoption of mixed loading
or multi-plant transportation for example, where one lorry visits three suppliers and delivers
three times a day as opposed to one supplier once a day. In the US and UK the job of
consolidating loads to facilitate frequent, small deliveries has also been outsourced to third
party logistics providers, 3PL. Formal receiving and inspection of incoming materials should
be eliminated as far as possible. Obviously, the quality of the supplier's product must be
reliable in terms of both the product performance and delivery, if inspection is eliminated.
Page 34
A further level of partnership and integration was introduced by Bose, a USA speaker
manufacturer, in the 1990s where the supplier’s personnel were located within the Bose,
placing purchase orders for their employer in Bose’s ERP system, (Greenblatt, 1993). In
automotive assemblers and suppliers some manufacturing equipment, such as paint cells,
may be operated and maintained by employees from the manufacturing equipment
manufacturer based full-time at the customer’s factory. This location of suppliers within the
customer’s factory could be said to have started with the Volkswagen modular consortium
approach at their Brazilian plant, (Marx, et al., 1997).
The need to have good supplier relationships is just as important today. In 2018 a survey of
US automotive suppliers about relationships with 6 customers found that “Toyota was the
only manufacturer to see an improvement in its supplier relations, albeit a small one” and
Toyota were praised, along with GM and Honda, for having a positive attitude to their
suppliers, (Churchill, 2018).
7.1. Digital disruption

Like all industries automotive is facing significant disruption with a move away from petrol
and diesel power, self-drive cars and Industry 4.0. (McKinsey, 2013 p. 6) In addition there are
many new non-automotive entrants into the self-drive car market with Techworld identifying
22 companies in total involved in manufacturing self-drive cars, including new comers like
Apple, Google, Huawei, Intel, Nvidia, Samsung and Uber. (Mercer, et al., 2018)
McKinsey in their report ‘The road to 2020 and beyond’ published in 2013 predicted that:
“Shifting industry landscape: Suppliers will add more value in alternative powertrain
technologies and in innovative solutions for active safety and infotainment.”
In 2016 Capgemini Consulting published a report ‘Digital Strategy for Automotive Suppliers’
and stated that “To strengthen their position, and improve profitability by 4 to 5 percentage
points, Tier 1 automotive suppliers (Tier 1s) now need to acquire digital mastery.” (Consulting,
2016 p. 2) They provided the following examples in Figure 24 of the potential savings from
digital manufacturing. One conclusion might be that digital manufacturing now has the
potential to provide a step change in operational performance, just as JIT/Lean did when it
was first implemented.
Some of the implications for supply are that automotive companies like Toyota may need to
find new digital partners and given the pace of change in digital technology they may need to
adopt a more Agile supply strategy for some purchases. Both the Original Equipment
Manufacturers, like Toyota, and Tier 1 suppliers are having to adapt to the increased
digitization within the car itself. Traditional parts, like door handles, bearings and air filters
are becoming commodity items and Tier 1 suppliers are moving away from these to protect
profits. (Guillot, 2018)
“Successful OEMs and suppliers are employing several new business strategies to meet the
demands of the new market. First, they’re focusing on innovation over production. Many are
reorganizing through mergers and acquisitions to acquire the knowledge, resources and talent
Page 35
needed to produce these new technologies. Tier 1 suppliers are also spinning off new divisions
to focus on innovative products while divesting others.” (Guillot, 2018)
Lean Supply relationships will not doubt need to evolve and adapt to the digital world.
Figure 24 - Automotive savings from digital manufacturing, (Consulting, 2016 p. 6)
8. Summary
There are of course both advantages and disadvantages of Lean and JIT. Whilst the goal to
continuously eliminate waste is universally applicable many Lean process principles can only
apply in high volume environments with low variability in demand volumes. Some Lean
process principles are only suitable for manufacturing, not services.
8.1. Advantages of Lean in manufacturing

• Continuously improves all company activities, operates factory as a complete team,
increases individual's responsibility and implements worker's knowledge.
• Distinguishes between value-added and non value-added activities; increases the
productivity of direct labour, indirect support employees and clerical staff.
• Stabilises the Master Production Schedule to ease manufacturing control complexity,
reduces the fluctuation of the demand on suppliers and on production.
• Simplifies the production planning and control effort and sets valid priorities.
• Manufacture should be as late as possible, adding value as late as possible.
• Work is pulled through the system and parts are only worked on that are specifically
required so output is balanced to demand.
• Storage space and complexity are reduced.
• Lead times are reduced by lowering set-up times and transport distance (zero lead times).
Page 36
• Highlights problems by systematically reducing all inventory to reveal failures:

breakdowns, vendors, set-up, scrap, bottlenecks (zero disturbances, zero inventory).
• Reduces batch sizes to facilitate throughput.
• Design for manufacture encourages strong links between design and manufacture;
simplifying manufacturing processes and using standard parts for easier cell loading.
• Cellular manufacture simplifies production control, reduces inventory and space.
• Reliable machines from TPM.
• Reliable suppliers from the building of long term supplier partnerships.
• An emphasis is placed on throughput rather than utilisation and an elimination of waste.
• Provides a structure for the process of continuous improvement.
8.2. Disadvantages of Lean in manufacturing

• Requires continuous and visible commitment and leadership from management - cultural
change with more emphasis on "management by walking about".
• Requires workers and first-line supervisors to take responsibility for production control
and productivity improvements.
• Requires an atmosphere of close co-operation and mutual trust between workers and
management which is the anathema to autocratic management style. To the Japanese,
work is the most important part of life, then they play.
• Requires daily production schedules that are virtually identical for extended periods.
• Requires a large number of production set-ups and frequent shipments of purchased
items from suppliers.
• Modifying machines to facilitate shorter set-up times can be expensive.
• There is no buffer stock between production stages so there is a risk if any one stage is
disrupted.
• Companies may become vulnerable to stoppages by suppliers, transportation systems,
inability to meet unexpectedly high demand and, in a multi-echelon company, the risk of
one factory stopping another.
• Requires ongoing investment in supplier relationships.
8.3. Conclusion
Many of the Lean lessons, tools and techniques have been applied into other industries, such
as mass volume services. Taking Lean into a low volume high variety environment in both
manufacturing and services can pose challenges but it is obvious that tools such as value
stream mapping and the 5Ss offer improvement opportunities to any environment. In
construction simple improvement ideas have been associated with Lean, such as reducing
wasted time in meetings by holding 15 minute daily meetings standing up.
Lean has become embedded in everyday business and the goal to eliminate waste is
universally applicable in any operating environment. However, it is worth remembering that
not all elements of Lean may apply even in manufacturing. Toyota themselves do not
universally apply all elements, such as pull systems as discussed in section 6.2. As so often in
Page 37
business it is the successful companies are able to identify what is most relevant to their
unique environment and culture and adapt their business, logistics and operations strategies.
Page 38
9. Seminar Questions
1. What conditions do you think encouraged the development of JIT in Japan?

2. Explain the main difference in operation between a one card Kanban system
and a two card Kanban system.
3. What steps can be taken to help level production schedules?
4. What steps can be taken to reduce set ups?
5. Explain in more detail the Poka Yoke techniques and illustrate with your own
examples.
6. Why do you think many companies changed their manufacturing operations
to follow a cellular structure?
7. How would you recommend a company implement a quality improvement
programme? What activities can they introduce?
8. You are trying to implement a JIT system with smaller batch sizes than are
calculated by the EBQ formula. Justify why these smaller batch sizes can still
be effective and why the EBQ formula may be being applied incorrectly.
9. Explain the key elements of Lean supply.
10. What conditions are necessary for JIT & Lean to be successful?
Page 39
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6 Planning & Control Systems: JIT & Lean

6.4.2. Error-proofing and Poka-Yoke ............................................................................... 28

2. Japan, Toyota and the origins of JIT & Lean

2.1. Japan’s lack of natural resources

2.2. Reputation for poor quality

2.3. Early difficulties with computers in Japan

• Time consuming computer runs.

2.4. Lifetime employment offered by large companies

2.5. Complex ownership structure with ‘keiretsu’

2.6. Some Toyota history

• By far the greatest part of a product's manufacturing lead-time is spent waiting in

3.1. The Toyota Production System (TPS)

Figure 1 - Toyota Production System House, (Liker, 2004 p. 33)

Figure 2 - the 4P model of the Toyota Way, (Liker, 2004 p. 6)

3.2. Liker’s 14 Toyota Principles

Continuously solving root problems drives organisational learning (Problem-solving)

4. Lean and the role of people

Figure 3 - Value and non-value adding activities

However, identifying value can be simpler in a manufacturing environment and is traditionally

5.1. Causes of waste, Muda, Mura and Muri

Figure 4 - Example of the 3-Mu, (Dennis, 2015 p. 36)

5.2. Types of waste

Undelivered code. Fully-prepared marketing

Waiting (often related to

Performing many different

Unnecessary Generating countless

Waste Production Software Dev Marketing

Undelivered code. Fully-prepared marketing

Waiting (often related to

Performing many different

Unnecessary Generating countless

5.3. Tools to identify and reduce waste

Figure 5 - Value stream mapping symbols, (Jacobs, et al., 2018 p. 356)

6. Lean process principles

6.1.1. One piece flow and uncovering problems

Figure 7 - Reducing the level of inventory, (Slack, et al., 2016 p. 503)

6.1.2. Takt time

6.1.3. Process layouts to improve flow

6.2. Principle 3 - Use pull systems to avoid overproduction

Figure 11 - Single Card Kanban

Figure 12 - Dual Card Kanban

Figure 13 - JIT and choice of Process, (Harrison, 1992)

6.3. Principle 4 - Level out the workload (heijunka)

Figure 14 - Schedule Levelling - One Run per Month

Figure 15 - Schedule Levelling - Five Runs per Month

6.3.1. Set-up or change-over time reduction

Start 90 minute average

Figure 16 - Example of Set-up Reduction, (Bicheno, 1991)

6.3.2. Reducing order or batch sizes

6.3.3. Fixing the production schedule to give stability

6.3.4. Review your product range

6.3.5. Heijunka for services

Figure 18 - Mobile breast screening unit, (NHS Lanarkshire, 2018)

Figure 19 - a Jidoka system, (Lean Enterprise Institute US, 2018)

6.4.2. Error-proofing and Poka-Yoke

Figure 20 - Examples of Poka Yoke design

6.4.3. Building quality in, not inspecting quality in

6.4.4. Total Quality Management, Kaizen and Six Sigma

6.4.5. Statistical Process Control