Lean is an operation strategy which aims to reduce the time between taking an order and receiving the cash for the delivered product or service. It does this by improving flow efficiency first and then improves the resource efficiency to reduce operational expenses. Flow efficiency in this case is the speed a product or service runs through a process from end to end. Resource efficiency is the level of value-added utilisation of the resources (operators and equipment) in each of the process steps.
Conventional operation systems are usually organised to increase resource efficiency as the benefits of organisation structures organised towards flow efficiency are not understood and difficult to quantify through simple utilisation or cycle-time studies. This is also the main reason for the so-called ‘silo’ organisation in which the focus on resource efficiency is so high that the resulting departmental thinking puts up barriers in the organisation and looses focus on the product flow.
To improve flow efficiency, Lean systematically tackles the following three roadblocks of continuous flow which therefore form the cornerstones of the improvement methodology:
The Toyota Production system is a methodology originally invented by Ford and applied to perfection by the Toyota corporation. The System can be summarised as a set of principles which steer operational management and decision making in an organisation in a direction which eventually generates a highly dynamic, flexible and efficient learning operation. Applied correctly the implementation concept of each principle will look different from one organisation to another as the concepts get modelled around individual requirements, challenges and strategic direction. The principles apply to any given operational environment but are slightly biased towards manufacturing organisations. The principles are: