Lean Management


A fusion of Japanese and US management principles focusing on the reduction of: waste, inventory and customer response time.


John Krafcik, an Massachusetts Institute of Technology (MIT) researcher in the late-1980s coined the term Lean Manufacturing. He had been involved in a study into best practice in automobile manufacture. The MIT study had examined the methodology developed at Japanese auto giant Toyota under the direction of production engineer Taichi Ohno. At the end of World War II with Toyota needing to improve brand image and market share, Ohno reputedly turned to Henry Ford’s classic book, “Today and Tomorrow” for inspiration. One of Ford’s guiding principles had been the elimination of waste (The Japanese word for waste is muda). Ohno identified seven wastes (“the 7Ws”): Defects, Over-Production, Waiting, Transporting, Movement, Inappropriate Processing and Inventory.

The simplest form of waste is components or products that do not meet the specification. The key point came with the switch from Quality Control to Quality Assurance - efforts devoted to getting the process right, rather than inspecting the results.
A key element of JIT was making only the quantity required of any component or product. Another Toyoto engineer who contributed to this change was Shigeo Shingo who led the move long machine tool set-ups to “Single Minute Exchange of Die” (SMED).
Time not being used effectively is a waste. Ohno looked at the reasons for machines or operators being under-utilised and set about addressing them all.
Items being moved unnecessarily incur a cost.
People moving unnecessarily also incur a cost.
Inappropriate Processing
A basic principle of the TPS is doing only what is appropriate.
Ohno was also influenced by the way shoppers in the USA were then beginning to purchase products from supermarket shelves, using a “take what’s needed, when it’s needed” approach. His response to this observation became known in the West as Just in Time (JIT).

Womack and Jones, the leaders of the MIT Study, suggested an 8th waste: “designing and making products, which do not meet the customer's requirements”, though this could perhaps be classified within Ohno's Inappropriate Processing.

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