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Lean Thinking

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Imagine that you were an Egyptian overseer, responsible for building a great pyramid for your Pharaoh. How would you want to organise things?

  • Would you want to start by knowing exactly what your Pharaoh wants?
  • Would you want to fully understand every part of the process?
  • Would you want to understand how stone moves from being part of the wall of a quarry to a perfectly fitting part of your Pharaoh’s pyramid?
  • Would you want to ensure that the giant blocks of stone arrived fast enough so the workers on the ramp always had a stone ready to move up?
  • Would you want to make sure stones got up to the top of the ramp fast enough to make sure that they were there as soon as the last stone was placed on the pyramid?
  • Would you want to avoid stones arriving too fast and causing a bottleneck?
  • Would you want to make sure every stone was perfect to avoid having to stop and find a replacement or re-dress the stone on site?

If your answer is yes to all of those questions, then congratulations: you are instinctively an ancient Lean Manager.

Lean thinking is not new: the ideas have been around for a very long time and accumulated in industry over the years. But there are a few names that are strongly associated with its emergence as a driving force in organisational effectiveness in the last years of the twentieth and early years of the twenty first century.

The thinking was done by the founder of Toyota, Sakichi Toyoda, his son, Kiichiro Toyoda, and their postWW2 production chief, Taiichi Ohno. The Toyodas set out how a production line could work best, avoiding the problems of Henry Ford’s original ‘don’t stop the flow of the line if anything goes wrong – sort it out at the end’ approach. When they could not make it work due to the flaws in their supply chain, it was Ohno who then solved the practical problems.

The message came out in a landmark study by researchers from The Massachusetts Institute of Technology (MIT). This was published in the 1991 book ‘The Machine that Changed the World’ which introduced the world to the term ‘Lean’. Two of its authors: James Womack and Daniel Jones, went on to write a series of influential books, spelling out how to apply the lean principles they had researched at Toyota, starting with ‘Lean Thinking’ and becoming even more practical, with ‘Lean Solutions’.

The Value Chain

At the heart of Lean Thinking is an understanding of the value chain, which we discussed in an earlier post. Lean thinking starts by defining value from the point of view of the end customer for your products or services. When you do this, you usually find that only a small proportion of your activities directly contribute to that value (from the customer’s perspective). The rest – including some parts of what Michael Porter described as Primary Business Activities are only necessary as supporting this value creation.

Performance improvement comes first from eliminating steps and interactions that are not necessary for value creation and then, redesigning those that are to be as effective and efficient as possible. This means less wastage due to delays, re-work, duplication, scrapping below quality products, and oversupply.

The five principles of Lean Thinking are set out below.

The Five Principles of Lean Thinking

Waste

At various points, Lean Thinking decries wastage. The Toyota production chief set out seven sources of waste that destroy value.

  1. overproduction
  2. excessive inventory
  3. defects
  4. delays
  5. unnecessary transportation of goods
  6. unnecessary movement of materials
  7. unnecessary processing or materials

Where is there waste in your organisation?

Further Reading

In 1997, James Womack founded the Lean Enterprise Institute. Its website is a valuable source of resources for understanding more about Lean thinking.

In our Management Thinkers series, you may like Taiichi Ohno: Lean Production.

From the Management Pocketbooks series:

  1. Improving Efficiency Pocketbook
  2. Improving Profitability Pocketbook
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Robotic Process Automation: RPA

Robotic Process Automation: RPA

Robotic Process Automation: RPAImagine an army of tiny robots. Each one can do one thing. It does it precisely and tirelessly. And when it completes it, another robot takes over and does another thing. This chain of ‘bots’ can together do what people can do. But without error, rest-breaks, or complaint. Welcome to the world of Robotic Process Automation.

Although it’s often abbreviated to RPA, we’ll stick with Robotic Process Automation. Because, if you’re reading this, you are probably not familiar enough yet, for the acronym to register easily. Because this article purports to be only one thing: a basic primer for the uninformed.

For more depth, you’ll need to seek out an expert on Robotic Process Automation. Maybe, by the time you read this, that expert will look like a little bot in the bottom right-hand corner of your screen. And, sitting behind it will be a series of other bots. Collectively, they may be a robotic process automation that answers questions about robotic process automation. How weird would that be?

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The Learning Organisation: Advantage through Adaptation

Learning Organisation

Learning OrganisationWhat’s the biggest long-term competitive advantage an organisation can have? It’s the ability to adapt rapidly to changing circumstances. And for that, it needs to learn. That’s the Big Idea behind Peter Senge’s Learning Organisation.

The Learning Organisation sits at the confluence between two powerful forces for good:

  1. Individual learning, development, and personal growth
  2. Systems thinking that allows us to mentally connect up the network of parts into a complex whole

What it means is simple in concept, though fiendishly hard to achieve in practice. A learning organisation is one that continually develops and evolves so that everyone shares a consistent vision and collectively prepares themselves to meet the next challenge in achieving it.

Continue reading The Learning Organisation: Advantage through Adaptation

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Value Engineering: The Same for Less

Value Engineering: The Same for Less

Value Engineering: The Same for LessHow do some products achieve astonishing quality and functionality at affordable prices? The answer is in the discipline of Value Engineering.

Value Engineering is often tarred with the same brush as ‘cost-cutting‘. Although it has a similar role, it plays to a wholly different business strategy. So, let’s look at what it is and why it matters.

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Business Process Reengineering | BPR

Business Process Reengineering

Business Process ReengineeringIs Business Process Reengineering (BPR) a Big Idea whose time has passed? An historical footnote for managers to be aware of; but of little use?

Or will we still have a use for the ideas of Business Process Reengineering in the 2020s?

That’s the question I will tackle in this article.

Continue reading Business Process Reengineering | BPR

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Six Sigma – Reducing Defects

Six Sigma
Six Sigma
Six Sigma

In the world of quality, Six Sigma is one of the biggest names. Total Quality Management (TQM) may aim for zero defects. But Six Sigma aims to reduce defects down to a statistical blip – arguably a more realistic enterprise.

What makes Six Sigma such a compelling proposition is the vast asset base of tools and process that accompany the core idea. What makes it a big idea is the impact it has had on manufacturing, combined with its wider potential in other domains.

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Lean Thinking… in all its forms

Lean

Lean ThinkingLean is an addictive drug.

But I’m not talking about the nasty mixture of cough syrup and soda that is hooking young Americans on codeine and promethazine.

I’m talking about the current favourite method for reducing corporate corpulence, which has been popular for nearly twenty years.

But don’t for one moment think Lean is a passing fad. Its day will come, for sure. But its pedigree is a rich one. And whatever will replace it must share many of its aspirations and principles, just as Lean shares much with TQM*, BPR* and much that has gone before.

Continue reading Lean Thinking… in all its forms

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Kaizen | Continuous Improvement

Kaizen | Continuous Improvement

Kaizen | Continuous ImprovementKaizen should be at the heart of every business and organisation’s operating model. After all, who could deny the appeal of Émile Coué’s* affirmation:

‘Every day, in every way, I’m getting better and better.’

But personal affirmations on their own, they don’t create change.

Kaizen does. It translates from the Japanese as change (kai) for the good (zen). And it comes with action. So, what is the origin of this big idea, and how can you implement Kaizen in your organisation?

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Monkey Management – William Oncken Jr’s Great Insight

Monkey Management - William Oncken Jr's great insight
Monkey Management - William Oncken Jr's great insight
Monkey Management – William Oncken Jr’s great insight

When the idea of Monkey Management first appeared in 1974, it was a big hit. And, rightly so. It clarifies how managers easily get drawn into over-work, and sets out rules for how they can avoid it.

The Monkey Management idea comes from William Oncken Jr. It first emerged in one of the most-requested Harvard Business Review articles. He then revised the details when it became the subject of one of the best-selling One Minute Manager books.

No self-respecting manager can afford to be unaware of the principles of Monkey Management. So, let’s take a look at it.

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Muda: The 7 Wastes of Lean

The 7 Wastes
The 7 Wastes
The 7 Wastes

Waste is a bad thing. So, any wise manager will do well to eliminate it. You just need to know where to look. One of the many contributions of Taiichi Ohno and his Toyota Production System (TPS) was to catalogue 7 Wastes that we need to eliminate.

The 7 Wastes are now a fundamental part of the concept of lean thinking; whether applied to manufacturing, services, or public administration. By understanding them, you can make just about any process more efficient.

Continue reading Muda: The 7 Wastes of Lean

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