Lean manufacturing and human resource

In the heart of lean manufacturing is the human resource. It is the most important of all the resources available for any lean organization. This is the only resource which can think and feel and importantly can make decisions consciously. No matter what is the industry you are in, people and respect for them forms a one primary pillar of lean. But unfortunately this is the most commonly wasted resource as well.

Wasting the human resource is most damaging for any organization. People will have more to offer your organization than what they offer now. Most of the success stories of lean are successful not because its tools or software etc. They are successful because they have found out the ways of using their human resources effectively in their operations. When guided with lean thinking and leadership motivated people can do wonders for your organization.

There are plenty of theories about motivation out there. All agree in one thing in common. People can not be made productive only with money. There are many other ways of motivating and making them happy. In a de motivated environment a person will only do what he has to do for his survival. If he is not de motivated he will put bit more effort and if he is motivated he will give his maximum effort to the organization.

In lean thinking people are respected. Respect is shown to them in many ways. One of the most important ways to respect an employee is by giving him the responsibility and the ability to make decisions. People who are actually doing the job will know how to do it better. All a lean manufacturer will have to do is facilitate people to come out with their ideas and implement them.

Importance of human resource will be the same in software, service and office environment. In fact importance of human resource will be higher in these environments than in manufacturing. Higher the respect for people, higher the out put from them. This is why Google became the best place to work in US. Not because they pay tons of money because they respect people and they use them effectively.

With this post I am concluding the series on wastes of lean manufacturing. I hope this was helpful to you.

Lean manufacturing and defects

Lean manufacturing is about eliminating non value added activities from the system. Defects are one of the most important waste categories identified in lean. Every defective product or a poor quality service costs the organization more than we think. It costs the organization money, time and other resources and importantly the reputation of the organization.

Actually it is interesting to study the steps involved in making and correcting a mistake. First the organization will make the defective product. This takes time and money. Then the organization identifies that there is a problem. This involves checking and related costs. Then we have to find the ways of correcting error. This again costs you in terms of money and time. Then we have to redo the product without errors. So we spend three times of resources in the process of making and correcting errors. But if the defective product reaches the customer the damage will be irreversible. Not only you are going to loose the customer who purchased the product, unsatisfied customers can stop other from coming to you. In the worst case you might have to face legal problems.

Most of the organizations work on the concept of AQL. They accept some degree of defects based on the lost size and the quality standard maintained. But as a lean thinker I do not like the concept of AQL. As lean manufacturing propose the quality should be inbuilt. Quality check is not the answer. Let’s say we are following a very high quality rating and we allow only 0.5% possibility of having a defect in a lot of 200. If we rephrase this, we can pass 1 defective piece of products to the customer for every 200 pieces we ship. Isn’t that scary? Although we ship them in bulk the user is not going to buy in bulk most of the times. If the customer buys 1 piece and if he found that to be defective they will never return to you.

In services and offices defects can not be easily identified. But you can easily get an idea by looking at the end customer. If they are not happy you are not providing a good service to them.

In the software development context, defective products are software which does not function as intended. In the systems which are vastly automated and integrated a defective piece of software can create unimaginably large losses to the user.

Application of lean concepts must ideally create a process where all the possibilities of having a defect are eliminated. Quality is inbuilt to the system hence there will not be any requirement to check the products specifically for the defects. Tools used in lean like JIT, KanBan and PokaYoke (mistake proofing) will make sure the system is not going to manufacture defective products.

Defects are identified as a result than a cause in lean manufacturing. Amount of defects is a good indicator which indicates the degree of imperfection in the system.

Lean and excess motion

Excess motion is a waste associated mainly with the manufacturing sector. Lean manufacturing identifies excess motion as non value adding. Therefore this is categorized as a major waste in lean context.

Transporting goods and raw material is a waste and this is discussed earlier. But how many times a person has to move in their day to day operations. How much of time is actually spent in value adding in comparison with the movements which dose not adds value. If someone has to bend to pick up a part before it is being assembled, how many time he has to do this over and over again. This wastes time, breaks the flow of work and especially can create health problems. Using a simple conveyer system might solve the problem and hence the waste of higher movement.

In general, excess movements are due to ergonomic problems. Lighting, height of the seat and the space the workstation all play a part in creating a productive work environment. Identifying wastes of these kinds needs trained eyes. Simple changes to the system can make a huge difference to the end result.

In lean office and lean service context all the factors we discussed in manufacturing will remain the same. Better computer monitors, cleaning the desk and adjusting the seat height, correct height of the table can make a difference. But in office and service context excess motion can be described as unnecessary processing or over processing. This is mainly due to the imperfections in the process design. Identifying the waste is the hardest task. Once identified it is very easy to remove from the system

In software development environment, motion can be identified as unnecessary movement of data and information. Excess motion of data takes place due to problems in the development process. Seamless integration within and between software is the simplest solution to this problem. Users need not to go to several screens in entering their information. Users will get all the required information in a single report. This will prevent users from moving between screens in generating the report.

Although easily visible in manufacturing environment, waste of excess motion can be identified in offices, service providers and even in software development. Once identified this can be removed from the system with simple adjustments and application of lean manufacturing techniques and concepts.

Lean manufacturing, Inventory and Work In Progress (WIP)

When we talk about lean manufacturing we talk about inventory and work in progress all the times. Lean and inventory are that close and therefore can not be separated. Lean manufacturing identifies inventory and WIP as the mirror of the imperfection system contain. Every imperfection creates a requirement for WIP in manufacturing. Apart from being a great reflector to the system imperfections, inventory becomes a waste by itself. Therefore work in progress and inventory in general is classified as a waste in lean waste classification.

With higher inventory, capital will be tied up. In simple words you get little cash by selling goods after investing large amounts of money in manufacturing it. Cost will be high since there are related costs like interests. So either product will be sold with higher price tag or the organization will loose money from its bottom line. Higher inventory and work in progress hides the problems. Problems are hidden in higher work in progress and will be not possible to remove from the system. For an example if we have one day of work in progress with us, a part manufactured today will be used in the next work station only tomorrow. If we start making a quality defect today, only by tomorrow we will get to know about that. So we will loose full one day of effort. Worst part is we have to redo it. This is almost three times of the effort and cost.

In lean manufacturing context it is not possible simply to reduce or remove inventory and work in progress from your system. Root cause to higher work in progress is one of the other seven wastes we are discussing. So identifying the correct root cause and treating them will reduce the WIP and higher levels of inventory. Just In Time manufacturing, purchasing and distribution techniques have a direct impact on the inventory levels. By using these techniques with other techniques like root cause analysis you will be able to reduce the inventory levels and avoid the problems identified.

In a lean office or in a lean service we can identify work in progress as unfinished service requests from users. For an example work in progress can be measured by the time taken to process an application or with the number of applications in a work station to be processed. Higher the work to be processed higher the process lead time. This can make costly delays to the service requesters and in the organization. For an example if your marketing office people couldn’t read a mail from your customer on the same day it was sent how big the impact would be if the customer says he is going to cancel the order to be processed on that day. Again mostly of the times reasons for higher work in process in an office or a service are same as explained in manufacturing. It will be a reflector of the problems you have in your system. You can remove them with the lean techniques explained throughout the blog and in this series of posts on lean and waste.

In software development point of view inventory can be referred as developments which are started but not finished. In a lean software development environment software must be developed in small parts which will be integrated to make the full product later. If we wait until the full massive software is finished to test and deliver products it will take longer and the timelines will be increased. Again work in progress is mainly mirrors the imperfections the system contain. When you change the system by applying lean techniques you will have lesser WIP and inventory of work. You will be able to deliver good quality software fast.

Work in progress is a key element in lean manufacturing. It is the single most important visual indicator reflecting the level of waste a system contain. And as we identified with this post inventory and WIP can be a waste by itself.

If you need further information you may find the below presentation useful. This presentation covers main topics relevant to inventory and WIP reduction like Pull Scheduling, Kanban and JIT. Entire presentation is 68 slides in length. You may download a sample here. To buy through secure servers please use this link