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Ken Rader - Lean Thinking

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As a member of the Seniors Executive Network I spent a great deal of time addressing the issues around implementing Lean business process

As a member of the Seniors Executive Network I spent a great deal of time addressing the issues around implementing Lean business process


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  • 1. Lean Production Lean Thinking Ken Rader May 2, 2002
  • 2. Production Evolution
  • 3.
    • CRAFT PRODUCTION
    • (1700 – 1880)
      • Labor
        • Skilled Craftsman (e.g. Wainwright)
        • Apprenticeships
      • Organization
        • Decentralized
        • Single Purpose Shops
      • Tooling
        • Generalized (Forge & Anvil)
        • Low Productivity
      • Manufacturing
        • Complete Product (e.g. Plow)
        • No Inventory
      • Metrics
        • Bookkeeping
  • 4.
    • MASS PRODUCTION
    • (1880 – 1950)
      • Labor
        • Unskilled Direct
        • Skilled Engineers
      • Organization
        • Centralized (Vertical)
        • Functional (e.g. R&D)
      • Tooling
        • Single Purpose
        • High Production Rates
      • Manufacturing
        • Single Task Assembly
        • High Inventories
      • Metrics
        • Product Cost (Accounting)
        • Yield
        • ROI
  • 5.
    • LEAN PRODUCTION
    • (1950 – Present)
      • Labor
        • Semi-Skilled Labor
        • Teams
      • Organization
        • Decentralized (Horizontal)
        • Process Based
      • Tooling
        • Multi-Purpose
        • Fast Changeover
      • Manufacturing
        • Component Assembly
        • Low Inventory
      • Metrics
        • Process Cost
        • Throughput
        • Quality
  • 6. CHARACTERISTICS OF LEAN PRODUCTION
  • 7.
    • Ultimate Goal:
    • Elimination of Waste
    • Errors
    • Producing Unneeded Goods
    • Producing Unwanted Goods
    • Unnecessary Processing Steps
    • Unnecessary Movement of Goods or People
    • Waiting
  • 8. Five Principles of Lean Production Specification of Value Value Stream Analysis Flow Management (Lean Manufacturing*) Pull Perfection
  • 9. Specify Value 1. Specific Products the firm expects to produce for the 2. Specific Customers who want the products at the 3. Specific Price they are willing to pay with the 4. Specific Product Performance and Quality needed to maintain a competitive advantage.
  • 10.
    • Value Stream Analysis
    • 1. Process Map every activity and categorize activities by
      • Those that create value for the Customer.
      • Those that do not create value but are required.
      • Those that create no value and are not required.
    • 2. Develop Measurements for each activity – activities which can’t be measured can’t be managed!
  • 11. Flow Management 1. Focus on the Specific Products the firm will produce and never let it out of sight! 2. Ignore All Boundaries (career, organizational, etc.) to remove impediments to the flow. 3. Redesign Work Practices and Tooling to eliminate waste (scrap, rework, backflows) so that flow is continuous. 4 . Reduce Cycle Time 5 . Synchronize Production Rate to Sales Rate (JIT)
  • 12. Pull 1. No good or service is produced or activity initiated until the customer requests it (DRB) . 2 . Eliminate Lead Times and non-constraint Inventories
  • 13.
    • Perfection
    • 1. Perfection is a condition that is created .
      • It is not a benchmark. The paths to it are not found, but made.
      • The pursuit of perfection changes both the pursuer and the destination.
    • 2 . Involves entire Supply Chain .
    • 3 . Focus on Eliminating Waste
    • 4 . Requires a Change Agent
  • 14. Advantages of Lean Production
  • 15.  
  • 16.  
  • 17.  
  • 18.  
  • 19. METRICS – COST VERSUS PROCESS ACCOUNTING An Exercise
  • 20.  
  • 21.  
  • 22.  
  • 23.  
  • 24.  
  • 25. The Lean Enterprise
  • 26. Organizational Design Business Discipline Process Control A Design for Lean Thinking Company Policies and Practices
  • 27. Reading List Womack, James P., Jones, Daniel T., Roos, Daniel, The Machine That Changed The World, New York: Harper Perennial, 1991 Womack, James P., Jones, Daniel T., Lean Thinking , New York: Simon & Schuster, 1996 Feld, William M., Lean Manufacturing, Boca Raton: St. Lucie Press/APICS, 2001. Goldratt, Eliyahu M. and Cox, Jeff, The Goal: A Process of Ongoing Improvement , Great Barrington, MA: North River Press, 2 nd Rev, 1992 Hammer, Michael and Champy, James A., Reengineering the Corporation : A Manifesto for Business Revolution, New York: Harper Business, 2001 Treacy, Michael and Wiersema, Fred, The Discipline of Market Leaders : Choose Your Customers, Narrow Your Focus, Dominate Your Market, Cambridge, MA: PERSEUS PUBLISHING, 1997