Monday, September 14, 2015

Lean Thinking

Unlike a lot of the "Lean" books I've profiled on this site, this book isn't about the internet. It's the predecessor of the current literature on lean, written back when manufacturing was the hot industry! In Lean Thinking, James Womack follows up on the old study of Toyota in order to come up with manufacturing principles that can reduce costs and help increase revenue.

I don't know a whole lot about manufacturing, so to me the book was pretty eye-opening. I think of manufacturing as a series of separate steps that are each done in batch. If you can increase the speed of your bottleneck, you can increase throughput. If you reduce the size of your batches, you can increase response time. All of these things and more are wonderfully illustrated in one of my favourite books, The Goal.

But Thinking Lean attacks problems in a completely different way. Rather than worrying about or optimizing the individual manufacturing steps, it seeks to optimize the whole. Only by examining the entire process (including up through suppliers and down through customers) can a large chunk of the waste be removed.

Many actual business examples are provided in a number of different segments. For example, a car windshield goes through a number of steps before it is installed. Melted sand is spread over a layer of liquid to actually form the glass, then it is heated so it can be shaped, and then it is heated again so it can be fitted. Often these steps take place weeks apart and in different companies...but notice how the heating step happens several times? Better integration would see this heating waste removed, along with all of the excess work-in-progress inventory that is created as a result.

The lean process was originally formalized and championed by Taiichi Ohno of Toyota in the decades following World War II, and as it has spread it dramatically improved manufacturing productivity. The process of "continuous flow" ensures that errors are caught early, improvements in process are easy to make, and product costs are allocated more appropriately, allowing for better management decisions. Ohno said that "Common sense is always wrong", which makes him my kind of guy!

One of the big impediments to continuous flow (as opposed to batch processing) is that setup times (i.e. where a machine goes from working on one type of part vs another) for some machines can be high. A key requirement of going to continuous flow is reducing setup times, but in the book there aren't many examples of how this can be done. Perhaps it's easy, just requiring a re-configuration of equipment that was previously deemed not worth doing? I would have appreciated a little more colour here.

The authors also make no attempt to distinguish when continuous flow vs batch processing may be appropriate. It appears to be their opinion that continuous flow is always better, but surely this is not the case. Sometimes inventory is cheap and therefore not worth getting rid of or waste is minimal, surely. The reader is provided no thoughts on whether a switch to continuous flow is appropriate...the authors say do it no matter what!

The book is a must read for anyone in manufacturing.

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