by Natalie J. Sayer and Bruce Williams

LeanFOR

DUMmIES‰

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by Natalie J. Sayer and Bruce Williams

LeanFOR

DUMmIES‰

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Lean For Dummies®

Published byWiley Publishing, Inc.111 River St.Hoboken, NJ 07030-5774www.wiley.com

Copyright © 2007 by Wiley Publishing, Inc., Indianapolis, Indiana

Published simultaneously in Canada

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About the AuthorsNatalie J. Sayer began studying and applying Lean before it was formallyknown as Lean. Over her 20-year career in the automotive industry in theUnited States and Mexico, Natalie honed her skills applying Lean andOrganizational Development methods across functional areas of Fortune 130companies. In 1996, Natalie was an instrumental team member in the Leantransformation of a GM facility in Matamoros, Mexico. The team was awardedthe 1996 GM President’s Council Honors for the project. While working withGeneral Motors, she had multiple opportunities to visit and learn from NewUnited Motor Manufacturing, Inc. (NUMMI). Natalie has trained, coached,mentored, and rolled up her sleeves to implement Lean practices, whetherworking in a company or volunteering at a food bank.

She received a Bachelor of Mechanical Engineering from the University ofDayton in 1988 and a Master of Manufacturing Systems Engineering from theUniversity of Michigan in 1992. She is a graduate of Coach University andCorporate Coach University. Natalie is also a Six Sigma Black Belt and aGlobal Leadership Executive Coach.

In 2003, Natalie founded I-Emerge, an Arizona-based global consultancy dedi-cated to the facilitation of people and processes experiencing significantchange. The I-Emerge toolbox includes executive and personal coaching,group facilitation, Lean methods, public speaking, and OrganizationalDevelopment tools and assessments. She is a passionate people person, wholives her life with the convictions that “there is always a better way” and“change won’t happen without the people.”

Beyond I-Emerge, Natalie can be found on stage acting in musical theater,teaching graduate school, traveling to exotic places, learning something new,working on causes advancing people and literacy, or spending time withfriends and family.

Bruce Williams strives for perfection and added value as a scientist, educa-tor, consultant, and entrepreneur. Leveraging the Lean principle of standard-ized work, this is his third For Dummies book in three years, havingpreviously coauthored the best-selling Six Sigma For Dummies in 2005 and theSix Sigma Workbook For Dummies in 2006.

Undergraduate degrees in physics and astrophysics from the University ofColorado testify to his early pursuit of understanding the ultimate nature ofroot cause.

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He was a sculler in the value stream of aerospace systems, where he shot therapids in the tumultuous whitewater of the Hubble Space Telescope program.With graduate degrees in technical management and computer science fromJohns Hopkins University and the University of Colorado, Bruce elevated hisvalue-stream role to that of tugboat captain, leading and managing technicalteams and projects.

A decade of personal Kaizen has inspired his continuous journey throughtechnology, software, business development, and management. A Kaikakumoment unleashed his entrepreneurial self in 1999. He is now sea captain ofSavvi International, charting the deeper value-stream waters of solutions forbusiness performance improvement using Six Sigma, Lean, and BusinessProcess Management.

He lives with his standard family in the rural desert foothills of NorthScottsdale, Arizona, flowing just-in-time value in response to their continuousdemand pull. He regularly suffers the muri of 5S’ing the house on weekends.His hobbies include mucking the muda of the family horses.

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DedicationNatalie J. Sayer: To Frank Cooney, Al Billis, and Pam Oakes, my first Leanteachers; to Jim, Patt, and Eric Sayer, my family who support all my endeav-ors; and to Anne Ramsey, Derek O’Neal, Lori Kobriger, and the rest of myinner circle. Thank you all.

Bruce Williams: To the Lean person within all of us. Recognize and nurtureyour Lean self. Every waste you eliminate today sets the stage for a betterworld tomorrow.

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Authors’ AcknowledgmentsThe authors acknowledge Craig Gygi for his expertise, dedication, andencouragement. You established the standard for us to follow; we hope we’vedone you proud.

We especially thank Frank Cooney for his mentoring, advice, and technicalreview. Lean can be a hard thing to pin down. Thanks, Frank, for bringingyour tremendous body of practical experience to bear.

We’d also like to acknowledge our good friends and colleagues Janet Young,Vern Young, Dr. Deborah Peck, Eleanor Clements, Scott Kurish, and Dr. KiranGarimella for your counsel, ideas, review, and support. Additionally, we’d liketo acknowledge everyone at the Phoenix Think Tank, a place where greatminds, ideas, and support meet to create “an exquisite shifting in thought.”

Thanks to Ken Carraher of iGrafx and Debbie Rosen of webMethods for theirunflinching support in providing whatever we needed. We could easily havefilled the book with value-stream maps, process models, and dashboards.We’ll just have to save them all for the Lean Workbook For Dummies!

As authors and researchers, we humbly bow to the miracle that is Google.

All people interested in Lean owe their ongoing gratitude to Mark Graban andhis associates, who through their blog site translate Lean to the worldaround us.

As consumers, and on behalf of consumers everywhere, we acknowledge theuniquely groundbreaking contributions of brilliant pioneers W. EdwardsDeming, Taiichi Ohno, and Shigeo Shingo, as well as U.S. Lean leaders NormBodek and Jim Womack. Through their achievements, we are all better off.

But most of all, we acknowledge the many thousands of Lean practitionersaround the world, who regularly confront established structures, functionalsilos, arcane accounting practices, and entrenched procedures to cut thewaste and find the real customer value. You make Lean thrive. You are ourheroes.

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Publisher’s AcknowledgmentsWe’re proud of this book; please send us your comments through our Dummies online registrationform located at www.dummies.com/register/.

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Media Development

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Publishing and Editorial for Consumer Dummies

Diane Graves Steele, Vice President and Publisher, Consumer Dummies

Joyce Pepple, Acquisitions Director, Consumer Dummies

Kristin A. Cocks, Product Development Director, Consumer Dummies

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Kelly Regan, Editorial Director, Travel

Publishing for Technology Dummies

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Contents at a GlanceIntroduction .................................................................1

Part I: Lean Basics .......................................................7Chapter 1: Defining Lean ...................................................................................................9Chapter 2: The Foundation and Language of Lean ......................................................27

Part II: Understanding Flow and the Value Stream........47Chapter 3: Seeing Value through the Eyes of the Customer .......................................49Chapter 4: A Resource Runs through It: Value Stream Mapping ................................71Chapter 5: Charting the Course: Using Value Stream Maps........................................93Chapter 6: Flowing in the Right Direction: Lean Projects and Kaizen .....................117

Part III: The Lean Toolbox..........................................133Chapter 7: Customer and Value-Stream Tools ............................................................135Chapter 8: Flow and Pull Tools .....................................................................................151Chapter 9: Perfection Tools ..........................................................................................169Chapter 10: Management Tools ....................................................................................191

Part IV: The Lean Enterprise ......................................209Chapter 11: Lean in the Organization: Principles, Behaviors, and Change.............211Chapter 12: Power to the People..................................................................................227Chapter 13: Go Lean: Implementation Strategy, Startup, and Evolution.................251Chapter 14: Lean within the Enterprise.......................................................................271Chapter 15: Lean across Industry ................................................................................295

Part V: The Part of Tens ............................................313Chapter 16: Ten Best Practices of Lean.......................................................................315Chapter 17: Ten Pitfalls to Avoid ..................................................................................321Chapter 18: Ten Places to Go for Help.........................................................................327

Glossary...................................................................335

Index .......................................................................345

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Table of ContentsIntroduction..................................................................1

About This Book...............................................................................................2Conventions Used in This Book .....................................................................2Foolish Assumptions .......................................................................................3How This Book Is Organized...........................................................................4

Part I: Lean Basics ..................................................................................4Part II: Understanding Flow and the Value Stream.............................4Part III: The Lean Toolbox .....................................................................4Part IV: The Lean Enterprise.................................................................5Part V: The Part of Tens.........................................................................5

Icons Used in This Book..................................................................................5Where to Go from Here....................................................................................6

Part I: Lean Basics........................................................7

Chapter 1: Defining Lean . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9What Is Lean?..................................................................................................12

Waste not, want not..............................................................................12The logic of Lean ..................................................................................13Where is Lean?......................................................................................14What it’s not ..........................................................................................17What makes Lean so special? .............................................................18

The Lean Pedigree..........................................................................................19Toyoda and Ohno .................................................................................20The Toyota Production System ..........................................................20

Lean and Its Continuous Process Improvement Cousins .........................22Total Quality Management (TQM) .....................................................22Six Sigma................................................................................................23Theory of Constraints (TOC)..............................................................24Total Productive Maintenance (TPM)................................................24ISO-9000 .................................................................................................24Business Process Management (BPM) ..............................................25

Chapter 2: The Foundation and Language of Lean . . . . . . . . . . . . . . . . .27Understanding Lean Basics ..........................................................................28

Creating the foundation.......................................................................28Learning from TPS................................................................................35Foundational wisdom ..........................................................................37

Getting into Shape..........................................................................................43Muda, muda, muda...............................................................................43All in the family.....................................................................................45

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Part II: Understanding Flow and the Value Stream ........47

Chapter 3: Seeing Value through the Eyes of the Customer . . . . . . . .49What Is Value?.................................................................................................49To Add Value or Not to Add Value, That Is the Question..........................51

Defining value-added ...........................................................................51Defining non-value-added....................................................................52When non-value-added seems like value-added...............................53

Understanding How the Customer Defines Value ......................................55Uncovering the elusive customer ......................................................55Considering customer value ...............................................................57

Understanding How the Consumer Defines Value .....................................61Responding to the consumer..............................................................62Understanding what consumers value ..............................................64

Introducing the Value Stream .......................................................................65Visualizing the value stream ...............................................................66Looking at the flow of information.....................................................67

Chapter 4: A Resource Runs through It: Value Stream Mapping . . . .71The Who, What, and Why of Value Stream Maps.......................................72

The purpose of a Value Stream Map ..................................................74The people who use a Value Stream Map..........................................74The elements of a Value Stream Map.................................................75

Row, Row, Row Your Boat: Getting Started.................................................76Identifying the natural owner .............................................................76Gathering the crew...............................................................................77Using mapping tools ............................................................................77Gathering supporting information .....................................................79A VSM example: Pre-made gourmet salads.......................................80

Sorting Through the Tributaries: Creating the Current-State Value Stream Map.......................................................................................82

Identifying the activities ......................................................................82Qualifying and quantifying ..................................................................85Determining the information flow ......................................................87

Summing Up the Process ..............................................................................88The box score .......................................................................................89Takt time................................................................................................90

Check the Chart: Validating the Value Stream Map ...................................90

Chapter 5: Charting the Course: Using Value Stream Maps . . . . . . . .93Investigating the Value Stream for Clues.....................................................94

Rounding up the usual suspects ........................................................94Analyzing from different perspectives...............................................98Evaluating the evidence: An analyzed example .............................103

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Painting a Picture of the Future..................................................................106Creating the Ideal-State Value Stream Map:

Where all is perfect in the world ..................................................107Stepping closer to perfection: The Future-State

Value Stream Map ...........................................................................107Creating the Mosaic of Continuous Improvement:

Setting the Stage for Kaizen ....................................................................114Looking toward the annual horizon.................................................114Future-State implementations...........................................................115

Chapter 6: Flowing in the Right Direction: Lean Projects and Kaizen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117

Kaizen: A Way of Life....................................................................................118Kaizen: The philosophy.....................................................................118Kaizen in action ..................................................................................119

Improving the Value Stream with Kaizen ..................................................122Selecting projects ...............................................................................122Project methodology..........................................................................123Individual projects .............................................................................125Group projects ....................................................................................125

Kaizen: The Workshop.................................................................................127Planning the Kaizen workshop .........................................................127Conducting the Kaizen workshop ....................................................130Sustaining the Kaizen-workshop gains ............................................132

Part III: The Lean Toolbox ..........................................133

Chapter 7: Customer and Value-Stream Tools . . . . . . . . . . . . . . . . . . .135Communing with the Customer .................................................................135

Capturing the voice of the customer ...............................................135Understanding customer satisfaction .............................................137Sizing up the competition .................................................................138

Working with the Value Stream ..................................................................140Quantifying the value stream............................................................140Making Woodward and Bernstein proud: Investigating

your value stream like a reporter .................................................143Using Qualitative Tools ...............................................................................145

Relations Diagrams: Relating to each other....................................145Affinity Diagrams: Like meets like ....................................................147Tree Diagrams: From trunk to leaves...............................................147Matrix Diagrams: Where information meets...................................148Matrix Data Analysis Charts: Comparing

multiple characteristics .................................................................148

xiiiTable of Contents

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