Lean Manufacturing Working More Efficiently

How much waste does your organization produce?

For example, do you ever have to wait for someone else to finish a task before you can get on with your own work? Do you have a large inventory of unsold stock? Do you have more workstations than you need? Or do you order materials months in advance of when they are needed?

How about flexibility? If consumers want a modification to your product, can you quickly change your processes to meet their needs?

Waste costs you and your customers money. And if your customers have to pay more because of it, they might go elsewhere. Being competitive also requires a lot of flexibility. You must be able to meet the changing demands of your customers quickly and effectively, and adapt to a rapidly changing business environment.

So, how can you reduce waste and do things more efficiently? And how can you keep up with the changing demands of consumers?

First mentioned in James Womack’s 1990 book, “The Machine That Changed the World,” Lean Manufacturing is a theory that can help you to simplify and organize your working environment so that you can reduce waste, and keep your people, equipment, and workspace responsive to what’s needed right now.

A Brief History of Lean Manufacturing

Henry Ford was one of the first people to develop the ideas behind Lean Manufacturing. He used the idea of “continuous flow” on the assembly line for his Model T automobile, where he kept production standards extremely tight, so each stage of the process fitted together with each other stage, perfectly. This resulted in little waste.

But Ford’s process wasn’t flexible. His assembly lines produced the same thing, again and again, and the process didn’t easily allow for any modifications or changes to the end product – a Model T assembly line produced only the Model T. It was also a “push” process, where Ford set the level of production, instead of a “pull” process led by consumer demand. This led to large inventories of unsold automobiles, ultimately resulting in lots of wasted money.

Other manufacturers began to use Ford’s ideas, but many realized that the inflexibility of his system was a problem. Taiichi Ohno of Toyota then developed the Toyota Production System (TPS), which used Just In Time manufacturing methods to increase efficiency. As Womack reported in his book, Toyota used this process successfully and, as a result, eventually emerged as one the most profitable manufacturing companies in the world.

Lean Manufacturing Basics

The Lean approach is based on finding efficiencies and removing wasteful steps that don’t add value to the end product. There’s no need to reduce quality with lean manufacturing – the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.

To find the efficiencies, lean manufacturing adopts a customer-value focus, asking “What is the customer willing to pay for?” Customers want value, and they’ll pay only if you can meet their needs. They shouldn’t pay for defects, or for the extra cost of having large inventories. In other words, they shouldn’t pay for your waste.

Waste is anything that doesn’t add value to the end product. There are eight categories* of waste that you should monitor:

  1. Overproduction – Are you producing more than consumers demand?
  2. Waiting – How much lag time is there between production steps?
  3. Inventory (work in progress) – Are your supply levels and work in progress inventories too high?
  4. Transportation – Do you move materials efficiently?
  5. Over-processing – Do you work on the product too many times, or otherwise work inefficiently?
  6. Motion – Do people and equipment move between tasks efficiently?
  7. Defects – How much time do you spend finding and fixing production mistakes?
  8. Workforce – Do you use workers efficiently?

Lean gives priority to simple, small, and continuous improvement such as changing the placement of a tool, or putting two workstations closer together. As these small improvements are added together, they can lead to a higher level of efficiency throughout the whole system. (Note that this emphasis on small improvements doesn’t mean that you cannot make larger improvements if they are required!)

Lean Manufacturing Process

The process has three key stages:

Stage 1 – Identify Waste

According to the Lean philosophy, waste always exists, and no matter how good your process is right now, it can always be better. This commitment to continuous improvement is known as Kaizen.

One of the key tools used to find this waste is a Value Stream Map (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you’ll see the processes that add value and those that don’t. You can then create a “future state” VSM that includes as few non-value-adding activities as possible.

Stage 2 – Analyze the Waste, and Find the Root Cause

For each waste you identified in the first stage, figure out what’s causing it by using Root Cause Analysis. If a machine is constantly breaking down, you might think the problem is mechanical and decide to purchase a new machine. But Root Cause Analysis could show that the real problem is poorly trained operators who don’t use the machine properly. Other effective tools for finding a root cause include Brainstorming and Cause and Effect Diagrams.

Stage 3 – Solve the Root Cause, and Repeat the Cycle

Using an appropriate problem-solving process, decide what you must do to fix the issue to create more efficiency.


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Tools to Reduce Waste

Once you have identified wastes using the three key stages above, you can then apply this next set of tools to help you reduce waste further:

  • Just in Time – This is the core idea of Lean and is based on the “pull” model. To minimize stock and resources, you only purchase materials, and produce and distribute products when required. You also produce small, continuous batches of products to help production run smoothly and efficiently. By reducing batch size, you can also monitor quality and correct any defects as you go. This reduces the likelihood of quality being poor in future batches.(In manufacturing, a key way of doing this is to use Kanban, below.)
  • Kanban – This is one of the key ways to involve people in the Lean process. Here, you support the Just In Time model by developing cues in the system to signal that you need to replace, order, or locate something. The focus is on reducing overproduction, so that you have what you need, only when you need it.
  • Zero Defects – This system focuses on getting the product right the first time, rather than spending extra time and money fixing poor-quality products. By using the Zero Defects system, you’ll reinforce the notion that no defect is acceptable, and encourage people to do things right the first time that they do something.
  • Single Minute Exchange of Die (SMED) – This helps you build flexibility into your production. For example, in the automotive industry, it could take days to change a line to produce a different car model. With SMED, the assembly process and machinery are designed to support quick and efficient changeovers. (Here, a “die” is a tool used to shape an object or material.)
  • The 5S Philosophy – Lean depends on standardization. You want your tools, processes, and workplace arrangements to be as simple and as standard as possible. This creates fewer places for things to go wrong, and reduces the inventory of replacement parts that you need to hold. To accomplish a good level of standardization, use the 5S System.

Apply This to Your Life

  1. Overproduction – Do you provide more data or information than is needed? Do you create reports more often than required for example? Or do you spend unnecessary amounts of time formatting these reports?
  2. Waiting – Do you spend too much time waiting for information or data from others, before you can do your work? What can you do about this?
  3. Inventory (work in progress) – Do you have a large stock of materials? Are your supply levels and work-in-process inventory too high?
  4. Transportation – Do things flow efficiently? Could you combine deliveries, or deliver things more quickly?
  5. Overprocessing – Do you needlessly work on something more than once?
  6. Motion – How is work passed along in your team? Do people understand what they’re required to do at each step? Do people and equipment move between tasks efficiently?
  7. Defects – How often do you find mistakes? Do you make the same mistakes on a regular basis?
  8. Workforce – Do you use your time wisely? Do you spend most of your time on activities that add value and are a high priority?
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Source @MindTools

Lean Manufacturing History

When people think of lean manufacturing they normally think that it began with Toyota and some go as far back as Ford and his production lines for the Model T ford, but depending on how you define lean, it has a very long history.

Origins of Lean

Ford put many ideas together when he first designed his production line for the model T Ford, however he did not invent very much of it himself.
The ideas of having interchangeable parts and the like were not new to Ford, they had been around for a long time, the principles had been used by Eli Whitney to manufacture muskets at the end of the 18th Century.
Production Lines were far from new, King Henry the 3rd watched the hourly production of Galley ships in 1574 through continuous flow processing, and Marc Brunel (father of Isambard) created production lines for the royal Navy in 1810.
Fredrick Taylor’s work on scientific management investigated workplace efficiencies and Frank Gilbreth  looked at motion studies. Both of their works influenced the design and functioning of the Ford production lines.
However Fords production lines were not flexible and they fostered very much a “them and us” attitude between the management and the workers on the lines, it was the management that did the thinking and the workers did as they were told.
Fords methods however worked for mass production and were highly effective during world war 2 where Ford helped to build Bombers at the Ford Willow Run plant and Boeing.

Lean History

Development of Lean Manufacturing

Development of the Toyota Production System

Sakichi Toyoda invented a weaving loom that was able to stop when it detected a broken thread. This enabled a single worker to be able to monitor several machines as the operator only had to intervene on an exceptions basis. This was the start of Autonomation or Jidoka; automation with a human touch, one of the important parts of the Toyota Production System and hence Lean Manufacturing.
Through selling the patents to this invention to Platt Bros in Yorkshire the Toyoda family were able to exit the textiles business and fund the start up of their automotive company – Toyota.

Toyota and the Quality Gurus

After world war two the US helped Japan rebuild its manufacturing capability, they did this by sending a number of “consultants” to provide aid and advice. The people that they sent were people like Deming who had no success at getting the Americans to listen to his philosophy with regard to Quality and Management. The Japanese however listened and learned, the Deming award now being the greatest award a company in Japan could gain.

Through Deming, Juran, Shewhart and the other consultants that were bought into help them Toyota and the other Japanese companies learned the importance of quality and satisfying their customers. They also learned the importance of involving their entire workforce in making improvements. Quality and respect for their people became very important for Toyota.
Toyota also listened and developed the concept of Just in Time (JIT), together with Jidoka this formed the two main pillars of the fledgling Toyota Production System (TPS).

Eiji Toyoda and Taiichi Ohno visited Ford to gain a greater understanding of how Ford was run, they also found huge inspiration from of all places American supermarket chains!

From Ford they saw how production lines worked and how processes could be broken down into manageable steps. They also discovered processes and ideas such as CANDO (Clean up, Arrange, Neatness, Discipline, Ongoing Improvements) which became the basis for their 5S system.

Kanban Pull System

Kanban enables pull systems

From the supermarkets they saw how the shelves only got replenished when customers removed produce; this ensured that the supermarket only had to purchase what the customers were buying  and could minimise their stocks. Something that was vital in an economy that was short of resources. This triggered the development of Just in Time and Kanban systems.
By the 1950’s the Toyota Production System was well into development, and Toyota was beginning its journey to out compete the rest of the world with regard to producing reliable quality cars.
In the 1960’s Shigeo Shingo developed the technique of Pokayoke (mistake proofing)  and Ishikawa devised the concept of Quality Circles giving the employees far more involvement in molding the future of Toyota.

Lean and the West

By the early 1980’s the west was begging to realize that the Japanese were out competing them and companies started to take a long hard look at what they were doing. Various consultants began to try to introduce their versions of the Toyota Production System under westernized names such as Continuous Flow Manufacturing, Stock-less production and World Class Manufacturing.

Companies in the West also tried to determine exactly what it was about Toyota that made them so good so they started taking individual ideas and trying to implement them in isolation such as quality circles or kanban systems.
It was not until 1990 that the results of an MIT study were published in the book titled “The Machine that Changed the World” by Womack and Jones that the world was introduced to the term Lean Manufacturing. Since then the name has stuck and Lean has gone from a “Must Have” in the Automotive industry to a technique that has been applied across almost every industry.
There are now many publications out there explaining the philosophy of Lean Manufacturing and the various Lean Tools in huge detail, there are also many consultancies out there selling business improvement through the application of Lean Manufacturing.


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The Rise and Fall and Rise of Lean

Like most management Fads and Philosophies Lean saw huge popularity at the start with many consultants appearing on the scene throughout the 80’s and 90’s offering to implement everything from 5S through to World Class Manufacturing. These consultants were jumping very much on the bandwagon of helping companies to compete effectively against the by now superior Japanese imports.

However many of these consultancies had very little idea of what lean was really about and no experience of implementing it! So many of these consultants would implement what they understood to be lean and try to make as many savings as they could so that they looked good to the companies that hired them. The savings more often than not vanished after a few months as soon as the consultants left the company and moved onto the next.

Lean therefore quickly gained a reputation as something that was implemented to remove people and cut costs and was not seen as something that was sustainable in the west. Many attributing the success of Lean in Japan to the attitude of the Japanese themselves, even though some of the most productive Toyota plants were actually located in places such as the States and were staffed by non-Japanese.

5S Training Course

In House 5S Training Course

Lean is still seen as a must have within the automotive industry and throughout its supply chain. It has also slowly been adopted into many other industries and even service areas. Lean for Health Care and even Programming are now areas where Lean is seen to be growing rapidly in popularity.

Even so many Consultants have seen the need to change the name to distance themselves from old bad press and misconceptions; now we have Agile manufacturing which focuses on being able to respond rapidly to changing customer demand and even Lean Sigma which seeks to combine the power of lean with the analytics and cost savings of Six Sigma.

Where will Lean be in the future?

Lean will continue to grow in popularity even if the consultants promoting it change its name. Leans aim of providing value to its customers means that it will always be applicable to any business. The Lean Tools however are going to develop and grow in much the same way as tools such as SCRUM have appeared for software development.

Lean Manufacturing, Lean for Service, Healthcare, Software and a host of other applications will continue to grow and tools will continue to evolve as customer needs change and grow also. Lean is not a set of static tools that can be applied according to a set formula but a philosophy of identifying customer’s perceived value and then providing it in the most economical way possible at their demand.

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Source @LeanManufacturingTools

What is Lean | Lean Manufacturing Definition

Defining Lean Manufacturing

Lean Manufacturing is a term that has been around now for many years, originally spawned within the MIT study that led to the book “The Machine That Changed the World” by Womack and Jones in 1990. However if you search through the many publications and web sites looking for a lean manufacturing definition you will find a myriad of differing definitions for Lean, partly because lean is a continuously developing philosophy and because it’s application is different for each and every company.

Lean has had a number of names over the years, developed primarily from the Toyota Production System (TPS) it has been called World Class Manufacturing (WCM), Continuous Flow Manufacturing, and Stock-less production to name a few. Today you will even here Lean Sigma and Agile Manufacturing.

Although developed mainly within manufacturing, Lean is equally applicable within your office based administrative functions or within service industries such as healthcare where it is seeing a huge amount of attention.

The term Lean in my mind is an unfortunate one, in many people it brings to mind not a fit capable organization but a thin, anorexic one that will break when pressure is applied. A fear that has been well founded when piecemeal and ill planned applications of Lean have failed.

Lean Development

The history of Lean Manufacturing goes back many centuries, well before Ford’s famous production lines for the model T ford; however it really starts to begin to be the philosophy that we know today with Toyota and the development of the Toyota Production System (TPS).
Toyota set out to be far better than Ford and the rest of the US Automobile Industry, an ambition that they quickly achieved despite a lack of resources and infrastructure. They achieved this through the application of Lean Principles and the many Lean Manufacturing Tools.
Toyota are far from perfect by their own admission, they are only part way on their never ending journey of Lean Manufacturing.

What is Lean For?

To understand what lean is it is helpful to understand why it developed; if you can understand the purpose of lean then you can better grasp exactly what it is. Lean (and the Toyota Production System) have two main purposes;

  1. Provide Customer Satisfaction
  2. Do so Profitably

Everything within Lean focuses on these two main points, with customer satisfaction taking the fore at all times.

Everything that you do should provide value to the customer, anything else is waste. If the customer does not explicitly want it why are you doing it? This is why when you look at any process your first question should always be “WHY?” Too many practitioners of lean jump straight into applying principles to a process without even questioning why the process exists; often they make a wasteful process more efficient and you end up getting better at doing something the customer does not even want.

Providing Customer Satisfaction

Quality Function Deployment

Use QFD to define Value according to the Customer

Understanding what your customer really wants is not always as clear cut as it could be. It is also not always clear exactly who your customer is; after all you have to consider your business owners and society as a whole as your customers also. All of your customers want something from you and sometimes those needs are conflicting; society wants you to use less energy but the consumer wants bigger and faster for example.

We can use tools such as QFD or Quality Funtion Deployment to try to discover what our customers really value and to also try to weight those values as to what is most important.

 QCD (Quality, Cost and Delivery)

Your customer satisfaction however comes down to just three main areas, normally Quality, Cost and Delivery (QCD). However which is the most important to your customer may depend on the product or service that you are delivering. Someone looking for a new sound system may put Quality first, while the consumer that needs a new Sofa may want it tomorrow rather than having to wait 5 weeks. Of course the person looking for a “consumable” rewritable DVD for their computer may only be motivated by the cost.

Understanding your customers needs is vital in being able to keep them fully satisfied and everything you do in the way of services that provide and products should be geared to meeting those needs. This means giving them the best quality, the right delivery time (which is not always immediate) and the right price.

Lean is very much about providing Quality; tools such as Poka Yoke and Kaizen are very much focused on ensuring that service and product quality are perfect.

Lean is also about Delivery; Just in Time is about providing flow using kanban systems to ensure that the customer gets what they want when they want it. We use standardized working through 5S and keep our machines reliable through TPM to help achieve this.

Lean is also about Cost; we reduce our costs by removing all non-value adding steps – but this is the result of implementing lean not the focus of lean. Lean is not “Just” a cost cutting machine to help improve profits without any thought of the customer!

Lean Makes us Profitable

A Business exists primarily to make money, if it does not make money it cannot pay wages, overheads etc and will eventually fail. Even Charities exist to make money for their cause. The more efficiently that a company can do this the happier all involved will be; the employees because their lives are easier and hopefully their wages fair, the customers because the prices are fair and the products good, the suppliers because they are receiving a fair price and finally the owners because they are making a profit.

By employing lean we remove all of the wasteful processes and focus only on providing the customer value; anything that does not provide the customer value is removed or minimized.

A traditional view of profit is one where we base our selling price on our costs plus our profit;

Selling Price = Profit + Costs

However as Taicii Ohno one of the main architects of the Toyota Production system argues; if the customer perceives our product or service to have a specific value they will only pay accordingly. If we raise our prices because our costs increase but the perceived value of our product remains the same our customers will stop buying as our selling price exceeds the value that they perceive.

So Taichii Ohno and Toyota look at profit and costs in the following way;

Profit = Selling Price – Costs

The selling price is the price that is fixed by what the consumer is willing to pay for the perceived value of the product, your profit therefore will depend on how you can reduce your costs. Therefore the aim of Lean and the Toyota Production System is to reduce costs so that the company can make a profit, not to manipulate your selling price to create a profit.

 Cutting Costs

Lean is about removing Cost; but it is about removing cost by focusing on what adds value not just trying to identify the wasteful steps in an isolated process.

We have to understand the Value Stream; how do we add value to our process right from raw materials through to the final customer, even the disposal of our product. It is by understanding how that value is added and avoiding the non-value adding steps that we remove waste from our processes. Lean helps us to remove the seven wastes from our processes;

7 Wastes of Lean

Remove Wastes to Reduce Costs

  1. Transport
  2. Inventory
  3. Motion
  4. Waiting
  5. Over Processing
  6. Over Production
  7. Defects

Mapping the Value Stream

Map the Value Stream to Understand Where Value is Added

Those implementations that focus on the removal of the seven wastes from an isolated process within the full value stream tend to make the system less able to cope with change. It is far more effective use techniques such as Value Stream Mapping to understand the whole Value stream from start to finish.

Lean and People

One of the most important aspects of Lean is the involvement of everyone in the organization from the CEO down to the guy that cleans the toilets. Everyone has a voice and everyone is expected to make a contribution within Lean.

While Ford used the ideas of Taylor and Gilbreth to create an efficient production process it very much relied on experts and management defining the production process and the workers following their instructions. Followers of Taylor may say that this was a misinterpretation of his work it was however how it was enforced within Ford and many other companies; the management provide direction and the workers did the work. This often led to resentment from the workers who felt that although wages improved they were being exploited and labor disputes often resulted.

Toyota and other Japanese companies however followed the ideas promoted by Juran, Deming and the other quality Gurus and they began to involve all of their employees in their improvements. From quality circles and kaizen through to Total Productive Maintenance (TPM) and 5S they valued and involved all of their employees. They saw their workforce as their greatest asset and sought to harness the power and creativity of their workers in improving their workplace.

It is often this involvement of the workforce where western companies fall down when implementing lean, while they may say that they value and involve their employees many fail to actually demonstrate it. Unless everyone in the organization is empowered and in fact compelled to participate in Lean it will never be an effective implementation.


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Lean is about Exposing and Solving Problems

Another way to look at lean is to look at the way that most of the lean  tools and techniques work, they use visual management techniques to make problems obvious; andon boards tell you which machines are not working, daily/hourly achievement boards show you where production is behind,5S layout shows when things are missing or placed incorrectly, Jidoka, and so on. All Lean tools are designed to highlight problems within the system which then have to be solved by the application of the various quality tools and the 5 whys to eliminate the root cause. Continually eliminating problems as they are exposed by the lean system using the power of your workforce teams ensures that you continuously improve every aspect of your business towards perfection as suggested within the 5th lean principle above.

Lean is Not Just For Manufacturing

While Lean has been developed primarily within a manufacturing environment the ideas behind lean are as applicable (if not more so) to service industries and even the various service departments within a manufacturing company. We are focusing on customer satisfaction and what is value as perceived by a customer.

So if value is an invoice that is accurate and delivered within 30 minutes through email then we had better make sure that the service department that provides this service does so. If value is a computer technician that can diagnose and fix 95% of our faults over the phone and internet then that is what we want. If Value is a quick diagnosis followed by rapid effective treatment then that is what we should provide.

Every function of a business has a customer and a purpose (If not why is it there?) What does that customer want and how can you provide them their service when they want it, in an efficient, cost effective way, perfectly every time?

Lean is Not Just Tools

Lean ToolsLean Manufacturing Tools are a means to an end, they are proven methods to achieve a lean state within your business but every tool needs to be adapted and refined for your specific situation. Just implementing individual lean tools on their own will not give you a sustainable improvement in your business, you have to look at the overall philosophy and the principles of lean.

While each lean tool can undoubtedly add value you to your business in its own right, especially tools such as 5S, they are best implemented within a full lean project. Lean tools are not something that can be just read from a book and implemented without any thought, each will require adaptation to fit your company. Without focusing on the main lean principles such as identifying value as perceived by the customer they will add little value to you on their own.

Can a Company Ever Be Lean?

I am sure some off you have heard someone say that they have “done lean”, but is lean something that can actually be achieved? Well Toyota do not believe that they are truly lean, they assess themselves and their suppliers and they think of themselves as only part way on the Lean Journey.

Lean is about Customer Value first, so if what customer’s value over time changes so will the requirements on our business change. Consumer’s expectations are constantly changing and evolving and so must our businesses if we want to succeed. If we stand still someone else will develop something better or faster or they will be able to provide better quality, quicker delivery or a lower cost and then we will lose our customers.

Of course it is this point when most companies start to look to Lean and other philosophies to rescue them from the results of their inaction and complacency. It takes a crisis to get many companies to look at what their customers really want and how they can provide it better, but often when they get to this point it is often too late.

What is Lean Manufacturing?

Womack and Jones define 5 main principles of Lean Manufacturing;Lean Manufacturing Definition
1.    Define Value as Perceived by the Customer
2.    Identify the Value Stream
3.    Make the Value Stream Flow
4.    Flow at the Pull of the Customer
5.    Strive for Perfection

These principles form the Backbone of Lean Manufacturing and are achieved through respecting and involving your workforce in every aspect of your business.
Many people define Lean as being about eliminating waste, while in some ways they are right, Lean is more about preventing waste. By implementing the lean principles above you identify those actions that add value and make them flow at the pull of the customer, this prevents the waste from occurring. Lean is not a hunt for waste it is a journey to add value.
Whilst Lean Manufacturing has a huge toolbox of tools and techniques you cannot define Lean Manufacturing from those tools. Lean is more than the sum of all of those tools, applying tools in isolation will not necessarily give you the benefits that you would expect and want to see.

 

Lean vs Six Sigma

There is much written about the differences between Lean and Six Sigma and many people ask which should they adopt? Which system will give them the biggest (and fastest) benefits? Lean vs Six sigma is a question that I hear often.
The answer is why chose? The two are not mutually exclusive; you can apply both side by side. Lean in my mind is better at establishing a bigger picture for organizational development and for establishing a firm foundation through things like standard operations and 5S. Six Sigma has superior problem solving tools using DMAIC and various statistical tools.
This is why you will often see companies promoting “Lean Sigma” or “Six Sigma Lean”.

Agile Manufacturing vs Lean

Lean is by definition “fast, flexible, flow” the very things that Agile manufacturing tries to achieve. Agile is an attempt to re-brand Lean Manufacturing because of many organizations failure in the past to focus across the entire value stream when applying lean manufacturing. Too many people in the past have used a lean definition that concentrates purely on waste reduction and have created anorexic processes that fail as soon as customer demand changes.
Agile tries to address this weakness by focusing across the supply chain.

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Source @LeanManufacturingTools