The routledge companion to lean management

THE ROUTLEDGE COMPANION TO LEAN MANAGEMENT Interest in the phenomenon known as ‘‘lean’’ has grown significantly in recent years This is the first volume to provide an academically rigorous overview of the field of lean management, introducing the reader to the application of lean in diverse areas, from the production floor to sales and marketing, from the automobile industry to academic institutions This volume collects contributions from well-known lean experts and up-and-coming scholars from around the world The chapters provide a detailed description of lean management across the manufacturing enterprise (supply chain, accounting, production, sales, IT etc.), and offer important perspectives for applying lean across different industries The contributors address challenges and opportunities for future development in each of the lean application areas, concluding most chapters with a short case study to illustrate current best practice The book is divided into three parts:    The Lean Enterprise Lean across Industries A Lean World This handbook is an excellent resource for business and management students as well as any academics, scholars, practitioners, and consultants interested in the ‘‘lean world.’’ Torbjørn H Netland is Chair of Production and Operations Management at the Department of Management, Technology, and Economics at ETH Zuărich, Switzerland Daryl J Powell is Lean Program Manager at the Subsea division of Kongsberg Maritime AS, Norway, and a visiting professor at the Faculty of Economics and Business at the University of Groningen, Netherlands This page intentionally left blank THE ROUTLEDGE COMPANION TO LEAN MANAGEMENT Edited by Torbjørn H Netland and Daryl J Powell First published 2017 by Routledge 711 Third Avenue, New York, NY 10017 and by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN Routledge is an imprint of the Taylor & Francis Group, an informa business Ó 2017 Taylor & Francis The right of Torbjørn H Netland and Daryl J Powell to be identified as editors of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe Library of Congress Cataloging in Publication Data Names: Netland, Torbjørn H., editor | Powell, Daryl J., editor Title: The Routledge companion to lean management/edited by Torbjørn H Netland and Daryl J Powell Description: New York, NY: Routledge, 2016 Identifiers: LCCN 2016025506| ISBN 9781138920590 (hbk) | ISBN 9781315686899 (ebk) | ISBN 9781317416500 (epub) | ISBN 9781317416494 (mobi/kindle) Subjects: LCSH: Management | Industrial management | Cost effectiveness | Cost control | Quality control | Organizational effectiveness Classification: LCC HD31.R756 2016 | DDC 658.4/013–dc23 LC record available at https://lccn.loc.gov/2016025506 ISBN: 978-1-138-92059-0 (hbk) ISBN: 978-1-315-68689-9 (ebk) Typeset in Bembo by Sunrise Setting Ltd., Brixham, UK CONTENTS List of contributors Preface ix xxi Introduction 1 The Evolution of Lean Thinking and Practice Daniel T Jones and James P Womack The Toyota Way: Striving for Excellence Jeffrey K Liker PART I The Lean Enterprise 21 Lean Production Pauline Found and John Bicheno 23 Lean Leadership Michael Balle´ 34 Lean Innovation Guănther Schuh, Stefan Rudolf, and Christian Mattern 44 Lean Product and Process Development Monica Rossi, James Morgan, and John Shook 55 Lean Systems Engineering Cecilia Haskins and Bohdan W Oppenheim 75 v Contents Lean Logistics Michel Baudin 83 Lean Safety Robert B Hafey 98 10 Lean Teams Desire´e Van Dun and Celeste Wilderom 106 11 Lean IT Paăr Ahlstroăm, Ryusuke Kosuge, and Magnus Maăhring 118 12 Lean Sales and Marketing Brent Wahba 130 13 Lean Branding Laura Busche 143 14 Lean Accounting Brian H Maskell 153 15 Lean Auditing James C Paterson 165 16 Lean Remanufacturing Elzbieta Pawlik, Winifred Ijomah, and Jonathan Corney 179 17 Lean and Green Keivan Zokaei, Ioannis Manikas, and Hunter Lovins 189 18 Lean Purchasing Tim Torvatn, Ann-Charlott Pedersen, and Elsebeth Holmen 202 19 Lean Supply Chains Jonathan Gosling, Maneesh Kumar, and Mohamed Naim 212 20 Lean Distribution Matthias Holweg and Andreas Reichhart 225 21 Lean After-Sales Services Barbara Resta, Paolo Gaiardelli, Stefano Dotti, and Dario Luise 234 22 Lean Global Corporations Torbjørn H Netland 248 vi Contents PART II Lean across Industries 259 23 Lean Healthcare Daniel T Jones 261 24 Lean Construction Glenn Ballard 271 25 Lean Engineer-to-Order Manufacturing Daryl J Powell and Aldert van der Stoel 286 26 Lean Mining Behzad Ghodrati, Seyed Hadi Hoseinie, and Uday Kumar 302 27 Lean Maintenance, Repair, and Overhaul Mandyam M Srinivasan 311 28 Lean Public Services Zoe Radnor 321 29 Lean Armed Forces Nicola Bateman and Peter Hines 339 30 Lean Policing Harry Barton, Rupert L Matthews, and Peter E Marzec 346 31 Lean Justice Ana Lucia Martins, Isabell Storsjoă, and Simone Zanoni 357 32 Lean Public Water Supply Kirstin Scholten, Benjamin Ward, and Dirk Pieter van Donk 368 33 Lean Dealerships David Brunt 378 34 Lean Software Development Mary Poppendieck 392 35 Lean Printing Ken Macro 403 36 Lean Retail Paul Myerson 413 vii Contents 37 Lean Education Vincent Wiegel and Lejla Brouwer-Hadzialic 422 38 Lean Schools Jan Riezebos 435 39 Lean Universities Steve Yorkstone 449 PART III A Lean World 463 40 A Lean World Torbjørn H Netland and Daryl J Powell 465 Index 474 viii CONTRIBUTORS The Editors Torbjørn H Netland, Ph.D., is Chair of Production and Operations Management at the Department of Management, Technology and Economics at ETH Zuărich, Switzerland He was until recently an Associate Professor at the Norwegian University of Science and Technology (NTNU) and a Senior Researcher at SINTEF, both Trondheim, Norway He has been a visiting researcher at the University of Cambridge, UK, and a Fulbright Research Fellow at Georgetown University, Washington, DC, USA His research on corporate lean programs appears in several peer-reviewed journals Netland serves on the Board of the European Operations Management Association (EurOMA) and the Lean Management Journal Daryl J Powell, Ph.D., is Lean Program Manager at the Subsea Division of Kongsberg Maritime AS, which has its main office in Horten, Norway He holds both an M.Sc and a Ph.D in lean, and has more than 10 years of experience working with lean implementations as both a practitioner and an academic Currently he leads the global implementation of Kongsberg Maritime Subsea’s corporate lean program Powell is also a Visiting Professor at the Department of Operations at the University of Groningen in the Netherlands His research appears in several peer-reviewed international journals He is a member of the Editorial Advisory Board for the International Journal of Lean Six Sigma Introduction Chapter The Evolution of Lean Thinking and Practice Daniel T Jones is the Founder and Chairman of the Lean Enterprise Academy in the UK He is also senior advisor to the Lean Enterprise Institute, a management thought leader, and a mentor on applying lean process thinking to every type of business He is the co-author of The Machine that Changed the World, Lean Thinking, Seeing the Whole Value Stream, and Lean Solutions He is the publisher of Breaking through to Flow, Creating Lean Dealers, and Making Hospitals Work Jones also has organized Lean Summit conferences in Europe, including the Frontiers of Lean Summit, the First Global Lean Healthcare Summit, and the Lean Transformation Summit Jones was the European Director of MIT’s Future of the Automobile and International Motor Vehicle ix This page intentionally left blank 40 A LEAN WORLD Torbjørn H Netland and Daryl J Powell Introduction Lean across the enterprise Lean across industries This Companion provides a deep investigation into one of the most celebrated, used, and criticized business concepts of our time, namely lean management Today, lean seems to be on everyone’s lips—not only across all functional areas of the traditional manufacturing enterprise (Part I of this book) but also in many different industries (Part II) Whereas other business concepts have proven to be short-lived and faddish, lean has maintained a strong position for almost three decades; what is more, it is gaining momentum Lean is spreading far beyond its original environment on the shop f loors of Toyota Motor Manufacturing As Figure 40.1 illustrates, the spread of lean thinking across the enterprise and into new industries is continuing at a rapid pace This chapter, which constitutes Part III of the Companion, discusses what the emergence of ‘‘a lean world’’ means for our understanding of lean in the broader sense Figure 40.1 t g s en tin s itie m e i as p rs r c t o e l s s d us rie ve s niv ce ing ts a ion ur ind ust e de are orce & u on ervi s en bros ct ct s f d i m & s c r s p s u a a t l e in a h d o a c u rn a g tr uf oc d tw alt e o uc bli rt- ve di & ns an pr foo sof he arm sch ed pu sta go me oil m co n a an an an an an an an an an an an an an Le Le Le Le Le Le Le Le Le Le Le Le Le Le 1985 1990 1995 2000 2005 2010 2015 2020 Le Le Le Le Le Le Le Le Le Le Le Le Le Le Le an an an an an an an an an an an an an an an an pr lo su en ac pu di pr R& IT of af au le sa br fic te d ad le an od gis pp gi co rc str od D e r-s itin er s & di uc tic ly ne un ibu uc /in al g sh m ng e tio s ch ri tin sin tio t d no es ip a v n ng g e g n rk ve ati se ns et lo on rv in pm ic g es en t Le The spread of lean thinking across the enterprise and select industries 465 Torbjørn H Netland and Daryl J Powell In the spirit of learning, before you read the rest of this chapter, ask yourself the following: Can an organization lean without knowing its customers? Without aiming to reduce variation? Without paying attention to just-in-time ( JIT)? Without pulling production to the demand of customers? Without paying attention to standards? If your answer was ‘‘no’’ to one or more of these questions, you are likely to learn something new in this chapter, just as we did in working with the 69 contributing authors in this Companion on lean management The various chapters describe and discuss what ‘‘lean’’ looks like in different settings To our surprise, it is clear that what is lean in one setting may be completely anti-lean in another Take ‘‘reduction of variation’’ as an example: many authors claim that variation is the number one ˚ hlstroăm, 2012), but as Schuh et al (Chapter enemy of lean (e.g Bicheno, 2004; Modig and A 5), Rossi et al (Chapter 6), and Poppendieck (Chapter 34) explain, creating more variation is a goal in successful lean innovation, lean product development, and lean software development Another example is Toyota’s archetypical JIT principle There is no doubt that this principle is appropriate for application to assemble-to-order manufacturing companies, but its legitimacy is less clear in lean remanufacturing (Chapter 16), lean engineer-to-order industries (Chapter 25), lean armed forces (Chapter 29), lean policing (Chapter 30), or lean education (Chapter 37), to mention a few There are several inconsistencies like these in the common understanding of lean, and these have the potential to disrupt and ruin any lean transformation It is therefore important to clarify what the essence of lean is as it applies in different settings; this is our goal in the present chapter Back to the Roots of Lean Production As a concept, lean has evolved since it was introduced by Krafcik (1988) and made popular through the publication of The Machine that Changed the World by Womack et al (1990) The MIT International Motor Vehicle Program showed that Toyota in the late 1980s used less of everything compared with its mass-production competitors but still produced more products with a higher variety, higher quality, and lower cost Toyota’s production system represented nothing less than a paradigm shift in manufacturing (Holweg, 2007) (For detailed discussions of the history and evolution of lean, see Jones and Womack, Chapter 1, Liker, Chapter 2, and Found and Bicheno, Chapter 3.) Considering Toyota’s staggering performance, it came as no surprise that companies all over the world tried to replicate the Toyota Production System under the label ‘‘lean production.’’ The first descriptions of Toyota’s production system focused on logistical and technical aspects (e.g Sugimori et al., 1977; Shingo, 1986; Ohno, 1988) Total quality management (TQM), total productivity maintenance (TPM), and JIT logistics were essential to Toyota’s performance and became an integral part of our descriptions of lean production (Cua et al., 2001) In addition, Toyota valued the principle of ‘‘respect for people,’’ using human resource management (HRM) practices, such as teamwork, cross-training, and a coaching leadership style (Spear and Bowen, 1999; Liker and Hoseus, 2008) Based on an empirical study by Shah and Ward (2003), these four ‘‘interrelated bundles of practices’’—TQM, TPM, JIT, and HRM—have come to represent one of the most used academic conceptualizations of lean production Developing and implementing TQM, TPM, JIT, and lean HRM practices is one way to build the foundation of lean capability in a production company Because these four bundles of practices are complementary, they should be developed in parallel, not in sequence or isolation (Shah and Ward, 2003; Furlan et al., 2011) However, to become a lean manufacturer, it is not enough to introduce new lean practices in the workplace Rather, the foremost characteristic of a lean production company is that it continuously challenges and improves on these practices 466 A Lean World That requires the meta-capability of continuous improvement (CI; ‘‘kaizen’’ in Toyota lingo) In our understanding, adding CI to TQM, TPM, JIT, and lean HRM practices provides a reasonable and useful conceptualization of lean production (illustrated in Figure 40.2) Figure 40.2 is consistent with a large body of research on lean production, and the elements are similar to those of many corporate lean programs of large manufacturing companies (see Netland, Chapter 22) However, the question is whether the five elements in Figure 40.2 also provide a reasonable understanding of lean thinking when it disseminates beyond the production floor—to administration, sales and marketing, the production development department, and so on—and beyond the bounds of the manufacturing enterprise to the healthcare sector, public services, the education system, and so on An analysis of the chapters in this book only finds CI to be considered and applied in all settings The four other elements of lean production are more or less relevant depending on the specific situation and environment Good examples are the biases toward JIT in lean distribution (see Holweg and Reichhart, Chapter 20) and toward TPM in lean public water supply (see Scholten et al., Chapter 32) Both of these examples make intuitive sense Therefore, whereas the model in Figure 40.2 provides a useful conceptualization of ‘‘original’’ lean in production and manufacturing environments, new models are needed to understand lean in the modern extended enterprise and new industries Revisiting the Five Lean Principles The five lean principles developed by Womack and Jones (1996) are perhaps the most referenced ‘‘explanation’’ of lean thinking and promise to be generic principles Several of the chapters in this book (and many other articles) use the five lean principles to structure the discussion on what lean could be in a specific application area Womack and Jones (1996) presented the five lean principles as a distillation of lean thinking Although often used as ‘‘the definition of lean,’’ a reassessment of the five lean principles shows that it is difficult to apply them directly in many settings Just-in-time (JIT) Lean human resource management (HRM) Continuous improvement (CI) Total productive maintenance (TPM) Figure 40.2 The five elements of lean production 467 Total quality management (TQM) Torbjørn H Netland and Daryl J Powell and application areas Below, we take a deeper look at each of the five principles in turn, which are as follows: define value for the customer; identify the value stream; create flow by eliminating waste; establish pull; and seek perfection Principle 1: Define Value for the Customer The first lean principle is as follows: ‘‘Specify value from the standpoint of the end customer’’ (Womack and Jones, 1996; Marchwinski and Shook, 2006) This has worked seamlessly in a wide selection of industries and helped many businesses change their mindset from an inward-looking resource efficiency perspective to a customer-driven flow efficiency perspective Applying this principle first requires identifying the customers and then specifying what they value A typical definition of a ‘‘customer’’ is ‘‘someone who buys a good or service from a business,’’ for example a consumer who buys commodities in a store, a car at a dealership, a meal in a restaurant, or a haircut at a hairdresser Business-to-business examples include an aircraft manufacturer that purchases jet engine parts from a supplier or a governmental institution that buys accounting services from a consultancy house In all of these examples, it is not hard to identify the customer or specify what the customer values While this fits easily into some contexts, the first lean principle is more difficult to apply in other settings In healthcare, for example, it is easy to look at the patient as the customer (this is even helpful and may radically improve the quality of a particular healthcare service), but the picture is not as clear cut as in the examples above (see Jones, Chapter 23) Often, the patient is not paying for all of the healthcare services she receives Rather, the society may be the ‘‘paying customer’’ through governmental tax systems Patients’ next of kin are also ‘‘customers’’ in a sense Furthermore, one of the biggest challenges for lean healthcare is that patients are unique individuals with partly overlapping, partly competing needs—all requesting services from the same, limited resources The identification of value for customers is even more difficult in the primary and higher education systems (see Wiegel and Brouwer-Hadzialic, Chapter 37; Riezebos, Chapter 38; and Yorkstone, Chapter 39) Let us take the example of a primary school Who are the ‘‘customers’’ of a school? Are they the learners, the parents, the government, the taxpayers, or other groups? Some would quickly point to the schoolchildren as the customers in this setting However, ‘‘learning’’ is not a commodity that can be transferred from a supplier to a customer Rather, it is co-created in the learning process between the learner and the teacher Hence, using business lingo, the learner is both a supplier and a customer (the same is true for many other transformational and experience-based services) In lean education, it is therefore practically impossible to deliver the highest value for each of the ‘‘customers.’’ As Wiegel and BrouwerHadzialic (Chapter 37) explain, ‘‘Different types of students will need different forms of support and different types of pedagogy will have different needs in terms of group size, IT facilities, and classroom organization.’’ For these reasons, the discussion on ‘‘value for the customer’’ is often a barrier to lean in the education sector The concept of customers and value is also difficult in many other lean application areas Who can be identified as the customers of public services (Radnor, Chapter 28), the military 468 A Lean World (Bateman and Hines, Chapter 29), law enforcement (Barton et al., Chapter 30), or the justice system (Martins et al., Chapter 31)? What about art, drug rehabilitation, an undertaker, or prison services? Reporting from an attempt to implement lean in Her Majesty’s Revenue and Customs (HMRC), Radnor (Chapter 28) ironically asks, ‘‘Who’s the customer [of HMRC]?’’ The answer is ‘‘everyone’’ (in the United Kingdom) Although it is difficult to think in terms of customers in all settings, the chapters in this book show that lean still has a lot to offer in multiple application areas Principle 2: Identify the Value Stream The second lean principle is to ‘‘identify all the steps in the value stream for each product family’’ (Womack and Jones, 1996; Marchwinski and Shook, 2006) The limitation of this principle is noticeable in industries that make and deliver one-off, custom-made products and services (see, e.g., lean engineer-to-order (ETO) as discussed by Powell and van der Stoel, Chapter 25, and occasionally lean construction, as considered by Ballard, Chapter 24) In dynamic environments, value streams not remain as stable as they would in a high-volume, low-variety production environment This is particularly true of project-oriented situations, wherein project value streams are characterized as a temporary endeavor Certainly, some projects have a repetitive nature and can easily benefit from a detailed mapping and understanding of the value stream However, if each project has a unique value stream, a simple high-level process map may be the best thing available The idea of detailed process mapping, such as in ‘‘value stream mapping’’ (Rother and Shook, 2009), is also challenging in the education sector Value streams are easier to identify in backoffice operations, such as student admission, semester payments, and examination procedures, than in the front-office learning processes of the classroom Perhaps this explains why lean has mostly been applied to back-office operations in this sector (Wiegel and Brouwer-Hadzialic, Chapter 37; Riezebos, Chapter 38; and Yorkstone, Chapter 39) Moreover, in other sectors with extreme variation (often human-centered sectors), such as sales, emergency departments, police work, armed forces, and sports, value stream mapping is often most useful in the back-office support processes rather than the core value-creating processes Principle 3: Create Flow by Eliminating Waste The third lean principle is as follows: ‘‘Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer’’ (Womack and Jones, 1996; Marchwinski and Shook, 2006) From a productivity perspective, flow is always smart (Schmenner, 2001)— and it is an integral part of both mass production and lean production Creating flow is easier in automotive assembly operations (Found and Bicheno, Chapter 3), lean mining (Ghodrati et al., Chapter 26), and lean public water supply (Scholten et al., Chapter 32) than in lean branding (Busche, Chapter 13), lean remanufacturing (Pawlik et al., Chapter 16), and lean dealerships (Brunt, Chapter 33), to give some examples The flow principle is also extremely difficult to achieve in knowledge-based work, such as product and software development (Rossi et al., Chapter 6; Poppendieck, Chapter 34) In Toyota lingo, the third lean principle is about ‘‘muri,’’ ‘‘mura,’’ and ‘‘muda.’’ Toyota regards the reduction of waste (‘‘muda’’; that is, everything that does not add value to the customer) as important but asserts that an organization can only reap the real benefits of waste reduction after resources are shielded from overburden (‘‘muri’’) and unevenness (‘‘mura’’) Unfortunately, this wisdom has not reached all organizations that seek to implement lean; although the objective of 469 Torbjørn H Netland and Daryl J Powell the third principle is to create flow, it is often interpreted simply as ‘‘reduction of waste’’ due to an overemphasis on muda at the expense of muri and mura Waste reduction seems to have immediate appeal in all settings that are new to lean because we can all see ‘‘wastes’’ or inefficiencies in our workplace Even if the customer is hard to identify, there is always waste that can be pointed out Therefore, one of the first things that usually happens when lean is introduced into a new area is that authors and consultants propose new classification of wastes for the specific area This is usually based on Taiichi Ohno’s categorization of seven sources of waste, namely transportation, inventory, motion, waiting, overproduction, overprocessing, and defects Examples are included in this book in the chapters ‘‘Lean Innovation,’’ ‘‘Lean Sales and Marketing,’’ ‘‘Lean After-sales Services,’’ ‘‘Lean Retail,’’ ‘‘Lean Justice,’’ and ‘‘Lean Universities.’’ Perhaps this signifies the infancy of lean in these application areas Principle 4: Establish Pull The fourth lean principle of Womack and Jones (1996) is as follows: ‘‘As flow is introduced, let customers pull value from the next upstream activity’’ (Marchwinski and Shook, 2006) However, as we shift our focus from the factory floor at Toyota to other settings, the way in which this principle is operationalized requires a reconsideration of pull as a concept A traditional pull system, such as the kanban system, authorizes value-adding activities to take place based on the consumption of materials However, some settings are better off if free capacity in the production system is what pulls in a new order This can be demonstrated through applying the drum-buffer-rope principle of bottleneck control theory, as in the theory of constraints (Goldratt and Cox, 1984) A good example of this can be found in the chapter on lean maintenance, repair, and overhaul (Srinivasan, Chapter 27), which integrates the theory of constraints with lean In Chapter 29, Bateman and Hines suggest the term ‘‘demand readiness’’ instead of pull in the context of public services, for example when a patient ‘‘pulls’’ services from a healthcare provider Again, this definition of pull considers the state of the process, while the capacity of the process is not consumed without a clear signal or requirement from a customer The process is itself ‘‘demand-ready,’’ and no work is carried out unless there is a clear customer signal (avoiding overproduction) Thus, we can conclude that it is a combination of the state of the system and the flow-controlling mechanism (authorizing consumption of capacity) that creates the distinction between push and pull in the wider context Principle 5: Seek Perfection Finally, the fifth lean principle is as follows: ‘‘Continuously improve the processes’’ (Womack and Jones, 1996; Marchwinski and Shook, 2006) Our analysis of the chapters in this Companion shows that this principle is the most versatile of the five lean principles Creating a culture of continuous improvement is essential for the success of a lean transformation in any industry According to Jones (Chapter 23), ‘‘What distinguishes lean from other process improvement methodologies is its focus on developing the capabilities of the front-line teams : : : to manage and continuously improve their work.’’ The ability of all employees to reflect on current ways of working and to improve these continuously is the only means by which the significant results one would expect from a successful lean implementation can be achieved The next question is how to make employees able to engage in continuous improvement The authors of the chapters in this Companion agree that this requires a culture of learning We dedicate the next section—‘‘the essence of lean’’—to learning and how to achieve it 470 A Lean World The Essence of Lean We suggest that the essence of lean—as it applies to all functional areas of the enterprise and different industries and sectors—is continuous improvement, with learning at its core Hence, present-day lean thinking is ultimately about creating the learning organization (e.g Senge, 1990; Garvin, 1993) A precondition for this is developing a long-term perspective In addition, fostering organization-wide learning requires a special form of leadership We call these the three essential Ls of lean—learning, a long-term perspective, and leadership Learning Just as rapid learning cycles are the essence of lean innovation (Schuh et al., Chapter 5), lean software development (Poppendieck, Chapter 34), and lean start-up (Ries, 2011), the success of the Toyota Production System (TPS) was very much built on a scientific method of learning (Liker, Chapter 2) It is not without reason that the TPS has been called ‘‘the thinking production system.’’ Through many small scientific experiments, Toyota updates its standard operating procedures to represent the state of the art and quickly trains all employees in the new and better standards To accomplish this, Toyota uses Deming’s plan, do, study, act (PDSA) cycle, as this approach encourages continuous reflection and improvement among all employees The trick is to go beyond ‘‘know-how’’ to create a deep understanding of ‘‘know-why.’’ Furthermore, because learning occurs when the outcome of an experiment is the predicted result, successful lean organizations exhibit a no-blame culture, as ‘‘failure’’ and problems are a necessary and valuable part of any learning process Improvement without a focus on learning is not lean thinking Long-term Perspective A successful lean transformation requires a long-term perspective Unfortunately, creating lasting improvement is often not the starting point of many lean initiatives Rather, cost cutting is considered as the main driving force for the implementation of lean in most industries that are new to the concept A few examples are healthcare ( Jones, Chapter 23), the mining industry (Ghodrati et al., Chapter 26), public services (Radnor, Chapter 28), the armed forces (Bateman and Hines, Chapter 29), police departments (Barton et al., Chapter 30), and the printing industry (Macro, Chapter 35) Budget cuts are also a driving force in many other sectors that have recently encountered lean, including airlines, banking, broadcasting, governments, insurance, law firms, oil and gas, telecoms, and so on The problem is not that practical ‘‘lean’’ tools and techniques not deliver quick cost-cutting results They can that Rather, the issue is that these results will not last Although value stream mapping workshops and ‘‘waste walks’’ can cause rapid changes, the benefits soon wear off if continuous learning is not part of the transformation Application of methods without a long-term perspective on learning is not lean thinking Leadership Creating a learning organization is easier said than done Thirty years of trial and error related to implementing lean in many sectors has taught us that it necessitates a special form of leadership, namely ‘‘lean leadership’’ (see Liker, Chapter 2; Balle´, Chapter 4; Brunt, Chapter 33) Balle´ argues that lean leadership is a set of practices and not a theory or principles; it cannot be done in an office, outsourced to consultants, or summarized in a boardroom presentation Perhaps the three most essential lean leadership practices are as follows: 1) go observe directly at gemba, 2) always 471 Torbjørn H Netland and Daryl J Powell challenge the current state of affairs by asking questions, and 3) develop a coaching leadership style (Spear, 2004; Rother, 2010; Liker and Convis, 2011) Often, this requires a complete shift in how management is performed, which again explains many failed attempts at lean transformations This is also the fundamental message behind the ‘‘lean transformation framework’’ (Shook, 2014), presented in detail in this book by Brunt (Chapter 33) Regardless of where a lean transformation begins, the lean transformation framework promises to set a premise for any successful enterprise transformation Jones (Chapter 23) points out that as soon as you tell someone what to do, you take away that person’s responsibility to learn Admittedly, developing lean leadership capabilities can be more difficult in some organizational cultures than in others In this Companion, we can read that the strong hierarchical cultures of the police force (Barton et al., Chapter 30) and the military (Bateman and Hines, Chapter 29) are hurdles for lean transformations in these sectors The healthcare and education sectors have similar challenges due to their strong profession-centered cultures, where doctors, teachers, and professors would like to preserve power ( Jones, Chapter 23; Riezebos, Chapter 38; Yorkstone, Chapter 39) Technically, however, these characteristics should not stop these industries from developing lean organizations Discussing lean healthcare, Jones reminds us that ‘‘lean uses the same scientific method to diagnose and treat organizational problems as doctors use to diagnose and treat medical problems.’’ Examples like the Consorci Sanitari Del Garraf in Spain (case study in Chapter 23) and Bærland primary school in Norway (case study in Chapter 38) show that it is also possible to develop lean cultures outside the traditional manufacturing environment A lean journey without dedicated and engaged leaders, however, is destined to fail Conclusions We started this chapter by asking a few questions relating to the characteristics of a lean organization, as follows: Can an organization lean without knowing its customers? Without aiming to reduce variation? Without paying attention to JIT? Without pulling production to the demand of customers? Without paying attention to standards? If you are thinking of lean production (i.e the TPS), the correct answer to all of these questions should be ‘‘no.’’ However, it should be clear by now that the answer to any of the above questions could be ‘‘yes’’ in a different sense It is not easy to define ‘‘customers’’ in primary education, yet we have lean schools Reduction in variation can hamper innovation, yet we have lean innovation JIT and pull production are not easy to apply in law enforcement, yet we have lean policing Different students’ learning processes are non-linear and non-standard, yet we have lean education Hence, what is lean in one setting may not be lean in another It is clear that a one-size-fits-all approach to lean is a strategy for failure Thus, managers must tailor lean to the characteristics of the specific industry and organization The common characteristic of lean that we found across all application areas in this book was continuous improvement Lean—cut to the core—is about creating a culture for continuously improving the operations of a business or organization Everybody in the organization should be engaged in improvement activities using problem-solving methods We suggest that any lean transformation—regardless of the sector and application area—is dependent on the three essential Ls of lean: learning, a long-term perspective, and leadership References Bicheno, J (2004) The New Lean Toolbox: Towards Fast, Flexible Flow, Buckingham, Production and Inventory Control, Systems and Industrial Engineering Books 472 A Lean World Cua, K O., Mckone, K E and Schroeder, R G (2001) Relationships between implementation of TQM, JIT, and TPM and manufacturing performance Journal of Operations Management, 19(6), 675–694 Furlan, A., Vinelli, A and Dal Pont, G (2011) Complementarity and lean manufacturing bundles: An empirical analysis International Journal of Operations & Production Management, 31(8), 835–850 Garvin, D A (1993) Building a learning organization Harvard Business Review, 71(4, July–August), 78 Goldratt, E M and Cox, J (1984) The Goal: Excellence in Manufacturing, Croton-on-Hudson, NY, North River Press Holweg, M (2007) The genealogy of lean production Journal of Operations Management, 25(2), 420–437 Krafcik, J F (1988) Triumph of the lean production system Sloan Management Review, 30(1), 41–51 Liker, J K and Hoseus, M (2008) Toyota Culture: The Heart and Soul of the Toyota Way, New York, McGraw-Hill Liker, J K and Convis, G L (2011) The Toyota Way to Lean Leadership: Achieving and Sustaining Excellence Through Leadership Development, New York, McGraw-Hill Marchwinski, C and Shook, J (2006) Lean Lexicon: A Graphical Glossary for Lean Thinkers, Cambridge, MA, Lean Enterprise Institute hlstroăm, P (2012) This is Lean: Resolving the Efficiency Paradox, Stockholm, Rheologic Modig, N and A Ohno, T (1988) Toyota Production System: Beyond Large-Scale Production, New York, Productivity Press Ries, E (2011) The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, Lake Arbor, MA, Crown Books Rother, M (2010) Toyota Kata: Managing People for Continuous Improvement and Superior Results, New York, McGraw-Hill Professional Rother, M and Shook, J (2009) Learning to See: Value Stream Mapping to Create Value and Eliminate Muda, Brookline, MA, Lean Enterprise Institute Schmenner, R W (2001) Looking ahead by looking back: Swift, even flow in the history of manufacturing Production and Operations Management, 10(1), 87–96 Senge, P M (1990) The Fifth Discipline: The Art and Practice of the Learning Organization, New York, Doubleday Shah, R and Ward, P T (2003) Lean manufacturing: Context, practice bundles, and performance Journal of Operations Management, 21(2), 129–149 Shingo, S (1986) Zero Quality Control: Source Inspection and the Poka-Yoke System, Cambridge, MA, Productivity Press Shook, J (2014) Transforming Transformation Cambridge, MA, Lean Enterprise Institute Spear, S (2004) Learning to lead at Toyota Harvard Business Review, 82(5), 78–86 Spear, S and Bowen, H K (1999) Decoding the DNA of Toyota Production System Harvard Business Review, 77(5), 95–106 Sugimori, Y., Kusunoki, K., Cho, F and Uchikawa, S (1977) Toyota Production System and kanban system: Materialization of just-in-time and respect-for-human system International Journal of Production Research, 15(6), 553–564 Womack, J P and Jones, D T (1996) Lean Thinking: Banish Waste and Create Wealth in your Corporation, New York, The Free Press Womack, J P., Jones, D T and Roos, D (1990) The Machine that Changed the World, New York, Rawson Associates 473 INDEX Diagrams, drawings and pictures are given in italics 3Es (economy, efficiency, and effectiveness) 321 3Rs (reduce, reuse, and recycle) 190 A3 problem solving 134–35, 291, 390, 406, 444 absorptive capacity 347 accounting 153–62, 156, 158 activity-based costing (ABC) 157 advanced manufacturing 296–97 affinity mapping 453 after-sales services 234–38, 239–41, 242–44 agile software development 396–97 agility 372–73 andon 444 armed forces 339–43, 340 assemble-to-order (ATO) 286; ATO-based approach 216, 218, 291 assessments 253–54, 254 auditing 165–77, 166, 169 augmented service offerings 438–39 batch size 36, 289–90 behavior-based safety (BBS) 102 best value 321 Big Data 399 bottlenecks, law of 290 bounded rationality 230 box score 157, 160 branding 143–51, 145–46 breakthrough improvement 159 build-measure-learn loop (BML) 144 build-to-order (BTO) production 228–30, 232 building information modeling (BIM) 214 bullwhip effect 414, 414 business process mapping 453 capability development 387 cause-and-effect diagram 28–29, 418 check: lists 418; sheets 418 chief engineers 58–59, 58, 63, 66–67 Chrysler Operating System 248–49 cloud computing 125, 398 coaching 6, 100, 110, 113–14, 136, 176, 264, 266, 268, 445 cobacabana (control of balance by card-based navigation) 293 collaborative planning forecast and replenishment (CPFR) 216–17, 417 company-specific production system (XPS) 248 compatibility before completion (CbC) 67 comprehensive spending reviews 346, 353 constant work-in-process (CONWIP) 27, 290, 292–93, 295 continuous improvement (CI) 15–16, 18, 28, 99–104, 108–111, 118–128, 159, 189–190, 206–208, 315, 340, 369, 371, 424–425, 428–432, 443–45, 446, 467, 471–472 control charts 331, 418 core services 438, 440 critical chain project management (CCPM) 316–18 cross-docking 204 customer: behavior 137; journey mapping 134; orientation 45; problem 455–56; value 436–37 customer order decoupling point (CODP) 286, 287, 290 customer relationship management (CRM) 124, 127–28 cycle time 173–74 474 Index decision making 34, 40, 60, 153–54, 157, 161–62, 234, 243 demand readiness 342 design-space management 49 disassembly 179–82, 277, 313 distribution 225–30, 226–27 drum-buffer-rope (DBR) 27, 316, 318–19, 470 education 422–32, 427, 439, 443; see also higher education, universities efficient consumer response (ECR) 415 electronic data interchange (EDI) 83, 93, 217 engineer-to-order manufacturing (ETO) 278, 286–97, 294–95, 436; one-of-a-kind 291 enterprise resource planning (ERP) 30, 91, 119–20, 123, 125, 160, 222 everyday low pricing (EDLP) 417 facilitating services 438–39 features and characteristics (F&C) method 159 FIFO (first-in-first-out) 289 fishbone diagram see cause-and-effect diagram 5S: and lean construction 279; and lean education 444, 446, 453; and lean engineer-to-order manufacturing 288, 297; and lean global corporations 254; and lean and green 190–91; and lean logistics 89; and lean printing 406, 411; and lean production 27; and lean remanufacturing 183, 187; and lean safety 101; and lean teams 113 flow: charts 418; creating 470; efficiency 393; principle 79, 204, 289–90, 306, 312; realizing 442, 443 Ford, Henry 24, 36, 316–17 Ford Motor Company 11, 24, 67, 94, 195 gemba 35, 100–104, 219 genchi genbutsu 17, 29–30, 197 generally accepted accounting principles (GAAP) 156, 161 hansei 423, 428 healthcare 261–62, 263, 264, 265, 266, 267, 268 heijunka 363 higher education (HE) 449, 452–57; see also education, universities histogram (bar graph) 418 hoshin kanri 5–6, 29, 132, 133, 140, 196, 364, 388, 430 human resource management (HRM) 112 innovation 44–52, 46, 68–70, 125, 143–44, 148 input-mediator-output-input (IMOI) model 107–9, 107, 111 input-process-output (IPO) model 107 integrated form of agreement (IFOA) 283 International Council on Systems Engineering (INCOSE) (www.incose.org) 76 International Group for Lean Construction (www.iglc.net) 271 International Motor Vehicle Program (IMVP) 5, 23 internet of things (IoT) 95 inventory 45, 236, 415; excess 182 Ishikawa diagram see cause-and-effect diagram Ishikawa, Kaoru 28, 196 ISO standards 308 IT (information technology) 118–28, 122, 127, 204, 362–63, 424, 430; information and communication technologies (ICT) 221–22 jidoka 11, 30, 36, 121, 387 jishuken 95, 219 Jotun Operations System 256 junkai 86 just-do-it improvements 159–60 just-in-time (JIT): and lean construction 280–81; and lean global corporations 248; and lean and green 189; and lean leadership 34; and lean mining 303; and lean retail 415; and lean teams 107; production 26–27, 121, 126, 190, 216–17, 226, 369, 472; and the Toyota Way 12, 17 justice 357–64, 359, 361 kaikaku 352 kaizen: and armed forces 340; and cross-functional 39–40; and education 423, 444–452; and engineer-to-order manufacturing 291, 293–96; and evolution of lean 5; and green issues 196; and lean leadership 37–38; and lean production 24, 28–29, 29; and maintenance, repair, and overhaul 315; and OEM 219; and safety blitz 101, 103; and the Toyota Way 12–13, 16 kanban: and lean distribution 225; and lean engineerto-order manufacturing 288, 291–92, 294–95; and lean and green 190; and lean IT 5, 27, 34, 83, 91, 93, 113, 119; and lean maintenance, repair, and overhaul 316–17; and lean printing 411–12; and lean software development 397 Karakuri 41–42 kata 29, 411, 423, 429, 431, 444–45 key performance indicators (KPIs) 196, 218, 245, 256 knowledge-based product development 65 LAMDA method 65 Last Planner system 273–74, 282–83, 282 leader standard work (LSW) 30 leadership 252, 384, 386, 471–72 leagility 222 Lean Construction Institute (LCI) (www.leanconstruction.org) 215, 271, 283; triangle 276, 276 Lean Enterprise Academy (www.leanuk.org) Lean Enterprise Institute (LEI) (www.lean.org) 5, 261 475 Index Lean Global Network (www.leanglobal.org) Lean Higher Education hub (www.leanhehub.ac.uk) 428 lean iceberg model 358 Lean Innovation Circle 47, 48 lean innovation maturity model 50 lean principles 27, 467, 468–70 lean systems engineering (LSE) 76–77 Lean Thinking (Womack and Jones) 14, 26–27, 45 lean transformation model 387–89 Little’s law 289 local autonomy 255–56 lockout-tagout (LOTO) 103 logistics 83–95, 84, 87, 89–90, 92–95 long-term perspective 471 maintenance, repair, and overhaul (MRO) 311–18, 312, 315 make-to-order (MTO) 278, 286, 436–37 make-to-stock (MTS) 219, 286, 291 malfunction 45–46, 373, 406 manufacturing critical-path time (MCT) 289 manufacturing execution systems (MES) 91, 120 manufacturing resources planning (MRP-II) scheduling system 318 massive open online courses (MOOCs) 424, 451 materials requirements planning (MRP) 22, 83, 88, 93, 119, 216, 290, 298 measurement systems 137, 161 merchandise management 418–19 milk runs 86 minimum reasonable inventory (MRI) 189 mistake-proofing 94–95, 315 model-based systems engineering (MBSE) 77 modularization 205, 278, 280 motion 46, 237 muda 64, 236, 315, 363, 411 multichannel approach 420 multidisciplinary teams (MDTs) 344 mura 26, 64, 363, 469–70 muri 26, 64, 363, 469–70 new public management (NPM) 321 non-financial rewards 255 obeya 4, 388, 390 omni-channels approach 420 one-piece flow 14, 104 original equipment manufacturers (OEMs) 179, 183, 185, 218–19, 249 over-processing 45–46, 237 overall equipment effectiveness (OEE) 369, 409 overproduction 45, 237 pacemaker 289 Pacesetter 325–26, 329, 334 Pareto principle 213, 229–30, 380, 417 patient planning boards 264 pedagogy 422–23, 428–29, 431 perfection principle 79, 205–6, 238, 291, 342, 470–71 performance monitoring 109, 115 plan-do-check-act (PDCA) method: and after-sales services 238, 245; and dealerships 379, 383, 386, 388; and engineer-to-order manufacturing 291; and evolution of lean 4, 6; and global corporations 255; and health 269; and justice 364; and lean product and process development 65; and sales and marketing 132, 140; and success of 471; and teams 114; and Toyota 16, 16, 18, 28, 262 political-economic-social-technological (PEST) analysis 191 poke-yoke (error-proofing) 190, 444 POLCA (paired-cell overlapping loops of cards with authorization) 290, 292–93, 298–99 policing 346–53, 353 PPC (percent planned tasks completed) 273, 273–74 printing 403–10, 405 product costing 157, 158, 159 product development 55–69 product life cycle management system (PLM) 49–51 product-service systems (PSSs) 243 production cells 279 production:delivery (P:D) ratio 227–28 production preparation process (3P) 268 Project Management Institute (PMI) (www.pmi.org) 80–81 project workload leveling 140 public sector organizations (PSOs) 330–31, 333–35 public services 321–23, 324–25, 325–35, 327 public water supply 368–75, 374 pull principle: and the armed forces 342; as a concept 470, 472; and education 429–30; and engineer-to-order manufacturing 290–92, 291, 294; and lean after-sales services 238; and lean distribution 225; and lean IT 120; and lean logistics 83, 88; and lean purchasing 205; and lean systems engineering 79; and lean teams 107 pulse line 344 purchasing 202–9 quick response (QR) 296, 299, 415 quality: checks 174; enhancement 445; management 192 quick response manufacturing (QRM) 289, 293, 297–98 research and development (R&D) 44–52, 57, 132 radical and continuous improvement 342 476 Index rapid improvement activities (RIAs) 344 rapid improvement events (RIEs) 330, 333, 335, 340 remanufacturing 179–85, 180 respect-for-people principle 80 responsible engineer (life cycle integrator) 81 retail 413–15, 414, 416–17, 417–20, 418 return on investment (ROI) 314, 409 returnable containers 87–88 risk-based auditing 165–66 roadmapping 48 return on capital employed (ROC) 37 role clarity 170–71 rollout approach 387 S-curve effect 251, 251 safety 98–104, 105, 112, 304 sales funnels 136–37 sales and marketing 130–39, 131, 133 sales, operations, and financial planning (SOFP) 161, 163 scatter plots 417 Scrum methodology 280, 290–96, 295 standardize-do-check-act (SDCA) method 245 sensei see coaching servitization 234, 243–44 set-based engineering 61–63, 63, 65–66, 68–69, 71–72, 394 Shewhart cycle 145; see also PDCA method single-minute exchange of dies (SMED) 27, 190, 369, 431 supplier-input-process-output-customer (SIPOC) framework 166 Six Sigma methodology 253, 315, 453 small and medium enterprises (SMEs) 31, 191 software development 392–400 space systems 75–76 SPIN (situation-problem-implication-need) 136 sprint 294 standard cost 154 standard work 315 standardization 61, 169, 184, 238, 446–47 stock-keeping unit (SKU) 417 strengths-weaknesses-opportunities-threats (SWOT) analysis 245 supplier performance 91, 92–95 supplier relationship management (SRM) 210 supply chain resilience 371 supply chains 212–23, 213, 221, 226, 369 supporting services 438 swim-lane diagrams 406 systems engineering (SE) 75–80, 75, 79, 123 takt 49, 174, 190, 279, 288, 430 targets: costing 160; value design 274–76, 280 tasks anticipated (TA) 280 tasks made ready (TMR) 280 test-driven development 397 theory of constraints (TOC) 313, 316–18 three lines of defense model 171–72, 171 top-down/bottom-up performance reporting 254–55 total productive management (TPM) 27 total productive maintenance (TPM) 369–74, 408 total quality management (TQM) 26, 369, 453 Toyoda, Akio 34 Toyoda, Eiji 5, 24, 28, 34, 36, 58 Toyoda, Kiichiro 11–12, 24, 34–35 Toyoda, Sakichi 10–12, 14, 24, 197 Toyota Business Practices (TBP) 16–17 Toyota Development System (TDS) Toyota Production System (TPS): an inspiration for other firms 250; and distribution 226, 228; and engineer-to-order manufacturing 287, 291; and evolution of lean 4; and Fujio Cho 225; and global corporations 248; and IT 121, 126; and lean leadership 39; and lean product and process development 57; and lean production 24–25, 27–28, 30–31; and retail 414; striving for excellence 11–14, 13, 17; success of 471 Toyota guiding principles 196–97 Toyota Loom Works 10, 24 Toyota Way 15, 17–18, 17, 189, 384, 390 Training Within Industry (TWI) 184 triple bottom line 189, 281 theory of inventive problem solving (TRIZ) 69 universities 449–58, 455–56, 460; see also education, higher education value propositions 140 value stream accounting 155–56, 160 value stream mapping (VSM): and evolution of lean 6; and lean after-sales services 242, 245; and lean construction 279; and lean dealerships 380, 383–84; and lean education 440–42; and lean engineer-to-order manufacturing 288; and lean product and process development 67; and lean production 29; and lean purchasing 204; and lean remanufacturing 184; and lean sales and marketing 134; and lean teams 113; workshops 471 value streams 288–89, 379–80, 383, 389, 469 value-adding 167–69, 172, 174, 237 value-driven purpose 387, 388 visual management 30, 297 visual planning boards 264, 266, 429 visual workplace concept 421 Volvo Production System 249–51 waste: and education 426, 441–42, 453; and flow 469–70; and lean after-sales processes 242; and lean construction 272; and lean and 477 Index green 193; and lean innovation 46; and lean mining 304–6; and lean product and process development 64; and lean purchasing 204; and lean remanufacturing 182; and lean sales and marketing 134, 135; and lean systems engineering 75, 77; and unproductive manufacturing practices 415, 416–17 Waterfall method 293 work-in-process (WIP) 289–90, 292, 298–99, 397, 406 work in progress (WIP) 313, 316 478 ... overview of the field of lean management, introducing the reader to the application of lean in diverse areas, from the production floor to sales and marketing, from the automobile industry to academic... practices and wrote them down for the first time in the early 1970s in order to teach them to their Japanese suppliers, and in the 1980s translated them into English as they opened their first joint-venture... across the world and led us to establish the Lean Enterprise Institute in the USA (www .lean. org), the Lean Enterprise Academy in the UK (www.leanuk.org), and 15 other non-profit institutes across the