Operational and

Project Management
Level 6
Module Leader: Adrian Gauci
Year: 2022/23
 WK8_S1
Intro to Lean Management
Chapter 15
Session Content
1. What is Lean Management
2. Benefits of Lean
3. Three perspectives - Plan & Control; Philosophy; Improve.
4. Lean is not mean and Lean with People
5. Traditional vs Lean Flows
6. Lean and Inventory Management
7. Eight Types of Waste by Tim Wood
8. Causes of Wastes - Muda, Mura, Muri
9. Additional Types of Wastes
• irregular flow
• inexact supply
• inflexible response
• Variability
10. Ways for Eliminating Waste & The 5S Terminology

Cases: Toyota (TPS), Atlas Copco, Virginia Mason Medical Center etc
What is Lean ?
• The focus of lean is to achieve a flow of materials, information or customers
that delivers exactly:
• what customers want (perfect quality),
• in exact quantities (neither too much nor too little),
• exactly when needed (not too early nor too late),
• exactly where required (in the right location) and
• at the lowest possible cost.

• Lean aims to meet demand for products and services instantaneously.

• Lean does this with perfect quality, no waste, and at low cost.
• Lean identifies three causes of waste – muda (poorly communicated processes or inefficient
resource use), mura (lack of consistency) and muri (unnecessary or unreasonable requests
placed on the process).
What is Lean ?
It is the concept that is almost synonymous with terms such as:
• ‘just-in-time’ (JIT)
• ‘Toyota Production System’ (TPS)
• ‘stockless production’
• ‘lean synchronization’

• Lean focuses on the removal of inventory in order to expose operations problems.

WATCH: How to optimize Inventory: 11 proven inventory reduction strategies

https://www.youtube.com/watch?v=o_8UG5UHlRI&t=176s

• Lean places less emphasis on maximizing capacity utilization given there is little value in
producing products or processing customers if the next stage in the process is not ready to receive
them.
What is Lean ?
• It is a concept that is almost synonymous with terms such as ‘just-in-
time’ (JIT), the ‘Toyota Production System’ (TPS), ‘stockless
production’ and ‘lean synchronization’.
• It results in materials, information and customers flowing rapidly and
smoothly through processes, operations and supply networks.
• The central idea is that this not only ensures reduced throughput time,
but also avoids the negative effects of in-process inventory or queues.
• Thus is lean, the inventories and queues are seen as obscuring the
problems that exist within processes and therefore inhibiting process
improvement.
Benefits of Lean Management
Typically, implementation of Lean principles brings four waves of benefit:

• improved quality and safety – fewer mistakes, accidents and errors,

resulting in better patient care
• improved delivery – better work gets done sooner
• improved throughput – the same people, using the same equipment, find
they are capable of achieving much more
• accelerating momentum – a stable working environment with clear,
standardised procedures creates the foundations for constant improvement.
Three Perspectives to Lean
1. Lean is a Philosophy of how to run operations:
This involves meeting customer needs exactly.
It requires:
(i) staff involvement, (ii) continuous improvement, (iii) elimination of waste.

2. Lean is a method of Planning & Controlling operations:

This involves using several methods to achieve synchronised
flow and reduce waste:
(i) pull control, (ii) levelled scheduling, (iii) mixed modelling.

3. Lean is a set of tools that improve operations performance:

For example, improvement cycles:
(i) PDCA (plan-do-check-act),
(ii) DMAIC (define-measure-analyse-improve-control).
Lean is not mean
• The purpose of Lean is not to make staff redundant. It is to deliver better
product/services at lower overall cost.
• One of the key principles of the Toyota system on which Lean is based is
respect for people and society.
• Lean is not about headcount reductions.
• It is about being able to do more – improve patient care – with existing
resources.
• Lean often means the same things can be achieved using fewer people.
• This means people and resources can be redeployed to create even more
value.
Lean and People
• Discipline – Work standards that are critical for the safety of staff, the
environment and quality must be followed by everyone all the time.
• Flexibility – It should be possible to expand responsibilities to the
extent of people’s capabilities. This applies as equally to managers as
it does to shop-floor personnel. Barriers to flexibility, such as grading
structures and restrictive practices, should be removed.
• Equality – Unfair and divisive personnel policies should be discarded.
Lean and People
• Autonomy – Delegate responsibility to people involved in direct activities so that
management’s task becomes one of supporting processes.
• Development of personnel – Over time, the aim is to create more company
members who can support the rigours of being competitive.
• Quality of working life (QWL) – This may include, for example, involvement in
decision making, security of employment, enjoyment and working area facilities.
• Creativity – This is one of the indispensable elements of motivation - improving
how the job is is done, and building the improvement into the process.
• Total people involvement – Staff take on more responsibility to use their abilities to
the benefit of the company as a whole. They are expected to participate in activities
such as the selection of new recruits, dealing directly with suppliers and customers
over schedules etc.
Activity – Lean and JIT at Toyota
• KORTEXT Page 517 – Read – Toyota: the Lean Pioneer

• Discuss how Toyota Changed The Way We Make Things…

Watch:
• https://
www.youtube.com/watch?v=F5vtCRFRAK0&list=PLlo_ws24vLAzNtpeGo7BcWg5Zbo
sRvj5H&index=18&t=17s

• This Bloomberg report shows how the Lean Just-In-Time system from the Japanese
Car Company helped it to became a corporate behemoth and changed the way the
world makes products by eliminating waste and maximise efficiency.
Traditional vs Lean Flows
• Traditional flow – allows inventory to build up between stages –
these ‘buffers’ insulate each stage from its neighbours.
• Traditional with Capacity – when stoppages occur, the ‘buffers’ allow
each stage to continue working and thus achieve high capacity.
Traditional vs Lean Flows
• Lean Flow – products, information & customers are processed in a
synchronised manner, ‘just-in-time’.
• Lean Capacity – any stoppage will affect the whole process and lead
to lower capacity, in the short term.
Traditional vs Lean Flows
• Capacity is important but producing just to keep capacity utilization
high is pointless.
• It is counter-productive because it makes improvements less likely.
Lean and Inventory Management
• Reducing the level of inventory or queues (the water) allows
operations management (the ship) to see the problems in the
operation (the rocks) and work to reduce.
operations management

inventory
or queue

Problems in the operation

Activity – Lean Manufacturing at Atlas
Copco.
• What makes a factory as lean as possible ?

• Watch:
• https://
www.youtube.com/watch?v=fMOPyHyNFw8&list=PLlo_ws24vLAzNtp
eGo7BcWg5ZbosRvj5H&index=12&t=3s

• This facatory focuses only on what add value to the final product and
eliminates all wastes ?
• The new GA VSD+ compressor from Atlas Copco is manufactured on
a lean production line. www.atlascopco.com/GAVSDplus
Types of Waste
Three causes of Wastes
• Muda are activities in a process that are wasteful because they do not add value to the operation or the
customer. The main causes of these wasteful activities are likely to be poorly communicated objectives
(including not understanding the customer’s requirements), or the inefficient use of resources.

• Mura means ‘lack of consistency’ or unevenness that results in periodic overloading of staff or equipment. So,
for example, if activities are not properly documented so that different people at different times perform a
task differently, then not surprisingly, the result of the activity may be different.

• Muri means absurd or unreasonable. It is based on the idea that unnecessary or unreasonable requirements
put on a process will result in poor outcomes. The implication of this is that appropriate skills, effective
planning, accurate estimation of times and schedules will avoid this ‘muri’ form of waste.

Thus waste can be caused by failing to carry out basic operations planning tasks such as prioritizing activities
(sequencing), and understanding the time (scheduling) and resources (loading) needed to perform activities.
The 8 wastes – Tim U Wood
Watch Tim Woods - https://www.youtube.com/watch?v=4nmWl89HRkQ

• Transport – moving people or things unnecessarily.

• Inventory – too much or too little.

• Motion – poor workplace organization.

• Unused Talent – not using creative ideas.

• Waiting – making people or materials wait.

• Over-Production – doing too much, too early or ‘just in case’.

• Over-Processing – unnecessary processing or duplication.

• Defects – the cost of not getting it right the first time.

Types of Wastes
• Waiting time – when products (materials), customers or information
wait as inventory or queues.

• Transportation – moving materials / customers around an operation,

together with double and triple handling, does not add value. Layout
changes can bring processes closer together, an improvements in
transport / workplace organization can all reduce waste.

• Process inefficiencies – the process itself may be a source of waste.

Some operations may only exist because of poor component design,
or poor maintenance, and so could be eliminated.
Types of Wastes – irregular flows
• Inventory – regardless of type (product (materials), customer, information) all
inventories should become a target for elimination. However, it is only by tackling
the causes of inventory or queues, such as irregular flow, that it can be reduced.

• Motion – an operator may look busy but sometimes no value is being added by
the work. Simplification of work is a rich source of reduction in the waste of
motion.

• Over-production or under-production – supplying more than, or less than,

is immediately needed by the next stage, process or operation. (This is the
greatest source of waste according to Toyota.)
Types of Wastes – inexact supply
• Early or late delivery – items should only arrive exactly when they are
needed. Early delivery is as wasteful as late delivery.

• Talent – misaligning individual talents, skills, creativity, and knowledge

relative to task generates waste.
• Examples include having skilled workers completing unskilled tasks or limiting
decision-making authority to a high level within a business.

• Inventory – again, all inventories should become a target for

elimination. However, it is only by tackling the causes of inventory,
such as inexact supply, that it can be reduced.
Types of Wastes – inflexible response
• Large batches – sending batches of materials, customers, or
information through a process inevitably increases inventory as the
batch moves through the whole process.

• Delays between activities – the longer the time (and the cost) of
changing over from one activity to another, the more difficult it is to
synchronize flow to match customer demand instantaneously.

• More variation in activity mix than in customer demand – if the mix

of activities in different time periods varies more than customer
demand varies, then some ‘batching’ of activities must be taking place.
Types of Wastes – Variability
• Poor reliability of equipment or staff – unreliable equipment or staff
usually indicates a lack of conformance in quality levels. It also means
that there will be irregularity in supplying customers. Either way, it
prevents synchronization of supply.

• Defective products or services – waste caused by poor quality is

significant in most operations. Errors in the service or product cause
both customers and processes to waste time until they are corrected.
Activity – Eliminating Waste in Virginia
Mason Medical Center
• What can a Medical Centre learn from Toyota ?

• Watch:
• https://www.youtube.com/watch?v=jZLtbye--sg

• When the Virginia Mason Medical Center in Seattle was losing money
for the first time in its history, CEO Dr. Gary Kaplan turned to an
unlikely place for help: giant automaker Toyota.
• A report on the hospital's success in lowering costs and improving
health outcomes.
READ KORTEXT = Page 526
Waste Reduction Analysis – Aircraft maintenance Example
Waste Reduction Analysis – Inventory
• Delivering smaller quantities more often can reduce inventory levels
Ways for Eliminating Waste
The 5S Terminology
• It helps to eliminate all types of waste relating to uncertainty, waiting, searching
for relevant information, creating variation and so on.
• The 5Ss can be thought of as a simple housekeeping methodology to organize work
areas that focuses on visual order, organization, cleanliness and standardization.

• Sort (seiri). Eliminate what is not needed and keep what is needed.
• Straighten (seiton). Position things in such a way that they can be easily reached
whenever they are needed.
• Shine (seiso). Keep things clean and tidy; no refuse or dirt in the work area.
• Standardize (seiketsu). Maintain cleanliness and order – perpetual neatness.
• Sustain (shitsuke). Develop a commitment and pride in keeping to standards.
 Eliminating waste – Streamlined flow
Long process routes provide opportunities for delay and inventory
build-up, add no value and slow down throughput time.
Re-consider the basic layout of processes to aid lean sychronization.
Value-stream mapping is a simple but effective approach to
understanding and improving flow – to reduce non-value added.
Example:
Virginia Mason Medical Centre,
Seattle, USA.
• A leading proponent of lean
synchronisation in healthcare –
many of the waiting rooms have
been significantly reduced in their
capacity, or removed entirely.
• This forces a focus on the flow of
the whole process because patients
have literally nowhere to be stored.
Eliminating waste – Matching supply & demand exactly
The supply of services and products is always time dependent.
Something that is delivered early or late often has less value than
something that is delivered exactly when it is needed.
Using pull control and kanbans are central to reducing waste by
aligning demand and supply.

Example:
St Clair Community Hospital,
Pittsburgh, USA.
• They converted from a par system
for replenishing nursing supplies to
a two-bin system.
• This is essentially a kanban system
which ensures nursing supplies are
always available on a pull control
basis which avoids situation of
either no stock or over-stocking.
 Eliminating waste – Flexible processes
Responding exactly and instantaneously to customer demand implies that
operations resources need to be sufficiently flexible to change both what they
do and how much they do it - without incurring high costs or long delays.
In fact, flexible processes (often with flexible technologies) can significantly enhance
smooth and synchronized flow. A major issue is the reduction of changeover times.

Example:
Operating theatres: NHS Improvement.
opportunities to reduce waiting lists.
Delays between cases
These are caused by many of the same factors that
challenge starting on time:
• waiting for specialist equipment or personnel.
• delays in patients arriving in theatre from wards
or surgical admission units.
• incomplete pre-surgical checks, etc.
• late changes in the order of the operating list.
• inability to provide, or a lack of planning for, cross-
cover for surgical team members through
handovers, breaks, etc.
• recovery areas that are full because of insufficient
recovery staff or patient flow problems.
 Eliminating waste – Minimizing variability
One of the biggest causes of the variability that will disrupt flow and
prevent lean synchronization is variation in the quality of products
and services.
A key issue here is quality conformance. (mura)

Example:
University College London
Hospitals, UK
• Have developed an Exemplar
Ward programme that is designed
to support clinical teams to
implement standard processes,
reduce unwarranted variation
and deliver local quality
improvement initiatives in their
wards and departments.
Questions ?
NEXT SESSION LINKAGE
Next Session Content
1. What is Just-in-Time ?
2. Integration with minimal inventories
3. JIT Production expectations
4. Advantage & Disadvantages of JIT
5. Pull Systems in JIT
6. Lean-Focused Supply Chain Components
7. Mass Production vs. Lean / JIT
8. Practical Elements of JIT
9. Decoding the Toyota Production System and the TPS ‘ House’
10. Improving Operations with JIT
11. Four Improvement Approaches:
• BPD, Six Sigma, TQM and Lean

Cases: Birmingham NHS, Toyota (TPS), Ford, Microsoft

Reference List

• Slack N. and Brandon-Jones A. (2019). Operations Management, (9th Edition),

London: Pearson. (available on ARUL Kortext)

• Slack N. and Brandon-Jones A. (2018). Essentials of Operations Management

(2nd Edition), London: Pearson.