First in concept by Ford Motor Company with the assembly line and later refined in Japan by the Toyota Motor Company beginning in the 1950’s called the Toyota Production System (TPS), it was defined as:

“A philosophical approach to business that is based on satisfying the customer (whether internal or external) by producing quality products that are just what they need, when they need them, in the quantity required, using the minimum of materials, equipment, space, labor and time.”

At its most basic, lean is a focus on greater operational efficiency, the elimination of waste throughout the organization, and continuous improvement. Some of the benefits include:

  • Reduced lead times
  • Improved delivery performance
  • Increased sales revenue
  • Lower operating costs and Increased profits
  • Improved customer satisfaction and supplier relations
  • Increased inventory turns and a drastic reduction in inventory
  • Better employee morale and Increased employee retention
  • Improved quality
  • Creation of additional working capital for new projects
  • Reduced physical space requirement

The basic concept surrounding the lean philosophy is to be able to do more with less. This means processing fewer transactions and with fewer resources, (including people, machine, material, energy, etc.), and only those that are essential to satisfying a customer order

The Lean process focuses on reduction of seven common wastes or MUDA to improve overall value, as seen through the eyes of the customer. The elimination of waste and bottle-necks greatly increases productivity, reduces costs and improves profits. The seven wastes are:

  • Over-production (Producing more qty than necessary)
  • Motion (of the person doing the job or machine)
  • Waiting time (of the person or a machine)
  • Transportation (movement of the materials)
  • Inventory (of raw materials)
  • Processing itself
  • Correction (Rework or Scrap)

Looking back:

Like many other manufacturing companies in Japan, Toyota during 1950’s thought if it has to compete in the West, then it would need to deliver high quality products at short lead times. Then Mr. Eiji Toyoda tasked Mr. Taichi Ohno, EVP to become part of the solutions. He then introduced the Kanban Cards (then called as Moustache’s Method). Inspired by the American manufacturing systems especially the Ford Mass Production concept, the TPS was born in Toyota Motor Company.

The main aim of Toyota Production System is

  1. Highest Quality
  2. Lowest Cost
  3. Shortest Lead-time

TPS goes on the assumption that MUDA or waste exists everywhere and the goal should be to eliminate or minimize the waste and improve resource utilization.

Tools Used in Lean :

  • Value Stream Mapping
  • Spaghetti Chart
  • Kaikaku (breakthrough improvement)
  • Kaizen (incremental improvement)
  • Standard work
  • 5 S
  • Cross – Functional Training
  • Visual Management
  • Poka-Yoke.

Lean Philosophy Vs Lean SixSigma Philosophy:

Lean Philosophy Lean SixSigma Philosophy
 Reduce lead time by eliminating the  waste in  the value stream  Reduce process variation
 Flow focused  Problem Focused
 Highly visual driven  Statistical Analysis driven
 Cannot bring a process under statistical  control  Concept is to eliminate variation and  hence  bring process under control
 Results in culture of waste prevention  and  Value Addition  Results in zero defects and First Time  Right  Quality culture