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  BUSINESS  MANAGEMENT  LEAN FOR DUMMIES CHEAT SHEET

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 CHEAT SHEET

LEAN FOR DUMMIES CHEAT SHEET

From Lean For Dummies, 2nd Edition
By Natalie J. Sayer, Bruce Williams
To understand how to apply Lean in any organization, you should know the basics: the
principles, the definitions of value and waste, how to lead effectively, and how to define and
improve the value stream. You should also be aware of how a Lean leader thinks and acts.

WHAT IS LEAN?

Lean is a customer-centric methodology used to continuously improve any process through

the elimination of waste in everything you do; it is based on the ideas of “Continuous
Incremental Improvement” and “Respect for People.”

FOCUS ON THE FUNDAMENTALS

The basic principles of Lean are

Focus on effectively delivering value to your Customer

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 Respect and engage the people

Improve the Value Stream by eliminating all types of waste

Maintain Flow

Pull Through the System

Strive for Perfection

YOUR CUSTOMER TELLS YOU WHAT THEY VALUE

You customer defines value or value-added with the following three conditions:

1 It must transform the product or service.

2 The customer must be willing to “pay” for it.

3 It must be done correctly the first time.

If you don’t meet all three of these criteria, then you have non-value-added activities or
waste.

WHAT’S “WASTE” ANYWAY?

Waste comes in three main forms:
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 Mura or waste due to variation

Muri or waste due to overburdening or stressing the people, equipment or system

Muda also known as the “seven forms of waste”

The following are the wastes most commonly associated with Lean:

Transportation: Is there unnecessary (non-value-added) movement of parts, materials,

or information between processes?

Waiting: Are people or parts, systems or facilities idle — waiting for a work cycle to be
completed?

Overproduction: Are you producing sooner, faster, or in greater quantities than the
customer is demanding?

Defects: Does the process result in anything that the customer would deem
unacceptable?

Inventory: Do you have any raw materials, work-in-progress (WIP), or finished goods that
are not having value added to them?

Movement: How much do you move materials, people, equipment, and goods within a
processing step?

Extra Processing: How much extra work is performed beyond the standard required by
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 the customer?

Sometimes you will also hear “the disengagement of people” identified as a form of muda.

BEHAVIORS OF A LEAN LEADER

Lean leaders effectively exhibit the following behaviors every day. They know how the
business serves the customer by

Understanding what customers want, need, and value, or what will thrill them

Knowing how the business satisfies the customer

Improving the effectiveness of how the business satisfies the customer

They build ability in the people through

Guiding problem solving — root cause, right problem, right resources

Leading from gemba; applying 3Gen

Asking open-ended, probing questions

They show a continuous improvement mindset by

Continually challenging the status quo

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 Knowing that there is always room for improvement

Understanding that the customer changes — what delights today is a necessity

tomorrow

They focus on process and results by

Obtaining results

Ensuring that how the results are achieved is the most effective utilization of all
resources, in the direction of the ideal state

Improving how the organization accomplishes results

They demonstrate an understanding of the value stream at a macro and micro level
through

Knowing what the customer requires and how the value stream satisfies them

Having knowledge of the overall value stream, including tributaries

Asking questions when changes are made at the local level to ensure that the team
understands how the change will impact the customer and the rest of the value stream

They create a culture to sustain improvement by

Identifying, modeling, and encouraging Lean behaviors

Finding the lessons in every “failure” — blame does not foster improvement or
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 innovation

Respecting and improving standards — questions when the organization is deviating

from the standard

LEADING A LEAN ORGANIZATION

To create a sustaining Lean organization, you lead differently. Lean leaders lead from
gemba, where the action happens. They know the only way to truly understand what is
happening is to go to the place where the action occurs. Once there, they apply 3Gen or the
3 Actuals:

1 genchi — (like gemba) go to the actual place

2 genbutsu — observe the actual product, process or service

3 genjitsu — gather actual facts

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 USING LEAN TO DEFINE AND IMPROVE THE VALUE STREAM

The value stream includes all of the activities, materials, people, and information that must
flow and come together to provide your customer the value they want, when they want it
and how they want it. You identify the value stream on a value-stream map, using specific
icons.

You improve the value stream by following the Plan-Do-Check-Act process (sometimes
called the Plan-Do-Study-Act process). The 3P Methodology (Production Preparation
Process) is used upfront to design products and processes before they are in the final form.
By creating an environment of safety and order, you can more easily identify where waste
happens. The process for this environment is sort, straighten, scrub, systematize, and
standardize while eliminating any unsafe conditions; this is known as 5S+.

EXAMPLE VALUE-STREAM MAP (VSM)

When you have created your VSM, you will identify areas for improvement. Here is an
example of a VSM showing the current state of the process and several potential areas for
improvement.

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 The current-state VSM markup for a salad company.

DEFINING WASTE IN THE LEAN SYSTEM

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 Waste comes in three main forms:

1 Mura or waste due to variation

2 Muri or waste due to overburdening or stressing the people, equipment or system.

3 Muda also known as the “seven forms of waste”.

The following are the wastes most commonly associated with Lean.

Transportation: Is there unnecessary (non-value added) movement of parts, materials, or

information between processes?

Waiting: Are people or parts, systems or facilities idle – waiting for a work cycle to be
completed?

Overproduction: Are you producing sooner, faster or in greater quantities than the
customer is demanding?

Defects: Does the process result in anything that the customer would deem
unacceptable?

Inventory: Do you have any raw materials, work-in-progress (WIP) or finished goods that
are not having value added to them?

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 Movement: How much do you move materials, people, equipment and goods within a
processing step?

Extra Processing: How much extra work is performed beyond the standard required by
the customer?

Sometimes you will also hear “the disengagement of people” identified as a form of muda.

Muda comes in two flavors called Type-1 muda and Type-2 muda. What’s the difference? In
both cases it fails to meet all three criteria for value-added as defined by your customer.

Type I muda — Non-value added, but necessary for the system to function. Minimize this
until you can eliminate it.

Type II muda — Non-value added and unnecessary. Eliminate this first!

THE KAIZEN PROJECT PDCA, OR PDSA, CYCLE OF LEAN

The term Kaizen is derived from two Japanese characters; kai, meaning “change” and zen
meaning “continuous improvement.” Eliminating waste in the value stream is the goal of
Kaizen. The PDCA (or PDSA) Cycle is the Lean working structure –the system for executing
Kaizen. The acronym stands for:

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 1 Plan.
Create a plan for change, identifying specifically what you want to change. Define the
steps you need to make the change, and predict the results of the change.

2 Do.
Carry out the plan in a trial or test environment, on a small scale, under controlled
conditions.

3 Check (or study).

Examine the results of your trial. Verify that you’ve improved the process. If you have,
consider implementing it on a broader scale. If you haven’t improved the process, go
back and try again.

4 Act.
Implement the changes you’ve verified on a broader scale. Update the standard
operating procedures.

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