WHAT IS LEAN

How to improve your emergency department through Lean management ...

Introduction

The concept of lean was initially developed from the Toyota Production System (TPS) in 1950s-1960s. 
The lean philosophy lies the concept of 
  • Zero Wastage
  • Providing product in time (JIT)
Lean is associated with the concept of Kaizen (continuous improvement). Kaizen philosophy is related to removal of all wastes in value delivery system. Lean is not only related with manufacturing system, but also related to various aspects of business such as payment processing, service management, project management etc. Lean aim to create more value to the customer with fewest resource.
Lean is also expressed as 0% wastage and 100% customer defined value. Lean provide value to customer  by removing wasteful resource or non-value adding activities.
 
The production operations can be grouped into the following three types of activities:
  • Value-added activities: These are activities, which transform the material into the exact product that the customer requires.
  • Non value-added activities: These are activities which are not required for transforming the material into the final product that customer wants. Anything, which is non value-added, may defined as waste. Anything that adds unnecessary time, effort or cost is considered non value-added. Another way of looking at waste is that it is any material or activity for which the customer is not willing to pay. Testing and inspection of material is also considered waste since this can be eliminated insofar as the production can be improved to eliminate defects from occurring.
  • Necessary non value-added activities: These are activities that do not add value from the perspective of the customer but are necessary for producing the product unless the existing supply or production process is radically changed. This kind of waste may be eliminated in long run but is unlikely to be eliminated in the near term.
Research at Lean Enterprise Research Centre (LERC) United Kingdom indicates that for a Typical manufacturing company the ratio for activity could be broken down as:


Fig. 1 Ratio of different activities

The fig. 1 shows different activities carried out in company which are value added non-value-added and necessary but non-value-added. Value added activity 5%, non-value-added activity (waste) 60% and necessary non-value- added activity 35%. This implies that upto 60% of the activity at a typical manufacturing company could potentially be eliminated. If non-value-added activities removed from day today's activities, then efficiency of company gradually increases. Also helps to minimize the waste, improve operational efficiency, and increase productivity. All Lean manufacturing tools are not possible to implement in small scale industry because of limited resources, i.e. finance, infrastructure, work force etc.

Value Added Activities are those that transform the product from raw material into finished goods that the customer is willing to pay for. Not all manufacturing activities in a factory add value to the product, non-value-added activities are those that customer is not willing to pay for it. Necessary non-value-added activities are those which helps in activities carried out for transforming raw material into final finished product but customer not ready to pay.

Objectives of lean principles

  1. Maximising customer value
  2. Minimising waste
  3. Reducing cost
  4. Reducing production cycle time 
  5. Minimising inventory
  6. Increase output quality
  7. Maximising utilisation of waste

     

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