History and Principles of LEAN
In the mid 1950s Taiichi Ohno started developing the methodology and principles of the Lean Manufacturing Approach in the form of the Toyota Production System (TPS) and to implement it at Toyota in the automobile assembly line production, which at that time was extremely unprogressive and of inferior quality.
The essential principle of the LEAN Manufacturing Approach is the implementation of the workflow in which all work sequences throughout all corporate functions are standardized and continuously optimized – holistically integrated without department, division or country boundaries.
The Four Basic Rules of LEAN
1. All work must be standardized to a high degree in terms of content, workflow and timing.
2. All customer and vendor relationships (external and internal) have to be direct, and there must be a clear yes/no procedure.
3. The pathway for every product and service has to be simple and direct.
4. All improvements have to be carried out in accordance with the standardized methodology and under the supervision of the “teacher” (Sensei) on the lowest possible organizational level.
Lean first goal is to reduce the total logistics costs by increasing the speed as well as the flow of material and information. Waste and variation needs to be taken out from the SupplyChain.
Then the second goal is visualize where the waste is and allocate resources where the biggest opportunities for improvements are, so we can get the most out of them.
The third and also very important objective is to improve the customer delivery performance while also reducing the total logistics costs. For achieving this goal it is very important to apply lean tools and systemic improvement methods. The reason is that in the same system if we reduce inventory we normally affect the service to our customers, but in lean the challenge is to balanced inventories and improve service.
The fourth goal is to create a process for implementing Kaizen processes and never end the improving processes applying lean logistics tools at all levels of the organization. This is striving toward perfection endlessly. The fifth goal is to make the Supply Chain an “ Active” logistics in which the customer has controlled over suppliers, 3PL´s, custom brokers, etc. in such a way to being able to optimize the total logistics cost.
Normally lean implementation began by transforming the company into lean organization This implementation has followed internal lean logistics improvements. Many companies have being able to implement this but the majority of the costs are not pertinent only to manufacturing but to other areas like engineering, logistics, purchasing, finance, packaging, etc and these areas are rarely integrated in lean. Departments have different objectives that many times affect the other areas. These silos work independently trying to achieve their goals many times affecting other areas more than the benefit they obtained.