THELEANTOOLBOX
THEESSENTIALGUIDETOLEANTRANSFORMATION
FOURTHEDITION



by

JohnBicheno

LeanEnterpriseResearchCentre,CardiffBusinessSchool

and

MatthiasHolweg

JudgeBusinessSchool,UniversityofCambridge



PRODUCTIONANDINVENTORYCONTROL,SYSTEMSANDINDUSTRIALENGINEERING(PICSIE)BOOKS

BUCKINGHAM,ENGLAND
2009















THELEANTOOLBOX:THEESSENTIALGUIDETOLEANTRANSFORMATION
FOURTHEDITION


Publishedby:

PICSIEBooks
Box622
Buckingham,MK187YE
UnitedKingdom

Howtoorder:

PICSIEBooks
Telephone&Fax: +44(0)1280815023
Website:  www.picsie.co.uk
Email:  picsiebook@btinternet.com

Copyright©PICSIEBooks,2009
Publicationdate:January2009
ISBN:9780954124458
BritishLibraryCataloguinginPublicationData
AcataloguerecordforthisbookisavailablefromtheBritishLibrary

 

 





‘The credit belongs to the man who is actually in the area, whose face is
marredbydustandsweatandblood,whoknowsthegreatenthusiasms,the
great devotions, and spends himself in a worthy cause; who, at best, if he
wins, knows the thrills of high achievement, and, if he fails, at least fails
daringgreatly,sothathisplaceshallneverbewiththosecoldandtimidsouls
whoknowneithervictorynordefeat.’

JohnFKennedyonTheodoreRoosevelt

NewYorkCity,December5th1961

TothosethatworkdaybydayattheGemba.

 
FOREWORDTOTHE4THEDITION
By
JulieMadigan

ThatthebookyouareabouttoreadopenswithachronologyofLean,isacuriousandrevealingthing.
Lean has been described as a philosophy, a theory, a method, a methodology, even a toolbox, but
noneofthesethingsobviouslylendthemselvestoachronology.Mosttheories,methods,philosophies
enjoyaheyday,areacceptedforabriefspan,andarethensuperseded,becomingobsolete.

Theydonotevolve.

Lean, however, it appears, has evolved in the last half century. And I say evolved rather than
developed,asithasdonesoonlyaspartofanexternalenvironment,inreactionto,andasaprompt
for,achanginglandscapeofbusinessandproduction.IthastravelledfromJapantoAmericaandback
again, from Australia to the Urals. Every mile has taken Lean closer to the purism of Ohno and yet
spawnedahostofvariants,eachpotentiallymoresuitedtoitsindividualtimeandplace.

ThereisnowaschismopeningbetweenthedisciplesofLeanwhocleavetothetraditionalcanonof
theToyotaProductionSystemandthosewhofavouranapproachofadaptation,ratherthanadoption,
ofLean.

WhetheryoufeelLeanisconvergingtowardsperfectionorexpandingtowardslocalspecialisms,this
bookwillgiveyoutheknowledgetojudgehowbestLeancanhelpyou.

Thetexthascertainlyplayedacentralroleintheeducationalprogrammesthathavebeendeliveredby
The Manufacturing Institute since 1995. The Institute has, in fact, ordered over 4,000 copies of the
previous editions, over the years, and it remains a core text on introductory courses through to the
MSc, and at all levels in between. The Lean Toolbox’s broad coverage, combined with depth of
knowledge,makeitakeychoiceforallstudentsofLean,whatevertheirlevelofexperience.

DrJulieMadigan

ChiefExecutive,
TheManufacturingInstitute

v


FOREWORDTOTHE3RDEDITION
By
PeterHines

I am frequently asked by firms on their Lean conversion journey what should they read. Another
questionoftenaskedinvolvesfindingoutwhattoolsshouldbeused.Athirdinvolveshowapparently
competingsubjectssuchasLean,theoryofconstraintsandSixSigmafittogether.Myusualresponse
referspeopletothispublicationanditsforerunners.

The New Lean Toolbox sets out in a clear and reader friendly way how Lean fits together. It is an
invaluable resource for staff right across an organisation. It provides a ready reckoner for directors
wantingtoknowwhatisgoingonintheirbusiness,aguidetotheimprovementagentaswellasan
insighttothoseinvolvedaspartofaprojectteam.
Whilst no organisation will ever use all of the tools illustrated here, understanding what is available
andhowthesecanbepulledtotheneedsoftheorganisationisanexcellentstartingpoint.Thosewho
are likely to be most successful will integrate their approach into a systematic change programme
takingintoaccounttheneedsofthecustomer,businessstrategyaswellastheneedsofthepeoplein
the business. In order to start from the right place I would suggest reading this publication right
throughatanoverviewlevelbeforedevelopingyourownimplementationplan.Afterthatitwillbea
handyreferencetexttowardsyourowndesiredfuturestate.

GoodluckonyourLeanjourney.

ProfessorPeterHines

Director,
LeanEnterpriseResearchCentre

vi


FOREWORDTOTHE2NDEDITION
By
DanJones


ThereisagrowingrealisationthatthereismuchmoretoLeanthanwethought.Initspurestformit
growsoutofagenericisedversionoftheToyotaProductionSystem,pioneeredbyTaiichiOhnoandhis
colleaguesintheearlypostwaryears.Howevertheyinturnrediscoveredthepathoriginallyfollowed
by Henry Ford in his first large plant in Highland Park. There every operation was arranged in a
continuousflowsequence.

ThisinturnwasinspiredbyColt’sriflefactoryinHertfordbackin1855.Sotheideaofcontinuousflow
hasalonghistory.

ButnoonewasabletofollowtheexampleofHighlandPark.Assoonastheyneededtomakearange
ofproductstheychosetoorganisebyprocess,activityanddepartmentandtoscheduleworkthrough
each step, using ever more complicated scheduling systems. The River Rouge plant was a classic
processvillageorganisation,withbigbatchedandlongleadtimes.EvenHenryFordlosttheplotand
followed a different fork in the way! But in truth as long as markets were growing fast the hidden
wastesinsuchasystemdidnotmatterandtheerrorofhiswaysdidnotbecomeapparent.

Except to Eiji Toyoda and Taiichi Ohno – who were determined to find a way of successively
overcoming all the obstacles to linking every step into a continuous flow sequence, precisely
synchronisedwiththedemandoftheendcustomer.Twentyfiveyearslatertheworldwokeuptothe
powerofthisalternativepath–andmanyhavebeenstrugglingtofollowtheirexample.

Astheydosotheydiscovernotonlythepowerofthisalternativepath,buthowprofoundlydifferentit
istothetraditionalbatchandqueuepath.Toolsandtechniquesformovingfrombatchtoflowarejust
thefirststep–thenextistocombinethemintherightwayusingLeanprinciples,andthentodesign
an implementation path to transform the organisation and its relationships with its suppliers and
customers down each value stream. We are at the beginning of a long journey to explore the true
powerofLean.

Thisbookwillbeagreathelponyourjourney.

Bestwishes

DanJones

FounderandChairman,TheLeanEnterpriseAcademyUK
Coauthorof‘TheMachinethatChangedtheWorld’,‘LeanThinking’and‘LeanSolutions’

vii


TableofContents
1 THEFOURTHEDITIONOFTHELEANTOOLBOX..1
1.1 GOINGBACK….........................................................1
1.2 LEAN,SUSTAINABILITYANDCHANGE............................2
1.3 LEANEVOLUTION......................................................2
2 PHILOSOPHY.....................................................4
2.1 LEANSEEKSTHE‘IDEALWAY’......................................4
2.2 LEAN IS NOT TOOLS – OR EVEN A SET OF INTEGRATED
TOOLS!....................................................................4
6 PREPARINGFORFLOW.....................................68
2.3 MUDA,MURI,ANDMURA.........................................5
2.4 AFORMULAFOR‘LEAN’.............................................7
2.5 LEANIS‘SYSTEM’......................................................8
2.6 LEANISCONTINUOUSLEARNING..................................9
2.7 LEANISBOTHREVOLUTIONANDEVOLUTION................10
2.8 LEANIS‘DISTRIBUTEDDECISIONS’..............................10
2.9 TWO ANALOGIES AND THE ‘F’S: THE ORCHESTRA AND
FITNESS.................................................................10
2.10 THEFIVELEANPRINCIPLES........................................12
2.11 THE25CHARACTERISTICSOFLEAN............................13
2.12 THETOYOTAWAY...................................................16
2.13 THELEANENTERPRISEHOUSE...................................17
7 MAPPING,ASSESSMENTSANDANALYSIS.........94
3 VALUEANDWASTE.........................................18
3.1 VALUE...................................................................18
3.2 VALUEANDTRIZ....................................................19
3.3 MUDAANDTHE7WASTES.......................................20
3.4 TYPE 1’ AND ‘TYPE 2’ MUDA, ELIMINATION AND
PREVENTION..........................................................20
8 LAYOUTANDCELLDESIGN.............................121
3.5 VALUE ADDED, NON VALUE ADDED (NECESSARY AND
AVOIDABLE)...........................................................21
3.6 OHNO’S7WASTES.................................................21
3.7 THENEWWASTES..................................................24
3.8 GEMBAAND‘LEARNINGTOSEE’................................27
3.9 TIMEBASEDCOMPETITION......................................28
4 LEANTRANSFORMATIONFRAMEWORKS........32
4.1 THEHOUSEOFLEAN................................................32
4.2 THEFLOWFRAMEWORK..........................................32
4.3 THEHIERARCHICALTRANSFORMATIONFRAMEWORK.....36
4.4 GENERALAPPROACHESTOLEANIMPLEMENTATION......43
4.5 THEFAILUREMODESOFLEANIMPLEMENTATIONS........44
4.6 THEWIREMOLDCASE..............................................48
4.7 AWARNINGONLEANIMPROVEMENT........................48
9 SCHEDULING..................................................137
5 STRATEGY,PLANNING,DEPLOYMENT.............49
5.1 OPERATIONSSTRATEGY............................................49
5.2 TYINGINOPERATIONSSTRATEGYWITHLEAN...............50
viii

5.3 UNDERSTANDING THE PROCESS: THE PRODUCTPROCESS
MATRIX................................................................50
5.4 UNDERSTANDINGTHECUSTOMER.............................51
5.5 VALUESTREAMECONOMICS:WHATTOMAKEWHERE.56
5.6 THEESSENTIALPARETOS..........................................58
5.7 FORMULATINGANOPERATIONSSTRATEGY..................61
5.8 POLICYDEPLOYMENT/HOSHINKANRI.......................63
6.1 DEMANDMANAGEMENT.........................................68
6.2 TOTALPRODUCTIVEMAINTENANCE(TPM)................70
6.3 TAKTTIMEANDPITCHTIME.....................................76
6.4 ACTIVITYTIMINGANDWORKELEMENTS....................77
6.5 5S.......................................................................78
6.6 VISUALMANAGEMENT............................................82
6.7 STANDARD WORK, STANDARD OPERATING PROCEDURES,
ANDJOBBREAKDOWNANALYSIS...............................84
6.8 CHANGEOVERREDUCTION(SMED)...........................89
6.9 SMALL MACHINES, AVOIDING MONUMENTS AND
THINKINGSMALL....................................................92
7.1 THEVALUESTREAMIMPLEMENTATIONCYCLE.............94
7.2 STAGESOFMAPPING..............................................96
7.3 MAPPINGANDIMPLEMENTATION..............................99
7.4 TYPESOFMAPPING..............................................101
7.5 LEANASSESSMENTSANDPRINCIPLES.......................117
8.1 LAYOUT,CELLANDLINEDESIGN,LEANPLANTLAYOUT121
8.2 MAJOR TYPES OF LAYOUT: THE PRODUCT PROCESS
MATRIX..............................................................121
8.3 GENERAL LAYOUT: GOOD AND NOT SO GOOD AT THE
FACTORYLEVEL....................................................122
8.4 MATERIAL HANDING: GOOD AND NOT SO GOOD AT THE
FACTORYLEVEL....................................................123
8.5 CELLS.................................................................123
8.6 CELLBALANCING..................................................128
8.7 CHAKUCHAKUCELLORLINE..................................133
8.8 VIRTUALCELLS.....................................................133
8.9 MOVINGLINESANDPULSELINES............................134
8.10 ERGONOMICS......................................................135
9.1 THELEVELSCHEDULE............................................138
9.2 CONSTRUCTING A LEAN SCHEDULING SYSTEM: EIGHT
BUILDINGBLOCKS.................................................139
9.3 THEELEVENSCHEDULINGCONCEPTS.......................142
10 THEORY OF CONSTRAINTS AND FACTORY
PHYSICS.........................................................163
10.1 ADRUMBUFFERROPEILLUSTRATION.......................163
10.2 DEPENDENTEVENTSANDSTATISTICALFLUCTUATIONS.164
10.3 CONSTRAINTS, BOTTLENECKS AND NONBOTTLENECK
RESOURCES:THESYNCHRONOUSRULES....................165
10.4 THELAWSOFFACTORYPHYSICS..............................166
10.5 CONFLICTS BETWEEN LEAN THINKING AND MRP
THINKING?...........................................................167
10.6 THETHEORYOFCONSTRAINTSIMPROVEMENTCYCLE..169
11 QUALITY........................................................171
11.1 AFRAMEWORKFORLEANQUALITY..........................171
11.2 COMPLEXITY.........................................................172
11.3 VARIATION...........................................................173
11.4 MISTAKES............................................................173
11.5 SIXSIGMA............................................................174
11.6 HOWTOCALCULATETHESIGMALEVELOFAPROCESS..176
11.7 INTEGRATINGLEANANDSIXSIGMA..........................177
11.8 MISTAKEPROOFING(POKAYOKE)............................179
12 IMPROVEMENT..............................................182
12.1 IMPROVEMENT CYCLES: PDCA, DMAIC, 8D, IDEA, AND
TWI....................................................................182
12.2 ‘FIVE WHYS’, ROOT CAUSES AND SIX HONEST SERVING
MEN...................................................................185
12.3 ORGANISINGFORIMPROVEMENT.............................186
12.4 CONTINUOUSIMPROVEMENTAPPROACHES...............189
12.5 KAIZEN................................................................192
12.6 MESSMANAGEMENT............................................199
12.7 A3PROBLEMSOLVINGANDREPORTS.......................199
12.8 COMMUNICATIONSBOARD.....................................201
13 MANAGINGCHANGE.....................................203
13.1 PEOPLEANDCHANGEINLEAN.................................203
13.2 WHATISTHE‘SOCIALSYSTEM’?..............................203
13.3 MODELSFORCHANGEMANAGEMENT......................204
13.4 CREATINGTHELEANCULTURE.................................210
13.5 TRAININGWITHININDUSTRY(TWI)..........................212
13.6 THEADOPTIONCURVEANDKEYPEOPLE...................215
14 SUSTAINABILITY–MAKINGCHANGESTICK......218
14.1 PROCESS(ANDSYSTEM)SUSTAINABILITY...................218
14.2 STAFFSUSTAINABILITY............................................220

15 NEW PRODUCT DEVELOPMENT AND
INTRODUCTION.............................................224
15.1 FOUROBJECTIVESANDSIXTRADEOFFS....................225
15.2 WASTESINNEWPRODUCTDEVELOPMENT...............226
15.3 TOYOTA’SAPPROACHTOPRODUCTDEVELOPMENT....227
15.4 COST..................................................................230
15.5 SPEED AND LEVELLING: CRITICAL CHAIN & LEAN PROJECT
MANAGEMENT.....................................................237
15.6 QUALITY..............................................................238
15.7 ADDITIONALTOOLSFORLEANPRODUCTDEVELOPMENT....
 .........................................................................244
16 CREATINGTHELEANSUPPLYCHAIN...............247
16.1 WHATISSUPPLYCHAINMANAGEMENT?...................247
16.2 DYNAMICDISTORTIONS..........................................249
16.3 MANAGINGSUPPLIERRELATIONS.............................252
16.4 SUPPLYCHAINCOLLABORATION..............................257
16.5 LEANLOGISTICS....................................................259
16.6 ORDERFULFILMENTANDPRODUCTCUSTOMISATION..260
16.7 CREATINGHIGHPERFORMANCESUPPLYCHAINS.........264
17 ACCOUNTINGANDMEASUREMENT...............265
17.1 LEANACCOUNTING...............................................265
17.2 PERFORMANCEMEASURES.....................................269
17.3 THEBASICLEANMEASURES...................................272
17.4 TARGETCOSTING,KAIZENCOSTINGANDCOSTDOWN 275
18 LEAN–HOWITALLCAMEABOUT..................278
18.1 LEANBEFORETOYOTA...........................................278
18.2 TOYOTA:THEBIRTHPLACEOFLEAN..........................279
18.3 WHYDOWECALLIT‘LEAN’?..................................280
19 FURTHERRESOURCES–WHERETOGETHELP 283
19.1 COMPANIONVOLUMES.........................................283
19.2 RESEARCH CENTRES, RESEARCH PROGRAMMES AND WEB
RESOURCES..........................................................283
19.3 ARTICLES,BOOKSANDVIDEOS................................283
19.4 CERTIFICATION.....................................................284
INDEX..................................................................285


ix
ALeanChronology–TheRoadto(andawayfrom)Lean
1780s – 1790s Development of what is today
called standard ops and quick changeover by
RoyalNavyenablingthemtodeliverabroadside
twiceasfastastheFrenchorSpanishNavies
1797 Maudslay builds the world’s first precision
metal screw cutting machine. This was the
‘parent’machineofthemachinetoolindustry.
1810 Maudslay and Brunel (father of Isambard)
set up the first mechanised production line that
produced160kpulleysperyearwith10men,for
the Royal Navy – previously done with inferior
qualityby100men
1859 Smiles publishes ‘SelfHelp’ – a book that
inspiresSakichiToyoda.Theonlybookondisplay
athisbirthplace.
1871 Denny,aScottishshipbuilder,askedhis
workerstosuggestmethodsforbuildingshipsat
lowercost
1893 Taylor begins work as a ‘consulting
engineer’.
1896 Pareto publishes law of economic
distribution
1898Taylorbeginshistimestudiesofshovelling
ofiron
1904 Cadillac begins building cars using
interchangeableparts
1906 Oldsmobile builds first car with multiple
partscomingfromexternalsuppliers
1908FordModelT
1909FrankandLillianGilbrethstudybricklaying.
Beginningsofmotionstudy.
1911 Wilson Economic Order Quantity (EOQ)
formula
1913 Ford establishes Highland Park plant using
themovingassemblyline
1922Gantt‘TheGanttChart:AWorkingToolfor
Management’
x
1925 Stuart Chase, ‘The Tragedy of Waste’,
Macmillian
1925 ‘Mass Production’ phrase coined by
EncyclopaediaBritannica
1926HenryFord‘TodayandTomorrow’
19271930 Mayo and Roethlisberger studies at
HawthornPlantofWesternElectric
1929 Sakichi Toyoda sells the rights for a quick
change shuttle to Platt Brothers UK for £100k,
andestablishesacarbusiness.
1931 Shewhart. ‘Economic Control of Quality of
ManufacturedProduct’VanNostrand.Firstbook
onSPCandPDCA
1934Maynardcoinstheterm‘MethodStudy’
1936 An engineer at General Motors coins the
term ‘automation’. Toyota sells first car. The
name‘Toyota’adoptedbecauseitcanbewritten
in Japanese with 8 pen strokes (8 is a lucky
number in Japan). Toyoda requires 12 strokes.
Kiichiro Toyoda visits USA, especially Ford, and
starts‘justintime’.
1937 Establishment of Toyota Motor (Toyoda
LoomWorksestablished1922)
1940 TWI (Training within Industry) programme
begun by US military sets out 3 key tasks for
supervisors: Job Instruction, Job Improvement,
JobRelations.IntroducedintoJapanin1949.
1942Juran:ReengineeringprocurementforLend
Lease(90daysto53hours)
1943Toyodahospitalestablished.Nowknownas
KariyaToyotahospital.
194344 Flow production of bombers at Boeing
PlantIIandFordWillowRun
1945Shingopresentsconceptofproductionasa
networktoJMA.Alsoidentifiesbatchproduction
asthemainsourceofdelays