Lecture 6 – Lean

(Improving)
Operations and Waste
EFIM30014 – Operations Management

Dr Aniekan Essien
Lecturer in Business Analytics
G.04 11-13 Tyndall’s Park Road
aniekan.essien@bristol.ac.uk
Recap from Week 5
1. Inventory is the items used to support
production, supporting activities and customer
service. Inventory exists to compensate the
differences in timing between supply and
demand.

2. The economic order quantity is a formula for

deciding how much of any item should be
ordered when replenishment occurs.

3. When deciding on the timing of ordering, safety

stocks help avoid stockouts when demand
and/or lead times are uncertain.
Weekly Outline

1. What are Lean Operations and

Waste (Muda)?
2. Background to Lean Production
using JIT
Learning Outcomes

1. Describe the concept of lean and how it

relates to operations in eliminating waste
(muda).

2. Describe JIT/Lean and understand the Lean

philosophy.
DIRECTING THE DESIGNING THE DELIVERING THE DEVELOPING THE
OPERATION OPERATION OPERATION OPERATION

1: Introduction to 5: Inventory Management 10. Sustainable &

3: Process Design
Operations responsible
& Analysis
Management READING WEEK operations

6: Improving Operations
2: Operations
Strategy 7: Supply Chain
Management

8: Quality Management
4: Service
Operations
Management 9: Technologies in
Operations Management
Section 1
What are Lean Operations and Waste
(Muda)?
What is Lean?

“a philosophy of production that emphasises the

minimisation of the amount of all resources (including time)
used in various stages of an operation.”
– Bozarth and Handfield (2020)
What is Lean? – Cont’d

▪ Removal of seven types of waste: ▪ No waste:

– Overproduction ▪ Whether of time, resources or
– Waiting effort
– Transport ▪ Lean is a philosophy of how
– Non-value adding processing to run operations, a method of
– Inventory in excess of immediate planning and controlling
needs operations, and a set of tools
– Inessential motion that improve operations
– Correction necessitated by defects performance.

Ohno, T., 1988. Toyota production system: beyond large-scale

production. crc Press.
What is Lean? – Cont’d

‘The key principle of lean operation is

relatively straightforward to understand, it
means moving towards the elimination
of all waste in order to develop an
operation that is faster, more
dependable, produces higher quality
products and services and, above all,
operates at low-cost’.
– Slack and Brandon-Jones (2019)

Image source: Kanbanize

Waste: Things that don’t add value!
▪ Over production: ahead of
demand (making things that
don’t sell)
▪ Waiting: for information,
materials, people, equipment,
etc., causing inefficient use of
time
▪ Transportation: conveyance of
materials, product, paperwork,
etc., more than is necessary
▪ Over-processing: unnecessary
excess production, includes any
form of inspection
▪ Inventories: having more than
absolute minimum.
▪ Motion: of people more than
necessary to complete task
▪ Defects or Rework: correcting
defects
Waste in Service Operations
▪ Delay on the part of customers waiting for
service, for delivery in queues, for response,
in queues, not arriving as promised. The
customer’s time is not free to the provider!
▪ Duplication: Having to re-enter data, repeat
details on forms, copy information across,
answer queries from several sources within
the same organisation
▪ Unnecessary movement: Queuing several
times, lack of “one-stop shopping”, poor
ergonomics in the service encounter.
▪ Unclear communication, and the wastes of
seeking clarification, confusion over product or
service use, wasting time finding a location
that may result in misuse or duplication
▪ Incorrect inventory. Being out-of-stock,
unable to get exactly what was required to the
customer
▪ Opportunity lost to retain or win customers,
failure to establish rapport, ignoring
customers, unfriendliness, rudeness
▪ Errors in the service transaction, product
defects in the product-service bundle, lost or
damaged goods
Bicheno, J. and Holweg, M., 2009. The lean toolbox–the essential
guide to lean transformation, 4. Aufl. PICSIE, Buckingham.
What is ‘Lean Thinking’?
▪ A philosophy or way of thinking, Approaches to removing Muda:
not a set of tools.
▪ Kaikaku - radical
▪ The removal of muda improvement
– Japanese word for waste. Also
▪ Kaizen - continuous
connected with muri (overburden)
and mura (unevenness). incremental improvement
– Muri = overload in capacity, mura
= high variability.
– No smooth flow. o Value adding versus Non-value
adding activities.
Value Add vs. Non-value Add
Value Add:
o Anything that changes or further
transforms a product, sub-assembly,
information or service into something
that the customer is willing to pay
for.
▪ Non-Value Add:
▪ Any activity that absorbs or
consumes resources (e.g., material,
time, equipment, people, paper,
space), without creating value.
▪ Typically, two types:
– Type 1: can be eliminated
immediately.
– Type 2: due to current state,
cannot yet be eliminated.
Oil Change Example
Exercise was solved by reducing waste
The times add up to 28 minutes,
which does not allow much room for
error if the 29-minute guarantee is to
be met and the mechanic travels a
total of 420 feet.
Why Lean?
o Industry used to function on the following profit equation:
▪ Cost + profit margin = price
o Now very few industries where this is the case (exceptions are monopolies,
government agencies etc.), but instead:
▪ Price – cost = profit margin
o Key is to be able to take cost out of the equation while still maintaining quality,
innovation, delivery etc. Starting point for
lean. “Any customer, in any industry, in
▪ Reduce cost AND increase quality. any market wants stuff that is both
cheaper and better, and they want
it yesterday.”
Nordstrom & Ridderstrale
 Identifying the Value Stream
o Time waiting in queue for check in, baggage 59 mins
etc.

o Time waiting being served at end of queue 11 mins

o Waiting in lounge / plane etc. 115 mins

o Generally, nonvalue adding moving around 5 mins

airport, car park – Schiphol
Image: Google Search
o Passport checking 31 mins

o Value adding time travelling in car, plane, taxi. 115 mins

So, only 1 hour 55 mins of a total throughput time of 5 hours 45 mins was spent in value-added
activity. That is, 33.3 % value added. Note: this was a smooth flight with no problems or delays.
 Summary for LO1
▪ Lean is a philosophy of production that
emphasizes the minimisation of the amount
of all resources (including time) used in the
various stages of an operation.

▪ Lean involves the removal of seven types

of waste – overproduction, waiting,
transport, non-value, inventory, inessential Describe the concept
motion, and correction of defects.
of lean and how it
▪ Lean aims to match demand perfectly –
neither too much nor too little, only when it relates to operations
is needed.
in eliminating waste.
▪ Waste can also be found in service
operations, for instance, delays,
duplication, etc.
Section 2
Introduction to Lean Production (Pull
Systems) and JIT
Lean Principle – Five Steps
▪ Specify Value: value can only be ▪ Pull: eliminate forecasting and make
defined by the ultimate customer. what the customers tell you.

▪ Identify the Value Stream: Specific ▪ Perfection: four initial steps

actions required to bring a product or represent a virtuous circle to
service through the critical tasks of constantly improve. Need for
the business. transparency with all partners.

▪ Flow: make the remaining value

creating steps flow (not batch and
queue).

James P. Womack, Daniel T. Jones, Daniel Roos and

Massachusetts Institute of Technology, 1991. The machine that
changed the world: The story of lean production. Harper Collins.
Lean Production – Key Principles
Eliminate all Waste ▪ Reduce variability (Standardisation of
▪ Streamline the flow, so that no Work and Practice).
unnecessary time is spent in moving
people or materials (Level Production).
– Examine the shape of process flow Involve Everyone
– Ensure visibility (Improving Visibility of ▪ Employee involvement
Performance)
– Use small-scale technology (Cellular ▪ Supplier management
Layout)
▪ Quality at the source
▪ Match the demand exactly (Demand
Pull, Use of Safety Capacity)
Continuous Improvement
▪ Increase process flexibility (Cellular ▪ Concepts of kaizen and kaikaku
Layout)
Flow at Tesco
Flow in a Traditional Process

Traditional approach – ‘Push’

buffer buffer
Work inventory Work inventory
Work
centre centre centre
The Traditional Approach – Inventory
 Flow in the Lean Process
Lean approach – ‘Pull’

Request Request Request

Work Work Work Work

centre centre centre centre

Delivery Delivery Delivery

Don’t send anything anywhere… make them come and get it!
Just-in-Time (JIT)
▪ Not just a technique but a ▪ JIT emphasises:
philosophy of waste removal and – reduction of waste,
continuous improvement. – continuous improvement,
– sychronisation of material flows,
▪ Parts pulled through the process
– collaboration in the supply chain
just-in-time, thus minimising
inventories and waste.

▪ Use of materials at any stage creates

a trigger for production and
replenishment from previous stage.
Just-in-Time vs. Just-in-Case
The JIT Pond Analogy – 1/5
The JIT Pond Analogy – 2/5
The JIT Pond Analogy – 3/5
The JIT Pond Analogy – 4/5
The JIT Pond Analogy – 5/5
 Summary for LO2
▪ Lean production is all about three
underlying principles – eliminating all
waste, involving everyone and
continuous improvement (kaizen).

▪ Lean items operate pull production – Describe JIT/Lean

don’t send anything anywhere…make
them come and get it! and differentiate
▪ JIT is not just a technique, but a
between the lean
philosophy, and differs from Kanban, philosophy and
which is a set of tools.
Kanban systems.
▪ JIT enables include continuous flow,
improvement in product design, working
with suppliers and human resources.
Reflective Questions
1. What is lean operation?
2. What are different types of wastes in lean
operation?
3. How does lean operation compare with other
approaches?
4. What are potential benefits derived from lean
operation?
5. What are associated problems with
implementing lean operation?