Lesson 4: The Lean enterprise, the seven wastes, and 5S

This lesson closes out the Define phase material by introducing Lean, the second half of "Lean Six Sigma." Where Six Sigma is primarily concerned with reducing variation and defects, Lean is primarily concerned with eliminating waste and speeding up flow. Yellow Belts need a working grasp of both, since most real projects use tools from each side.

Understanding Lean

Lean is a philosophy and set of tools aimed at maximizing customer value while minimizing waste, on the principle that any activity a customer would not knowingly pay for is waste and a candidate for elimination or reduction. Lean does not ask "how do we do this faster with more people," it asks "does this step need to exist at all, and if it does, how do we do it with the least possible waste." That distinction is why Lean projects often produce results with no new investment at all, simply by removing steps that were never adding value in the first place.

The history of Lean

Lean's practices trace primarily to the Toyota Production System, developed in Japan after World War Two, most closely associated with Taiichi Ohno and Shigeo Shingo. Facing capital and material shortages very different from post-war American manufacturing's abundance, Toyota built a system focused on producing only what was needed, when it was needed, in the amount needed, and on relentlessly removing anything that did not directly contribute to that goal. The term "lean production" was coined by John Krafcik in a 1988 article, and it was popularized for a Western business audience by the 1990 book "The Machine That Changed the World," which studied Toyota's methods against the rest of the global auto industry.

Lean and Six Sigma together

Six Sigma alone is very good at reducing variation and defects but, on its own, has no dedicated toolset for eliminating waste or speeding up flow. Lean alone is very good at speeding up flow and removing waste but has no dedicated statistical toolset for understanding why a process varies. Lean Six Sigma merges the two: Lean's waste-elimination tools are typically applied early, since removing waste is often fast and cheap, while Six Sigma's statistical tools are applied to the variation and defect problems that remain once the obvious waste is gone. A project is rarely purely one or purely the other in practice.

The seven elements of waste

Lean identifies seven classic categories of waste, all traced back to the Toyota Production System. A widely used way to remember them is the acronym TIMWOOD:

• Transportation: unnecessary movement of materials, products, or information between steps or locations.
• Inventory: more material, work in process, or finished goods on hand than is needed to meet actual demand.
• Motion: unnecessary movement by people, as distinct from transportation of materials, such as walking, reaching, or searching.
• Waiting: idle time whenever a person, a part, or information is not actively being worked on.
• Overproduction: producing more, sooner, or faster than the next step or the customer actually needs, widely considered the most serious of the seven because it hides and generates the other six.
• Overprocessing: doing more work, or a higher level of precision or quality, than the customer actually requires or is willing to pay for.
• Defects: any output that fails to meet requirements, requiring rework, scrap, or a redo of the work already done.

Identifying which of these seven a given inefficiency falls under is usually the first move in a Lean improvement, because each category points toward a different family of tools and fixes.

5S

5S is a Lean workplace organization method, also from Toyota's practice, built around five sequential steps, each an English approximation of a Japanese original term:

• Sort (Seiri): separate what is needed from what is not, and remove what is not.
• Straighten, or Set in Order (Seiton): arrange what remains so it has an obvious place and is easy to find, use, and return.
• Shine (Seiso): clean the workspace and equipment, which also surfaces problems, such as a leak or a wear pattern, that dirt and clutter would otherwise hide.
• Standardize (Seiketsu): establish a consistent way of doing Sort, Straighten, and Shine so the improvement does not depend on one person's memory or habits.
• Sustain, or Self-Discipline (Shitsuke): build the habits and accountability that keep the first four steps from quietly decaying back to the old, cluttered state within a few weeks.

5S is often a team's first hands-on Lean exercise because its benefits are immediate and visible, and because a workplace that cannot sustain basic organization is a poor candidate for more advanced Lean or Six Sigma work layered on top of it.