3. Lean Operations

Lean operations, lean is a management philosophy that has its roots in the Toyota production system. The goal is to produce as much product given a set of resources. So it’s a very effective system of production.
Now, how did this system of production come about?
Toyota traces its roots producing cars back to the 1940s. And at that time, in war-torn, post-World War II Japan, there are not many resources available. Toyota was a small car maker, they have just completed 2,500 cars. They went to see Ford, who was producing 8,000 cars a day. And what they saw was the marvel of production technology of that time, which was the River Rouge plant in Dearborn, Michigan. Now that production system was great for Ford, but it didn’t work in Japan. Japan is a small island with lots of mountains, and they couldn’t build such large factories. They also didn’t have a lot of money to build up all that inventory that Henry Ford had. Therefore, they took some ideas and thought about how to do it differently. And the result was the Toyota production system, which propelled them to become the largest car manufacturer in the world today. Now this road to become the largest car maker in the world was a long one. However, Toyota experienced tremendous growth in the 1960s, 1970s and 1980s. And this growth can be attributed to two central tendencies in their production system. One is the concept of Kaizen, and that means continuous improvement. If there is a quality issue, every worker has the power to stop the line and investigate and fix the problem right there as it occurs. The other one is the elimination of waste. And in the traditional philosophy there are seven wastes that must be eliminated, and I’ll explain them in a second.
Now the goal of the production system is to be as effective as possible. To produce the best products with the least amount of resources possible. In the Toyota production system there’s seven types of waste that we seek to eliminate.
The first one is transportation. Moving product just for the sake of moving it is not necessary. The second one is inventory.
Inventory without a customer adds no value.
The third one is motion. Moving machines or people in order to work on a product does not add value.
The fourth one is waiting.
And waiting doesn’t help anybody.
The fifth one is overproduction.
Overproduction, because the quality is poor and you need to produce more is a waste.
Over processing, because you have to rework a poorly manufactured product is also wasteful. And finally, defects that arise during the production process do not add any value and should be eliminated as much as possible. [FOREIGN], which is a term in Japanese for waste, has to be eliminated from the production process. And if you’re able to eliminate it effectively,
that is how you create a good manufacturing system.
Two MIT researchers wanted to investigate the auto industry. And after looking at all of the big car makers, they came away with the idea that Toyota’s system was the only one worth replicating. And they wrote up a book entitled The Machine that Changed the World.
A few years later, they wrote another book called Lean Thinking, which really started to revolutionize the idea of lean.
In their book, they provide five central lessons of lean. Number 1, you want to specify value from the customer’s perspective.
Number 2, you look at your whole supply chain and you map out where that value is created. You create a value stream map. Number 3, you want to make that value flow. In other words, you discontinue all activities that do not add value, and accelerate the activities that do add value.
Fourth, you want to pull back from the customer. And that is a very important idea. Rather than producing and hoping that your customer will buy the product, ie pushing the product onto the customer, you want to wait for the customer to ask for a product and then you start producing it.
And finally, you want to strive for perfection and eliminate all defects.
This system around these five central ideas have become a standard for many organizations throughout the world.

Jim Rohn Sứ mệnh khởi nghiệp