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Each company that want to become world class has to solve the same challenge. How can we provide products or services with maximum value for our clients at the lowest possible costs and with shortest delivery time? With regard to the production and delivery process operational excellence is a requirement.

The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.

To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.

Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.

Operational excellence is about delivering to customer expectations, without failures, on time and in a cost -efficient manner. It is a philosophy where problem solving, teamwork and leadership result in the on-going improvement of an organization. The process involves focusing on the customer’s needs, keeping the employees positive and empowered and continually improving the current activities in the workplace.

History of continuous improvement

In the last few years, the Lean and the Six Sigma philosophies merged to Lean Six Sigma as a holistic view and approach for process improvement. Is is combination of Lean manufacturing and Six Sigma and uses a combined set of both Lean and Six Sigma tools. It also embraced best practices from other improvement methods like total quality management, total productive maintenance and theory of constraints. Lean Six Sigma includes common goals of lead time reduction, operational cost reduction and overall quality improvement.

In this section we will review the history of quality management general in general and what is Lean manufacturing and Six Sigma in particular.

History of quality  management

The origin of managing quality dated back thousands of years, building the great pyramids of Cheops at 2560 BC could not have been done without proper quality management.

The concept of quality as what we think of it now first emerged during the industrial revolution previously goods had been made from start to finish by the same person or team of people, with handcrafting and tweaking the product to meet quality criteria. Mass production brought huge teams of people together to work on specific stages of production where one person would not necessarily complete a product from start to finish. In the late 19th century pioneers such as Henry ford recognized the limitations of the methods being used in mass production at the time and the subsequent varying quality of output. Henry ford (1863-1947) was the founder of motor company and sponsor of the development of the assembly line technique of mass production. Many would say that Lean started with Henry Ford initially this was more a lawn initiative than a quality management initiative. Each t-ford was supplied in any possible color, as long as it was black, and it was supplied with a tool box in the trunk, later ford emphasized standardization of design and component standards to ensure standards and was implemented by inspection of product output to catch defects.

What is Lean Manufacturing

Lean manufacturing focuses stability and elimination of waste. Lean manufacturing began with Henry Ford who was the first person to truly integrate and entire production process. Sequence using standardized work and interchangeable by lining up called this flow production (1913). The problem with ford’s system was its inability to provide variety. As mentioned the model-t was limited to one colour and to one specification, as a result , all model -t chassis were essentially identical until the end of the production in1926.

In the 1930s and more intensely just after world war II (1950) Kiichiro Toyoda,  Taiichi Ohnom and others at Toyota started looking at ford’s situation. While ford was producing 8000 vehicles per day, Toyota had produced only 2500 vehicles in13 years. Toyota wanted to scale up production but lacked the financial resources required for the huge quantity of inventory and subassemblies as seen at the ford plant. It occurred to them that a series of simple innovations might make it possible to provide both – continuity in process flow as well as a wide variety of product offerings. Soon after, Toyota developed the Toyota production system (TPS). TPS borrowed ideas from ford but developed the just in time philosophy (JIT) , the pull concept and judoka to address the issues of high cost associated with ford’s large inventories. The Lean thought process is thoroughly described in the book the machine that changed the world (James P Womack and Daniel T. Jones 1990) and in a subsequent volume Lean thinking (1996), which specifically describes the five Lean principles.)

History of six sigma

The year was 1979 when Motorola was engaged in a painful process of self-discovery and began to realize the extent to which it had lost market share in many key segments, including televisions car radios and semiconductors. That same year, during a company officers meeting Motorola’s president and corporate chief began voicing the standard, politically correct excuses. Blame it on the Japanese, blame it on the economy in general, blame it on weak research and development.

While all this was going on, a lone voice in the back of the room spoke up loudly and clearly saying I will tell you what is wrong with this company… our quality stinks! That voice was art sundry, a sales manager for Motorola’s most profitable business at the time. Everyone thought he would be fired for this ballsy assertion. How could someone make such a statement in such horrible and turbulent times? Surely Motorola had always been and still was among the world best manufacturers. Regardless of the head times it was facing.

Motorola was at a major turning point in its history it could continue on a downward trend relative to competitors, or it could break that trend with an ambitious culture change and quality improvement initiative. This was that moment Motorola began its search for ways to eliminate waste and improve its quality. Two Motorola engineers, Bill Smith and Mikel Harry, were credited for their pioneering work aimed at improving processes and for finding and resolving defects. Their work on process capability, tolerance critical-to -quality characteristics, and design margins laid much of the foundation for what today is called Six Sigma.

Lean principals

Womack, Jones and Roos published two successful books entitled that machine that changed the world (1990) and Lean thinking (1996). Both books address the revolutions in manufacturing represented by the Toyota production system of the Toyota Corporation of Japan. They compared this way of working with the traditional mass production system that was used by other companies in the western world. They described in their books Lean thinking the following five principals:

 Lean Principles

 

Description
Value Define what is of value to the customer
Value stream Indentify the value stream/eliminate waste.
Flow Create a constant flow
Pull Produce based on demand
Perfection Continues improvement