1. The invention of waste, 2. The elimination of extravagance
The attack of the financial crisis has caused many enterprises to lose market share, and they have no choice but to reduce costs in order to gain more profits. Lean production, as the best way of low-cost management, is the inevitable choice for many enterprises. Even Toyota could not escape the impact of the financial crisis. In a press conference, Toyota's senior management expressed: "From this financial crisis, we see that we still have many problems. Toyota needs to find more waste and carry out another lean revolution from a systemic perspective."
The five major principles of lean production are: value, value stream, flow, demand pull, and perfection.
So-called perfection means that every employee participates in improvement activities and strives to eliminate every waste in each link of the enterprise, no matter how small it may be.
In lean production, waste is categorized into seven types: defective products, overproduction, inventory, transportation, excessive processes, unnecessary movements, and waiting.
At first glance, these seem simple enough. However, truly understanding them is difficult. Why? Because in order to eliminate these seven wastes, we need to go through two steps: discovery and elimination.
1. The discovery of waste
First, let's look at how to discover waste. These wastes exist every day in our production sites and various corners of the company, but many of us (including some managers) turn a blind eye to the waste around us. Why? Because the process of waste generation makes them unable to see the waste right in front of them.
Problems often cannot be controlled or solved at their root all at once. Therefore, many times, we adopt temporary countermeasures. For example, when production exceeds sales, what can we do? Many companies simply store the excess in a temporary warehouse. Over time, it seems like this warehouse becomes necessary. The person who set up the temporary warehouse might even feel proud: "If it weren't for me, where would we put the things?"
As a result, this phenomenon gets tacitly accepted, approved by the boss, and regarded as necessary by various departments. Over time, everyone gets used to it, and overproduction ceases to be seen as a problem because there's a warehouse. The original temporary warehouse becomes a permanent one.
Thought determines consciousness, consciousness determines action, action determines habit, and habit determines success or failure. Bad habits become flaws.
Such phenomena lead to waste being present everywhere in the company. So, how do we discover waste? What methods can we use?
There are many ways to discover waste, such as the process method, value stream analysis (Value Stream Mapping, which is currently the most popular lean production method among European and American companies), system engineering, etc.
Here, let's talk about the simplest and most widely understood method: 5S. The content of 5S is very simple: sorting, setting in order, cleaning, standardizing, and sustaining discipline.
(1) First, separate what you need from what you don't.
What do you need, and what don't you need? Many people easily say while implementing 5S: "This cabinet is not needed, take it away! That wrench is not needed, take it away." These actions are correct and are common during the initial implementation of 5S in many companies. However, as we delve deeper into its implementation (so usually, I personally implement 5S in two phases: basic and advanced), we should redefine what is needed and what is not.
We can see that overproduction on the production line is actually something we don't need, and we should remove it. Where should it be removed to? Here, those who have implemented lean production and those who haven't start to differ. Normally, people rush to move items to the warehouse. What about semi-finished goods? These people will quickly move them to the next warehouse, forming our traditional method.
We should remove items, not to the warehouse, nor to finish them and send them to the warehouse. We should move them to the previous process! Inform them that these are excessive, and we don't need them. You can rest until I need them and will inform you then! If sent to the previous process, they will see their overproduction and stop. Similarly, they will inform their upstream process, creating a chain reaction that eventually reaches the logistics department and the supplier. When I was at a motor company, we did just this with the Japanese management staff, and our inventory significantly decreased.
Here is an important mindset: managers must realize that they should move items to the previous process instead of rushing to store them in the warehouse! And there should be a necessary system for moving forward.
Additionally, exposure of waiting is bad. Yet almost every company has varying degrees of waiting waste. When exposing waiting waste using 5S, even the most basic differentiation can reveal much. You'll find that many of your personnel have idle time or downtime. Are these waits necessary? Definitely not. Should we remove them? Where to? It's not about removing people but removing the actions of waiting. If you recognize this step, you'll find that your production balance rate can greatly improve.
Finally, defects and inventory can be exposed extensively through this step of 5S. There are many systems involved here, covering both points and surfaces. For example, stopping machines to deal with defective products—can you do it? Why stop the machine? This is about thorough exposure! We won't list all examples here.
(2) Place the needed items in designated locations and label them properly.
Placing items in designated locations doesn't need much explanation. Let's briefly look at labeling. Generally, companies in the early stages of implementation will label materials and tools well, mark production lines, channels, and venues appropriately, which is good. But this is only the basic level of 5S.
Let's carefully examine whether our defective products need to be labeled. Everyone...
(Note: The passage seems incomplete in the original Chinese text, so the translation ends here.)
This article originates from recent innovation management trends.