LEAN provides several linkages to help identify specific shop-floor activities that will contribute to the bottom line.

– A value stream map (VSM) is a diagram of all of the steps, both value-adding and non-value-adding, required to produce a product from raw material to the customer. A properly constructed current state VSM reveals the causes of discrepancies between the time spent adding value for the customer and the total time it takes product to get through the value stream. This provides a powerful focusing mechanism for our improvement efforts on the path to a leaner future state.

– Just-In-Time (JIT) is pulling parts through production based on customer demand instead of pushing parts through production based on projected demand. It relies on many lean tools, such as Continuous Flow, Heijunka, Kanban, Standardized Work and Takt Time.

This is provided, of course, that the pull system is quantified to account for constraints in the flow. Such constraints may include short customer lead times, long changeover times, resource downtime, or quality policy to name just a few. If the flow is correctly quantified, we have another focusing tool.

– Lean metrics (and accounting) are based on the total output of the value stream (sales), the lead time through the value stream (inventory), and the total cost of the value stream (spending). When we see the ratios of the three metrics move in the wrong direction, root cause analysis will lead us to corrective action.

KPIs (Key Performance Indicators) are metrics designed to track and encourage progress towards critical goals of the organization. Strongly promoted KPIs can be extremely powerful drivers of behavior – so it is important to carefully select KPIs that will drive desired behavior.

Kaizen is a strategy where employees work together proactively to achieve regular, incremental improvements in the manufacturing process.

Once we have identified specific improvement opportunities with VSM, pull, or lean metrics, how do we deliver them? This is the function of kaizen events.

A kaizen is a group activity, usually lasting several days, in which a team identifies and implements a significant improvement in a process. It usually includes:

– Initial analysis of the process, including event area selection, team selection, and development of a contract and a mandate

– Kaizen event, including training in the lean tool, process analysis & baseline measurement, development & implementation of new processes, and formal presentation of the process and accomplishment

– Follow up, including debugging the process, assuring timely completion of all remaining action items, and assuring the new process is institutionalized.

Five Focusing steps(5FS):

1. Identify the system constraint

2. Decide how to exploit the system constraint

3. Subordinate everything else to the above decision

4. Elevate the system constraint

5. If, in the previous steps, the constraint was eliminated, go back to step three. Do not let inertia become the system constraint.

The central working tenet of TOC is the five focusing steps (5FS), a process that focuses the continuous improvement efforts on what matters the most: the constraints.

– Drum-Buffer-Rope (DBR) is the TOC technique for scheduling and managing production. In essence, it provides a way of translating the principles of the 5FS into practice; a way of scheduling and managing production according to the constraint.

DBR reduces scheduling complexity by focusing attention only on critical resources, rather than all resources. As noted earlier, TOC views every system as a chain of dependent events, a fundamental precept of DBR. Since the constraint limits the throughput of the entire system, it acts as a drum, setting the pace of production.

– Buffer Management (BM) is an associated TOC technique for managing the trade-off between lead time and protection of the constraint. Too much protection or early release of materials increases WIP and lead time, while too little protection may cause the constraint to starve, jeopardizing throughput.

– The TOC Performance Measurement System. If the goal is to make money now and in the future, the ultimate measures of goal attainment are net profit (NP), return on investment (ROI), and cash flow (CF).

The three basic measurements are throughput (T), inventory (I), and operating expense (OE). In a for profit environment these are defined as:

Throughput – “the rate at which the system generates money through sales”

Inventory – “all the money the system invests in purchasing things the system intends to sell”

Operating Expense – “all the money the system spends in turning inventory into throughput”

– Thinking processes (TPs) – In order to identify policy constraints and successfully implement 5FS, are developed a suite of generic problem-solving tools, known as the thinking processes.

The TPs help the user answer three basic questions: a) “what to change?”, b) “what to change to?”, and c) “how to cause the change?”.

1. undesirable effects (UDEs), which show that the system is not working as well as it could, the core problems are “rarely superficially apparent”, and “they manifest themselves through a number of undesirable effects linked by a cause-and-effect network.”

2. The current reality tree (CRT) is used to identify the core problem, the CRT “depicts prevailing logical relationships responsible for the current, and relatively poorly performing, state of the system under study”.

3. Conflict resolution diagram (CRD) is used to visualize the conflict and to surface hidden assumptions underlying the dilemma. This allows invalid assumptions to be recognized and challenged, and valid ones addressed.

4. Future reality tree (FRT), “which demonstrates logically that the proposed changes will produce a more desirable future system state” that the changes will eliminate the core conflict (or problem) and the resulting UDEs.