Quality management

The term quality management has a specific meaning within many business sectors. This specific definition,
which does not aim to assure 'good quality' by the more general definition, but rather to ensure that an
organization or product is consistent, can be considered to have four main components: quality
planning, quality control, quality assurance and quality improvement. Quality management is focused not only
on product/service quality, but also the means to achieve it. Quality management therefore uses quality
assurance and control of processes as well as products to achieve more consistent quality.
Quality management evolution
Quality management is a recent phenomenon. Advanced civilizations that supported the arts and crafts allowed
clients to choose goods meeting higher quality standards than normal goods. In societies where arts and crafts
are the responsibility of a master craftsman or artist, they would lead their studio and train and supervise
others. The importance of craftsmen diminished as mass production and repetitive work practices were
instituted. The aim was to produce large numbers of the same goods. The first proponent in the US for this
approach was Eli Whitney who proposed (interchangeable) parts manufacture for muskets, hence producing
the identical components and creating a musket assembly line. The next step forward was promoted by several
people including Frederick Winslow Taylor a mechanical engineer who sought to improve industrial efficiency.
He is sometimes called "the father of scientific management." He was one of the intellectual leaders of the
Efficiency Movement and part of his approach laid a further foundation for quality management, including
aspects like standardization and adopting improved practices. Henry Ford was also important in bringing
process and quality management practices into operation in his assembly lines. In Germany, Karl Friedrich
Benz, often called the inventor of the motor car, was pursuing similar assembly and production practices,
although real mass production was properly initiated in Volkswagen after World War II. From this period
onwards, North American companies focused predominantly upon production against lower cost with increased
efficiency.
Walter A. Shewhart made a major step in the evolution towards quality management by creating a method for
quality control for production, using statistical methods, first proposed in 1924. This became the foundation for
his ongoing work on statistical quality control. W. Edwards Deming later applied statistical process control
methods in the United States during World War II, thereby successfully improving quality in the manufacture of
munitions and other strategically important products.
Quality leadership from a national perspective has changed over the past five to six decades. After the second
world war, Japan decided to make quality improvement a national imperative as part of rebuilding their
economy,
and
sought
the
help
of Shewhart, Deming andJuran,
amongst
others. W.
Edwards
Deming championed Shewhart's ideas in Japan from 1950 onwards. He is probably best known for his
management philosophy establishing quality, productivity, and competitive position. He has formulated 14
points of attention for managers, which are a high level abstraction of many of his deep insights. They should
be interpreted by learning and understanding the deeper insights. These 14 points include key concepts such
as:

Break down barriers between departments

Management should learn their responsibilities, and take on leadership

Supervision should be to help people and machines and gadgets to do a better job

Improve constantly and forever the system of production and service

Institute a vigorous program of education and self-improvement
In the 1950s and 1960s, Japanese goods were synonymous with cheapness and low quality, but over time
their quality initiatives began to be successful, with Japan achieving very high levels of quality in products from
the 1970s onward. For example, Japanese cars regularly top the J.D. Power customer satisfaction ratings. In
the 1980s Deming was asked by Ford Motor Company to start a quality initiative after they realized that they
were falling behind Japanese manufacturers. A number of highly successful quality initiatives have been
invented by the Japanese (see for example on this page: Genichi Taguchi, QFD, Toyota Production System.
Many of the methods not only provide techniques but also have associated quality culture (i.e. people factors).
These methods are now adopted by the same western countries that decades earlier derided Japanese
methods.
Customers recognize that quality is an important attribute in products and services. Suppliers recognize that
quality can be an important differentiator between their own offerings and those of competitors (quality
differentiation is also called the quality gap). In the past two decades this quality gap has been greatly reduced
between competitive products and services. This is partly due to the contracting (also called outsourcing) of
manufacture to countries like India and China, as well internationalization of trade and competition. These
countries amongst many others have raised their own standards of quality in order to meet International
standards and customer demands. The ISO 9000 series of standards are probably the best known International
standards for quality management.
There are a huge number of books available on quality management. In recent times some themes have
become more significant including quality culture, the importance of knowledge management, and the role of
leadership in promoting and achieving high quality. Disciplines like systems thinking are bringing more holistic
approaches to quality so that people, process and products are considered together rather than independent
factors in quality management.
The influence of quality thinking has spread to non-traditional applications outside of walls of manufacturing,
extending into service sectors and into areas such as sales, marketing and customer service.
Principles
The International Standard for Quality management (ISO 9001:2008) adopts a number of management
principles that can be used by top management to guide their organizations towards improved performance.
The principles include:
Customer focus
Since the organizations depend on their customers, therefore they should understand current and future
customer needs, should meet customer requirements and try to exceed the expectations of customers. An
organization attains customer focus when all people in the organization know both the internal and external
customers and also what customer requirements must be met to ensure that both the internal and external
customers are satisfied.
Leadership
Leaders of an organization establish unity of purpose and direction of it. They should go for creation and
maintenance of such an internal environment, in which people can become fully involved in achieving the
organization's quality objective.[
Involvement of people
People at all levels of an organization are the essence of it. Their complete involvement enables their abilities
to be used for the benefit of the organization.
Process approach
The desired result can be achieved when activities and related resources are managed in an organization.
System approach to management
An organization's effectiveness and efficiency in achieving its quality objectives are contributed by identifying,
understanding and managing all interrelated processes as a system.
Continual improvement
One of the permanent quality objectives of an organization should be the continual improvement of its overall
performance.
Factual approach to decision making
Effective decisions are always based on the data analysis and information.
Mutually beneficial supplier relationships
Since an organization and its suppliers are interdependent, therefore a mutually beneficial relationship between
them increases the ability of both to add value.
These eight principles form the basis for the quality management system standard ISO 9001:2008.
Kaizen
Kaizen , Japanese for "improvement", or "change for the better" refers to philosophy or practices that focus
upon continuous improvement of processes in manufacturing, engineering, and business management. It has
been applied in healthcare, psychotherapy, life-coaching, government, banking, and other industries. When
used in the business sense and applied to the workplace, kaizen refers to activities that continually improve all
functions, and involves all employees from the CEO to the assembly line workers. It also applies to processes,
such as purchasing and logistics, By improving standardized activities and processes, kaizen aims to eliminate
waste (see lean manufacturing). Kaizen was first implemented in several Japanese businesses after
the Second World War, influenced in part by American business and quality management teachers who visited
the country. It has since spread throughout the world and is now being implemented in many other venues
besides just business and productivity.

Introduction
The Japanese word "kaizen" simply means "improvement," with no inherent meaning of either "continuous" or
"philosophy" in Japanese dictionaries or in everyday use. The word refers to any improvement, one-time or
continuous, large or small, in the same sense as the mundane English word "improvement". However, given
the common practice in Japan of labeling industrial or business improvement techniques with the word "kaizen"
(for lack of a specific Japanese word meaning "continuous improvement" or "philosophy of improvement"),
especially in the case of oft-emulated practices spearheaded by Toyota, the word Kaizen in English is typically
applied to measures for implementing continuous improvement, or even taken to mean a "Japanese
philosophy" thereof. The discussion below focuses on such interpretations of the word, as frequently used in
the context of modern management discussions.
Kaizen is a daily process, the purpose of which goes beyond simple productivity improvement. It is also a
process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and teaches
people how to perform experiments on their work using the scientific method and how to learn to spot and
eliminate waste in business processes. In all, the process suggests a humanized approach to workers and to
increasing productivity: "The idea is to nurture the company's human resources as much as it is to praise and
encourage participation in kaizen activities. Successful implementation requires "the participation of workers in
the improvement. People at all levels of an organization participate in kaizen, from the CEO down to janitorial
staff, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion
system, small group, or large group. At Toyota, it is usually a local improvement within a workstation or local
area and involves a small group in improving their own work environment and productivity. This group is often
guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role. Kaizen
on a broad, cross-departmental scale in companies, generates total quality management, and frees human
efforts through improving productivity using machines and computing power.
While kaizen (at Toyota) usually delivers small improvements, the culture of continual aligned small
improvements and standardization yields large results in the form of compound productivity improvement. This
philosophy differs from the "command and control" improvement programs of the mid-twentieth century. Kaizen
methodology includes making changes and monitoring results, then adjusting. Large-scale pre-planning and
extensive project scheduling are replaced by smaller experiments, which can be rapidly adapted as new
improvements are suggested.
In modern usage, it is designed to address a particular issue over the course of a week and is referred to as a
"kaizen blitz" or "kaizen event". These are limited in scope, and issues that arise from them are typically used in
later blitzes.
History
After WWII, to help restore Japan, American occupation forces brought in American experts to help with the
rebuilding of Japanese industry while The Civil Communications Section (CCS) developed a Management
Training Program that taught statistical control methods as part of the overall material. This course was
developed and taught by Homer Sarasohn and Charles Protzman in 1949-50. Sarasohn recommended W.
Edwards Deming for further training in Statistical Methods.
The Economic and Scientific Section (ESS) group was also tasked with improving Japanese management skills
and Edgar McVoy was instrumental in bringing Lowell Mellen to Japan to properly install the Training Within
Industry (TWI) programs in 1951.
Prior to the arrival of Mellen in 1951, the ESS group had a training film to introduce the three TWI "J" programs
(Job Instruction, Job Methods and Job Relations)---the film was titled "Improvement in 4 Steps" (Kaizen eno
Yon Dankai). Thus the original introduction of "Kaizen" to Japan. For the pioneering, introduction, and
implementation of Kaizen in Japan, the Emperor of Japan awarded the 2nd Order Medal of the Sacred
Treasure to Dr. Deming in 1960. Consequently, the Union of Japanese Science and Engineering (JUSE)
instituted the annual Deming Prizes for achievement in quality and dependability of products.
On October 18, 1989, JUSE awarded the Deming Prize to Florida Power & Light Co. (FPL), based in the US,
for its exceptional accomplishments in process and quality control management. FPL was the first company
outside Japan to win the Deming Prize.
Implementation
The Toyota Production System is known for kaizen, where all line personnel are expected to stop their moving
production line in case of any abnormality and, along with their supervisor, suggest an improvement to resolve
the abnormality which may initiate a kaizen.
The PDCA cycles
The cycle of kaizen activity can be defined as:

Standardize an operation and activities.

Measure the operation (find cycle time and amount of in-process inventory)

Gauge measurements against requirements

Innovate to meet requirements and increase productivity

Standardize the new, improved operations

Continue cycle ad infinitum
This is also known as the Shewhart cycle, Deming cycle, or PDCA. Other techniques used in conjunction with
PDCA include 5 Whys, which is a form of root cause analysis in which the user asks "why" to a problem and
finds an answer five successive times. There are normally a series of root causes stemming from one problem,
and they can be visualized using fishbone diagrams or tables.
Masaaki Imai made the term famous in his book Kaizen: The Key to Japan's Competitive Success.
Apart from business applications of the method, both Anthony Robbins and Robert Maurer have popularized
the kaizen principles into personal development principles. In the book One Small Step Can Change Your life:
The Kaizen Way, and CD set The Kaizen Way to Success, Maurer looks at how individuals can take a kaizen
approach in both their personal and professional lives.
In the Toyota Way Fieldbook, Liker and Meier discuss the kaizen blitz and kaizen burst (or kaizen event)
approaches to continuous improvement. A kaizen blitz, or rapid improvement, is a focused activity on a
particular process or activity. The basic concept is to identify and quickly remove waste. Another approach is
that of the kaizen burst, a specific kaizen activity on a particular process in thevalue stream.[14]
The five main elements of kaizen

Management teamwork

Increased labor responsibilities

Increased management morale

Quality circles

Management suggestions for labor improvement
Six Sigma
Six Sigma is a set of tools and strategies for process improvement originally developed by Motorola in 1986.
Six Sigma became well known after Jack Welch made it a central focus of his business strategy at General
Electric in 1995, and today it is used in different sectors of industry.
Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects
(errors) and
minimizing variability in manufacturing and business processes.[5] It uses a set of quality
management methods, including statistical methods, and creates a special infrastructure of people within the
organization ("Champions", "Black Belts", "Green Belts", "Orange Belts", etc.) who are experts in these very
complex methods.[5] Each Six Sigma project carried out within an organization follows a defined sequence of
steps and has quantified financial targets (cost reduction and/or profit increase).[5]
The term Six Sigma originated from terminology associated with manufacturing, specifically terms associated
with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be
described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A six sigma
process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects
(3.4 defects per million), although, as discussed below, this defect level corresponds to only a 4.5 sigma level.
Motorola set a goal of "six sigma" for all of its manufacturing operations, and this goal became a byword for the
management and engineering practices used to achieve it.

Historical overview
Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects,
but its application was subsequently extended to other types of business processes as well. [6] In Six Sigma, a
defect is defined as any process output that does not meet customer specifications, or that could lead to
creating an output that does not meet customer specifications.[5]
CEO Bob Galvin decided to focus on improving the quality of Motorola products, and found an ally in John F.
Mitchell,[7][8][9] a young engineer on the rise to becoming Chief Engineer. Mitchell was seen as a
demanding,[10][11] hands-on manager who cared for his co-workers[12][13] and insisted on team effort.[14] Mitchell
believed in building quality into the engineering and manufacturing processes as a way of lowering costs and
improving yield.[10] He also favored competition among product lines and distributors as a business discipline to
both reduce costs and to promote quality improvement.[12] Mitchell’s early successes with quality control
appeared with the introduction of a new digital transistorized pager, and the formalization of improvised Mitchell
Quality Tests.[15] He used Shainin Methods and other tests[16] in his operations.[17] John F. Mitchell set the bar
high for his engineers knowing they would respond.[18] By the early 1970s, as John F. Mitchell was on his
ascendancy to General Manager, Communications Division in 1972, Motorola had established itself as second
largest producer of electronic equipment behind IBM,[19] and as the world leader in wireless communication
products, and had been battling Intel and Texas Instruments for the number one slot in Semiconductor sales.
Motorola was also the largest supplier of certain parts and products to Japan's National Telegraph & Telephone
Company, but at the same time, the Japanesewere beginning to erode Motorola's lead in the pager
market.[20] The rapid successes and expansion of the Motorola pager business created by John F. Mitchell, as
cited above, led to competitive deficiencies in quality controls, notwithstanding the "Mitchell Testing."
In the late 1970s, John F. Mitchell was on the ascendancy to being named President & COO in 1980. he was
joined by other senior managers, notably CEO Bob Galvin, Jack Germain,[19][21] and Art Sundry,[14][15][22][23] who
worked in John F. Mitchell's pager organization to set the quality bar ten times higher. Sundry was reputed to
have shouted "our quality stinks"[20] at an organizational meeting attended by Galvin, John F. Mitchell and other
senior executives; and Sundry got to keep his job.[20] But most importantly, the breakthroughs occurred when it
was recognized that intensified focus and improved measurements, data collection, and more disciplined
statistical approaches had to be applied to the causes of variance. [23][24][25] John F. Mitchell's untiring
efforts,[10][26] and support from Motorola engineers[14] and senior management, prevailed. They brought
Japanese quality control methods back to the United States, [27] and resulted in a significant and permanent
change in culture at Motorola. "We ought to be better than we are," said Germain, director of Quality
Improvement.[20] The culmination of Motorola quality engineering efforts occurred in 1986, with the help of an
outside quality control consultant, Bill Smith,[28][29][30][31] who joined Motorola when the Motorola University and
Six-Sigma Institute[27] was founded. Two years later, in 1988, Motorola received the coveted Malcolm Baldrige
National Quality Award[32] which is given by the United States Congress.
Later, the Six Sigma processes were adopted at the General Electric Corporation. Jack Welch said: "Six Sigma
changed the DNA of GE."[23][33] The Six Sigma process requires 99.99967% error free processes and products,
(or 3.4 parts per million defects or less).[20]Without the Six Sigma process controls, it may not have been
possible for John F. Mitchell to launch the Iridium satellite constellation, one of the most complex projects
undertaken by a private company, which involved some 25,000 electronic components, [34] and took 11 years to
develop and implement at a cost of $5 billion.[34] Six Sigma processes resulted in $16–17 billion in savings to
Motorola as of 2006.[23][35] Over a thousand books have been written about Six Sigma,[23] with over five hundred
published since 2009.[4]
Six Sigma Doctrine
Like its predecessors, Six Sigma doctrine asserts that:

Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of
vital importance to business success.

Manufacturing and business processes have characteristics that can be measured, analyzed, improved
and controlled.

Achieving sustained quality improvement requires commitment from the entire organization, particularly
from top-level management.
Features that set Six Sigma apart from previous quality improvement initiatives include:

A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. An
increased emphasis on strong and passionate management leadership and support.

A special infrastructure of "Champions", "Master Black Belts", "Black Belts", "Green Belts", etc. to lead
and implement the Six Sigma approach.

A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather
than assumptions and guesswork.
The term "Six Sigma" comes from a field of statistics known as process capability studies. Originally, it referred
to the ability of manufacturing processes to produce a very high proportion of output within specification.
Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect
levels below 3.4 defects per million opportunities (DPMO). Six Sigma's implicit goal is to improve all processes
to that level of quality or better.
Six Sigma is a registered service mark and trademark of Motorola Inc. As of 2006 Motorola reported over
US$17 billion in savings from Six Sigma. Other early adopters of Six Sigma who achieved well-publicized
success
include Honeywell (previously
known
as
AlliedSignal)
and General
Electric,
where Jack
Welch introduced the method. By the late 1990s, about two-thirds of the Fortune 500organizations had begun
Six Sigma initiatives with the aim of reducing costs and improving quality.
In recent years, some practitioners have combined Six Sigma ideas with lean manufacturing to create a
methodology named Lean Six Sigma. The Lean Six Sigma methodology views lean manufacturing, which
addresses process flow and waste issues, and Six Sigma, with its focus on variation and design, as
complementary disciplines aimed at promoting "business and operational excellence" .Companies such as IBM
and Sandia National Laboratories use Lean Six Sigma to focus transformation efforts not just on efficiency but
also on growth. It serves as a foundation for innovation throughout the organization, from manufacturing and
software development to sales and service delivery functions.
Methods
Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-Check-Act Cycle. These
methodologies, composed of five phases each, bear the acronyms DMAIC and DMADV.[41]

DMAIC is used for projects aimed at improving an existing business process. [41] DMAIC is pronounced as
"duh-may-ick" (<ˌdʌ ˈmeɪ ɪk>).

DMADV is used for projects aimed at creating new product or process designs.[41] DMADV is pronounced
as "duh-mad-vee" (<ˌdʌ ˈmæd vi>).
DMAIC
The DMAIC project methodology has five phases:

Define the problem, the voice of the customer, and the project goals, specifically.

Measure key aspects of the current process and collect relevant data.

Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships
are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under
investigation.

Improve or optimize the current process based upon data analysis using techniques such as design of
experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set
up pilot runs to establish process capability.

Control the future state process to ensure that any deviations from target are corrected before they result
in defects. Implementcontrol systems such as statistical process control, production boards, visual
workplaces, and continuously monitor the process.
Some organizations add a Recognize step at the beginning, which is to recognize the right problem to work on,
thus yielding an RDMAIC methodology.[43]
DMADV or DFSS
The DMADV project methodology, known as DFSS ("Design For Six Sigma"),[41] features five phases:

Define design goals that are consistent with customer demands and the enterprise strategy.

Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production
process capability, and risks.

Analyze to develop and design alternatives, create a high-level design and evaluate design capability to
select the best design.

Design details, optimize the design, and plan for design verification. This phase may require simulations.

Verify the design, set up pilot runs, implement the production process and hand it over to the process
owner(s).
Quality management tools and methods used in Six Sigma
Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many established qualitymanagement tools that are also used outside Six Sigma. The following table shows an overview of the main
methods used.

5 Whys

Pareto analysis

Analysis of variance

Pareto chart

ANOVA Gauge R&R

Pick chart

Axiomatic design

Process capability

Business Process Mapping

Quality Function Deployment (QFD)

Cause & effects diagram (also known as fishbone or Ishikawa 
Quantitative
diagram)
Feedback Management (EFM) systems
marketing
research through
use
o

Check sheet

Regression analysis

Chi-squared test of independence and fits

Rolled throughput yield

Control chart

Root cause analysis

Correlation

Run charts

Cost-benefit analysis

Scatter diagram

CTQ tree

SIPOC analysis (Suppliers, Inputs, Process, Outputs,Custo

Design of experiments

Stratification

Failure mode and effects analysis (FMEA)

Taguchi methods

General linear model

Taguchi Loss Function

Histograms

TRIZ
Implementation roles
One key innovation of Six Sigma involves the "professionalizing" of quality management functions. Prior to Six
Sigma, quality management in practice was largely relegated to the production floor and to statisticians in a
separate quality department. Formal Six Sigma programs adopt a ranking terminology (similar to some martial
arts systems) to define a hierarchy (and career path) that cuts across all business functions.
Six Sigma identifies several key roles for its successful implementation. [44]

Executive Leadership includes the CEO and other members of top management. They are responsible for
setting up a vision for Six Sigma implementation. They also empower the other role holders with the
freedom and resources to explore new ideas for breakthrough improvements.

Champions take responsibility for Six Sigma implementation across the organization in an integrated
manner. The Executive Leadership draws them from upper management. Champions also act as mentors
to Black Belts.

Master Black Belts, identified by champions, act as in-house coaches on Six Sigma. They devote 100% of
their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from
statistical tasks, they spend their time on ensuring consistent application of Six Sigma across various
functions and departments.

Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They
devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas
Champions and Master Black Belts focus on identifying projects/functions for Six Sigma.

Green Belts are the employees who take up Six Sigma implementation along with their other job
responsibilities, operating under the guidance of Black Belts.
Some organizations use additional belt colours, such as Yellow Belts, for employees that have basic training in
Six Sigma tools and generally participate in projects and 'white belts' for those locally trained in the concepts
but do not participate in the project team.
Certification
Corporations such as early Six Sigma pioneers General Electric and Motorola developed certification programs
as part of their Six Sigma implementation, verifying individuals' command of the Six Sigma methods at the
relevant skill level (Green Belt, Black Belt etc.). Following this approach, many organizations in the 1990s
started offering Six Sigma certifications to their employees. Criteria for Green Belt and Black Belt certification
vary; some companies simply require participation in a course and a Six Sigma project. There is no standard
certification body, and different certification services are offered by various quality associations and other
providers against a fee. The American Society for Quality for example requires Black Belt applicants to pass a
written exam and to provide a signed affidavit stating that they have completed two projects, or one project
combined with three years' practical experience in the body of knowledge. The International Quality Federation
offers an online certification exam that organizations can use for their internal certification programs; it is
statistically more demanding than the ASQ certification. Other providers offering certification services include
the Juran Institute, Six Sigma Qualtec, Air Academy Associates, Management and Strategy Institute, IASSC.
EmbryInc.com, and many others.
University Certification Programs
In addition to certification service provider institutes, there are Six Sigma certification programs offered through
a few four-year colleges and universities. These programs provide the same courses verifying individuals'
command of the Six Sigma methods at the relevant skill level from Green Belt to Black Belt etc.

Boston University[50]

Cal State Fullerton[51]

Emory University[52]

George Washington University[53]

Kent State University[54]

Ohio State University[55]

Rutgers University[56]

University of Texas[57]

Villanova University[58]
Origin and meaning of the term "six sigma process"
The term "six sigma process" comes from the notion that if one has six standard deviations between the
process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meet
specifications.[36] This is based on the calculation method employed in process capability studies.
Capability studies measure the number of standard deviations between the process mean and the nearest
specification limit in sigma units. As process standard deviation goes up, or the mean of the process moves
away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest
specification limit, decreasing the sigma number and increasing the likelihood of items outside specification. [36]
Graph of the normal distribution, which underlies the statistical assumptions of the Six Sigma model. The Greek letter σ
(sigma) marks the distance on the horizontal axis between the mean, µ, and the curve's inflection point. The greater this
distance, the greater is the spread of values encountered. For the green curve shown above, µ = 0 and σ = 1. The upper
and lower specification limits (USL and LSL, respectively) are at a distance of 6σ from the mean. Because of the properties
of the normal distribution, values lying that far away from the mean are extremely unlikely. Even if the mean were to move
right or left by 1.5σ at some point in the future (1.5 sigma shift, coloured red and blue), there is still a good safety cushion.
This is why Six Sigma aims to have processes where the mean is at least 6σ away from the nearest specification limit.
Role of the 1.5 sigma shift
Experience has shown that processes usually do not perform as well in the long term as they do in the short
term. As a result, the number of sigmas that will fit between the process mean and the nearest specification
limit may well drop over time, compared to an initial short-term study. To account for this real-life increase in
process variation over time, an empirically-based 1.5 sigma shift is introduced into the calculation. According to
this idea, a process that fits 6 sigma between the process mean and the nearest specification limit in a shortterm study will in the long term fit only 4.5 sigma – either because the process mean will move over time, or
because the long-term standard deviation of the process will be greater than that observed in the short term, or
both.
Hence the widely accepted definition of a six sigma process is a process that produces 3.4 defective parts per
million opportunities(DPMO). This is based on the fact that a process that is normally distributed will have 3.4
parts per million beyond a point that is 4.5 standard deviations above or below the mean (one-sided capability
study). So the 3.4 DPMO of a six sigma process in fact corresponds to 4.5 sigma, namely 6 sigma minus the
1.5-sigma shift introduced to account for long-term variation. This allows for the fact that special causes may
result in a deterioration in process performance over time, and is designed to prevent underestimation of the
defect levels likely to be encountered in real-life operation.
Sigma levels
A control chart depicting a process that experienced a 1.5 sigma drift in the process mean toward the upper specification
limit starting at midnight. Control charts are used to maintain 6 sigma quality by signaling when quality professionals should
investigate a process to find and eliminate special-cause variation.
See also: Three sigma rule
The table below gives long-term DPMO values corresponding to various short-term sigma levels.
It must be understood that these figures assume that the process mean will shift by 1.5 sigma toward the side
with the critical specification limit. In other words, they assume that after the initial study determining the shortterm sigma level, the long-term Cpk valuewill turn out to be 0.5 less than the short-term Cpk value. So, for
example, the DPMO figure given for 1 sigma assumes that the long-term process mean will be 0.5
sigma beyond the specification limit (Cpk = –0.17), rather than 1 sigma within it, as it was in the short-term study
(Cpk = 0.33). Note that the defect percentages indicate only defects exceeding the specification limit to which
the process mean is nearest. Defects beyond the far specification limit are not included in the percentages.
Sigma level DPMO
Percent defective Percentage yield Short-term Cpk Long-term Cpk
1
691,462 69%
31%
0.33
–0.17
2
308,538 31%
69%
0.67
0.17
3
66,807 6.7%
93.3%
1.00
0.5
4
6,210
0.62%
99.38%
1.33
0.83
5
233
0.023%
99.977%
1.67
1.17
6
3.4
0.00034%
99.99966%
2.00
1.5
7
0.019
0.0000019%
99.9999981%
2.33
1.83
Software used for Six Sigma
Statistics Analysis tools with comparable functions

Arena

ARIS Six Sigma

Bonita Open Solution BPMN2 standard and KPIs for statistic monitoring

JMP

Mathematica

MATLAB

Microsoft Visio

Minitab

R language (The R Project for Statistical Computing[62]). Some contributed packages at CRAN contain
specific tools for Six Sigma: SixSigma,[63] qualityTools,[64] qcc[65] and IQCC.[66]

SDI Tools

SigmaXL

Software AG webMethods BPM Suite

SPC XL

STATA

Statgraphics

STATISTICA
Application
Main article: List of Six Sigma companies
Six Sigma mostly finds application in large organizations. [67] An important factor in the spread of Six Sigma was
GE's 1998 announcement of $350 million in savings thanks to Six Sigma, a figure that later grew to more than
$1 billion.[67] According to industry consultants like Thomas Pyzdek and John Kullmann, companies with fewer
than 500 employees are less suited to Six Sigma implementation, or need to adapt the standard approach to
make it work for them.[67] This is due both to the infrastructure of Black Belts that Six Sigma requires, and to the
fact that large organizations present more opportunities for the kinds of improvements Six Sigma is suited to
bringing about.[67]
In healthcare
Six Sigma strategies were initially applied to the healthcare industry in March 1998. The Commonwealth Health
Corporation (CHC) was the first health care organization to successfully implement the efficient strategies of
Six Sigma.[68] Substantial financial benefits were claimed, for example in their radiology department throughout
improved by 33% and costs per radiology procedure decreased by 21.5%;[69] Six Sigma has subsequently been
adopted in other hospitals around the world.[70][71]
Critics of Six Sigma believe that while Six Sigma methods may have translated fluidly in a manufacturing
setting, they would not have the same result in service-oriented businesses, such as the health industry.[72]
Criticism
Lack of originality
Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of quality improvement",
stating that "there is nothing new there. It includes what we used to call facilitators. They've adopted more
flamboyant terms, like belts with different colors. I think that concept has merit to set apart, to create specialists
who can be very helpful. Again, that's not a new idea. The American Society for Quality long ago established
certificates, such as for reliability engineers."[73]
Role of consultants
The use of "Black Belts" as itinerant change agents has (controversially) fostered an industry of training and
certification. Critics argue there is overselling of Six Sigma by too great a number of consulting firms, many of
which claim expertise in Six Sigma when they have only a rudimentary understanding of the tools and
techniques involved.[5]
Potential negative effects
A Fortune article stated that "of 58 large companies that have announced Six Sigma programs, 91 percent
have trailed the S&P 500since". The statement was attributed to "an analysis by Charles Holland of consulting
firm Qualpro (which espouses a competing quality-improvement process)".[74] The summary of the article is that
Six Sigma is effective at what it is intended to do, but that it is "narrowly designed to fix an existing process"
and does not help in "coming up with new products or disruptive technologies." Advocates of Six Sigma have
argued that many of these claims are in error or ill-informed.[75][76]
A more direct criticism is the "rigid" nature of Six Sigma with its over-reliance on methods and tools. In most
cases, more attention is paid to reducing variation and searching for any significant factors and less attention is
paid to developing robustness in the first place (which can altogether eliminate the need for reducing
variation).[77] The extensive reliance on significance testing and use of multiple regression techniques increases
the risk of making commonly-unknown types of statistical errors or mistakes. Another serious consequence of
Six Sigma's array of P-value misconceptions is the false belief that the probability of a conclusion being in error
can be calculated from the data in a single experiment without reference to external evidence or the plausibility
of the underlying mechanism.[78] Since significance tests were first popularized many objections have been
voiced by prominent and respected statisticians. The volume of criticism and rebuttal has filled books with
language seldom used in the scholarly debate of a dry subject.[79][80][81][82] Much of the first criticism was already
published more than 40 years ago. Refer to: Statistical hypothesis testing#Criticism for details.
Articles featuring critics have appeared in the November–December 2006 issue of USA Army Logistician
regarding Six-Sigma: "The dangers of a single paradigmatic orientation (in this case, that of technical
rationality)
can
blind
us
to
values
associated
with double-loop
learning and
the learning
organization, organization
adaptability,
workforce
creativity
and
development,
humanizing
the
workplace,cultural awareness, and strategy making."[83]
A BusinessWeek article says that James McNerney's introduction of Six Sigma at 3M had the effect of stifling
creativity and reports its removal from the research function. It cites two Wharton School professors who say
that Six Sigma leads to incremental innovation at the expense of blue skies research.[84] This phenomenon is
further explored in the book Going Lean, which describes a related approach known as lean dynamics and
provides data to show that Ford's "6 Sigma" program did little to change its fortunes.[85]
Lack of systematic documentation
One criticism voiced by Yasar Jarrar and Andy Neely from the Cranfield School of Management's Centre for
Business Performance is that while Six Sigma is a powerful approach, it can also unduly dominate an
organization's culture; and they add that much of the Six Sigma literature lacks academic rigor:
One final criticism, probably more to the Six Sigma literature than concepts, relates to the evidence for Six
Sigma’s success. So far, documented case studies using the Six Sigma methods are presented as the
strongest evidence for its success. However, looking at these documented cases, and apart from a few that are
detailed from the experience of leading organizations like GE and Motorola, most cases are not documented in
a systemic or academic manner. In fact, the majority are case studies illustrated on websites, and are, at best,
sketchy. They provide no mention of any specific Six Sigma methods that were used to resolve the problems. It
has been argued that by relying on the Six Sigma criteria, management is lulled into the idea that something is
being done about quality, whereas any resulting improvement is accidental (Latzko 1995). Thus, when looking
at the evidence put forward for Six Sigma success, mostly by consultants and people with vested interests, the
question that begs to be asked is: are we making a true improvement with Six Sigma methods or just getting
skilled at telling stories? Everyone seems to believe that we are making true improvements, but there is some
way to go to document these empirically and clarify the causal relations.[77]
Based on arbitrary standards
While 3.4 defects per million opportunities might work well for certain products/processes, it might not operate
optimally or cost effectively for others. A pacemaker process might need higher standards, for example,
whereas a direct mail advertising campaign might need lower standards. The basis and justification for
choosing six (as opposed to five or seven, for example) as the number of standard deviations, together with the
1.5 sigma shift is not clearly explained. In addition, the Six Sigma model assumes that the process data always
conform to the normal distribution. The calculation of defect rates for situations where the normal distribution
model does not apply is not properly addressed in the current Six Sigma literature. This particularly counts for
reliability-related defects and other problems that are not time invariant. The IEC, ARP, EN-ISO, DIN and other
(inter)national standardization organizations have not created standards for the Six Sigma process. This might
be the reason that it became a dominant domain of consultants (see critics above).[5]
Criticism of the 1.5 sigma shift
The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because of its arbitrary
nature.[86] Its universal applicability is seen as doubtful.[5]
The 1.5 sigma shift has also become contentious because it results in stated "sigma levels" that reflect shortterm rather than long-term performance: a process that has long-term defect levels corresponding to 4.5 sigma
performance is, by Six Sigma convention, described as a "six sigma process." [36][87] The accepted Six Sigma
scoring system thus cannot be equated to actual normal distribution probabilities for the stated number of
standard deviations, and this has been a key bone of contention over how Six Sigma measures are
defined.[87] The fact that it is rarely explained that a "6 sigma" process will have long-term defect rates
corresponding to 4.5 sigma performance rather than actual 6 sigma performance has led several
commentators to express the opinion that Six Sigma is a confidence trick.[36]
Six Sigma for ROI
Six Sigma for ROI (SSROI) is a practice for increasing ROI through Six Sigma by applying Six Sigma
best practices.
Six Sigma for ROI deals with current limitation of Return on Investment (ROI) measurement,Six Sigma,
and the Project Management Office (PMO). Six Sigma benefits are well known, but end due to project
entropy. ROI measurement limitations are related to intangibles. PMO business value limitations are
related to intangible administrative benefits. Six Sigma for ROI creates PMO accountability to ROI by
allowing executives to promote the value of their portfolio by aligning corporate resources to the right
initiatives in their corporate portfolio.
see. RedPost V Orage for example of dissulsionment and non-improvement of quality.
Lean Six Sigma
Lean Six Sigma is a synergized managerial concept of Lean and Six Sigma that results in the elimination of
the seven kinds of wastes/muda (classified as Transportation, Inventory, Motion, Waiting, Overproduction,
Over-Processing, and Defects, ) and provision of goods and service at a rate of 3.4 defects per million
opportunities (DPMO) . A mnemonic for the wastes is "TIMWOOD".
Lean Six Sigma Organization Structure
The Lean Six Sigma concepts were first published in the book titled "Lean Six Sigma: Combining Six Sigma
with Lean Speed" authored by Michael George in 2002. Lean Six Sigma utilizes the DMAIC phases similar to
that of Six Sigma. The Lean Six Sigma projects comprise the Lean's waste elimination projects and the Six
Sigma projects based on the critical to quality characteristics. The DMAIC toolkit of Lean Six Sigma comprises
all the Lean and Six Sigma tools. The training for Lean Six Sigma is provided through the belt based training
system similar to that of Six Sigma. The belt personnel are designated as White Belts, Yellow Belts, Green
Belts, Black Belts and Master Black Belts, similar to Karate.
Lean manufacturing
Lean manufacturing, lean enterprise, or lean production, often simply, "Lean," is a production practice that
considers the expenditure of resources for any goal other than the creation of value for the end customer to be
wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a
product or service, "value" is defined as any action or process that a customer would be willing to pay for.
Essentially, lean is centered on preserving value with less work. Lean manufacturing is a management
philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also
prevalent) and identified as "Lean" only in the 1990s.[1][2] TPS is renowned for its focus on reduction of the
original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this
is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker,[3] has
focused attention on how it has achieved this success.
Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it is a present-day
instance of the recurring theme in human history toward increasing efficiency, decreasing waste, and using
empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas. As such, it is a
chapter in the larger narrative that also includes such ideas as the folk wisdom of thrift, time and motion
study, Taylorism, the Efficiency Movement, and Fordism. Lean manufacturing is often seen as a more refined
version of earlier efficiency efforts, building upon the work of earlier leaders such as Taylor or Ford, and
learning from their mistakes.
Contents
[hide]

1 Overview
o

1.1 Origins
2 A brief history of waste reduction thinking
o
2.1 Pre-20th century
o
2.2 20th century
o
2.3 Ford starts the ball rolling
o
2.4 Toyota develops TPS

3 Types of waste

4 Lean implementation develops from TPS
o
4.1 An example program
o
4.2 Lean leadership
o
4.3 Differences from TPS

5 Lean services

6 Lean goals and strategy

7 Steps to achieve lean systems
o
7.1 Design a simple manufacturing system
o
7.2 There is always room for improvement
o
7.3 Continuously improve
o
7.4 Measure

8 Implementation pitfalls

9 See also

10 References

11 Further reading
Overview
Lean principles are derived from the Japanese manufacturing industry. The term was first coined by John
Krafcik in his 1988 article, "Triumph of the Lean Production System," based on his master's thesis at the MIT
Sloan School of Management.[4] Krafcik had been a quality engineer in the Toyota-GM NUMMI joint venture in
California before coming to MIT for MBA studies. Krafcik's research was continued by the International Motor
Vehicle Program (IMVP) at MIT, which produced the international best-seller book co-authored by Jim
Womack, Daniel Jones, and Daniel Roos called The Machine That Changed the World.[1] A complete historical
account of the IMVP and how the term "lean" was coined is given by Holweg (2007).[2]
For many, Lean is the set of "tools" that assist in the identification and steady elimination of waste (muda). As
waste is eliminated quality improves while production time and cost are reduced. Examples of such "tools"
are Value Stream Mapping, Five S, Kanban (pull systems), and poka-yoke (error-proofing).
There is a second approach to Lean Manufacturing, which is promoted by Toyota, in which the focus is upon
improving the "flow" or smoothness of work, thereby steadily eliminating mura ("unevenness") through the
system and not upon 'waste reduction' per se. Techniques to improve flow include production leveling, "pull"
production (by means of kanban) and the Heijunka box. This is a fundamentally different approach from most
improvement methodologies, which may partially account for its lack of popularity.[citation needed]
The difference between these two approaches is not the goal itself, but rather the prime approach to achieving
it. The implementation of smooth flow exposes quality problems that already existed, and thus waste reduction
naturally happens as a consequence. The advantage claimed for this approach is that it naturally takes a
system-wide perspective, whereas a waste focus sometimes wrongly assumes this perspective.
Both Lean and TPS can be seen as a loosely connected set of potentially competing principles whose goal is
cost reduction by the elimination of waste.[5] These principles include: Pull processing, Perfect first-time quality,
Waste minimization, Continuous improvement, Flexibility, Building and maintaining a long term relationship with
suppliers, Autonomation, Load leveling and Production flow and Visual control. The disconnected nature of
some of these principles perhaps springs from the fact that the TPS has grown pragmatically since 1948 as it
responded to the problems it saw within its own production facilities. Thus what one sees today is the result of
a 'need' driven learning to improve where each step has built on previous ideas and not something based upon
a theoretical framework.
Toyota's view is that the main method of Lean is not the tools, but the reduction of three types of
waste: muda ("non-value-adding work"), muri ("overburden"), and mura ("unevenness"), to expose problems
systematically and to use the tools where the ideal cannot be achieved. From this perspective, the tools
are workarounds adapted to different situations, which explains any apparent incoherence of the principles
above.
Origins
Also known as the flexible mass production, the TPS has two pillar concepts: Just-in-time (JIT) or "flow", and
"autonomation" (smart automation).[6] Adherents of the Toyota approach would say that the smooth flowing
delivery of value achieves all the other improvements as side-effects. If production flows perfectly then there is
no inventory; if customer valued features are the only ones produced, then product design is simplified and
effort is only expended on features the customer values. The other of the two TPS pillars is the very human
aspect of autonomation, whereby automation is achieved with a human touch. [7] In this instance, the "human
touch" means to automate so that the machines/systems are designed to aid humans in focusing on what the
humans do best. This aims, for example, to give the machines enough intelligence to recognize when they are
working abnormally and flag this for human attention. Thus, in this case, humans would not have to monitor
normal production and only have to focus on abnormal, or fault, conditions.
Lean implementation is therefore focused on getting the right things to the right place at the right time in the
right quantity to achieve perfect work flow, while minimizing waste and being flexible and able to change. These
concepts of flexibility and change are principally required to allow production leveling, using tools like SMED,
but have their analogues in other processes such as research and development (R&D). The flexibility and
ability to change are within bounds and not open-ended, and therefore often not expensive capability
requirements. More importantly, all of these concepts have to be understood, appreciated, and embraced by
the actual employees who build the products and therefore own the processes that deliver the value. The
cultural and managerial aspects of Lean are possibly more important than the actual tools or methodologies of
production itself. There are many examples of Lean tool implementation without sustained benefit, and these
are often blamed on weak understanding of Lean throughout the whole organization.
Lean aims to make the work simple enough to understand, do and manage. To achieve these three goals at
once there is a belief held by some that Toyota's mentoring process,(loosely called Senpai and Kohai, which is
Japanese for senior and junior), is one of the best ways to foster Lean Thinking up and down the organizational
structure. This is the process undertaken by Toyota as it helps its suppliers improve their own production. The
closest equivalent to Toyota's mentoring process is the concept of "Lean Sensei," which encourages
companies, organizations, and teams to seek outside, third-party experts, who can provide unbiased advice
and coaching, (see Womack et al., Lean Thinking, 1998).
There have been recent attempts to link Lean to Service Management, perhaps one of the most recent and
spectacular of which was London Heathrow Airport's Terminal 5. This particular case provides a graphic
example of how care should be taken in translating successful practices from one context (production) to
another (services), expecting the same results. In this case the public perception is more of a spectacular
failure, than a spectacular success, resulting in potentially an unfair tainting of the lean manufacturing
philosophies.[8]
A brief history of waste reduction thinking
The avoidance of waste has a long history. In fact many of the concepts now seen as key to lean have been
discovered and rediscovered over the years by others in their search to reduce waste. Lean manufacturing
builds on their experiences, including learning from their mistakes.
Most of the basic goals of lean manufacturing are common sense, and documented examples can be seen as
early as Benjamin Franklin. Poor Richard's Almanac says of wasted time, "He that idly loses 5s. worth of time,
loses 5s., and might as prudently throw 5s. into the river." He added that avoiding unnecessary costs could be
more profitable than increasing sales: "A penny saved is two pence clear. A pin a-day is a groat a-year. Save
and have."
Again Franklin's The Way to Wealth says the following about carrying unnecessary inventory. "You call them
goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap,
and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be
dear to you. Remember what Poor Richard says, 'Buy what thou hast no need of, and ere long thou shalt sell
thy necessaries.' In another place he says, 'Many have been ruined by buying good penny worths'." Henry
Ford cited Franklin as a major influence on his own business practices, which included Just-intime manufacturing.
The concept of waste being built into jobs and then taken for granted was noticed by motion efficiency
expert Frank Gilbreth, who saw that masons bent over to pick up bricks from the ground. The bricklayer was
therefore lowering and raising his entire upper body to pick up a 2.3 kg (5 lb.) brick, and this inefficiency had
been built into the job through long practice. Introduction of a non-stooping scaffold, which delivered the bricks
at waist level, allowed masons to work about three times as quickly, and with less effort.
20th century
Frederick Winslow Taylor, the father of scientific management, introduced what are now called standardization
and best practice deployment. In his Principles of Scientific Management, (1911), Taylor said: "And whenever a
workman proposes an improvement, it should be the policy of the management to make a careful analysis of
the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of
the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to
the old, it should be adopted as the standard for the whole establishment."
Taylor also warned explicitly against cutting piece rates (or, by implication, cutting wages or discharging
workers) when efficiency improvements reduce the need for raw labor: "…after a workman has had the price
per piece of the work he is doing lowered two or three times as a result of his having worked harder and
increased his output, he is likely entirely to lose sight of his employer's side of the case and become imbued
with a grim determination to have no more cuts if soldiering [marking time, just doing what he is told] can
prevent it."
Shigeo Shingo, the best-known exponent of single minute exchange of die (SMED) and error-proofing or pokayoke, cites Principles of Scientific Management as his inspiration.[9]
American industrialists recognized the threat of cheap offshore labor to American workers during the 1910s,
and explicitly stated the goal of what is now called lean manufacturing as a countermeasure. Henry Towne,
past President of the American Society of Mechanical Engineers, wrote in the Foreword to Frederick Winslow
Taylor's Shop Management (1911), "We are justly proud of the high wage rates which prevail throughout our
country, and jealous of any interference with them by the products of the cheaper labor of other countries. To
maintain this condition, to strengthen our control of home markets, and, above all, to broaden our opportunities
in foreign markets where we must compete with the products of other industrial nations, we should welcome
and encourage every influence tending to increase the efficiency of our productive processes."
Ford starts the ball rolling
Henry Ford continued this focus on waste while developing his mass assembly manufacturing system. Charles
Buxton Going wrote in 1915:
Ford's success has startled the country, almost the world, financially, industrially, mechanically. It
exhibits in higher degree than most persons would have thought possible the seemingly contradictory
requirements of true efficiency, which are: constant increase of quality, great increase of pay to the
workers, repeated reduction in cost to the consumer. And with these appears, as at once cause and
effect, an absolutely incredible enlargement of output reaching something like one hundredfold in less
than ten years, and an enormous profit to the manufacturer.[10]
Ford, in My Life and Work (1922),[11] provided a single-paragraph description that encompasses the entire
concept of waste:
I believe that the average farmer puts to a really useful purpose only about 5%. of the energy he
expends.... Not only is everything done by hand, but seldom is a thought given to a logical
arrangement. A farmer doing his chores will walk up and down a rickety ladder a dozen times. He will
carry water for years instead of putting in a few lengths of pipe. His whole idea, when there is extra
work to do, is to hire extra men. He thinks of putting money into improvements as an expense.... It is
waste motion— waste effort— that makes farm prices high and profits low.
Poor arrangement of the workplace—a major focus of the modern kaizen—and doing a job
inefficiently out of habit—are major forms of waste even in modern workplaces.
Ford also pointed out how easy it was to overlook material waste. A former employee, Harry Bennett,
wrote:
One day when Mr. Ford and I were together he spotted some rust in the slag that ballasted the right of
way of the D. T. & I [railroad]. This slag had been dumped there from our own furnaces. 'You know,'
Mr. Ford said to me, 'there's iron in that slag. You make the crane crews who put it out there sort it
over, and take it back to the plant.'[12]
In other words, Ford saw the rust and realized that the steel plant was not recovering all of the
iron.
Ford's early success, however, was not sustainable. As James P. Womack and Daniel Jones
pointed out in "Lean Thinking", what Ford accomplished represented the "special case" rather
than a robust lean solution.[13] The major challenge that Ford faced was that his methods were
built for a steady-state environment, rather than for the dynamic conditions firms increasingly face
today.[14] Although his rigid, top-down controls made it possible to hold variation in work activities
down to very low levels, his approach did not respond well to uncertain, dynamic business
conditions; they responded particularly badly to the need for new product innovation. This was
made clear by Ford's precipitous decline when the company was forced to finally introduce a
follow-on to the Model T (see Lean Dynamics).
Design for Manufacture (DFM) also is a Ford concept. Ford said in My Life and Work (the same
reference describes just in time manufacturing very explicitly):
...entirely useless parts [may be]—a shoe, a dress, a house, a piece of machinery, a railroad, a
steamship, an airplane. As we cut out useless parts and simplify necessary ones, we also cut down
the cost of making. ... But also it is to be remembered that all the parts are designed so that they can
be most easily made.
This standardization of parts was central to Ford's concept of mass production, and the
manufacturing
"tolerances",
or
upper
and
lower
dimensional
limits
that
ensured interchangeability of parts became widely applied across manufacturing. Decades
later, the renowned Japanese quality guru, Genichi Taguchi, demonstrated that this "goal
post" method of measuring was inadequate. He showed that "loss" in capabilities did not
begin only after exceeding these tolerances, but increased as described by the Taguchi Loss
Function at any condition exceeding the nominal condition. This became an important part
of W. Edwards Deming's quality movement of the 1980s, later helping to develop improved
understanding of key areas of focus such as cycle time variation in improving manufacturing
quality and efficiencies in aerospace and other industries.
While Ford is renowned for his production line it is often not recognized how much effort he
put into removing the fitters' work to make the production line possible. Until Ford, a car's
components always had to be fitted or reshaped by a skilled engineer at the point of use, so
that they would connect properly. By enforcing very strict specification and quality criteria on
component manufacture, he eliminated this work almost entirely, reducing manufacturing
effort by between 60-90%.[15] However, Ford's mass production system failed to incorporate
the notion of "pull production" and thus often suffered from over-production.
Toyota develops TPS
Toyota's development of ideas that later became Lean may have started at the turn of the
20th century with Sakichi Toyoda, in a textile factory with looms that stopped themselves
when a thread broke, this became the seed of autonomation and Jidoka. Toyota's journey
with JIT may have started back in 1934 when it moved from textiles to produce its first
car. Kiichiro Toyoda, founder of Toyota Motor Corporation, directed the engine casting work
and discovered many problems in their manufacture. He decided he must stop the repairing
of poor quality by intense study of each stage of the process. In 1936, when Toyota won its
first truck contract with the Japanese government, his processes hit new problems and he
developed the "Kaizen" improvement teams.
Levels of demand in the Post War economy of Japan were low and the focus of mass
production on lowest cost per item via economies of scale therefore had little application.
Having visited and seen supermarkets in the USA, Taiichi Ohno recognised the scheduling
of work should not be driven by sales or production targets but by actual sales. Given the
financial situation during this period, over-production had to be avoided and thus the notion
of Pull (build to order rather than target driven Push) came to underpin production
scheduling.
It was with Taiichi Ohno at Toyota that these themes came together. He built on the already
existing internal schools of thought and spread their breadth and use into what has now
become the Toyota Production System (TPS). It is principally from the TPS, but now
including many other sources, that Lean production is developing. Norman Bodek wrote the
following in his foreword to a reprint of Ford's Today and Tomorrow:
I was first introduced to the concepts of just-in-time (JIT) and the Toyota production system in 1980.
Subsequently I had the opportunity to witness its actual application at Toyota on one of our numerous
Japanese study missions. There I met Mr. Taiichi Ohno, the system's creator. When bombarded with
questions from our group on what inspired his thinking, he just laughed and said he learned it all from
Henry Ford's book." The scale, rigor and continuous learning aspects of TPS have made it a core
concept of Lean.
Types of waste
While the elimination of waste may seem like a simple and clear subject it is noticeable
that waste is often very conservatively identified. This then hugely reduces the potential
of such an aim. The elimination of waste is the goal of Lean, and Toyota defined three
broad types of waste: muda, muri and mura; it should be noted that for many Lean
implementations this list shrinks to the first waste type only with corresponding benefits
decrease. To illustrate the state of this thinking Shigeo Shingo observed that only the
last turn of a bolt tightens it—the rest is just movement. This ever finer clarification of
waste is key to establishing distinctions between value-adding activity, waste and nonvalue-adding work.[16] Non-value adding work is waste that must be done under the
present work conditions. One key is to measure, or estimate, the size of these wastes,
to demonstrate the effect of the changes achieved and therefore the movement toward
the goal.
The "flow" (or smoothness) based approach aims to achieve JIT, by removing the
variation caused by work scheduling and thereby provide a driver, rationale or target and
priorities for implementation, using a variety of techniques. The effort to achieve JIT
exposes many quality problems that are hidden by buffer stocks; by forcing smooth flow
of only value-adding steps, these problems become visible and must be dealt with
explicitly.
Muri is all the unreasonable work that management imposes on workers and machines
because of poor organization, such as carrying heavy weights, moving things around,
dangerous tasks, even working significantly faster than usual. It is pushing a person or a
machine beyond its natural limits. This may simply be asking a greater level of
performance from a process than it can handle without taking shortcuts and informally
modifying decision criteria. Unreasonable work is almost always a cause of multiple
variations.
To link these three concepts is simple in TPS and thus Lean. Firstly, muri focuses on the
preparation and planning of the process, or what work can be avoided proactively by
design. Next, mura then focuses on how the work design is implemented and the
elimination of fluctuation at the scheduling or operations level, such as quality and
volume. Muda is then discovered after the process is in place and is dealt with
reactively. It is seen through variation in output. It is the role of management to examine
the muda, in the processes and eliminate the deeper causes by considering the
connections to the muri and mura of the system. The muda and mura inconsistencies
must be fed back to the muri, or planning, stage for the next project.
A typical example of the interplay of these wastes is the corporate behaviour of "making
the numbers" as the end of a reporting period approaches. Demand is raised to 'make
plan,' increasing (mura), when the "numbers" are low, which causes production to try to
squeeze extra capacity from the process, which causes routines and standards to be
modified or stretched. This stretch and improvisation leads to muri-style waste, which
leads to downtime, mistakes and back flows, and waiting, thus the muda of waiting,
correction and movement.
The original seven muda are:

Transport (moving products that are not actually required to perform the processing)

Inventory (all components, work in process and finished product not being
processed)

Motion (people or equipment moving or walking more than is required to perform
the processing)

Waiting (waiting for the next production step)

Overproduction (production ahead of demand)

Over Processing (resulting from poor tool or product design creating activity)

Defects (the effort involved in inspecting for and fixing defects)[17]
Later an eighth waste was defined by Womack et al. (2003); it was described as
manufacturing goods or services that do not meet customer demand or specifications.
Many others have added the "waste of unused human talent" to the original seven
wastes. These wastes were not originally a part of the seven deadly wastes defined by
Taiichi Ohno in TPS, but were found to be useful additions in practice. For a complete
listing of the "old" and "new" wastes see Bicheno and Holweg (2009)[18]
Some of these definitions may seem rather idealistic, but this tough definition is seen as
important and they drove the success of TPS. The clear identification of non-valueadding work, as distinct from wasted work, is critical to identifying the assumptions
behind
the
current
work
process
and
to
challenging
them
in
due
course.[19] Breakthroughs in SMED and other process changing techniques rely upon
clear identification of where untapped opportunities may lie if the processing
assumptions are challenged.
Lean implementation develops from TPS
The discipline required to implement Lean and the disciplines it seems to require are so
often counter-cultural that they have made successful implementation of Lean a major
challenge. Some[20] would say that it was a major challenge in its manufacturing
'heartland' as well. Implementations under the Lean label are numerous and whether
they are Lean and whether any success or failure can be laid at Lean's door is often
debatable. Individual examples of success and failure exist in almost all spheres of
business and activity and therefore cannot be taken as indications of whether Lean is
particularly applicable to a specific sector of activity. It seems clear from the "successes"
that no sector is immune from beneficial possibility.[citation needed]
Lean is about more than just cutting costs in the factory. [21] One crucial insight is that
most costs are assigned when a product is designed, (see Genichi Taguchi). Often an
engineer will specify familiar, safe materials and processes rather than inexpensive,
efficient ones. This reduces project risk, that is, the cost to the engineer, while
increasing financial risks, and decreasing profits. Good organizations develop and
review checklists to review product designs.
Companies must often look beyond the shop-floor to find opportunities for improving
overall company cost and performance. At thesystem engineering level, requirements
are
reviewed
with
marketing
and customer
representatives to
eliminate
those
requirements that are costly. Shared modules may be developed, such as multipurpose
power supplies or shared mechanical components or fasteners. Requirements are
assigned to the cheapest discipline. For example, adjustments may be moved into
software, and measurements away from a mechanical solution to an electronic solution.
Another approach is to choose connection or power-transport methods that are cheap or
that used standardized components that become available in a competitive market.
An example program
In summary, an example of a lean implementation program could be:
With a tools-based approach

Senior
With a muri or flow based approach (as
used in the TPS with suppliers[22]).
management to
agree and discuss their lean



quality problems as you can, as
Management brainstorm to
well as downtime and other
identify project leader and
instability problems, and get the
set objectives
internal scrap acknowledged and
Communicate
plan
its management started.
and

the
the Lean Implementation
continuous
team (5-7 works best, all
using workcells and market
from different departments)
locationswhere

process
as
possible
necessary
variations
as
in
and
the
Introduce standard work and
stabilize the work pace through
Train the Implementation
the system
Team in the various lean

or
operators work cycle
Manufacturing
tools - make a point of
system
avoiding
Appoint members of the
Implementation Team

Make the flow of parts through
Ask for volunteers to form
Lean

Sort out as many of the visible
vision
vision to the workforce



Start pulling work through the
trying to visit other non
system, look at the production
competing businesses that
scheduling and move toward daily
have implemented lean
orders with kanban cards
Select a Pilot Project to

Even out the production flow by
implement – 5S is a good
reducing batch sizes, increase
place to start
delivery frequency internally and
Run
the
pilot
for
if
2–3
learn
mistakes
from
your
externally,
level
internal demand
months - evaluate, review
and
possible

Improve exposed quality issues
using the tools



Roll out pilot to other
Remove some people (or increase
factory areas
quotas) and go through this work
Evaluate results, encourage
again (the Oh No !! moment)
feedback

Stabilize the positive results
by teaching supervisors how
to train the new standards
you've developed with TWI
methodology
(Training
Within Industry)

Once you are satisfied that
you
have
a
program,
habitual
consider
introducing the next lean
tool. Select the one that
gives you the biggest return
for your business.
Lean leadership
The role of the leaders within the organization is the fundamental element of sustaining
the progress of lean thinking. Experienced kaizen members at Toyota, for example,
often bring up the concepts of Senpai, Kohai, and Sensei, because they strongly feel
that transferring of Toyota culture down and across Toyota can only happen when more
experienced Toyota Sensei continuously coach and guide the less experienced lean
champions.
One of the dislocative effects of Lean is in the area of key performance indicators (KPI).
The KPIs by which a plant/facility are judged will often be driving behaviour, because the
KPIs themselves assume a particular approach to the work being done. This can be an
issue where, for example a truly Lean, Fixed Repeating Schedule (FRS) and JIT
approach is adopted, because these KPIs will no longer reflect performance, as the
assumptions on which they are based become invalid. It is a key leadership challenge to
manage the impact of this KPI chaos within the organization.
Similarly,
commonly
production are
no
used
longer
accounting
systems
appropriate
for
developed
companies
to
pursuing
support mass
Lean. Lean
Accounting provides truly Lean approaches to business management and financial
reporting.
After formulating the guiding principles of its lean manufacturing approach in the Toyota
Production System (TPS), Toyota formalized in 2001 the basis of its lean management:
the key managerial values and attitudes needed to sustain continuous improvement in
the long run. These core management principles are articulated around the twin pillars
of Continuous Improvement (relentless elimination of waste) and Respect for People
(engagement in long term relationships based on continuous improvement and mutual
trust).
This formalization stems from problem solving. As Toyota expanded beyond its home
base for the past 20 years, it hit the same problems in getting TPS properly applied that
other western companies have had in copying TPS. Like any other problem, it has been
working on trying a series of countermeasures to solve this particular concern. These
countermeasures have focused on culture: how people behave, which is the most
difficult challenge of all. Without the proper behavioral principles and values, TPS can be
totally misapplied and fail to deliver results. As with TPS, the values had originally been
passed down in a master-disciple manner, from boss to subordinate, without any written
statement on the way. Just as with TPS, it was internally argued that formalizing the
values would stifle them and lead to further misunderstanding. However, as Toyota
veterans eventually wrote down the basic principles of TPS, Toyota set to put the Toyota
Way into writing to educate new joiners.[23]
Continuous Improvement breaks down into three basic principles:
1.
Challenge: Having a long term vision of the challenges one needs to face to
realize one's ambition (what we need to learn rather than what we want to do
and then having the spirit to face that challenge). To do so, we have to
challenge ourselves every day to see if we are achieving our goals.
2.
Kaizen: Good enough never is, no process can ever be thought perfect, so
operations must be improved continuously, striving for innovation and
evolution.
3.
Genchi Genbutsu: Going to the source to see the facts for oneself and make
the right decisions, create consensus, and make sure goals are attained at the
best possible speed.
Respect For People is less known outside of Toyota, and essentially involves two
defining principles:
1.
Respect: Taking every stakeholders' problems seriously, and making every
effort to build mutual trust. Taking responsibility for other people reaching their
objectives.
2.
Teamwork: This is about developing individuals through team problem-solving.
The idea is to develop and engage people through their contribution to team
performance. Shop floor teams, the whole site as team, and team Toyota at the
outset.
Differences from TPS
Whilst Lean is seen by many as a generalization of the Toyota Production System into
other industries and contexts there are some acknowledged differences that seem to
have developed in implementation.
1.
Seeking profit is a relentless focus for Toyota exemplified by the profit
maximization principle (Price – Cost = Profit) and the need, therefore, to
practice systematic cost reduction (through TPS or otherwise) to realize
benefit. Lean implementations can tend to de-emphasise this key measure and
thus become fixated with the implementation of improvement concepts of "flow"
or "pull". However, the emergence of the "value curve analysis" promises to
directly tie lean improvements to bottom-line performance measuments.20
2.
Tool orientation is a tendency in many programs to elevate mere tools
(standardized work, value stream mapping, visual control, etc.) to an unhealthy
status beyond their pragmatic intent. The tools are just different ways to work
around certain types of problems but they do not solve them for you or always
highlight the underlying cause of many types of problems. The tools employed
at Toyota are often used to expose particular problems that are then dealt with,
as each tool's limitations or blindspots are perhaps better understood. So, for
example, Value Stream Mapping focuses upon material and information flow
problems (a title built into the Toyota title for this activity) but is not strong on
Metrics, Man or Method. Internally they well know the limits of the tool and
understood that it was never intended as the best way to see and analyze
every waste or every problem related to quality, downtime, personnel
development, cross training related issues, capacity bottlenecks, or anything to
do with profits, safety, metrics or morale, etc. No one tool can do all of that. For
surfacing these issues other tools are much more widely and effectively used.
3.
Management technique rather than change agents has been a principle in
Toyota from the early 1950s when they started emphasizing the development
of the production manager's and supervisors' skills set in guiding natural work
teams and did not rely upon staff-level change agents to drive improvements.
This can manifest itself as a "Push" implementation of Lean rather than "Pull"
by the team itself. This area of skills development is not that of the change
agent specialist, but that of the natural operations work team leader. Although
less prestigious than the TPS specialists, development of work team
supervisors in Toyota is considered an equally, if not more important, topic
merely because there are tens of thousands of these individuals. Specifically, it
is these manufacturing leaders that are the main focus of training efforts in
Toyota since they lead the daily work areas, and they directly and dramatically
affect quality, cost, productivity, safety, and morale of the team environment. In
many companies implementing Lean the reverse set of priorities is true.
Emphasis is put on developing the specialist, while the supervisor skill level is
expected to somehow develop over time on its own.
Lean services
Main article: Lean services
Lean, as a concept or brand, has captured the imagination of many in different spheres
of activity. Examples of these from many sectors are listed below.
Lean principles have been successfully applied to call center services to improve live
agent call handling. By combining Agent-assisted Automation and Lean's waste
reduction practices, a company reduced handle time, reduced between agent variability,
reduced accent barriers, and attained near perfect process adherence.[24]
Lean principles have also found application in software application development and
maintenance and other areas of information technology (IT).[25] More generally, the use
of Lean in information technology has become known as Lean IT.
A study conducted on behalf of the Scottish Executive, by Warwick University, in
2005/06 found that Lean methods were applicable to the public sector, but that most
results had been achieved using a much more restricted range of techniques than Lean
provides.[26]
A study completed in 2010 identified that Lean was beginning to embed in Higher
Education in the UK (see Lean Higher Education). [27]
The challenge in moving Lean to services is the lack of widely available reference
implementations to allow people to see how directly applying lean manufacturing tools
and practices can work and the impact it does have. This makes it more difficult to build
the level of belief seen as necessary for strong implementation. However, some
research does relate widely recognized examples of success in retail and even airlines
to the underlying principles of lean.[14] Despite this, it remains the case that the direct
manufacturing examples of 'techniques' or 'tools' need to be better 'translated' into a
service context to support the more prominent approaches of implementation, which has
not yet received the level of work or publicity that would give starting points for
implementors. The upshot of this is that each implementation often 'feels its way' along
as must the early industrial engineers of Toyota. This places huge importance upon
sponsorship to encourage and protect these experimental developments.
Lean goals and strategy
The espoused goals of Lean manufacturing systems differ between various authors.
While
some
maintain
an
internal
focus,
e.g.
to
increase
profit
for
the
organization,[28] others claim that improvements should be done for the sake of the
customer[29]
Some commonly mentioned goals are:

Improve quality: To stay competitive in today's marketplace, a company must
understand its customers' wants and needs and design processes to meet their
expectations and requirements.

Eliminate waste: Waste is any activity that consumes time, resources, or space but
does not add any value to the product or service. See Types of waste, above.
Taking the first letter of each waste, the acronym "TIM WOOD" is formed. This is a
common way to remember the wastes.

Reduce time: Reducing the time it takes to finish an activity from start to finish is
one of the most effective ways to eliminate waste and lower costs.

Reduce total costs: To minimize cost, a company must produce only to customer
demand. Overproduction increases a company’s inventory costs because of
storage needs.
The strategic elements of Lean can be quite complex, and comprise multiple elements.
Four different notions of Lean have been identified:[30]
1.
Lean as a fixed state or goal (Being Lean)
2.
Lean as a continuous change process (Becoming Lean)
3.
Lean as a set of tools or methods (Doing Lean/Toolbox Lean)
4.
Lean as a philosophy (Lean thinking)
Steps to achieve lean systems
The following steps should be implemented to create the ideal lean manufacturing
system:[31]:
1.
Design a simple manufacturing system
2.
Recognize that there is always room for improvement
3.
Continuously improve the lean manufacturing system design
Design a simple manufacturing system
A fundamental principle of lean manufacturing is demand-based flow manufacturing. In
this type of production setting, inventory is only pulled through each production center
when it is needed to meet a customer's order. The benefits of this goal include: [31]

decreased cycle time

less inventory

increased productivity

increased capital equipment utilization
There is always room for improvement
The core of lean is founded on the concept of continuous product and process
improvement and the elimination of non-value added activities. "The Value adding
activities are simply only those things the customer is willing to pay for, everything else
is waste, and should be eliminated, simplified, reduced, or integrated" (Rizzardo, 2003).
Improving the flow of material through new ideal system layouts at the customer's
required rate would reduce waste in material movement and inventory.[31]
Continuously improve
A continuous improvement mindset is essential to reach the company's goals. The term
"continuous improvement" means incremental improvement of products, processes, or
services over time, with the goal of reducing waste to improve workplace functionality,
customer service, or product performance (Suzaki, 1987).
Stephen Shortell (Professor of Health Services Management and Organisational
Behaviour – Berkeley University, California) states:"For improvement to flourish it must be carefully cultivated in a rich soil bed (a receptive
organisation), given constant attention (sustained leadership), assured the right amounts
of light (training and support) and water (measurement and data) and protected from
damaging."
[edit]Measure
Overall equipment effectiveness (OEE) is a set of performance metrics that fit well in a
Lean environment.
[edit]Implementation
pitfalls
One criticism of lean perennially heard among rank-and-file workers is that lean
practitioners may easily focus too much on the tools and methodologies of lean, and fail
to focus on the philosophy and culture of lean. The implication of this for lean
implementers is that adequate command of the subject is needed in order to avoid failed
implementations.
[edit]See
also

Toyota Production System

Lean software development

Lean CFP driven

Job Shop Lean
Tools:

5S

Value Stream Mapping

Kanban

Key performance indicators

Overall equipment effectiveness

Ishikawa diagram

Spaghetti diagram
5S (methodology)
5S is
the
name
of
a
workplace
organization
method
that
uses
a
list
of
five Japanese words:seiri, seiton, seiso, seiketsu, and shitsuke. Transliterated or translated into English, they
all start with the letter "S". The list describes how to organize a work space for efficiency and effectiveness by
identifying and storing the items used, maintaining the area and items, and sustaining the new order. The
decision-making process usually comes from a dialogue about standardization, which builds understanding
among employees of how they should do the work.

The 5 Esses
There are five primary 5S phases: sorting, set in order, systematic cleaning, standardizing, and sustaining.
Sorting
Eliminate all unnecessary tools, parts, and instructions. Go through all tools, materials, and so forth in the plant
and work area. Keep only essential items and eliminate what is not required, prioritizing things per
requirements and keeping them in easily-accessible places. Everything else is stored or discarded.
Straightening or Setting in Order
Arranging tools, parts, and instructions in such a way that the most frequently used items are the easiest and
quickest to locate. The purpose of this step is to eliminate time wasted in obtaining the necessary items for an
operation.
Sweeping or Shine
Standardized cleaning-point at a 5S organized plant
Clean the workspace and all equipment, and keep it clean, tidy and organized. At the end of each shift, clean
the work area and be sure everything is restored to its place. This makes it easy to know what goes where and
ensures that everything is where it belongs.
Standardizing
All work stations for a particular job should be identical. All employees doing the same job should be able to
work in any station with the same tools that are in the same location in every station. Everyone should know
exactly what his or her responsibilities are for adhering to the first 3 esses. Synonym : Systemize
Sustaining the Practice
Maintain and review standards. Once the previous 4 esses have been established, they become the new way
to operate. Maintain focus on this new way and do not allow a gradual decline back to the old ways. While
thinking about the new way, also be thinking about yet better ways. When an issue arises such as a suggested
improvement, a new way of working, a new tool or a new output requirement, review the first 4 esses and make
changes as appropriate. It should be made as a habit and be continually improved.
Additional Esses
Three other phases are sometimes included: safety, security, and satisfaction. This is however not a traditional
set of "phases". Safety for example is inherent in the 5S methodology and is not a step in itself. Therefore the
additions of the phases are simply to clarify the benefits of 5S and not a different or more inclusive
methodology.
Safety
A sixth phase, "Safety", is sometimes added.[1] There is debate over whether including this sixth "S" promotes
safety by stating this value explicitly, or if a comprehensive safety program is undermined when it is relegated
to a single item in an efficiency-focused business methodology.
Security
A seventh phase, "Security", can also be added.[citation needed] To leverage security as an investment rather than
an expense, the seventh "S" identifies and addresses risks to key business categories including fixed assets
(PP&E), material, human capital, brand equity, intellectual property, information technology, assets-in-transit
and the extended supply chain.
Satisfaction
An eighth phase, "Satisfaction", can be included.[citation
needed]
Employee Satisfaction and engagement in
continuous improvement activities ensures the improvements will be sustained and improved upon. The Eighth
waste – Non Utilized Intellect, Talent, and Resources can be the most damaging waste of all.
It is important to have continuous education about maintaining standards. [citation needed] When there are changes
that affect the 5S program such as new equipment, new products or new work rules, it is essential to make
changes in the standards and provide training. Companies embracing 5S often use posters and signs as a way
of educating employees and maintaining standards.
The Origins of 5S
5S was developed in Japan. It was first heard of as one of the techniques that enabled what was then termed
'Just in TimeManufacturing'. The Massachusetts Institute of Technology's 5-year study into the future of the
automobile in the late 1980s[2] identified that the term was inappropriate since the Japanese success was built
upon far more than components arriving only at the time of requirement. John Krafcik, a researcher on the
project, ascribed Lean to the collective techniques being used in Japanese automobile manufacturing; it
reflected the focus on waste in all its forms that was central to the Japanese approach. Minimised inventory
was only one aspect of performance levels in companies such as Toyota [3] and in itself only arose from
progress in fields such as quality assurance and Andon boards to highlight problems for immediate action.
5S was developed by Hiroyuki Hirano within his overall approach to production systems.[4] Many Western
managers coming across the approach for the first time found the experience one of enlightenment. They had
perhaps always known the role of housekeeping within optimised manufacturing performance and had always
known the elements of best practice. However, Hirano provided a structure for improvement programs. He
pointed out a series of identifiable steps, each building on its predecessor. Western managers, for example,
had always recognised the need to decide upon locations for materials and tools and upon the flow of work
through a work area; central to this (but perhaps implicit) is the principle that items not essential to the process
should be removed – stored elsewhere or eliminated completely. By differentiating between Seiri and Seiton,
Hirano made the distinction explicit. He taught his audience that any effort to consider layout and flow before
the removal of the unnecessary items was likely to lead to a sub-optimal solution.
Equally the Seiso, or cleanliness, phase is a distinct element of the change program that can transform a
process area. Hirano's view is that the definition of a cleaning methodology (Seiso) is a discrete activity, not to
be confused with the organisation of the workplace, and this helps to structure any improvement program. It
has to be recognised, however, that there is inevitably an overlap between Seiton and Seiso. Western
managers understood that the opportunities for various cleanliness methodologies vary with the layout and
storage mechanisms adopted. However, breaking down the improvement activity in this way clarifies that the
requirements for the cleanliness regime must be understood as a factor in the design aspect of Seiton. As
noted by John Bicheno,[5] Toyota's adoption of the Hirano approach, is '4S', with Seiton and Seiso combined –
presumably for this very reason. The improvement team must avoid the trap of designing the work area and
then considering the cleanliness or tidiness mechanism.
Hirano also reminded the world of the Hawthorne effect. We can all introduce change and while people in the
business consider the change program to be under management focus the benefits of the change will continue,
but when this focus has moved (as is inevitably the case) performance once more slips. Western managers, in
particular, may have benefited from the distinction between the procedural or mechanical elements, Seiketsu,
of keeping these matters in focus and the culture change, Shitsuke, which is a distinct approach to bringing
about a new way of working. A number of publications on the subject in the West have questioned whether this
culture can really be tackled as part of an exercise of relatively limited scope. [6] The broader kaizen, or
continuous improvement, approach is built, among other things, upon the company's valuation of all members
of the workforce. If employees don't feel valued within the overall company culture, perhaps the change
required falls outside the limits of a housekeeping improvement program.
The
Objectives
of 5S
Hirano identified a range of benefits from improved housekeeping, all of which can be regarded as falling within
the Lean portfolio – that is, they are all based around the elimination of waste in one form or another.
The most obvious benefit from items being organized in such a way (i.e. that they are always readily available)
is that of improved productivity. Production workers being diverted from production to look for tools, gauges,
production paperwork, fasteners, and so on is the most frustrating form of lost time in any plant. A key aspect of
Hirano's organisation approach is that the often-needed items are stored in the most accessible location and
correct adoption of the standardisation approach means that they are returned to the correct location after use.
Another element of Hirano's improved housekeeping is improved plant maintenance – workers 'owning' a piece
of plant, responsible for keeping it clean and tidy, can take ownership for highlighting potential problems before
they have an impact on performance. (Of course, this brings with it the interface with preventive maintenance
and the need for clarity in the 'assignment map', that is – who does what. The division of tasks between
production workers and specialist maintenance engineers varies with the nature of the business, but ownership
rests within the business unit rather than within the 'service provider'.)
The next aim is Quality. The degree of impact of dirt in a manufacturing environment, obviously, varies with the
nature of the product and its process but there are few, if any, areas where dirt is welcome. Even if it is only in
the form of soiled documentation accompanying the goods to the customer this can send a very negative
message about the company and its culture. In other cases dirt can have a serious impact on product
performance – either directly or indirectly, perhaps through compromising the integrity of test processes. Of
course, 5S does more than address dirt; an inappropriate layout can result, for example, in product damaged
through excessive movement or through the use of tooling other than that defined as the standard.
Standardisation is a theme of Hirano's approach, overlapping to a considerable extent with, for example, that of
Ohno. A Standard Operating Procedure for tool certification is much easier to achieve if the tool to be certified
is always in a clearly-marked location.
Another goal is improved Health & Safety. Clear pathways between workbenches and storage racks can
minimise accidents, as can properly-swept floors. As with Quality, a well-organised, clean and tidy facility lends
itself more readily to standard practice. Hirano also described how an environment in which the workforce has
pride in their workplace can contribute to a considerable extent in a number of ways including customer
service. Improving the layout of the facility merges with the concept of visual management; if workers can see
the status of plant and of work in the facility, thus removing the need for complex tracking and communication
systems, then benefits will accrue. 5S can also be a valuable sales tool when potential customers visit; a wellorganised, clean and tidy facility sends a message of a professional and well-organised supplier.
One point made by all practitioners is that the adoption of 5S must be driven by goals. An article in the journal
of the UK's Institute of Operations Management written by Mark Eaton and Keith Carpenter of the Engineering
Employers' Federation noted that "the successful implementation of 5S requires that everyone understand why
it is being used and what the expected results are. As with all Lean techniques the aim is improvement in
business performance; the adoption is not an end in itself..
The Evolution of 5S
Many Western companies now promote Hirano's approach with a sixth 'S' added for Quality. Not unnaturally,
there is some debate over this, with devotees on both sides of the argument. The sixth S serves a fundamental
purpose – it reminds everyone of the need for Quality. A key lesson taught by Japanese automobile
manufacturers, and one central to the Toyota Production System, is that traditional levels of performance must
be not only exceeded, but replaced by a completely different perception of the scale of what is acceptable.
Rather than managing defects in percentage terms, Western managers heard of management in 'parts per
millions', with single-figure levels of defects being the goal. Given that a 1% failure rate equates to 10,000 ppm
the scale of improvement to be sought as part of the adoption of Lean was, to say the least, spectacular.
This improvement in quality levels could, of course, only be achieved with a complete re-definition of processes
and culture within Western manufacturing. This includes issues such as 'Design for Manufacturing' and the
fundamental change from Quality Control to Quality Assurance (that is, the Quality department role moving
from inspecting and highlighting problems to guaranteeing methods and procedures to eliminate errors).
Housekeeping, of course, is central to this and adding a sixth 'S' highlights this.
The contrasting view, and the one taken by Hirano in establishing this approach, is that each and every 'S' is a
phase. As noted earlier, a major lesson for Westerners was Hirano's 5S methodology breaking the program
down into a series of steps. The sixth 'S' does not add to this; Quality is not a phase, it is an objective – along
with productivity and the others described above. Moreover, it is an objective of each and every phase. Adding
the sixth 'S' might be perceived as recommending a program carrying out the sorting out, organising,
cleanliness, procedural and cultural steps and subsequently building in Quality, which of course is not possible.
If all the objectives have not been built in throughout each element of the definition of the new way of working
then they cannot be applied as an additional phase.
Kanban
Kanban principles
Kanbans maintain inventory levels; a signal is sent to produce and deliver a new shipment
as material is consumed. These signals are tracked through the replenishment cycle and
bring extraordinary visibility to suppliers and buyers. [1]

Kanban (かんばん(看板)?) (literally signboard or billboard) is a scheduling system for lean and just-in-time (JIT)
production.[2]Kanban is a system to control the logistical chain from a production point of view, and is not
an inventory control system. Kanban was developed by Taiichi Ohno, at Toyota, to find a system to improve
and maintain a high level of production. Kanban is one method through which JIT is achieved. [3]
Kanban became an effective tool in support of running a production system as a whole, and it proved to be an
excellent way for promoting improvement. Problem areas were highlighted by reducing the number of kanban
in circulation.[4]

Origins
In the late 1940s, Toyota started studying supermarkets with the idea of applying store and shelf-stocking
techniques to the factory floor. In a supermarket, customers obtain the required quantity at the required time,
no more and no less. Furthermore, the supermarket stocks only what it expects to sell within a given time
frame, and customers take only what they need, since future supply is assured. This observation led Toyota to
view a process as being a customer of one or more preceding processes, and the preceding processes are
viewed as a kind of store. The customer "process" goes to the store to obtain required components which in
turn causes the store to restock. Originally, as in supermarkets, signboards were used to guide "shopping"
processes to specific shopping locations within the store.
A Kanban system, when combined with unique scheduling tools, can dramatically reduce inventory levels,
increase inventory turnover, enhance supplier/customer relationships and improve the accuracy of
manufacturing schedules. Kanban aligns inventory levels with actual consumption; a signal is sent to produce
and deliver a new shipment when material is consumed. These signals are tracked through the replenishment
cycle, bringing visibility to both the supplier and the buyer.
Kanban uses the rate of demand to control the rate of production, passing demand from the end customer up
through the chain of customer-store processes. In 1953, Toyota applied this logic in their main plant machine
shop.[5]
Operation
One important determinant of the success of production scheduling based on demand "pushing" is the ability of
the demand-forecast to receive such a "push". Kanban, by contrast, is part of an approach where the "pull"
comes from the demand. The supply or production is determined according to the actual demand of the
customers. In contexts where supply time is lengthy and demand is difficult to forecast, often, the best one can
do is to respond quickly to observed demand. This situation is exactly what a kanban system accomplishes, in
that it is used as a demand signal that immediately travels through the supply chain. This ensures that
intermediate stocks held in the supply chain are better managed, and are usually smaller. Where the supply
response is not quick enough to meet actual demand fluctuations, thereby causing significant lost sales, stock
building may be deemed more appropriate, and is achieved by placing more kanban in the system.
Taiichi Ohno stated that to be effective, kanban must follow strict rules of use.[6] Toyota, for example, has six
simple rules, and close monitoring of these rules is a never-ending task, thereby ensuring that the kanban does
what is required.
Toyota's six rules

Do not send defective products to the subsequent process

The subsequent process withdraws only what is needed

Produce only the exact quantity withdrawn by the subsequent process

Level the production

Kanban is a means of fine tuning

Stabilize and rationalize the process
Kanban cards
Kanban cards are a key component of kanban and signal the need to move materials within a manufacturing or
production facility or move materials from an outside supplier in to the production facility. The kanban card is, in
effect, a message that signals that there is a depletion of product, parts, or inventory that, when received, the
kanban will trigger the replenishment of that product, part, or inventory. Consumption therefore drives demand
for more production, and demand for more product is signaled by the kanban card. Kanban cards therefore
help create a demand-driven system.
It is widely held[citation
needed]
by proponents of lean production and manufacturing that demand-driven systems
lead to faster turnarounds in production and lower inventory levels, thereby helping companies implementing
such systems to be more competitive.
In the last few years, systems sending kanban signals electronically have become more widespread. While this
trend is leading to a reduction in the use of kanban cards in aggregate, it is still common in modern lean
production facilities to find widespread usage of kanban cards. In Oracle ERP ( enterprise resource planning),
kanban is used for signalling demand to vendors through e-mail notifications. When stock of a particular
component is depleted by the quantity assigned on kanban card, a "kanban trigger" is created (which may be
manual or automatic), a purchase order is released with predefined quantity for the vendor defined on the card,
and the vendor is expected to dispatch material within a specified lead time.[citation needed]
Kanban cards, in keeping with the principles of kanban, simply convey the need for more materials. A red card
lying in an empty parts cart conveys that more parts are needed.
This system is available in enterprise resource planning software such as Oracle's JD Edwards and eBusiness
Suite, IFS AB, Infor ERP LN, SAP ERP, Deltek Costpoint or Microsoft Dynamics AX.[7]
Three-bin system
An example of a simple kanban system implementation might be a "three-bin system" for the supplied parts,
where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in
the factory store (the inventory control point), and one bin is at the supplier's business. The bins usually have a
removable card containing the product details and other relevant information — the classic kanban card.
When the bin on the factory floor becomes empty (an indication that there was demand for parts), the empty
bin and kanban cards are returned to the factory store (the inventory control point). The factory store then
replaces the bin on the factory floor with a full bin from stock, which also contains a kanban card. The factory
store then contacts the supplier’s business and returns the now-empty bin with its kanban card. The supplier's
full product bin, with its kanban card, is then delivered into the factory store, completing the final step in the
system. Thus, the process will never run out of product, and could be described as a closed loop in that it
provides the exact amount required, with only one spare bin so there will never be an oversupply. This 'spare'
bin allows for the uncertainties in supply, use, and transport that are found in the inventory system. The secret
to a good kanban system is to calculate just enough kanban cards required for each product. Most factories
using kanban use the coloured board system (heijunka box). This slotted board was created especially for
holding the cards.
Electronic kanban systems
Main article: Electronic kanban
Many manufacturers have implemented electronic kanban systems [8] aka an "e-kanban system." These help to
eliminate common problems such as manual entry errors and lost cards. [9] E-kanban systems can be integrated
into enterprise resource planning (ERP) systems, enabling real-time demand signaling across the supply chain
and improved visibility. Data pulled from e-kanban systems can be used to optimize inventory levels by better
tracking supplier lead and replenishment times.[10]
Personal kanban
The application of kanban to personal work originated with Jim Benson [11] after he learned of related concepts
through his associations with authors David Anderson,[12][13] Corey Ladas[14] and Don Reinertsen.[15][16][17]
See also

Backflush accounting

CONWIP

Material requirements planning

Manufacturing resource planning

Scheduling (production processes)

Supply chain management

Drum-buffer-rope

List of software development philosophies

Lean software development

Visual control

Continuous-flow manufacturing

Kanban board

Kanban (development)