Monday, November 15, 2010

The House of Lean

by Al Norval,

The House of Lean has many parts to it that work together in combination to form a Lean Production System. One, which we are all familiar with, is Just-in-Time but it’s also one of the most misunderstood parts of the Lean Production System.
Just-In-Time or JIT means giving your customer:

A. what they want,
B. when they want it,
C. in the quantity they want it.

It’s based upon a foundation of Standard and Stable processes and works together with the other pillar Jidoka or Built in Quality. Typically, organizations want the benefits of JIT, namely cash from freed up inventory but often reduce inventory to a level lower than their processes are capable of supporting. This results in missed schedules, customer service problems and higher costs. For this reason it’s called “Just about in Time” or “Almost in Time” and has a bad, almost negative, connotation to it. In fact JIT can be very powerful in driving quick response to problems by making problems visible and urgent. However, we need to have a couple of pre-requisites in place first including stable and standard processes and a human response system capable of responding to problems as they arise and putting counter measures in place before we run out of materials.

We must understand the capability of our processes and the variation inherent in our processes. Only then can we set the right level of inventory in our production system. Then as we drive process improvement we can remove inventory and move closer and closer to Just in Time.

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