The need for Lean derives as a result of numerous changes and dynamic environmental shifts that have influenced

the industry around the world. a) Technological Changes:- This factor is one of the fastest developing fields, allowing precision in processes as well as quick response and flexibility. Information technology simultaneously enables lower costs, flexibility, credibility, reliability and increases efficiency of manufacturing processes; as well as integrating marketing processes and collaboration with customers. The strategic overview of numerous businesses is influenced as a result of the improved collaboration between suppliers and their customers together with the ability to respond quickly to customers demand. b) Globalization The globalization process is defined as the unlimited geographical borders that allow the international arena to become a free marketplace in which the flow of investments is less manipulated by governments. Companies in industrialized countries are driven to accelerate improvements in industrial processes, improve technology, quality and work efficiency. c) Changes in customer behavior Lately, the highlighted link in the supply chain is the customer. Much emphasis and sensitivity is placed upon the customers who demand high standards of quality and real value for their investments. As a result of the competitive marketplace, the customers demand simultaneously personalized orders and quick response. d) Changes in Business Environment The three factors stated above influence the business environment in which firms are currently active. Competitive processes force organizations to lower costs and to improve management of the supply chain. Additionally, there are several factors that may cause an organization to adapt lean principles: High manufacturing costs, significant changes in demand, non-consistent processes, lack of raw materials, sharp increase in manufacturing cycles, complex products etc. Lean is a systematic approach used to identify and eliminate waste through continuous improvement by adjusting the product flow according to customer demand in pursuit of perfection. The objective of the lean tool is to improve organizational profitability. The means to achieve the objective are as follows: decreasing work in process (WIP), lowering inventory whilst raising efficiency of machines and employees. Lean thinking emphasizes processes which contribute to what the customer perceives as value. Non-value adding procedures/materials/activities are perceived as wastes. Due to lack of communication, there are cases of bottleneck effects or discontinuity in the manufacturing processes. In such cases there are risks of order losses, delays, mistakes and additional errors, often expressed by deviations in scheduled times and budgets as well as by customer dissatisfaction. Eliminating waste may potentially be the ultimate resource in improving operational profitability, productivity and customer service

Implementing Lean
Lean might seem to be simple, however, numerous companies find themselves struggling

to implement its principles, the main reasons are: -The process requires strong organizational commitment throughout all ranks of the organization, from the top management to the simple operator on the manufacturing floor. -Lack of expertise and experience in Lean techniques. -It is an extensive and difficult mission to execute. -Difficulties in changing the mentality of the Push approach. -Planning and implementation errors in adapting to the new method.

Principles of Implementing the Lean Concept

1) Define the value of product/service as perceived by the customer. 2) Identify each link in the value chain in order to eliminate all wastes in the chain. 3) Enable product flow by eliminating unnecessary intervals, WIP and other wastes. 4) Manufacture only what is pulled by the customer. 5) Strive for perfection through continuous improvement.

Enterprise Evaluation
Evaluate customers demand, map out the different processes and define the value stream. A serious evaluation of the entire organization will allow analyzing the differences between current conditions using lean methodologies and past conditions lacking mapping and value adding procedures.

System Streamlining
Eliminating wastes: The main sources of waste are as follows: Overproduction-producing quantities over the amounts required for the next work station (i.e. causing a bottleneck effect).For example, continuous unnecessary production of a machine. Inventory -Due to inefficiencies and unexpected problems caused by suppliers, excess inventory is held. Excess inventory directly affects the cash flow of the organization. Defects -Defects are usually caused due to poor quality control, poor quality of materials, inadequate instructions and training, and inadequate product design as a result of misunderstood demands and/or needs of the customers. Waiting Periods/Times -Waiting periods result due to inadequate manufacturing schedules, long set-up intervals, misuse of automation, quality defects that require additional quality control. Motion Waste -Any movements of workers or machines that are defined as non-value adding actions are perceived as waste. Such waste is caused due to inconsistent work methods, unfavorable facility/cell layout, poor maintenance, and low efficiency of human resources and machines. Transportation Waste -Excessive transportation wastes are due to inadequate plant layout, misunderstanding of process flow, large inventory batches in storage, large storage areas, and long lead times. Wastes / non-value adding procedures or activities often disrupt the continuous flow of processes during the manufacturing of goods. The above mentioned problem is caused due to incorrect training or inadequate human resources, poor quality, unexpected long lead times, lack of knowledge and information, and misunderstanding of the key objectives. However, if we operate as a lean system, we can have everyone in the organization focused real-time on solving problems and driving waste out of the organization. In the end, we

can enjoy both people success and business success greater than our competitors because we are solving more problems and engaging people at every level.

PRINCIPLES OF LEAN
1. The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easy to achieve: 2. Specify value from the standpoint of the end customer by product family. 3. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value. 4. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer. 5. As flow is introduced, let customers pull value from the next upstream activity. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

LEAN ACTION PLAN

While every individual or company embarking on a lean journey will have different challenges based on their particular set of circumstances, there are several crucial steps that can help reduce resistance, spread the right learning, and engender the type of commitment necessary for lean enterprise.

Getting Started

Find a change agent, a leader who will take personal responsibility for the lean transformation. Get the lean knowledge, via a sensei or consultant, who can teach lean techniques and how to implement them as part of a system, not as isolated programs. Find a lever by seizing a crisis or by creating one to begin the transformation. If your company currently isnt in crisis, focus attention on a lean competitor or find a lean customer or supplier who will make demands for dramatically better performance. Forget grand strategy for the moment. Map the value streams, beginning with the current state of how material and information flow now, then drawing a leaner future state of how they should flow and creating an implementation plan with timetable. Begin as soon as possible with an important and visible activity. Demand immediate results. As soon as youve got momentum, expand your scope to link improvements in the value streams and move beyond the shop floor to office processes.

Creating an Organization to Channel Your Value Streams

Reorganize your firm by product family and value stream. Create a lean promotion function. Deal with excess people at the outset, and then promise that no one will lose their job in the future due to the introduction of lean techniques. Devise a growth strategy. Remove the anchor-draggers. Once youve fixed something, fix it again. Two steps forward and one step backward is O.K.; no steps forward is not O.K.

Install Business Systems to Encourage Lean Thinking

Utilize policy deployment. Create a lean accounting system. Pay your people in relation to the performance of your firm. Make performance measures transparent. Teach lean thinking and skills to everyone. Right-size your tools, such as production equipment and information systems.

Completing the Transformation

Convince your suppliers and customers to take the steps just described. Develop a lean global strategy. Convert from top-down leadership to leadership based on questioning, coaching, and

teaching and rooted in the scientific method of plan-do-check-act.

The 5 S Program to Eliminating Waste

Seiri Sort Sorting through the elements and tools that are not needed for a specific process. Seiton Straightening Straightening out the tools that are needed, creating an easily accessible and highly functional tool layout. Sieso Shine Clean equipment/tools and the entire working area (cell). Creating a friendly working environment. Seiketso Spread -Constantly keeping and improving the work area spread out in order to avoid chaos. Shitsuke Standardize Believing in and relying on the system. The new rules and regulations should become accepted disciplined methods or even new habits.

Improving Work Flow in the System

When referring to improved work flow it includes not only product manufacturing flow, but also free flowing information, documents, inventory and workforce (multiskilled human resources). Lean Techniques to Improve Flow: Visual Control The main objective is to illustrate procedures such that they are immediately understood. Creating a universal language, using signals, Kan-Ban cards, color coded dies, lines on plant floor and walls to define certain areas . Plant Layout Unifying processes which have a common denominator, identifying restrictions and working around them accordingly, saves on transportation. A well established layout will enable the free flow of inventory, processes and procedures in the most efficient manner. Decreasing Batch Size With the increase in batch size, we increase the waiting periods, the following will result in the increase of WIP as well as the increase of non-value adding processes, which the lean concept tries to reduce.

Improving Quality Control in the System

Much has been written on improving quality, mainly using tools such as: Histograms, FishBone Diagrams, Quality Control Diagrams, 6 Sigma Method. Lean implementation projects have often utilized Poka Yoke a product/service planning method which enables identifying errors and/or wastes in the process with great ease, as well as enabling one to find quick and efficient solutions.

The Pull System

Pull Method A method of controlling the flow of resources by replacing only what has been consumed, uses concepts of Just-In-Time (JIT) and Kanban. JIT Just in Time Manufacturing required products, in required quantities, at required time. Characteristics of the JIT system: The system concentrates on quality control, small batch sizes, unified

workloads in each station, full collaboration with suppliers, multi-skilled workers, line flow strategy, manufacturing automation, preventive maintenance. Kanban The Kanban signals the need for renewing inventory or manufacturing procedures. The Kanban system is based on the need to supply inventory for a specific process in the line of manufacturing procedures. A work station may begin or end its shift according to the Kanban signals. The Kanban signals may be passed out by simple cards, empty defined spaces, containers, conveyor belts, light bulbs, buttons, colors, shapes and forms.

Information Systems
Enterprise Resource Planning (ERP) Management of all resources of the organization via an integrative system. The system deals with all resources of the organization such as, human, financial and information resources. The system enables control of the entire supply chain which may be geographically spread out in different regions. The data is provided to all the participants in the process. Other systems which support this phase are: SCM Supply Chain Management Information System CRM Customer Relationship Management System

System Perfection
Kaizen is a Japanese approach which has been and is being adapted by many companies as a means of survival in an increasingly competitive world. The Kaizen approach concentrates on continuous minor changes which are to improve the efficiency of the organization as well as eliminating wastes. It is believed that through these minor changes significant outcomes will be evident. The Kaizen philosophy led to the development of the Kaizen Events, which are based on the approach of investing minimum and achieving significant outcomes. The level of success is highly dependant on the level of collaboration between the management and the worker. The level of commitment should be high on both sides. It is vital to overcome organizational sluggishness; eliminating cultural barriers to change and make it clear that the transformation must be enterprise-wide. Everyone must be committed to change.

Building an Organizational Culture-The Lean Enterprise

The transition of organizations from the traditional management to lean management entails many changes which require a long term commitment, constant improvement and the determination to achieve perfection. The long term commitment must be expressed throughout the organizations culture. The main elements that make up the organizations culture are as follows: An organizations vision which is aligned to all employees concentrating on the customer. Teamwork Management behavior to lead and manage changes Providing constant training and guidance Clear standards Striving for perfection The transition to becoming a lean organization requires the change of fundamental human resource behavior. In order to create a learning organization, one should concentrate on creating a new structure based on renewed values and beliefs. To guarantee

cultural changes, one needs to perform on all three levels of learning: The behavioral level: developing multi-skilled teamwork, leadership qualities and the ability to implement standardized work. The cognitive level: development of technical and analytical skills. The values level: changes the set of values and customs in order to lead a lean organization. The areas that require change in order to transform from a traditional organization into a lean one: 1) Vision/Business Strategy Top management needs to define its vision and pass it down to all ranks in the organization (alignment). 2) Communication All employees are to have access to data and information needed. No worker should receive instructions without understanding the meaning fully. 3) Decision Making Process A team effort approach to solving problems, understanding that every employee can contribute to the organizations improvement. A well defined process enables gathering all information required to make a decision. 4) Team work There should also be training and rewards for team efforts and accomplishments. 5) Performance measures and rewards for accomplishments The indicators are monitored based on effectiveness of the organization. They monitor long term outcomes such as product development, new markets vertical integration. 6) Resolving Conflicts Conflicts test the communication barriers in the system. It is advisable to brainstorm and improve performance through conflict management. 7) General Organizational Process Every employee performs his task with an understanding of the whole system. Every employee must understand that his personal contribution leads the organization to achieve its goals. In order for the transition to be beneficial and effective, the lean approach should cover all areas of the enterprise.

Lean Enterprise Transformation

The Lean Enterprise is regarded as an integrated entity that creates value for its multiple stakeholders by employing lean principles. This means that the lean approach needs to be integrated in all areas of the organization, not only in production, where the concept originated. Areas that need attention are product research and development, product support, finance, marketing, HRM, procurement and supplier management, quality assurance and IT. This requires a Lean vision and strategy for the entire Lean Enterprise, focused on the value stream and developing lean structure and behavior within the organization. The process requires a Lean transformation framework at the enterprise and functional levels, as well as enterprise metrics to evaluate and control the total implementation. The undertaking requires senior executive leadership, personal involvement and commitment. The biggest challenges are institutionalizing the lean transformation and sustaining the change. The outcomes are evident even in the short term. Customer satisfaction, profitability improvement and process improvements are just a few of the many successful outcomes.