2. Lean Thinking
• The core idea is to maximize customer
value while minimizing waste. Simply, lean
means creating more value for customers with
fewer resources.
• The core idea is to maximize customer
value while minimizing waste. Simply, lean
means creating more value for customers with
fewer resources.
Prepared By:- Parampal Singh
3. • Eliminating waste along entire value streams,
instead of at isolated points, creates processes
that need less human effort, less space, less
capital, and less time to make products and
services at far less costs and with much fewer
defects
• The term "lean" was coined to describe
Toyota's business during the late 1980s by a
research team headed by Jim Womack
Prepared By:- Parampal Singh
4. • The essence of lean thinking is to drive out
“MUDA” (the Japanese word for waste )
• Lean thinking has 5 principles
– Specify value
– Identify the value stream
– Create flow
– Pull not push
– Strive for prefection
Prepared By:- Parampal Singh
5. SPECIFY VALUE
• Value must be defined by customer.
– It should not be from producer side, because
producer has a mentality that assume that product
is good.
• Eg- Some airlines are example of organisation
that have not understood value, providing
executive lounges and extra facilities on flights
when passengers want is rapid and safe travel
to their destination.
Prepared By:- Parampal Singh
6. IDENTIFY THE VALUE STREAM
• The value stream is the set of actions required to bring the
product to the customer.
• Analysis of the value stream leads to identification of the three
types of activities
– Those that create value to customer
– Those that create no value to customer but cannot be eliminated
because of current technology or process constraints
– Those that create no value to customer and can be removed.
• Eg telecom industries are doing this type of analysis
Prepared By:- Parampal Singh
7. CREATE FLOW
• Flow of information must be continuous through
the value chain
• Discontinuity in the flow of work, create errors
• Batched work creates queues, creates the need of
prioritization
• Eg- This work flow thinking is applied in the back
offices of many financial services companies
Prepared By:- Parampal Singh
8. PULL NOT PUSH
• The challenge of lean thinking is to have operations
schedules governed by demand pull not by production
push
• Push system are replenishment system working on
the basis of “sell one, make one”.
• Pull system leads to reduction in work in progress.
• Eg- Mc Donald’s consumption of one burger, leads to
production of one burger
Prepared By:- Parampal Singh
9. STRIVE FOR PERFECTION
• First four processes leads to identification of
the errors in the supply chain
• It develops culture for improvement.
Prepared By:- Parampal Singh
10. Seven sources of “muda” in service
operations
• Over production ahead of demand
• Waiting for the next process step
• Unnecessary transport of material
• Excessive inventories
• Unnecessary movement of employees
• Defective production
• Over processing of parts due to poor technology
11. SCM implementation challenges
• Lack of top management support
• Non aligned strategy with the operations
• Inability to share information
• Lack of trust among the supply chain members
• Inflexible organization process
• Resistance to change
• Lack of training for new skills
• Inconsistent performance measures
Prepared By:- Parampal Singh
