Session 2

April 2013

Improving Operational Performance

To introduce lean organisation techniques in

business.

Session Aims

By the end of this session you will be able to:

Describe the concept of a lean environment. Implement a productivity needs analysis.

Session

Objectives

Lean is a term used to express a range of business

improvement techniques. It originated from the

need to constantly improve quality while reducing

the costs of the production performance in the

manufacturing sector.

The concepts of this approach are now used as the

basis for improvement across every sector,

improving business performance by eliminating

waste and increasing efficiency.

What is lean?

There are lots of examples of lean thinking that date

as far back as the 18th century, but the first person

to really integrate an entire production process was

Henry Ford.

What

The problem with Fords system was that there was

no variety. The Model T was limited to one colour

and to one specification.

When the world wanted variety, Ford seemed to

loose his way.

“Any customer can have any car, any colour they

want, as long as it’s black”. – Henry Ford 1912.

Before long people wanted choice, a choice of

models, a choice of specifications and a choice of

colour.

Carmakers responded by filling their plants with

larger and larger machines than ran faster and

faster – but the problem was that this increased

throughput times and inventory.

Then the world was interrupted by the outbreak of

World War 2.

At the end of World War 2 America was the leading

producer in the world.

However, Japan was in need of economic re-birth

and viewed quality as essential to their economy.

W. Edwards Deming and Joseph Juran travelled to

Japan and helped the country become the industrial

power it is today. Their teaching lead to the birth of

the Toyota Production Sytem.

Lean production is a state where waste is reduced or

eliminated totally from a process, where almost

every step adds value to the product for the

customer, where products flow continuously without

being held up or creating bottlenecks, where every

part made is made to the required standard first

time every time.

Lean applies in every business and every process. It

is not a cost reduction program but a way of

thinking and acting for an entire organisation.

A lean organisation understands customer value and

focuses its key processes to continuously increase it.

It will look at every aspect of the business and look

to improve the flow of information and services in

order to achieve 100% customer satisfaction.

There are many benefits to implementing a lean

approach in any organisation, such as;Improved productivityReduced wasteImproved lead timeImproved stock turnsBeing able to respond to change efficiently

Benefits of lean

The starting point of any lean organisational journey

should be implementing a productivity needs

analysis.

This is an essential tool in measuring where the

organisation is compared to where the organisation

wants to be.

Most organisations follow a set of measures within

their business known as key performance indicators.

Productivity needs analysis

The process of carrying out a productivity needs

analysis involves gathering all the necessary

information that you will need.

This could include information from customers about

expected order levels, quality concerns, historical

data on machine reliability, data around staff skills,

material costs etc.

By the end of this session you will be able to:

Describe the concept of a lean environment. Implement a productivity needs analysis.

Session

Objectives