How Does Lean Production Improve Efficiency? 4 Steps to Getting it Right
We know about lean and its benefits, but how does lean production improve efficiency? Well it’s all about wasteful activities. We may be busy people, but are we busy doing the things that add value? Or are we spending countless time treading water, doing unproductive tasks?
How does lean production improve efficiency? Lean production focuses on stripping waste out of business processes and flowing product or information through faster with less waiting and holds ups. By removing this waste, you can get more done with no or little extra people and resource, thus improving efficiency.
There are a number of tools that when combined, help processes become more efficient. The key requirement is to observe your key processes and learn to see the waste.
And once you see it, document it, and then remove it. Here’s an example of what I mean.
Step 1: Observe the Current Process
Looking at the definition of efficiency in a business context, it’s what is actually achieved in comparison to what could be achieved using the same resource (time, money, people).
When we look at our processes and we observe how things are done…
We’ll be able to see that actually, most of the activity is spent on not adding value. It’s the stuff that goes into:
- moving information or product
- reviewing things
- setting up for the job and preparing
- asking questions
- reworking or reprocessing things that weren’t right first time.
- creating work-arounds
The list goes on.
I challenge you to go see. Go to a key process or work area and watch. You’ll be amazed at just how little time is spent actually adding value.
And when we map our processes, we’ll see that the total time it takes to process the money making steps can be calculated in either seconds or minutes.
In comparison, the total time it takes to complete the entire job (the total lead time of the process) normally accounts to days or weeks, or even months.
There’s always a lot to improve if you compare these two factors.
Use a Time Observation Chart
Here’s a tool that’s often used in lean analysis. It’s called a time observation chart. It’s simply a table that captures how things are currently processed, and is designed to show the value add steps (where you actually make money) and the non value added steps (wasteful activities). Look at how many wasteful activities there are in red in our example below:
Column 1 is the sequence of steps
Column 2 is the task within the process
Columns 3-12 are the Different time observations
Columns 13-14 are average task time and VA or NVA categorisation
Notice the total VA time is 341 minutes and NVA time is 934 minutes. This means that our process is not adding value for around 73% of the entire time!
There’s a lot of wasteful activities within this process. And our aim in lean is to reduce these NVA steps as much as we can.
So, if our processes hold a lot of waste… and we remove it…we can then repeat the same process many more times in the same period, and get more done. This is the efficiency gains that lean production can bring.
We effectively get more output over the same time frame and with the same people.
Step 2: Strip The Waste & Create a New Process
the next step is to create ideas and solutions to remove as much of our waste as possible.
In this example, we’ve worked on stripping a number of wasteful steps from our time observation chart.
- we removed the need to prepare for the job – We agreed to get items supplied to the line in the right sequence, so the operators don’t have to prepare and sort.
- We’ve removed the need to ‘mastinox’, as we ‘ve found a more innovative way to lock the bolts in our assembly process
- We’ve spoken to our supplier and agreed that they spray and metal finish only the selected parts, meaning that we don’t have to remove excessive paint before gluing
- Waiting for glue to warm up has been removed, there’s now always warm glue supplied by external helpers who keep things topped up while the operators are busy assembling.
The result is this new way of working:
Notice the drastic improvement in our process now.
- Our Value Add time is 341 minutes
- Our Non Value Add time is 318 minutes
- Our NVA is now 48% of the total time. That’s a 34% improvement.
This is typical of lean production improvements.
And now we can get more almost double the work out with no extra people.
Step 3: Lock the Steps in and Make it a Standard
Once we’ve improved the process, it’s time to standardise everything so it becomes the standard way of working.
In lean we create standard work so everyone follows it.
It’s simple and visual. And it shows clearly how to complete a given process.
Here’s an example of standard work. Notice that following:
- there are images to show the task
- a few sentences to describe the task
This standard work can then get used as a training aid to help people learn the new process in the agreed way. This in turn helps maintain the efficiency of the process, without things falling back to the way they used to be.
Step 4: Repeat to Find More Gains
Once you’ve locked in the gains, it’s time to repeat the steps to go again and remove even more NVA. This process gets continuously repeated, using the concept of Plan-Do-Check-Act (PDCA). It’s the cornerstone of lean and allows everyone in the business to continuously challenge their existing processes, in view of stripping more wasteful tasks… no matter how small they appear.
This PDCA process involves:
Firstly, observe the process (similar to what we did above).
Once we understand the process, we look for areas we can improve. This is normally in the form of wasteful work.
When we have an idea, we :
- Plan a small scale trial, and what we would expect as a result a successful experiment
- Do – Conduct the trial
- Check – We observe the results – did it work?
- Act – Based on what we observed, do we make it the new standard or try something else?
You can see that although we have our standard work and new way of working, we don’t just settle with it and never challenge our current thinking. We keep looking for improvements among the team. When an improvement is made, we follow the PDCA process to make lasting change, repeatedly, and update our standard work.
A Culture of Continuous Improvement
Constantly improving means lean production will pay for itself for years to come. It also means that you’ll constantly improve productivity and efficiency.
And with efficiency gains, quality, cost and delivery improves too.
I’ve worked with clients where we’ve achieved some vast step changes. Some of which are:
- Doubled productivity, without adding any extra people – We literally transformed their operations to achieve doubled sales over the coming months, with no extra members of staff and floor space needed
- Redesigned a factory to cope with 60% growth, and prevented them from having to move into a new facility
- Improved a construction project management process – so they could manage more projects in a given year with the existing team that they have
Word of caution though. For it to be sustained, lean must be embedded into the culture of the business.
Often many lean practitioners focus too much on the lean tools and application. The real secret is managing change and getting people to follow lean every day. It can easily be done by spending time to prefect it.
Here are some frequently asked questions that people often ask.
Can I Improve Productivity in Non Manufacturing Processes, Using Lean Production? Absolutely. Where there’s a process… Any process… It can be improved. You can use lean production techniques on every process in the business. You’ll get long lasting and huge gains if you implement it right.
What’s the Difference Between Lean Production and Continuous Improvement? The only difference is the title. Continuous improvement and lean are the same thing. The 5 fundamental principles embody what continuous improvement is:
- Understand what your customers value
- Map your key processes (value stream)
- Identify the waste and make your processes flow
- Create pull, where you make only what the customer wants
- Continuously improve
Implementing lean correctly means that there should be a culture of daily improvements, which embodies continuous improvement.