Lean Terms & Tools

Below is an A-Z list of lean tools and terms used to eliminate waste. Like a carpenter building a home, you use the correct tool for the correct application. For more definitions of terms please see the Lean Lexicon from the Lean Enterprise Institute or LeanSpeak from Productivity Inc.

80% Solution: In many cases, Pareto’s law applies; i.e. we can attain 80% of the results with 20% of the expenditure. 80% is very helpful for consensus. “Will you buy into this at an 80% level if you know we will keep working on continuous improvement?” Another thought is “Perfect is the enemy of effective.”
90% of Authority is Assumed: Decide what needs to be done, and do it. Lean leaders will tell their employees, “Sometimes it’s better to Beg Forgiveness than to Ask Permission”
Bottleneck / Constraint: Usually tied to a machine or function that limits the output of an entire factory, bottlenecks also occur in office and business systems. The idea is to focus efforts on improving the output of the bottleneck.
Cellular Manufacturing: Arrange equipment so that a product or information can flow easily from operation to operation or person to person.
Checklists: The airline pilot goes through the pre-flight checklist to make certain that no important parameter is overlooked. This same logic can and should be applied to equipment start-up procedures, between shift hand-offs and between maintenance crews. Checklists are a basic fundamental of good maintenance and safety procedures.

Don’t Over Study. Just Do It! Overcoming inertia to get something done is difficult. Ask three test questions: 1) Is it safe? (i.e. no one will get hurt if we try this) 2) Is the customer protected? (If this fails in the worst way, can we still provide the customer with a quality product or service on time?) 3) Has everyone been informed and provided input? If the answers are positive and/or no real barriers have been identified, Just Do It! Standardize the work and keep improving it.

Employee involvement: Input and participation of employees is important, but forcing “teams for team’s sake” can be both a waste of money and a cause of additional headaches.

Enterprise Resource Planning (ERP): ERP was a natural progression from Material Requirements Planning or MRP. ERP software attempts to integrate all functions of the organization, as well as customer and supplier information. While a comprehensive ERP system can be a powerful resource to the company, many companies have spent huge amounts of money to automate their waste!

Error-Proofing (also known as “Poka Yoke” in Japan) is used to ensure products and processes are completed correctly the first time. If your customers must initial places on a legal form and errors frequently result when they overlook a spot, error-proofing could be accomplished by taking a sheet of 8 ½ x 11 cardboard and cutting holes where the initials are required. Anyone could error-proof the form by using highlighter in the spaces. A “standard” has been used to reduce or eliminate errors.

Dashboards: Make sure you dig into the data. Get the source data, and check it out for yourself. Measure what matters.
Five Whys: As a rule of thumb, if you ask “why” five times, you’ll get to the actual root cause of the problem.

Why is our customer unhappy? Deliveries have been late for the last month

Why have deliveries been late? Production was behind schedule

Why was production behind? Parts shortage

Why was there a parts shortage? Because many parts were rejected for not being up to specification

Why are so many parts defective? Because Purchasing switched to a low-cost supplier

Just In Time (JIT): An earlier term for “Lean Manufacturing”.

Kaizen: Japanese term for Continuous Improvement.

Kaizen Blitz: Kaizen Events are highly focused improvement events designed to address and resolve important business issues and/or constraints.

Kanban: A signal to move or make an item. The simple rule is that no item is produced or moved unless there is a kanban authorizing it. Kanbans can be anything: A light, a card, etc. ,It often takes the form of a physical space or container (e.g. squares taped out on a table, lines painted on the floor, marked tote bins, carts, racks, etc)
KISS: Everyone has heard of KISS: “Keep It Simple, Stupid.” It’s easy to say and seemingly easy to understand but many organizational cultures thrive on complexity and confusion. Getting to KISS is not easy.

Kitting: The “Set-Up” for Assembly: The traditional way to get sets of parts to the assembly area is through “kit pulling.” This kitting activity acts very much like the change-over of a machine in its impact on the ability to reduce lot sizes.

Knowledge folders: Manila folders or virtual folders are standardized work where a procedure and all relevant information to carry out a task is contained in one location so that a task can be done without error by a reasonably competent person who is unfamiliar with the procedure.

Management by Walking Around (MBWA): Whether factory floor, office, or a hospital, lean practitioners know that they must observe how work is being done to appreciate the complexity and variation that may be present in the process.
Measurement & Reward Systems: The largest productivity improvements come from methods changes, not from increasing the level of effort of the people. Instead of spending effort calculating a theoretical “standard,” you will be further ahead if you focus on finding a better way of doing work and on providing people timely feedback as to how well they are performing.

Muda: Japanese work for “waste".

One page reports: “One-pagers” are a take-off of Toyota’s A3 reports. It is a form of standardized work that forces crisp thinking, facilitates consensus where appropriate and makes things easier for others to read and understand. One pagers can refer to other one pagers or attachments or files as appropriate.

One Size Does Not Fit All: Deming teaches us that we must understand the variation in the workplace. If you write one standard for a similar task done five different machines or locations and there is a significant difference in the task requirements, you may create both safety and operational concerns. Standardize the work when you understand the variation.

Optimize the Whole, Not Necessarily the Pieces: Optimizing the entire organization must be the goal of any lean initiative. One of the most difficult obstacles that many organizations encounter is the fact that their current measurement and reward systems target “unit optimization”. The easiest way to think about this is to picture an automobile assembly line. Every piece of equipment is paced to the rate of the line, yet most of the equipment could produce considerably more than that pace.

Pareto’s Law: The 80/20 rule is typically utilized in inventory control, reaching consensus and identifying priorities. When you understand that 20% of anything causes 80% of the problems, it becomes much easier to focus on the real issues.
Preventative Maintenance: (See “Total Productive Maintenance, TPM”)

Pull vs. Push: In a “Pull” philosophy, the next operation is considered a customer. As such, it is reasonable to ship a product to a customer only when it is requested, i.e. only when it is needed. In a “Push” environment, product is delivered to the next operation based on schedule, or simply availability, whether the next operation needs it or not. Pull works well in offices, service industry and manufacturing.

“Rule” or “Exceptions”? In most discussions as to why a lean initiative “can’t be done”, it is the exception that is used to justify things.
Shadow Boards: Help people put things back where they belong by creating a shadow board. By putting the outline of the tool on a board or in a drawer the location for proper placement becomes obvious. Combining the outline with color-coding can be even more effective. This concept is part of Step 4 in 5S.

Show Me: It is not uncommon for people to claim that laws, standards, policy, etc… will not allow change. Demand to see the written document.

Silence is Acceptance: A culture of continuous improvement demands on-going change. It is difficult to make rapid progress if approvals are required for every action taken. Institute a procedure that encourages teams to “notify” people of actions they intend to take. The onus is then on those notified to “raise a flag” of concern. “Speak now, or your silence is acceptance.”
Small lot, JIT deliveries, to the point-of-use: Receiving transactions, incoming inspection, moving parts to a stockroom, recording transactions, picking parts, etc. are all non-value adding functions. One solution is to evolve to frequent vendor delivery directly to the point of use, bypassing receiving, incoming inspection, and the raw material stockroom. This concept also works well in an office. When you see a pile of paper on someone’s desk waiting to be finished for the next step of the process, think about flow and small lot delivery to smooth out your process.
SMED, Single Minute Exchange of Dies: Originally a concept for manufacturing, SMED also applies to “Single Minute Exchange of Data.” The concept refers to reducing the amount of time it takes to ‘changeover’ from one piece of equipment or idea to another. The basic rule is “Make just what the customer wants when s/he wants it.” Any additional production is waste and adds to inventory. The ideal is lot size of one. Lot size must be balanced against change-over costs. Determine the right lot size based on customer demand, then match set up to customer demand, using lean tools and thinking to reduce the time and effort for setup.
Solutions Looking For a Problem: If lean is not tied to a transition plan, it will produce little in the way of meaningful results. Too many “lean transitions” begin with an unfocused approach. “Let’s do a 5S”; “Let’s change the layout this area”; “Let’s blitz the stockroom”; etc.” On the other hand, continuous improvement is about making incremental improvements and you will sometimes only “see” the next opportunity when you have done something. That’s why “lean is a journey” and you want to keep things simple for making future changes.

Standard Work: Standardized work is visual controls and/or instructions that allow processes to be completed in a consistent, timely and repeatable manner. By implementing standardized work, employees can do things faster, better and cheaper. Standardized work should always have the input of those who do the work. It’s important to have the consensus of those who will use the standardized approach, remembering that “silence is acceptance.” Once processes are standard, continuous improvement can occur.

Statistical Process Control (SPC): A traditional analytic technique for process control, involving the frequent measurement of various product attributes to detect if the production process is drifting out of control. It involves analysis of process capability to verify that the current equipment is capable of holding the desired tolerances. Properly applied, SPC can be much simpler than Six Sigma and used with a broader segment of the workforce.
Takt Time: This term derived from the German word Taktzeit which translates to cycle time, sets the pace for industrial manufacturing lines. For example, in automobile manufacturing, cars are assembled on a line, and are moved on to the next station after a certain time - the takt time. The time needed to complete work on each station has to be less than the takt time in order for the product to be completed within the allotted time. Takt time concept aims to match the pace of production with customer demand. As with all lean tools and thinking, the concept can also be applied to office systems.

Total Productive Maintenance (TPM): TPM is a program for planning and achieving minimal machine downtime. It requires planning for maintenance to keep the operations functioning without breakdown.

U shaped cells: Removing the queues from between operations allows equipment to be located next to one another. Product begins and ends on the same aisle. The shape enhances communication. And, a U shaped cell minimizes travel distance, i.e. one operator can “walk” the product through the cell if / when needed. This concept also works well in offices when you use the principle. The “U” shape is not as important as the flow that it is intended to create.
Value Add: Those process steps that the customer would be willing to pay for. Most production steps are value adding. Non-value adding steps are things that do not alter the fit, form, or function of the product or service. Examples of non-value adding activities include receiving, inspections, transaction processing, transportation, de-trashing, product movement, storage, etc. One objective of Lean is the reduction / elimination of all non-value added activities.
Value Stream: The entire chain of participants and responsibilities from beginning to the ultimate consumer. It involves all stakeholders including suppliers, customers and internal roles. Since the ultimate consumer price/expectation is a function of the cumulative costs of the entire value stream, streamlining it becomes critical. In many industries, the competitive environment has boiled down to one industry leader’s value stream vs. another. On a more narrow perspective, “value stream” is also used to denote the entire stream of activities required to move a product or service through the internal roles within a company.
Value Stream Mapping: The process of flow-charting all activities required to move a product/service through the value stream. The focus is then on identifying and removing/reducing the non-value adding activities.
Walk the Talk: What you say will be of far less impact than what you do. People watch closely to see if you really are doing as you say.
Waste: Anything that does not add value, from the customer’s perspective. Ask the questions: “Would the customer pay extra for us to do this?” “Would the customer care if we eliminated this activity?”
What Would You Do If You Were In Charge? This question reveals interesting information. Employees know where the problems are.