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Lean Management - Yamazumi Analysis

Updated on April 18, 2014

Lean Management Ideas

Lean management extends the concepts of just-in-time manufacturing, continuous improvement and lean production that have revolutionised manufacturing industry. It takes industrial and engineering process improvement techniques such as Six Sigma and applies them to the challenges of the busy office or shop counter. The idea is not to dehumanise through a mechanistic, "Taylorist" approach - but rather to apply the team spirit and collaborative processes that Deming championed in service driven environments. This hub showcases some of the best lean management ideas and demonstrates that they can work well in modern retail and office environments. Quality should never begin and end at the factory floor. 

Welcome to Lean Management - A Crash Course

The core idea at the heart of lean management is flow. This is based on a profound understanding of the customer as the source and driver of demand. Instead of the "push" concept whereby producers shove products onto the consumer, discounting where necessary to "shift the metal", lean management starts with genuine customer wants and needs. This "pull" concept designs the entire business process around the consumer, so that the process operates at a speed dictated actual by demand. Waste is therefore squeezed out of the system - all seven kinds of it! (More below).

An efficient manufacturing line should operate according to a beat, or takt time, that represents the pace of the process. The heartbeat is customer demand, and the takt time determines the speed that an item moves from one workstation to another. These same principles can be applied to service operations, as long as the Voice of the Customer is thoroughly known and researched. The concept of customer CTQ (Critical to Quality) - the things that really matter to the customer from a service fulfillment perspective - should be the foundation of every business. Determining the CTQ and the metrics that the customer demands is certainly the benchmark of every Six Sigma process improvement project.

So when a process is smoothly operating at a speed and quality that matches customer demand, the flow is seamless. Unfortunately the real world is a messier and more complex place. In reality bottlenecks and constraints hold up production lines, and inventory is stockpiled. Inventory is a form of waste - as it depreciates and has a storage cost. Exceessive stock build-up is usually the symptom of a malfunctioning or a sub-optimal process. It ties up cash.

Here the office manager can seek insights from Eli Goldratt's ground-breaking Theory of Constraints. The existing process, imperfect and limited as it is, has to be optimised, so the current system can be exploited to its maximum possible capability. Then the pace and productive power of the entire process is subordinated to the speed of bottleneck. There is no point running a preceding work station at top speed if it is then held up when it hits the constraint. That is a waste of time. Finally, the bottleneck is directly addressed, or elevated. Then a more perfect alignment of the productive pace and capacity of the process with real customer demand is possible.

The ultimate aim of any lean process is a fluid and dynamic reactive relationship with the market. Ronald Coase's theory of the firm suggested that a large company only makes sense where it can allocate resources more efficiently than the untrammelled free market. Otherwise the business will be misaligned with the perpetually shifting curve of customer demand. Lean production, through minimising inventory and increasing flexibility, reduces this friction between producer and consumer. Lean management speeds up cycle time and breaks down bottlenecks; enabling a more perfect alignment of a service or product with customer needs.

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Top 5 Lean Management Tools

Think that quality begins and ends on the factory floor? Heard of Six Sigma and believe that it's great for the engineers, but meaningless for finance or sales or the public sector? Think again. Some of the most useful Six Sigma tools are the most basic ones - for simplicity, not complexity, is power in the lean management world. Read on for details of five truly effective lean tools that can be applied in any office environment. In fact, at a stretch, some of these data-driven decision approaches, such as the FMEA, can even be applied in your daily life.

1. DMAIC. It was the legendary American management guru W. Edwards Deming, who, fresh from applying his statistical process control techniques in post-war Japan, adopted a simple cycle of process improvement steps. It was called PDCA - or Plan, Do, Check and Act. The same concepts, in a more structured project format, were adopted by the Six Sigma pioneers at Motorola and General Electric in the 1980s and 1990s. DMAIC stands for DEFINE, MEASURE, ANALYSE, IMPROVE AND CONTROL. Wherever intuition, anecdote or fuzzy logic is a tempting way of approaching a problem, try applying this structured and intelligent approach instead.

2. The Ishikawa diagram. Ah, the humble old fish bone diagram, so called because.. well, it looks like our piscine friends. This diagram is brilliant because it is highly visual, with the fishbones (X's, root causes and key drivers of outcomes) feeding a central spine and resulting in a clear Y, or result. It is an effective way of encapsulating the diverse forces that drive a particular outcome or result and is a useful diagnostic tool in root cause analysis. No special technical or artistic ability is, fortunately, required.

3. The hidden factory. Imagine if there was a hidden source of wastage which didn't figure in the headline productivity statistics, but was still sapping time, energy and money from your business process. This is the time and money wasted on internal re-work - the fixes made before a product or service ever reaches the customer. In some organisations the size of the hidden factory is actually larger than its profit margin. This concept derives from W Edwards Deming's "seven forms of waste", an insight that lies a the heart of lean. Deming identified waste as arising from overproduction, waiting time, scrap, transport, inventory, motion and defects. If you are in doubt, ask a Black Belt to calculate the Rolled Throughput Yield (RTY) which measures loss and wastage at every step of the process. The figure can be shocking.

4. The Yamazumi Board. A Yamazumi or load balancing board originated in Japanese car factories and is a graphical, bright and highly insightful mainstay of the visual factory. Essentially it breaks every process down into green, yellow and red components.These are respectively the value-added parts of the process (green), the necessary set-up times to make such value-add happen (yellow), and the delays or roadblocks in a process (red). The main use of the Yamazumi chart is to identify where bottlenecks and problems are arising and also provide a perspective of total process flow. Try applying Yamazumi thinking to your own daily work schedule and you may be surprised.

5. Process mapping.The key insight of lean management is to show that a sequence of what may be poorly coordinated business steps is in fact a seamless process. The customer service experience is the key. In the modern age, this will typically cover different departments and geographical locations. Supply chains can cross continents, in today's outsourced and "flat" world when a call centre in the Philippines will resolve the complaint of a shopper in Milwaukee. A process map, of flowchart, is a simple descriptive pictorial that uses standard symbols to represent the process. Like the Yamazumi chart, it is great for identifying bottlenecks. Unlike the Yamazumi board, it can be constructed in multiple dimensions to cover materials flows, information flows, cash flows, legal chains of title and accounting steps. This kind of multi-dimensional analysis is critical for achieving mastery of your business.

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    • brainmeasures profile image

      brainmeasures 6 years ago from India

      i think this is a very informative hub, i like the flow of information.