2.4 Lean Management

Lean Management optimises processes by reducing time spent on non-value-added tasks (unnecessary operations or transport, waiting, overproduction, etc.), causes of poor quality and complications

Here we are going to learn about Lean Management, which is a management philosophy, which is centered around optimizing time spent and tasks assigned.


Toyota was the first company to spearhead Lean Management. Let’s take a look at what they did to improve their motor production in the mid 20th century.

As you can see, Toyota utilized a new way of production, where only parts were produced when they were about to be consumed in further production. This lead to less overproduction and waste, which allowed for a tighter budget. This was a precursor for the scheduling method “Kanban”, which was developed in-house at toyota. They innovated with Lean Production by reducing waste and striving for improvement.

Methods in Lean Management

Videos are German language only! A short summary of each video in english is found below!

A little cringe, but the content is good:

Lean Tools are tools to improve efficiency in production companies. In this Video five different lean tools are presented:

  • 5S: This is a mantra based around five japanese words, pertaining to the work environment.
    1. Seiri: Sort through all your items in a location and remove unnecessary items.
    2. Seiton: Set your items in order and at the correct place to fulfill their function.
    3. Seiso: Sweep and clean your workplace frequently and inspect your tools on a regular basis.
    4. Seiketsu: Standardize your work processes.
    5. Shitsuke: Develop a sense of self-discipline in your employees, also translates to “do without being told”
  • TPM: Total Productive Management; Contingency plan to continuously improve and keep equipment functional
  • SFM: Shop Floor Management; Organization of leadership and management culture for improved cooperation between workers and management
  • Problem-Solving: Establishment of a problem-solving culture, where employees feel responsibility for problems and solve them independently
  • VSM/VSD: Value Stream Mapping/Design; Visualisation of value generating processes to eliminate processes, which do not generate value

These Lean Tools are best implemented with a Plan->Do->Check->Act task cycle.

This video aggregates some useful tips for shop floor management meetings. All departments, which are working towards production should be present at those meeting and should gather the current data and compare them to the expected data (such as production output). Frequent meetings cut down on miscommunication and resources can be allocated more accurately. The meeting should always take place at a certain time and place. One employee should present one metric (e.g. safety) and discuss the current metric, how it changed in the last 24 hours, and what actions might help to reach the target metric.

This video explains how to manage the shop floor panel. It allows for visualization of metrics and actions to improve metrics. The panel should take a central spot on the shop floor. The goal is to find problems early on, take actions against problems and identity difficult problems to get them into the next higher management level for a solution.

A partition into five different divisions has proven to be useful

  1. Safety - Rundown of work place accidents, preventative measurements, security instructions, health
  2. Quality - Scrap shares, errors, reclamation
  3. Deployment - Productivity, Piece counts, delivery delays, turnaround
  4. Costs - Budget, cost reports, cost centers
  5. Employees - shift scheduling, vacation plans, qualifications, training

A traffic light solution (red, yellow, green) to indicate the current quality of the partition can help to organize the panel.

This video is all about process analysis of the toyota guideline using a welding and assembly line as an example.

As a first step the deployment of the product should be displayed graphically. One example would be displaying the amount of produced pieces per day. That way the current performance and monthly variance can be assessed.

In the second step customer demand and planned cycle time are calculated. This entails calculating the cycle time by dividing the total work time per day by the amount of items on daily demand. The result is a goal: the average work time interval between finished products.

The planned cycle time should be faster than what was calculated, as factors such as scrap, machine failures, staff issues etc. will inhibit the cycle time and need to be factored in.

As a third step we are analyzing the flow pattern of the process. We can do so easily after we displayed a diagram of the process steps. Inventory control or automation of the separate steps can also be analyzed at this point.

Measuring the length of a process cycle in production can be very helpful, especially if done frequently to analyze the variance in production speed. Once problems there are identified, they can be addressed much more easily.

Fourthly, we analyze the procedural patterns of the production. This means actually watching the production process instead of measuring it. Here roots of the identified problems can be found.

Now it can be assessed whether the machine and employee capacities are sufficient to handle the planned cycle time.

This last video explains the Overall Equipment Effectiveness (OEE) metric. It assesses the overall effectiveness of an equipment or an entire shop floor. It is composed of availability, performance and quality and is set as a value between 0 and 100%. While it doesn’t offer solutions directly, it can show which problems are standing in the way of high effectiveness.

In the first step we are looking at the availability. In the example, the shop floor is used for 2 shifts รก 8 hours per day, which translates to 16h production time and 8 hours unoccupied downtime. Losses of availability, such as cleaning, maintaining and interferences need to be calculated as well. Remaining are 13 hours per day of available production time. This results in 13/16 or 81% of availability.

In the second step, we need to calculate losses of performance. These include times when machines run at reduced speed, employee breaks or shift changes, problems through lack of material or employees. In the example it was calculated, that only 11.5 hours of used production time remain. The production factor is 11.5/13 or 88%.

In the third step, we need to calculate losses of quality. This is primarily scrap pieces, which can’t be sold. In the example 60 of 690 pieces are unfit to be sold, which results in a quality factor of 630/690 or 91%.

Multiplying all factors leads to the final OEE as result, which is 66% here.

Last modified October 5, 2022: Historian article (#107) (5f30dc0)