The History of Lean

Summary

This script delves into the history and fundamentals of lean thinking, emphasizing its evolution over centuries, not a fleeting trend. It highlights the contributions of Frederick Taylor, Ford Motor Company, and Toyota's Taiichi Ono in developing lean principles. The script underscores the importance of standard work, flow, reducing waste, and focusing on customer value. It also credits Dr. Deming for quality management and the books 'The Machine That Changed the World' and 'Lean Thinking' for consolidating lean concepts. Lean is presented as a business system fostering a learning culture that eliminates waste and adds value to customers.

Takeaways

• 📚 The importance of understanding the history of lean thinking is emphasized to avoid considering it as a passing trend and to recognize its long-term development.
• 🛠️ Frederick Taylor's 'Scientific Management' is identified as the starting point of lean fundamentals, introducing the concept of a 'best way' to do work, which is foundational to standard work.
• 🏭 Ford Motor Company's role in lean thinking is highlighted for pioneering manufacturing systems with interchangeable parts, leading to the creation of flow and optimal manufacturing processes.
• 🔄 The challenges of variety in the automobile industry led to the development of economic order quantity, which inadvertently resulted in overproduction and waste, contrary to customer demand.
• 🚫 The concept of overproduction as the 'grandfather of all waste' is introduced, as it leads to other forms of waste in the manufacturing process.
• 🌟 The Toyota Production System (TPS) is recognized for addressing the complexity of manufacturing variety without the waste associated with overproduction, building on Ford's principles.
• 👷 Taiichi Ohno's leadership in developing TPS is acknowledged, formalizing key lean concepts such as standard work, quality at the source, and error proofing.
• 🔄 The principle of 'Pull replenishment' in TPS is noted for its efficiency in responding to customer demand, reducing waste.
• 🏆 Dr. Deming's influence on lean thinking through quality management is recognized, emphasizing the importance of getting things right the first time to minimize waste.
• 📚 The consolidation of lean thinking is marked by the publication of 'The Machine That Changed the World' and 'Lean Thinking,' summarizing a century of operational excellence.
• 🌱 Lean thinking has evolved beyond manufacturing into a business system, promoting a learning culture that focuses on problem exposure and root cause solutions to eliminate waste.
• 🛑 The script concludes by reinforcing that lean is not a temporary fad but a consolidated body of knowledge aimed at delivering the highest value to customers at the lowest cost.

Q & A

Why is understanding the history of lean thinking important?

Understanding the history of lean thinking is important to prevent team members from viewing lean as a passing fad and to appreciate its long-term development over centuries, which provides a solid foundation for current practices.

What is the significance of Frederick Taylor's work in the context of lean thinking?

Frederick Taylor's work, particularly his book 'Scientific Management,' is significant because it introduced the concept of a 'best way' to do work, which laid the groundwork for standard work and continuous improvement in lean thinking.

How did Ford Motor Company contribute to lean thinking?

Ford Motor Company contributed to lean thinking by engineering manufacturing systems based on interchangeable parts, which allowed for flow and inventory reduction, setting the stage for a waste-free manufacturing process.

What challenges did the automobile industry face as it progressed in the 20th century?

As the automobile industry progressed, it faced challenges due to customer demand for variety and customization, which introduced complexity and changeovers in the manufacturing process.

What is the economic order quantity and why was it not an effective solution for managing complexity?

The economic order quantity is a mathematical calculation for determining optimal batch sizes in manufacturing to minimize changeover costs. However, it was not effective because it led to the production of goods not necessarily aligned with customer demand, resulting in overproduction and waste.

How did Toyota Production System address the waste of overproduction?

Toyota Production System addressed the waste of overproduction by developing methods to manufacture variety and handle complexity without incurring the waste associated with overproduction, focusing on flow, quality, and pull replenishment.

Who is Taiichi Ohno and what is his contribution to lean thinking?

Taiichi Ohno is a famed engineer at Toyota who was a key figure in the development of the Toyota Production System. His contributions include formalizing concepts like standard work, quality at the source, and error proofing processes.

What is the significance of Dr. Deming's work in the history of lean thinking?

Dr. Deming's work emphasized quality management, advocating that getting things right the first time is crucial to reducing waste. His philosophy has been integral to lean thinking's focus on quality and continuous improvement.

How did the books by Jim Womack and Dan Jones contribute to the understanding of lean thinking?

Jim Womack and Dan Jones's books, 'The Machine That Changed the World' and 'Lean Thinking,' consolidated a century of operational excellence thinking into a cohesive framework, popularizing the term 'lean' and its principles.

Why is lean thinking not just a manufacturing concept but also a business system?

Lean thinking is not just a manufacturing concept because it has evolved into a business system that emphasizes building a learning culture, exposing and solving problems at their root cause, and focusing on delivering the highest value to customers at the lowest cost.

What is the core principle of lean thinking in terms of customer value?

The core principle of lean thinking in terms of customer value is to focus on what the customer perceives as valuable, eliminating all forms of waste in the process, and ensuring that the business system is designed to deliver this value efficiently.

Outlines

00:00

📚 The Evolution of Lean Thinking

This paragraph delves into the historical development of lean principles, emphasizing their long-standing evolution rather than being a recent trend. It highlights the significance of understanding lean's history to appreciate its depth and continuous improvement philosophy. Key contributors like Frederick Taylor and his 'Scientific Management' are mentioned, setting the stage for standard work and efficiency. The Ford Motor Company's role in creating manufacturing systems for flow and reducing waste is acknowledged, as is the challenge of managing variety and the resulting overproduction waste. The paragraph also introduces Taiichi Ohno and the Toyota Production System (TPS), which addressed the issue of overproduction and introduced concepts like standard work, quality at the source, and pull replenishment, all centered around customer value.

05:00

🌟 The Consolidation of Lean Thinking

The second paragraph discusses the consolidation of lean thinking in the late 20th century, particularly through the influential works of Jim Womack and Dan Jones, who authored 'The Machine That Changed the World' and 'Lean Thinking.' These books encapsulated a century of operational excellence and manufacturing insights, coining the term 'lean.' The paragraph underscores lean's transition from a manufacturing concept to a comprehensive business system, advocating for a learning culture that identifies and solves problems at their root cause, thereby eliminating waste and focusing on customer value. It concludes by emphasizing lean as a long-term, knowledge-driven approach to business, rather than a fleeting fad, with the goal of delivering the highest value at the lowest cost.

Keywords

💡Lean Thinking

Lean Thinking is a philosophy and set of principles focused on maximizing value while minimizing waste in production systems. It is central to the video's theme, emphasizing the importance of understanding its history and development over time. The script discusses how Lean Thinking has evolved from early 20th-century manufacturing practices to a comprehensive business system aimed at delivering the highest value to customers at the lowest cost.

💡Standard Work

Standard Work refers to the best-known method of performing a task, which serves as a baseline for continuous improvement. In the script, it is mentioned as an initial concept stemming from Frederick Taylor's work, emphasizing the need for team members to understand and follow the best way to do work, allowing for a consistent starting point for improvements.

💡Ford Motor Company

Ford Motor Company is highlighted in the script as an early contributor to lean thinking, particularly through its focus on creating flow in manufacturing systems and recognizing the waste-reducing benefits of reducing inventory and speeding up the manufacturing process. The company's approach to manufacturing with interchangeable parts is a foundational element in the development of lean principles.

💡Overproduction

Overproduction is identified in the script as the 'grandfather of all waste,' referring to the production of more goods than are needed by the customer, leading to excess inventory and associated waste. The script explains how economic order quantity contributed to this waste by encouraging batch sizes disconnected from actual customer demand.

💡Toyota Production System (TPS)

The Toyota Production System, developed by Toyota, is a key concept in the script that formalized several lean principles such as standard work, quality at the source, and error proofing. TPS is recognized for its ability to manufacture variety without the resultant waste of overproduction, showing a significant evolution from earlier lean thinking.

💡Taiichi Ohno

Taiichi Ohno is credited in the script as one of the leaders who drove the development of the Toyota Production System. His contributions are integral to the lean thinking narrative, particularly in the context of creating a system that values flow and reduces waste.

💡Pull Replenishment

Pull Replenishment is a lean principle mentioned in the script where production is triggered by customer demand rather than by forecasts or schedules. This concept is part of TPS and aims to reduce waste by ensuring that products are made only when they are needed.

💡W. Edwards Deming

Dr. W. Edwards Deming is acknowledged in the script for his work in quality management, emphasizing that quality should be the gold standard in production. His philosophy aligns with lean thinking by advocating for doing things right the first time to minimize waste from errors and defects.

💡Value Stream

While not explicitly mentioned in the script, the concept of a value stream is implied in discussions about focusing on customer value and eliminating waste. A value stream refers to the series of actions and processes that create value for the customer in a product or service.

💡Learning Culture

A learning culture is a concept discussed in the script that encourages a work environment where problems are exposed and solved at their root cause, thereby eliminating waste. This culture is a key aspect of lean thinking, promoting continuous improvement and adaptation.

💡Operational Excellence

Operational Excellence is a goal mentioned in the script, which involves achieving high levels of performance in business operations. It is tied to the history of lean thinking, where a century of ideas and practices have been consolidated to improve speed, efficiency, and manufacturing excellence.

Highlights

Understanding the history of lean thinking is crucial to avoid considering it as a temporary trend and to recognize its long-term development.

Frederick Taylor's 'Scientific Management' laid the foundation for the concept of standard work, emphasizing the importance of a baseline for improvement.

Ford Motor Company's early 20th-century manufacturing systems were based on interchangeable parts, contributing to the creation of flow in production.

Ford's focus on inventory reduction and process speed aimed to optimize manufacturing for a waste-free environment.

The economic order quantity concept led to the creation of large batch sizes disconnected from customer demand, resulting in overproduction and waste.

The concept of overproduction as the 'grandfather of all waste' emerged from the realization of the inefficiency of large batch production.

The Toyota Production System (TPS) was developed to manufacture variety without the waste associated with overproduction.

Taiichi Ohno, a key figure in Toyota, played a significant role in developing the principles of TPS, including standard work and error proofing.

TPS introduced and formalized concepts such as quality at the source, flow, and pull replenishment, emphasizing customer value.

Dr. Deming's work on quality management highlighted the importance of getting things right the first time to minimize waste.

The late 1980s and early 1990s saw the consolidation of lean thinking with the publication of 'The Machine That Changed the World' and 'Lean Thinking'.

Lean thinking has evolved from its manufacturing origins to be recognized as a comprehensive business system.

Lean encourages building a learning culture that exposes and solves problems at their root cause, thereby eliminating waste.

Lean is not a temporary program but a consolidation of ideas and practices aimed at delivering the highest value to customers at the lowest cost.

The history of lean thinking is a testament to the continuous improvement and adaptation of business and manufacturing practices over the past century.

Lean principles have been shaped by the expertise of individuals and organizations dedicated to operational excellence.

The body of knowledge in lean thinking provides a framework for building a business system focused on customer value and cost efficiency.

Transcripts

a very important aspect of lean

fundamentals is to understand the

history of lean thinking this is for two

reasons the first is that we do not want

people and team members in our

organization to think that lean is

something new or some flavor of the

month the second reason is that we want

people to understand that lean is

something that has been being developed

for a long time in fact some would argue

over the last hundreds of years however

from a purpose of lean fundamentals it's

important to look back for the last

century one of the first contributions

to lean thinking would be Frederick

Taylor's work and his resultant book

Scientific Management in this work

Frederick Taylor taught us that there is

in fact a best way to do work and that

means that team members need to

understand what is this best way to do

work and from that we create a baseline

from which we can improve upon this

really was the initial starting point of

what we now know as standard work

standard work just being some best way

of doing something in order that we can

all do it that way so that we have a

baseline from which we can improve upon

there is no question that Ford Motor

Company played a role in lean thinking

as well early in the 20th century they

were engineering Manufacturing Systems

that were based on interchangeable parts

and what this allowed them to do was to

create flow even 100 years ago Ford

Motor Company recognized that inventory

reduction and speed through the

manufacturing process will create a

manufacturing process that is optimal

from a waste-free

environment while Ford was focusing on

Flow early in the century as the

automobile industry progressed it did

create some challenges for manufacturing

those challenges were that the customer

wanted variety they wanted different

models they wanted different colors this

created complexity in the manufacturing

process and it also created changeovers

because we had to change lines over from

building one product to building the

next because of the complexity relative

to the variety unfortunately the way

many organizations handled management of

this complexity was to develop the

economic order quantity which was a

mathematical calculation of what a batch

size in manufacturing should be based on

trying to minimize the cost of

changeovers however this was not a good

move as now what was happening was we

were building batch sizes that were not

connected to customer demand in other

words we were Building Product that was

not necessarily wanted from the customer

and what this did was create product and

finished goods inventory that had no

place to go after it was manufactured

and consequently it needed to be

transported it needed to be stored it

needed to be counted and it needed to be

managed and in many cases it would need

to be obsoleted at some point in its

life when we realize that in fact it did

not and would not have any demand from a

customer point of view this was the

first notion of the waste of

overproduction known as the grandfather

of all waste because the waste of

overproduction creates all of the other

Wass as the 20th century progressed

another important player in the history

of lean is Toyota production system

which was developed by Toyota in order

to be able to manufacture variety and

deal with complexity without of the

resultant waste of over production

what's interesting about the Toyota

production system is that many of its

thoughts and principles are based on

Ford's original work from 50 years ago

that were focused on Flow and speed in

the supply chain taiichi Ono is Toyota's

famed engineer with being one of the

leaders really driving the development

of the Toyota production system there's

no question that TPS or the Toyota

production system has its place in the

history of lean thinking as it

introduced and formalized concepts for

us such as standard work quality at the

source and error proofing of processes

flow and and Pull replenishment and

understanding the most critical aspect

of lean fundamentals which is you have

to first focus on value of the customer

relative to the history of lean thinking

it's also important to give some credit

to Dr Deming and his work around quality

management that quality first has to be

the gold standard that if we just make

sure that we get things done the right

way the first time then we will create

an environment that does not have all of

the waste that is created when we are

making mistakes producing errors and

defects and allowing those defects to be

passed through down into the supply

chain the history of lean thinking

really got going as well in the late

1980s and the early 1990s from two books

written by Jim wac and Dan Jones the

first book was the machine that changed

the world and the second book was lean

thinking this is really the first step

where all of the thoughts of Ford Motor

Company and Toyota Motor Manufacturing

and Dr Deming and others all came

together in a Consolidated fashion where

we got to see a hundred years of

thinking relative to operational

excellence relative to speed and

relative to business and Manufacturing

Excellence all in one place and this is

really where the term lean first came

about while it could be argued that lean

thinking really has its origins in

manufacturing the last 20 years however

shows specifically that lean is now

recognized as a business system it is

now recognized as a way that you

actually run your business in that what

lean thinking tells us is that we want

to build a learning culture we want to

build a culture that creates an

environment where every day we go to

work and expose problems that exist and

then we solve those problems at the root

cause therefore eliminating waste inside

our systems and processes and therefore

allowing us to spend more time focusing

on what adds value to the customer lean

is certainly not a flavor of the month

or a new program what this is is a

incredible consolidation of ideas driven

from the expertise of organizations and

individuals who allowed their entire

careers to be focused on implementing

and Design in theories and principles

and tools and what we now have is a body

of knowledge that will allow us to build

a business system that will allow us to

focus on delivering the highest value to

our customer at the lowest possible

total cost