B.      Lean principles in the organization

                                                       1.            Lean concepts and tools
Define and describe concepts such as value chain, flow, pull, perfection, etc., and tools commonly used to eliminate waste, including kaizen, 5S, error-proofing, value-stream mapping, etc. (Understand)

                                                       2.            Value-added and non-value-added activities
Identify waste in terms of excess inventory, space, test inspection, rework, transportation, storage, etc., and reduce cycle time to improve throughput. (Understand)

                                                       3.            Theory of constraints
Describe the theory of constraints. (Understand)

Lean Six Sigma is a principle that integrates the Six Sigma focus on quality with the Lean Production focus on eliminating waste and speed with the result being better quality faster and efficient.

Value chain (value stream) – specifying value is the first step in lean principle as determined by the customer. Value = function/cost. Thus, a value chain is all the steps (both value added and non-value added) in a process that a customer is willing to pay for. Once value is defined, the “target cost” of the product may be determined. The target cost is the mixture of current selling prices by competitors and the elimination of muda (waste).

Value stream mapping – a tool the maps the flow of material and information (not only the activity of the product, but the management and information systems that support the basic process) as a product or service makes it way through the value stream. This is especially helpful when working to reduce cycle time, because you gain insight into the decision making flow in addition to the process flow. First map your process, then above it map the information flow.

Flow – the activities for production should be in a steady, continuous flow with no wasted motions, batches, or WIP. Employ the concepts of  Total Productive Maintenance (TPM) and poka-yoke to prevent defects from proceeding to the next step.

Pull – Only produce when the customer requires. Resources in the process are replaced only when consumed.

Perfection – as you incorporate the first four principles: realizing customer value, mapping value, flow and pull, all which help to eliminate waste, the process nears perfection or the complete elimination of muda.

Kaizen - Japanese term that means continuous improvement, taken from words 'Kai' means continuous and 'zen' means improvement.

5S – the five Japanese words for workplace organization are translated into: sort, straighten, shine, standardize, sustain.

Kanban – The Japanese word for sign. It is one of the primary tools of a Just in Time (JIT) manufacturing system. It signals a cycle of replenishment for production and materials. This can be considered as a “demand” for product from on step in the manufacturing or delivery process to the next. It maintains an orderly and efficient flow of materials throughout the entire manufacturing process with low inventory and work in process. It is usually a printed card that contains specific information such as part name, description, quantity, etc.

Error-proofing – A Japanese concept called poka-yoke which purpose is to provide some intervention to catch a mistake (error) before producing a defect.

Value-added and non-value-added activities – the preceding principles and activities add value. Non-value-added activities are classified as muda. Seven muda categories are: overproduction, inventory, repair/rejects, motion, processing, waiting, and transport.

Theory of constraints - called constraints management, it is a set of tools that examines the entire system for continuous improvement. Constraint management could describes as removing the bottlenecks that limit throughput. The current reality tree, conflict resolution diagram, future reality tree, prerequisite tree and transition tree are the five tools used in its ongoing improvement process.