Page 66 - Lean six sigma demystified

Chapter 2 Lean Demy S tifie D 45

What’s weird about this kind of thinking?
1. The top priority is to produce products at the rate of customer demand,
not to keep workers busy.

2. Sometimes the best thing you can do is to stop making stuff. Finished but
unsold inventory is wasteful (e.g., Compaq versus Dell).

3. Create only a small inventory of finished goods to level out the production
schedule.

4. The more inventory you maintain, the less likely you will have what you
need! Too much inventory creates clutter and hides shortages.

5. It’s usually best to work out a process manually first before adding
technology.

Lean versus Mass Production

The old models of business required stability, not the unpredictable nature of
today’s markets. In the good old days, you could make and sell products using
some sort of strategic planning. In the volatile, ever-changing marketplace of
today, however, you must be able to rapidly sense what customers want and
respond to their needs quickly.

Lean Production Mass Production
Build to order Make and sell
Economies of speed Economies of scale
Effective Efficient

Pull (from customer) Push (to customer)
Small lots Large batches
Quick changeover Changeover unimportant
Production cells that do everything Functional silos and production lines
Right-sized machines Big, fast machines
Fast to respond Slow to change
Adaptive Rigid, inflexible
General knowledge Specialized knowledge

Lean prizes flexibility and speed. Mass production focused on the economies
of building lots of things at a lower unit price. When you get good at Lean, you
can often produce a product for the same price as a mass-produced item and