LEAN

OPERATING
SYSTEM
CHAPTER 13
 LEARNING
AGENDA
OBJECTIVES
After studying this chapter you should be able to:

Explain the four principles of

lean operating systems 13 . Explain how lean principles
are used in manufacturing 13 .
1
Describe the basic lean tools and service organization 4
and approaches 13 .
2 Describe the concepts and
Explain the concept of Lean philosophy of just-in-time 13 .
Six Sigma and how it is operating systems. 5
13 .
applied to improving
operations performance 3
LEAN THINKING
refers to approaches that focus on the
elimination of waste in all forms, and smooth,
efficient flow of materials and information
throughout the value chain to obtain faster
customer response, higher quality and lower
cost.
Manufacturing and service operations
that apply the principles of lean
enterprise are often called lean
operating systems.
 PRINCIPLES OF
LEAN OPERATING
SYSTEM

01 Eliminate of 03
Improved
waste
quality

02 Increased 04
Reduced Cost
speed and
principles
4 PRINCIPLE OF LEAN
OPERATING SYSTEM

1.
ELIMINATE
WASTE
means performing only the activities that are truly necessary to complete the
job. Any material, task, or process that does not add value to the
organization is considered waste.

The goal is to remove all such non-value-adding activities, aiming for zero waste
across all value-creation and support processes in the entire value chain.

Toyota Motor Company classified waste into 7 major categories : OVERPRODUCTION,

WAITING TIME, TRANSPORTATION, PROCESSING, INVENTORY, MOTION, and PRODUCTION
DEFECTS
ELIMINATE WASTE

7 MAJOR CATEGORIES OF
WASTE
WAITING TIME
TRANSPORTATION
OVERPRODUCTION PROCESSING
time wasted when people, unnecessary moving of
making products than machines, or materials are doing extra work that’s
items
needed or before they idle not needed
are needed

INVENTORY PRODUCTION DEFECTS

too much stock sitting MOTION product or works that are not
around unnecessary movement right the first time and require
of workers or rework or scrapping
equipment
EXHIBIT 13.1 - shows common waste in organization
2. INCREASE SPEED AND 4 PRINCIPLE OF LEAN
OPERATING SYSTEM

RESPONSE
means designing and coordinating all processes in the value chain to deliver
products and services quickly and efficiently. It focuses on producing according to
customer demand, meeting delivery requirements, responding promptly to
competitors, and handling customer needs effectively.

The goal is to synchronize every step in the value chain to maximize efficiency,
minimize delays, and ensure fast and reliable value delivery.

3. IMPROVE QUALITY
improving quality means making sure that every part of the process—raw materials,
tools, machines, and operations—works correctly and consistently. Poor quality
causes delays, extra work, more inventory, and wasted space, which all increase
costs and disrupt schedules.

4. REDUCE COST
reducing cost happens naturally when waste is eliminated and quality is improved.
Less waste means fewer unnecessary materials, less extra work, and fewer errors—
 LEAN TOOLS AND
APPROACHES

01 04 Small Batch and

The 5s
Single-Piece
Flow
02 Visual 05 Quality and
Controls Continuous
Improvement
03 Single Minute 06 Total Productive
Exchange of Maintenance
Dies (SMED)
6 LEAN TOOLS AND
APPROACHES

1. THE 5S
TOP 5 B2B MARKETING
STRATEGIES
Workers cannot be efficient if their workplaces are messy and disorganized. Firms use the "5s"
principles to create this work environment. The 5S’s are derived from Japanese terms: seiri (sort),
seiton (set in order), seiso (shine) seiketsu (standardize), and shitsuke (sustain).

Sort Set in Order Shine Standardize Sustain

(Seiri) (Seiton) (Seiso) (Seiketsu) (Shitsuke)
arrange materials and keep the workplace formalize procedures keep the process or
ensure that each item
equipments so that clean to ensure safety and practices to create habit through training,
in the workplace is in its
they are easy to find and early identification consistency and ensure communication, and
proper place. Get rid of
and use of problems that all steps are organizational
unnecessary items.
performed correctly. structures.

01 02 03 04 05
 6 LEAN TOOLS AND
APPROACHES

2. VISUAL CONTROLS
Are indicators for operating activities that are placed in the plain
sight of all employees so that everyone can quickly and easily
understand the status and performance of the work system.

Visual Signaling System is one kind of visual control that actively

signals a problem or alerts workers (ex. Andon, Cords, Scoreboards)

3. SINGLE MINUTE
EXCHANGE OF DIES
(SMED)
Refers to the quick setup or changeover of tooling and fixtures in
processes so that multiple products in smaller batches can be run
on the same equipment.

Helps companies switch products quickly so they can produce

more, less waste, and respond fast to customers
 [Link] BATCH AND SINGLE PIECE FLOW
BATCHING SINGLE-PIECE FLOW
the process of producing large quantities of making items one at a time and
items at once before they are transferred to moving each item immediately to the
the next operation. next step.

5. QUALITY AND CONTINUOUS

QUALITY
IMPROVEMENT
CONTINUOUS IMPROVEMENT
• in business refers to the degree to which • known as Kaizen in lean systems
products, services, or processes meet • always trying to make business
specified standards and customer processes better, faster, and
• expectations
quality at the source means doing it right easier, little by little, every day.
the first time, and therefore eliminates 6 LEAN TOOLS AND
the opportunities for waste. APPROACHES
 6 LEAN TOOLS AND
APPROACHES

[Link] PRODUCTIVE
MAINTENANCE

Total Productive is focused on ensuring that operating systems will

Maintenance - perform their intended function reliably.

GOAL : prevent equipment failures and downtime; zero

accidents, zero defects, zero failures.

keeping
Lean Maintenance - machines, equipment, and systems running
smoothly with no waste, using the lean thinking
principle.
 Loyalty Programs
Reward long-term customers with exclusive
6 LEAN TOOLS AND benefits and special offers
APPROACHES

AUTONOMOUS MAINTENANCE

FOCUSED MAINTENANCE

PLAN MAINTENANCE

8 PILLARS OF QUALITY MAINTENANCE

TOTAL
PRODUCTIVE EARLY EQUIPMENT MAINTENANCE
MAINTENANCE
EDUCATION AND TRAINING

SAFETY HEALTH ENVIRONMENT

ADMINISTRATIVE OF TOTAL MAINTENANCE

WHAT IS
LEAN SIX
SIGMA?
 LEAN
AGENDA
SIX
SIGMA
1. What is Lean Six Sigma?

- Describes as a useful and complementary approach. It combines

the best parts of two different methods: Lean Production and Six

Sigma.
The main goal is simple: to make processes faster, cheaper, and

higher quality all at the same time.

Let's look at what each part
does:

LEAN PART

Lean focuses on Lean tools help

01 eliminating waste.
03 companies
quickly
streamline a
process and fix
Think of it as simple issues,
02 getting rid of like someone
things that slow entering the
you down, like wrong customer
excess inventory, address.
unnecessary
steps, or waiting
time.
Let's look at what each part
does:

SIGMA PART

Six Sigma focuses

It's about making
01 on reducing errors 03 sure the process
and defects.
is highly
accurate and
consistent, so
It uses statistical mistakes don't
02 tools to deeply happen in the
analyze a process first place.
and find the root
cause of
problems.
TIMKEN
COMPANY AND
SOUTHWEST
AIRLINES
TIMKEN
COMPANY
The Timken Company is a global
manufacturer of bearings, alloy
steels, and related products. Like
many manufacturers, they
recognized that survival required
operational excellence, and they use
Lean to improve productivity.
Timken focuses on four
key areas of
improvement:
4 PRINCIPLE OF LEAN
OPERATING SYSTEM

1.
ELIMINATE
WASTE
Action: Timken uses what they call a 'boot camp' approach. This is where
employees and managers from different plants visit each other to find ways to
reduce waste and inefficiency.
Result: They focus on removing non-value-added steps from processes,
reducing paperwork, and improving equipment utilization. This is the core of
Lean—removing waste to speed things up.
2. INCREASE SPEED AND 4 PRINCIPLE OF LEAN
OPERATING SYSTEM

RESPONSE
Action: Timken is focused on reducing the total cycle time for
new product development. Cycle time is the time it takes to
complete a process.
Result: This helps them get new products to the market faster
and be more responsive to customer requests.
3. IMPROVE QUALITY
Action: Timken worked toward improving total quality
throughout the supply chain by sharing information with
suppliers and customers. They implemented worldwide quality
audits to meet high standards.
Result: This emphasis on quality led to lower rework and

4. REDUCE COST
reduced scrap, improving overall product value.

Action: Timken worked with partners to create an 'integrated supply

chain,' streamlining logistics and inventory management to reduce
operating costs.
Result: These improvements led to a significant financial impact,
SOUTHWEST
AIRLINES

Southwest Airlines is a prime

example of applying Lean
principles in the service industry,
focusing on both back-room
operations (like maintenance) and
front-office services (like check-
in).
4 PRINCIPLE OF LEAN
OPERATING SYSTEM

1.
ELIMINATE
WASTE
Action: Southwest minimizes ground time through effective
systems, with flight crews helping clean and speed up the process.
Result: They achieve a quick turnaround—sometimes as fast as 15
minutes—allowing them to fly more flights per day with fewer
planes.
2. INCREASE SPEED AND 4 PRINCIPLE OF LEAN
OPERATING SYSTEM

RESPONSE
Action: Southwest simplified customer processes like ticketing
(introducing ticketless travel) and boarding (using open seating
instead of complex assigned seats).
Result: This makes the customer experience faster and more
fluid, improving customer satisfaction.

3. IMPROVE QUALITY
Action: Southwest simplified complex steps like routing and
maintenance and focused on employee training to improve service
delivery reliability.
Result: This focus on simplification and employee quality led to
fewer customer complaints, such as lower incidence of misrouting

4. REDUCE COST
or damaged baggage.

Action: Southwest maintained a simple fleet of aircraft and

established fast and efficient processes (like the 15-minute
turnaround) throughout their operations.
Result: The efficiency translates directly into higher asset
utilization and significantly lower operating costs, which is a core
 JUST-IN-
TIME (JIT)
 JUST-IN-TIME
(JIT)

What is Just-in-Time The Key Goal: The Contrast: Benefits:

(JIT)?
Traditionally, parts are
'pushed' into the process JIT helps overcome
JIT is a production JIT tries to reduce problems like excessive
based on forecasts. If the
philosophy that aims to inventory levels to zero by inventory and long lead
forecast is wrong, you end
provide the right part, at coordinating materials and times—problems often
up with too much
the right time, in the right components to arrive caused by traditional
inventory. JIT systems
quantity. It was originally exactly when they are 'push' systems.
'pull' production based on
developed by Toyota in needed for production.
actual customer demand.
the 1950s.
OPERATION
OF A JIT
SYSTEM
OPERATION OF A JIT
SYSTEM
OPERATION OF A JIT
SYSTEM
Kanban

—Kanban is a Japanese word for a 'visual record' or 'card.'

These cards control the supply chain.

—The system is a 'pull system': production only begins when

a downstream customer or process signals that it needs
materials.
STEPS:

The Customer The Supply

01 03
Pulls (The Cycle Starts
Withdrawal)

02 Production is 04 The Supply

Authorized Cycle Ends
JIT IN SERVICE
ORGANIZATIONS

JIT isn't only for

manufacturing, as we saw
with Southwest Airlines.
Many service
organizations also use JIT
principles.
 Examples:

SOUTHWEST
AIRLINES
—They use JIT for their planes. They want
the plane 'just-in-time' for the next flight,
not sitting around empty.

—They achieve this by having a super-fast

15-minute turnaround time on the ground.
Less waiting means more flights and lower
costs.
 Examples:

STARBUCKS

—When you order a latte, the barista

doesn't make it until you ask. The drink
is made 'just-in-time' for you to walk
away with it.

—This is efficient because they aren't

wasting milk and coffee making drinks
that might not sell.
THANK
YOU!