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Lean Transformation and ICT

Lean IT is the extension of lean production and lean office principles to the development and management of info tech (IT) products and services. Its central concern, applied in the context of IT, is the elimination of waste, where waste is work that adds no value to a product or service.

Although lean principles are generally well established and have broad applicability, their extension from manufacturing to IT is only just emerging.Indeed, Lean IT poses significant challenges for practitioners while raising the promise of no less significant benefits. And whereas Lean IT initiatives can be limited in scope and deliver results quickly, implementing Lean IT is a continuing and long-term process that may take years before lean principles become intrinsic to an company’s culture.

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Lean Six Sigma toolkit with KanBan?

Kanban Definition, very usefull Lean Tool

  • A communication system used to signal starting work on the work items in processes – Kanban is Japanese for card or signal

Concept

  • The Kanban signal contains the specific information required to authorise the commencement of work and comes from the next step in the process; without the signal, no work is started

This means that the customer pulls the item through the entire value chain

Nothing is supplied until it is needed by the next process step (JIT)

This means all the links in the value chain have to be very, very close

Examples of Kanban mechanisms

  • Cards, faxes
  • Bins
  • Defined Floor Location
  • Call Light
  • Electronic Signal (email, EDI, RF, Bar Code Reader)
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In the Lean Six Sigma methodology is Level Scheduling an important concept.

In the Lean Six Sigma methodology is Level Scheduling an important concept;

‘ The process of smoothing production volume and model mix over a given time period.’

This major component of the Lean philosophy is to smooth out the flow of value so that minimal waste inventory and waiting are incurred. To be able to provide a smooth flow when many product types are produced on the same lines it is necessary to even out the schedule, so Level Scheduling is often used. Benefits to be gained from employing level scheduling include; reduces inventory of raw materials, reduced quantity of finished goods and reduced lead times.

Not only the scheduling will do the job, with Lean Six Sigma, it will also require implementing other process improvements, e.i.;

• replacing the existing order entry process with an online system

• cross-training engineering / operations
• automating the BOM
• standardising parts where possible to allow suppliers to build-to-stock
• developing blanket orders to reduce the work involved in the purchasing
• initiating purchasing in parallel with the customer approval process
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Lean Six Sigma and the Baby Boomers

Europe’s population is aging. More and more workers, especially the Baby Boomers, are or will be approaching retirement age in the very near future. When this group of workers begins to leave the labour force, it will place great demands on the existing workforce and on the economy as a whole. Through Lean Six Sigma and Lean Transformation we might be more efficient with less resources. But how will we deal with the lesser knowledge and experience of the Baby Boomers?

Europeans relocating from other parts of the continent or immigration will not address the full shortage of workers in the European economy. In order to successfully meet the challenges of the demographic shift and the high demands of today’s employers, we need to tackle the labour issue from both the supply and demand sides of the equation.

It is important to understand that all companies compete in a global market place and, more often then not, are competing with companies with a greater cost advantage. To ensure European companies are able to sustain themselves, they must look at how they can improve operational efficiencies to maintain their competitive advantage.

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Lean for Production and Services

A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.

The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.

A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.

To accomplish this, lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.

Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.

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The word is, lean transformation !

Businesses in all industries and services, including healthcare and governments, are using lean principles as the way they think and do. Many organizations choose not to use the word lean, but to label what they do as their own system, such as the Toyota Production System or the Danaher Business System. Why? To drive home the point that lean is not a program or short term cost reduction program, but the way the company operates. The word transformation or lean transformation is often used to characterize a company moving from an old way of thinking to lean thinking. It requires a complete transformation on how a company conducts business. This takes a long-term perspective and perseverance. A client of PEEC doing just that, it’s the new word! lean transformation.

Lean for Production and Services A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.

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Kunden stehen auf Lean

Ja, dass stimmt; Die Ansprüche der Kunden auf prompte Lieferung, hohe Qualität und besten Preis werden weiter steigen. Um die Kosten niedrig und Erträge profitabel zu halten, darf erst dann produziert werden, wenn der genaue Bedarf gegeben oder zumindest höchstwahrscheinlich ist. Dann aber muss sofort geliefert werden, da Kunden ungeduldig sind.

Sofort mit hoher Qualität und geringen Kosten zu liefern gelingt aber nur, wenn die Abläufe und Operations so nahe wie möglich mit den Kunden verbunden sind. Und, hier sind ja auch kreative Lösungen möglich, wie die Integration der Kunden und deren Ideen in das Design; oder, Kunden können sich ihr eigenes Produkt konfigurieren.

Diese veralteten Praktiken müssen den modernen Ansätzen der Bedarfs-orientierten Produktion (Just-In-Time, JIT) weichen. Damit werden Investitionen in Produktion/Kapazitäten erst dann getätigt, wenn Kunden dies auch kaufen wollen – nicht auf Basis schöner Prognosen.  Denn: Produktion minus Verkauf = Schrott.

Ein Kernprinzip des Lean besteht im Respekt für alle Mitarbeiter, Lieferanten und Kunden. Wie zeigt sich dieser Respekt im Falle von schweren wirtschaftlichen Verwerfungen, die Kündigungen notwendig machen?

Das wegen bieten wir eine Lean Seminar für die Geschäftsführung (ca. ½  Tag)

Fachkundige und engagierte Führung ist für den Erfolg der Lean Initiative wesentlich. Ohne diese aktive Führung verläuft Lean Management im Sand, so wie andere gutgemeinte aber nicht diszipliniert umgesetzte Programme.

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Europe has a great economy. Why do we need to worry about productivity?

Europe’s economy has experienced seemingly high productivity over the past decades, due largely to the massive capital investments in various sectors. However, the real issue is Europe’s productivity growth rate (how quickly we’re improving our productivity).

Over the recent years, Europe’s productivity has been lower then China’s and India’s productivity growth rate. Europe doesn’t fare any better when compared to countries around the world. As an economy, we start to lag behind, but on the macroeconomic level, Europe’s prospects remain very rosy, but from a microeconomic perspective our performance is of serious concern.

Compared to other developed economies, Europe has weakening labour productivity growth and sliding real income growth. Concerns about weak productivity growth will only intensify as structural changes in the global economy shift the engines of economic growth to China, India, and Brazil.

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Why is Europe performing so poorly in productivity growth?

Various factors have contributed to our poor productivity growth:

  • slow or no adoption of new processes and technologies to enhance efficiency
  • underinvestment in machinery, equipment, and technology
  • lack of innovation to enable the creation of new products and technologies
  • lagging workplace re-organization and worker training

The EU, in close partnership with industry and other levels of governments, is working on a strategic three-pronged approach to address the productivity growth challenges faced by Europe:

  • education and awareness of productivity
  • productivity enhancement tools
  • policies to promote and enhance productivity and innovation
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