A five-step thought process is proposed by James Womack and Dan Jones in Lean Thinking to guide managers through a Lean transformation.
“The five principles are:
1. To specify value from the standpoint of the end customer.
2. To identify all the steps in the value stream for each deliverable, eliminating whenever possible those steps that do not create value.
3. To make the value-creating steps occur in tight sequence so the value will flow smoothly towards the customer.
4. As flow is introduced, let customers pull value from the next upstream activity.
5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste. “
Jim Womack has further elaborated on the basic principles of the thought process in his article ‘From Lean Tools to Lean Management
- - All value created in any organization is the end result of a lengthy sequence of steps – a value stream. These steps must be conducted properly in the proper sequence at the proper time.
- - Getting the right value to the customer at the right time with the right cost to the organization is the key to survival and prosperity.
- - The flow of value toward the customer is horizontal, across the organization.
- - All organizations are organized vertically by departments. They always will be because this is the best way to create and store knowledge and the most practical way to channel careers.
- - Someone needs to see, manage and improve the entire process of horizontal value creation on behalf of the customer, from concept to launch, from order through production to delivery, and from delivery through the product life cycle.
- - In most organizations, no one is actually responsible for the horizontal flow of value by product family, whatever senior managers may think. The product is an organizational orphan.
- - In most organizations, managers at every level are being graded on whether they make their department-- specific numbers. These are the metrics – usually financial – set by high-level managers as they attempt to fully utilize assets and “control” the organization.
- - Improvements to value streams are managed by staff experts (or consultants) who usually don’t see the whole flow of value, the most pressing needs of the customer and the most urgent business needs of the organization. They use the tools they feel most comfortable with to solve the problems that seem easiest.
Jim Womack has further suggested three initial steps to be carried out to start a journey towards Lean Operations
- - Make sure every value stream has someone responsible for overseeing the whole flow of value and continually improving every aspect of the process in light of the needs of the customer and the business. - - The question for this value-stream manager to ask is, “How can I make customers happy while making money by engaging the full energies of our people to improve this value stream?”
- - Instead of developing complex metrics, ask value-stream managers how they will improve the value- creating process they are overseeing. If managers focus on their process, the performance metrics will come right; but if managers focus on their numbers, the process is likely never to improve.
- - Teach all managers to ask questions about their value streams. Turn these questions into experiments using Plan-Do-Check-Act. In Value-Stream Analysis don’t assume anything. One has to question even the basics. Do we need to come to the office everyday to add value to the Customer? This is a perfectly legitimate question.
Author & Acknowledgement: James Womack & Jim Womack