Lean Lexicon-LEX4 - Ebook PDF

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Lean
Lexicon
a graphical glossary
for Lean Thinkers
Fourth Edition
Compiled by the Lean Enterprise Institute

Yokoten
115
115
Lean Lexicon
a graphical glossary
for Lean Thinkers
Compiled by the Lean Enterprise Institute

Edited by Chet Marchwinski, John Shook, and Alexis Schroeder
Foreword by Jose Ferro, Dan Jones, and Jim Womack
The Lean Enterprise Institute

Cambridge, MA, USA
lean.org
Fourth Edition, Version 4.0

March 2008
With gratitude to Michael Brassard, Pascal Dennis, Dave Logozzo,
Robert Martichenko, Rachel Regan, Thomas Skehan, Art Smalley,
Durward Sobek, Tonya Vinas, Jim Womack, and Helen Zak for their
close review of the manuscript. The root cause of all remaining errors
resides with the LEI editors.
© Copyright 2008 The Lean Enterprise Institute, Inc.

One Cambridge Center, Cambridge, MA 02142 USA
Tel: 617-871-2900 • Fax: 617-871-2999 • lean.org
ISBN 0-9667843-6-7
All Rights Reserved.
Design by Off-Piste Design, Inc.
Printed in the USA
Fourth Edition, Version 4.0, March 2008
Contents
Foreword
by Jose Ferro, Dan Jones, and Jim Womack
Introduction
by Chet Marchwinski and John Shook
Lean Terms: A to Z
Appendix A: Value-Stream Mapping Icons

Appendix B: Lean Acronyms
Appendix C: Lean Japanese and German Terms
Appendix D: Pronunciation Guide to Japanese Words
Appendix E: Cited Works
Foreword
We receive many inquiries from members of the Lean Community

asking for definitions of the terms we commonly use, ranging from
A3 report to yokoten. In addition, as we attend events and visit
companies we frequently find widespread confusion and inconsistent
use of terms as simple and fundamental as takt time. (It’s often still
confused with cycle time.)
Chet Marchwinski, LEI’s director of communications, and John
Shook, an LEI senior advisor, have responded for several years now
by clarifying many matters of terminology in response to individual
requests and by placing these clarifications on the Community Page
of the LEI web site. However, many Lean Thinkers continue to ask
the meaning of lean terms and we have decided that the best course
is simply to write them all down in one place in this Lean Lexicon.
We have asked Chet and John, as veterans of the lean movement
with broad knowledge of lean terminology at Toyota and elsewhere,
to tackle this task.
Lexicon is just a fancy word for dictionary—one that conveniently
alliterates with “lean”—and like all dictionaries, there is a need for
upgrades as usage changes and new terms emerge. This is therefore
Version 4.0 of what we imagine will be a continuing effort to define
and sharpen our language as we all move toward future states and
ideal states. In this spirit, we hope to hear from Lean Community
members about additional terms to include in future versions and
about changing usage and changing business needs that may call
for revised definitions and additional examples.
As most Lean Thinkers know, precision is the key to lean performance:
A precise plan for every part. Precisely determined standardized work.
Precise takt image visible to everyone in a production process. Precise
calculation of standard inventory at every point inventories still are
needed. But to achieve precision on the gemba (see the definition on
page 25) we require precision in our language. The Lean Lexicon is
our effort to precisely meet this critical need.
Jose Ferro, Dan Jones, and Jim Womack

Sao Paulo, SP, Brazil
Ross-on-Wye, Herefordshire, UK
Cambridge, MA, USA
Introduction
Drawing up a comprehensive list of lean terms is not an easy task.

Many members of the Lean Community have gained their knowledge
from different sources and use terms in slightly different ways. And
many companies have developed their own “lean lingo” in an effort
to customize usage to their needs and to make their production
system unique. We therefore have devised two simple principles for
selecting terms. These are:
1. The term is important.
You really need it to successfully operate a lean system.
2. The term is in widespread use.
It’s not just “company speak,” but lives in the broader community.
We also have needed to develop a common approach to definitions.
As shown on the sample page at right, for each term we provide:
A simple definition. An example, often showing different types
of applications. Cross-references to related terms. An illustration,
whenever possible. Of course, many terms, like chief engineer and
greenfield, would be impossible to illustrate beyond photos of specific
individuals and facilities!
As editors, we are acutely aware that there will be some differences

within the Lean Community on definitions, and we have tried to
provide the most common usage. We are even more aware that
some important terms may have been left out. We therefore hope
to hear suggestions for additions and improvements (which should
be sent to: [email protected]). We will issue revisions of the
Lean Lexicon as appropriate.
Chet Marchwinski, John Shook, and Alexis Schroeder

Bethel, CT, USA
Ann Arbor, MI, USA
Somerville, MA, USA
Andon
Term Andon
A visual management tool that highlights the status of the operations
in an area at a single glance and that signals whenever an
abnormality occurs.
Definition An andon can indicate production status (for example, which

machines are operating), an abnormality (for example, machine
downtime, a quality problem, tooling faults, operator delays, and
materials shortages), and needed actions, such as changeovers.
An andon also can be used to display the status of production in
terms of the number of units planned versus actual output.
Example A typical andon, which is the Japanese term for “lamp,” is an
overhead signboard with rows of numbers corresponding to
workstations or machines. A number lights when a problem is
detected by a machine sensor, which automatically trips the
appropriate light, or by an operator who pulls a cord or pushes
a button. The illuminated number summons a quick response
from the team leader. Colored lighting on top of machines to
signal problems (red) or normal operations (green) is another
type of andon.
Cross- See: Jidoka, Visual Management.
reference
Product
A 1 2 3 4
Illustration Product
B 1 2 3 4
Planned Production Actual Production

110 98
Simple andon. Complex andon.
3
Fourth Edition Highlights
• Dashboard
• LAMDA Cycle
• Lean Product and Process Development
• Trade-off Curves
• True North
• Useable Knowledge
Treatment of Foreign Terms

Our editorial North Star, The Chicago Manual of Style,
states that foreign words usually are set in italics if they are
likely to be unfamiliar to readers. And in many works on
lean production and lean thinking terms such as kaizen and
muda are italicized. However, in preparing this lexicon, our
objective is to bring all of these terms into common usage.
Plus, we have no way to know which terms are now familiar
and which are still novel across the Lean Community.
We therefore have decided to welcome the entire list of terms
into the English language and have set all of them in plain
type. To avoid any confusion, we have included a list of all
foreign words in Appendix C so readers may be sure of each
term’s point of origin.
A3 Report
A3 Report
A Toyota-pioneered practice of getting the problem, the analysis,
the corrective actions, and the action plan down on a single sheet
of large (A3) paper, often with the use of graphics. At Toyota, A3
reports have evolved into a standard method for summarizing
problem-solving exercises, status reports, and planning exercises
like value-stream mapping.
A3 paper is the international term for paper 297 millimeters wide and
420 millimeters long. The closest U.S. paper size is the 11-by-17 inch
tabloid sheet.
See: Value-Stream Mapping (VSM).
1
A-B Control
A-B Control
A way to regulate the working relationships between two machines
or operations to control overproduction and ensure balanced use
of resources.
In the Illustration, neither of the machines nor the conveyor will cycle
unless three conditions are met: Machine A is full, the conveyor
contains the standard amount of work-in-process (in this case, one
piece), and Machine B is empty. When those conditions are met,
all three will cycle once and wait until the conditions are met again.
See: Inventory, Overproduction.
Signal
ABC Production Analysis

Segmenting part numbers into groups based on demand. Lean
Thinkers use this analysis to decide how much and for which
products to hold inventory. A items are high runners, B items are
medium runners, and C items are low runners. C items typically
include infrequent color and build combinations, special-edition
items, and replacement parts.
See: Flow Production, Pull Production.
2
Andon
Andon
A visual management tool that highlights the status of operations
in an area at a single glance and that signals whenever an
abnormality occurs.
An andon can indicate production status (for example, which
machines are operating), an abnormality (for example, machine
downtime, a quality problem, tooling faults, operator delays, and
materials shortages), and needed actions, such as changeovers.
An andon also can be used to display the status of production in
terms of the number of units planned versus actual output.
A typical andon, which is the Japanese term for “lamp,” is an
overhead signboard with rows of numbers corresponding to
workstations or machines. A number lights when a problem
is detected by a machine sensor, which automatically trips the
appropriate light, or by an operator who pulls a cord or pushes
a button. The illuminated number summons a quick response
from the team leader. Colored lighting on top of machines to
signal problems (red) or normal operations (green) is another
type of andon.
See: Jidoka, Visual Management.
Product
A 1 2 3 4
Product
B 1 2 3 4
Planned Production Actual Production

110 98
Simple andon. Complex andon.
3
Automatic Line Stop
Automatic Line Stop

Ensuring that a production process stops whenever a problem
or defect occurs.
For an automated line this usually involves the installation of sensors
and switches that automatically stop the line when an abnormality
is detected. For a manual line a fixed-position stop system often is
installed. This permits operators to pull an overhead cord or push
a button that stops the process at the end of a work cycle if the
problem encountered cannot be fixed during the cycle.
These examples illustrate the lean principle of jidoka, which prevents
defects from going to the next phase of production and avoids the
waste of making a series of defective items. Mass producers, by
contrast, will try to keep lines running to achieve high equipment
utilization, even when known defects occur repetitively and require
rework at the end of the process.
See: Error-Proofing, Fixed-Position Stop System, Jidoka.
Automatic line stop.
Autonomation
See: Jidoka.
4
Build-to-Order
Batch-and-Queue
A mass production approach to operations in which large lots
(batches) of items are processed and moved to the next process
—regardless of whether they are actually needed—where they
wait in a line (a queue).
See: Continuous Flow, Lean Production, Overproduction,
Push Production.
Batch-and-queue production.
Brownfield
An existing production facility, usually managed in accordance with
mass production thinking.
Compare: Greenfield.
Buffer Stock
See: Inventory.
Building in Quality, Built-in Quality

See: Jidoka.
Build-to-Order
A situation in which production lead time and order lead time are
less than the time the customer is prepared to wait for the product,
and the producer builds products entirely to confirmed order rather
than to forecast.
5
Build-to-Order
This is a condition Lean Thinkers strive to achieve because it avoids

the demand amplification and waste inherently involved in building
products based on informed guesses about customer desires.
See: Demand Amplification, Heijunka, Level Selling.
Capital Linearity
A philosophy for designing and buying production machinery so
that small amounts of capacity can be added or subtracted as
demand changes. In this way, the amount of capital needed per
part produced can be very nearly level (linear).
For example, in capacitizing for 100,000 units of annual output, a
manufacturer might purchase a series of machines, each with an
annual capacity of 100,000 units, and link them in one continuous
flow production line (first alternative). Alternatively, the manufacturer
might buy 10 sets of smaller machines to install in 10 cells, with each
cell having annual capacity of 10,000 units (second alternative).
If the forecast of 100,000 units proved to be exactly correct, the single
line with 100,000 units might be the most capital efficient. But if real
demand is different, the second alternative offers distinct advantages:
• Whenever demand goes beyond 100,000 units, the
manufacturer can add either another line with 100,000
units of capacity or just the required number of cells,
each with 10,000 units of capacity, to satisfy the higher
demand. By adding cells, the capital investment per unit
of output would vary only slightly with changing demand.
It would be very nearly linear.
Whenever the real demand is less than 100,000 units, a more serious
problem arises. The first alternative makes it almost impossible to
decrease capacity and maintain efficiency at the current level. However,
the second alternative allows the manufacturer to subtract capacity
by shutting down as many cells as required.
See: Labor Linearity, Monument, Right-Sized Tools.
Catchball
See: Policy Deployment.
6
Cell
Cell
The location of processing steps for a product immediately adjacent
to each other so that parts, documents, etc., can be processed in
very nearly continuous flow, either one at a time or in small batch
sizes that are maintained through the complete sequence of
processing steps.
A U shape (shown below) is common because it minimizes walking
distance and allows different combinations of work tasks for
operators. This is an important consideration in lean production
because the number of operators in a cell will change with changes
in demand. A U shape also facilitates performance of the first and
last steps in the process by the same operator, which is helpful in
maintaining work pace and smooth flow.
Many companies use the terms cell and line interchangeably.
Fer Ass
rul em
Hos es bly
II
es
ses
T. Ho es
Valv
Assembly I
1
Crimper
Material
Connectors
Flow
Tube Bender
out 2
(automatic)
load 1 tube load Te
at a time Operator (au ster
tom
Motion atic
)
Tubes
30 pcs./container
(finished goods)
Example of a U-shaped cell.
7
Cell
There is a school of thought that material should flow through cells

in a right-to-left direction relative to the operator, because more
people are right handed and it is more efficient and natural to work
from right to left. However, many efficient processes flow to the left
and many flow to the right. Simply evaluate on a case-by-case
basis whether a particular direction makes more sense.
See: Continuous Flow, Operator Balance Chart, Standardized Work.
Chaku-Chaku
A method of conducting one-piece flow in a cell where machines
unload parts automatically so that the operator (or operators) can
carry a part directly from one machine to the next without stopping
to unload the part, thus saving time and motion.
For instance, the first machine in a processing sequence automatically
ejects a part as soon as its cycle is completed. The operator takes the
part to the next machine in the sequence, which has just finished
cycling and ejected its part. The operator loads the new part, starts
the machine, and takes the ejected part to the next machine, which
has just finished cycling and ejected its part and so on around the
cell. The term literally means "load-load" in Japanese.
See: Cell, Continuous Flow.
Change Agent
The leader of a lean conversion who has the willpower and drive to
initiate fundamental change and make it stick.
The change agent—who often comes from outside the organization
—doesn’t need detailed lean knowledge at the beginning of the
conversion. The knowledge can come from a lean expert, but the
change agent absolutely needs the will to see that the knowledge
is applied and becomes the new way of working.
Compare: Sensei.
Changeover
The process of switching from the production of one product or
part number to another in a machine (e.g., a stamping press or
8
Chief Engineer
molding machine) or a series of linked machines (e.g., an assembly
line or cell) by changing parts, dies, molds, fixtures, etc. (Also called
a setup.) Changeover time is measured as the time elapsed between
the last piece in the run just completed and the first good piece from
the process after the changeover.
See: Single Minute Exchange of Die (SMED).
Chief Engineer
The term used at Toyota for the program manager with total
responsibility for the development of a product line; previously
known by the Japanese term shusa.
The chief engineer leads a small, dedicated team that creates the
product concept, develops the business case, leads the technical
design of the product, manages the development process, coordinates
with production engineering and sales/marketing, and takes the
product into production.
Chief engineers typically have strong technical skills that enable
them to effectively lead and coordinate the technical work of
engineers, designers, and other developers assigned to their
projects. Their most important responsibility is to integrate the
work of the development team around a coherent and compelling
vision for the product.
However, chief engineers do not directly supervise most of the
developers who work on their products. Most members of the
development team report to managers within their own functional
units (in Toyota’s case, body engineering, drive train engineering,
test engineering, purchasing, and so forth). The organizational
structure sets up a natural tension between the project leader (who
wants to realize his product vision) and the functional units (who
understand intimately what is possible).
This creative tension becomes a source of innovation as the project
leaders continually push the organization into new territory according
to market needs, even as the functional units try to keep the project
leaders true to the organization’s technological capabilities. Also
called an Entrepreneur System Designer or Deployment Leader.
See: Value-Stream Manager.
9
Continuous Flow
Continuous Flow
Producing and moving one item at a time (or a small and consistent
batch of items) through a series of processing steps as continuously
as possible, with each step making just what is requested by the
next step.
Continuous flow can be achieved in a number of ways, ranging from
moving assembly lines to manual cells. It also is called one-piece
flow, single-piece flow, and make one, move one.
See: Batch-and-Queue, Flow Production, One-Piece Flow.
Continuous flow processing.
Cross-Dock
A facility that sorts and recombines a variety of inbound items
from many suppliers for outbound shipment to many customers,
such as assembly plants, distributors, or retailers.
A common example is a facility operated by a manufacturer with
many plants in order to efficiently gather materials from many
suppliers. When a truck loaded with pallets of goods from suppliers
arrives on one side of the dock, the pallets are immediately unloaded,
and taken to several shipping lanes for loading onto outbound trucks
bound for different facilities (see illustration on p. 11).
A cross-dock is not a warehouse because it does not store goods.
Instead, goods are usually unloaded from inbound vehicles and
moved to shipping lanes for outbound vehicles in one step. If
outbound vehicles leave frequently, it may be possible to clear
the floor of the cross-dock every 24 hours.
10
Cycle Time
Example of a Cross-Dock
inbound
cross-
dock
outbound
Current-State Map
Cycle Time
The time required to produce a part or complete a process, as timed
by actual measurement.
Cycle Time—Related Terms Involving Time

Effective Machine Cycle Time
Machine cycle time plus load and unload time, plus the result of
dividing changeover time by the number of pieces between change-
overs. For example, if a machine has a cycle time of 20 seconds, plus
a combined load and unload time of 30 seconds, and a changeover
time of 30 seconds divided by a minimum batch size of 30, the
Effective Machine Cycle Time is 20+30+(30/30) or 1 = 51 seconds.
Machine Cycle Time
The time a machine requires to complete all of its operations
on one piece.
11
Cycle Time
Nonvalue-Creating Time
The time spent on activities that add costs but no value to an item
from the customer’s perspective. Such activities typically include
storage, inspection, and rework.
Operator Cycle Time
The time it takes an operator to complete all the work elements at
a station before repeating them, as timed by direct observation.
Order Lead Time
Production lead time plus time expended downstream in getting
the product to the customer, including delays for processing orders
and entering them into production and delays when customer orders
exceed production capacity. In other words, the time the customer
must wait for the product.
Order-to-Cash Time
The amount of time that elapses from the receipt of a customer
order until the producer receives cash payment from the customer.
This can be more or less than order lead time, depending on
whether a producer is in a build-to-order or a ship-from-stock
mode, on terms of payment, etc.
Processing Time
The time a product actually is being worked on in design or production
and the time an order actually is being processed. Typically, processing
time is a small fraction of production lead time.
Production Lead Time (also Throughput Time and Total Product
Cycle Time)
The time required for a product to move all the way through a process
or a value stream from start to finish. At the plant level this often is
termed door-to-door time. The concept also can be applied to the
time required for a design to progress from start to finish in product
development or for a product to proceed from raw materials all the
way to the customer.
Value-Creating Time
The time of those work elements that actually transform the
product in a way that the customer is willing to pay for. Usually,
value-creating time is less than cycle time, which is less than
production lead time.
See: Value.
12
Cycle Time
Cycle Time (CT)
Cycle Time (CT)

How often a part or product
actually is completed by a process,
as timed by observation. Also, the
time it takes an operator to go
through all work elements before
repeating them.
Value-Creating Time
Value-Creating Time (VCT)

Time of those work elements that
actually transform the product
in a way that the customer is
willing to pay for.
Production Lead Time
Production Lead Time (PLT)

The time it takes one piece to
move all the way through a
process or a value stream, from
start to finish. Envision timing a
marked part as it moves from
beginning to end.
or
Usually: VCT < CT < PLT
13
Dashboard
Dashboard
A one-page measurement tool comprising the critical few end-of-pipe
(downstream) and process (upstream) measures related to a strategy
or action plan (see illustration on p. 15). It helps a leader check and
adjust a plan and provides real-time measures for real-time feedback.
Value-stream maps and dashboards are complementary tools:
Maps raise critical questions to be addressed during the plan
phase of the plan-do-check-act cycle. Dashboards raise questions
for leaders to address during the check and act phases. (Adapted
from Dennis 2006, p. 62.)
See: Plan, Do, Check, Act (PDCA), Value-Stream Mapping
Demand Amplification
The tendency in any multistage process for production orders
received by each upstream process to be more erratic than actual
production or sales at the next downstream process. This also is
called the Forrester Effect (after Jay Forrester at MIT who first
characterized this phenomenon mathematically in the 1950s) and
the Bullwhip Effect.
The two main causes of demand amplification as orders move
upstream are: (a) The number of decision points where orders can
be adjusted; and (b) delays while orders wait to be processed and
passed on (such as waiting for the weekly run of the Material
Requirements Planning system). The longer the delays, the greater
the amplification as more production is determined by forecasts
(which become less accurate the longer the forecasting horizon)
and as more adjustments are made to the orders (by system
algorithms adding “just-in-case” amounts).
Lean Thinkers strive to use leveled pull systems with frequent
withdrawals for production and shipping instructions at each stage
of the value stream in order to minimize demand amplification.
The demand amplification chart on p. 16 shows a typical situation
in which the variation in demand at the customer end of the value
stream (Alpha) is modest, about +/-3% during a month. But as
orders travel back up the value stream through Beta and Gamma
they become very erratic until Gamma’s orders sent to its raw
materials supplier vary by +/-35% during a month.
14
Dashboard
Example of a dashboard.
15
Demand Amplification
Demand Amplification Chart
% variation Demand Amplification

x
35
30
x
25 x
20
x
15
x
10
5 x
GAMMA GAMMA BETA BETA ALPHA ALPHA

ORDER PRODUCTION ORDER PRODUCTION ORDER PRODUCTION
The demand amplification chart is an excellent way to raise

consciousness about the degree of amplification present in a
production system. If demand amplification could be completely
eliminated, the variation in orders at every point along this value
stream would be +/-3%, reflecting the true variation in customer
demand.
See: Build-to-Order, Heijunka, Level Selling.
Design-In
Collaboration between a customer and a supplier to design both
a component and its manufacturing process.
Typically the customer provides cost and performance targets
(sometimes called an envelope) with the supplier doing detailed
design of the component and manufacturing process (tooling, layout,
quality, etc.). The supplier often stations a resident engineer at the
customer to ensure that the component will work properly with the
completed product to minimize total cost.
Design-in contrasts with work-to-print approaches in which the
supplier simply is given a complete design and told to tool and
produce it.
See: Resident Engineer.
16
Efficiency
Downtime
Production time lost due to planned or unplanned stoppages.
Planned downtime includes scheduled stoppages for activities such
as beginning-of-the-shift production meetings, changeovers to
produce other products, and scheduled maintenance. Unplanned
downtime includes stoppages for breakdowns, machine adjustments,
materials shortages, and absenteeism.
See: Overall Equipment Effectiveness, Total Productive Maintenance.
Efficiency
Meeting exact customer requirements with the minimum amount
of resources.
Apparent Efficiency vs. True Efficiency
Taiichi Ohno illustrated the common confusion between apparent
efficiency and true efficiency with an example of 10 people producing
100 units daily. If improvements to the process boost output to 120
units daily, there is an apparent 20 percent gain in efficiency. But
this is true only if demand also increases by 20 percent. If demand
remains stable at 100 the only way to increase the efficiency of the
process is to figure out how to produce the same number of units
with less effort and capital. (Ohno 1988, p. 61.)
Current state — 10 operators 100 pieces

“But I only need
100 pieces!”
Apparent efficiency — 10 operators 120 pieces
customer
True efficiency — 8 operators 100 pieces
17
Efficiency
Total Efficiency vs. Local Efficiency

Toyota also commonly distinguishes between total efficiency,
involving the performance of an entire production process or value
stream, and local efficiency, involving the performance of one point
or step within a production process or value stream. It emphasizes
achieving efficiency in the former over the latter.
See: Overproduction, Seven Wastes.
Error-Proofing
Methods that help operators avoid mistakes in their work caused
by choosing the wrong part, leaving out a part, installing a part
backwards, etc. Also called mistake-proofing, poka-yoke (error-
proofing) and baka-yoke (fool-proofing).
Common examples of error-proofing include:
• Product designs with physical shapes that make it impossible
to install parts in any but the correct orientation.
• Photocells above parts containers to prevent a product from
moving to the next stage if the operator’s hands have not
broken the light to obtain necessary parts.
A contact-type error-proofing device.
18
First In, First Out (FIFO)
• A more complex parts monitoring system, again using photocells,
but with additional logic to make sure the right combination of
parts was selected for the specific product being assembled.
See: Inspection, Jidoka.
Every Product Every Interval (EPEx)

The frequency with which different part numbers are produced in
a production process or system.
If a machine is changed over in a sequence so that every part
number assigned to it is produced every three days, then EPEx
is three days. In general, it is good for EPEx to be as small as
possible in order to produce small lots of each part number and
minimize inventories in the system. However, a machine’s EPEx
will depend on changeover times and the number of part numbers
assigned to the machine. A machine with long changeovers (and
large minimum batch sizes) running many part numbers will
inevitably have a large EPEx unless changeover times or the
number of part numbers can be reduced.
See: Heijunka.
Fill-Up System
A pull production system in which preceding (supplier) processes
produce only enough to replace—or fill up—product withdrawn by
following (customer) processes.
See: Kanban, Pull Production, Supermarket.

The principle and practice of maintaining precise production and
conveyance sequence by ensuring that the first part to enter a
process or storage location is also the first part to exit. (This ensures
that stored parts do not become obsolete and that quality problems
are not buried in inventory.) FIFO is a necessary condition for pull
system implementation.
19
STOP
! FULL?
max. 5 pieces Downstream

Upstream
Process Process
FIFO Lane
An example of a FIFO lane with five pieces in the lane.
The FIFO sequence often is maintained by a painted lane or physical

channel that holds a certain amount of inventory. The supplying
process fills the lane from the upstream end while the customer
process withdraws from the downstream end. If the lane fills up, the
supplying process must stop producing until the customer consumes
some of the inventory. This way the FIFO lane can prevent the
supplying process from overproducing even though the supplying
process is not linked to the consuming process by continuous flow
or a supermarket.
FIFO is one way to regulate a pull system between two decoupled
processes when it is not practical to maintain an inventory of all
possible part variations in a supermarket because the parts are
one-of-a-kind, have short shelf lives, or are very expensive but
required infrequently. In this application, the removal of the one
part in a FIFO lane by the consuming process automatically triggers
the production of one additional part by the supplying process.
See: Kanban, Pull Production, Supermarket.
20
Five Ss
Five Ss
Five related terms, beginning with an S sound, describing workplace
practices conducive to visual control and lean production. The five
terms in Japanese are:
1. Seiri: Separate needed from unneeded items—tools, parts,
materials, paperwork—and discard the unneeded.
2. Seiton: Neatly arrange what is left—a place for everything
and everything in its place.
3. Seiso: Clean and wash.
4. Seiketsu: Cleanliness resulting from regular performance
of the first three Ss.
5. Shitsuke: Discipline, to perform the first four Ss.
The Five Ss often are translated into English as Sort, Straighten,

Shine, Standardize, and Sustain. Some lean practitioners add a
sixth S for Safety: Establish and practice safety procedures in the
workshop and office.
21
Five Ss
However, Toyota traditionally refers to just Four Ss:

1. Sifting (Seiri): Go through everything in the work area,
separating and eliminating what isn’t needed.
2. Sorting (Seiton): Arrange items that are needed in a neat and
easy-to-use manner.
3. Sweeping Clean (Seiso): Clean up the work area, equipment,
and tools.
4. Spic and Span (Seiketsu): The overall cleanliness and order that
result from disciplined practice of the first three Ss.
The last S—shitsuke (sustain)— is dropped because it becomes

redundant under Toyota’s system of daily, weekly, and monthly
audits to check standardized work. Whether four, five, or six Ss are
used, the key point to remember is that the effort is systematic and
organic to lean production, not a “bolt-on” stand-alone program.
See: Standardized Work.
Five Whys
The practice of asking why repeatedly whenever a problem is
encountered in order to get beyond the obvious symptoms to
discover the root cause.
For instance, Taiichi Ohno gives this example about a machine
that stopped working (Ohno 1988, p. 17):
1. Why did the machine stop?
There was an overload and the fuse blew.
2. Why was there an overload?
The bearing was not sufficiently lubricated.
3. Why was it not lubricated?
The lubrication pump was not pumping sufficiently.
4. Why was it not pumping sufficiently?
The shaft of the pump was worn and rattling.
5. Why was the shaft worn out?
There was no strainer attached and metal scraps got in.
22
Fixed-Position Stop System
Without repeatedly asking why, managers would simply replace
the fuse or pump and the failure would recur. The specific number
five is not the point. Rather it is to keep asking until the root cause
is reached and eliminated.
See: Kaizen; Plan, Do, Check, Act (PDCA).

A method of addressing problems on assembly lines by stopping
the line at the end of the work cycle—that is, at a fixed position—if
a problem is detected that cannot be solved during the work cycle.
In the fixed-position stop system, an operator discovering a problem
with parts, tools, materials supply, safety conditions, etc., pulls a
rope or pushes a button to signal the supervisor. The supervisor
assesses the situation and determines if the problem can be fixed
before the end of the current work cycle. If the problem can be
fixed, the supervisor resets the signal system so the line doesn’t
stop. If the problem can’t be corrected within the remainder of the
cycle time, the line stops at the end of the work cycle.
Fixed-position stop system.
23
The fixed-position stop system was pioneered by Toyota to solve

three problems: (1) The reluctance of production associates to pull
the signal cord if the entire line would be stopped immediately;
(2) unnecessary line stoppages to deal with minor problems that
could be resolved within one work cycle; and (3) the need to stop
the line at the end of a work cycle rather than mid-way through the
cycle to avoid the confusion—plus the quality and safety problems—
inherent in restarting work tasks part of the way through a cycle.
The fixed-position stop system is a method of jidoka, or building in
quality, on manual processes along moving assembly lines.
See: Andon, Automatic Line Stop, Jidoka.
Flow Production
The production system Henry Ford introduced at his Highland Park,
Michigan, plant in 1913.
The objective of flow production was to drastically reduce product
throughput time and human effort through a series of innovations.
These included consistently interchangeable parts so that cycle
times could be stable for every job along an extended line, the line
itself, the reconfiguration of part fabrication tasks so that machines
were lined up in process sequence with parts flowing quickly and
smoothly from machine to machine, and a production control
system insuring that the production rate in parts fabrication
matched the consumption rate of parts in final assembly.
See: Continuous Flow.
Compare: Mass Production.
Four Ms
The variables that a production system manipulates to produce
value for customers. The first three are resources, the fourth is the
way the resources are used.
In a lean system, the Four Ms mean:
1. Material—no defects or shortages.
24
Gemba
2. Machine—no breakdowns, defects, or unplanned stoppages.
3. Man—good work habits, necessary skills, punctuality, and
no unscheduled absenteeism.
4. Method—standardized processes, maintenance, and
management.
Fulfillment Stream
A supply chain that embodies the principles of lean and therefore
flows collaboratively and smoothly like a stream rather than operating
as a group of connected links.
The lean fulfillment stream relentlessly focuses on lead-time
reduction by eliminating all nonvalue-creating activities (waste)
among suppliers and producers that collaboratively create a product.
This is accomplished through rigorous process discipline, inventory
reduction, and first-time quality. The lean fulfillment stream flows
to the demand of the customer; all supply stream activities are
triggered by pull. The goal of the lean fulfillment stream is to
deliver the highest value to the customer at the lowest total cost
to stakeholders. (Adapted from Martichenko and Von Grabe 2008.)
Future-State Map
Gemba
The Japanese term for “actual place,” often used for the shop
floor or any place where value-creating work actually occurs; also
spelled genba.
The term often is used to stress that real improvement requires a
shop-floor focus based on direct observation of current conditions
where work is done. For example, standardized work for a
machine operator cannot be written at a desk in the engineering
office, but must be defined and revised on the gemba.
25
Genchi Genbutsu
Genchi Genbutsu
The Toyota practice of thoroughly understanding a condition by
confirming information or data through personal observation at
the source of the condition.
For example, a decision maker investigating a problem will go
to the shop floor to observe the process being investigated and
interact with workers to confirm data and understand the situation,
rather than relying solely on computer data or information from
others. The practice applies to executives as well as managers. In
Japanese, genchi genbutsu essentially means “go and see” but
translates directly as “actual place and actual thing.”
See: Gemba.
Greenfield
A new production facility providing the opportunity to introduce
lean working methods in a new work culture where the inertia of
the past is not a barrier.
Compare: Brownfield.
Group Leaders
At Toyota, these are the front-line supervisors who typically lead a
group of four teams or 20 workers; called kumicho in Japanese
(see illustration on p. 27).
A group leader’s duties, among others, include planning
production, reporting results, coordinating improvement activities,
scheduling vacation and manpower, developing team members,
testing process changes, and performing daily audits of team
leaders to make sure they have done their standard work audits of
team members. They also do a weekly Five S audit of their teams’
work areas.
See: Five Ss, Team Leader.
26
Hansei
Location of Group Leaders in Typical Chain of Responsibility
Operators
Group Leaders
Supervisor
Area
Manager
Plant
Manager
Hansei
The continuous improvement practice of looking back and thinking
about how a process or personal shortcoming can be improved;
the Japanese term for “self-reflection.”
In the Toyota Production System, hansei or reflection meetings
typically are held at key milestones and at the end of a project to
identify problems, develop countermeasures, and communicate the
improvements to the rest of the organization so mistakes aren’t
repeated. Thus, hansei is a critical part of organizational learning
along with kaizen and standardized work. It sometimes is
compared to “check” in the plan-do-check-act improvement cycle.
See: Kaizen; Plan, Do, Check, Act; Standardized Work; Toyota
Production System (TPS).
27
Heijunka
Heijunka
Leveling the type and quantity of production over a fixed period of
time. This enables production to efficiently meet customer demands
while avoiding batching and results in minimum inventories, capital
costs, manpower, and production lead time through the whole
value stream.
With regard to level production by quantity of items, suppose that
a producer routinely received orders for 500 items per week, but
with significant variation by day: 200 arrive on Monday, 100 on
Tuesday, 50 on Wednesday, 100 on Thursday, and 50 on Friday.
To level production, the producer might place a small buffer of
finished goods near shipping, to respond to Monday’s high level
of demand, and level production at 100 units per day through the
week. By keeping a small stock of finished goods at the very end of
the value stream, this producer can level demand to its plant and
to its suppliers, making for more efficient utilization of assets along
the entire value stream while meeting customer requirements.
With regard to leveling production by type of item, as illustrated on
the next page, suppose that a shirt company offers Models A, B, C,
and D to the public and that weekly demand for shirts is five of
Model A, three of Model B, and two each of Models C and D. A
mass producer, seeking economies of scale and wishing to
minimize changeovers between products, would probably build
these products in the weekly sequence A A A A A B B B C C D D.
A lean producer, mindful—in addition to the benefits outlined
above—of the effect of sending large, infrequent batches of orders
upstream to suppliers, would strive to build in the repeating
sequence A A B C D A A B C D A B, making appropriate production
system improvements, such as reducing changeover times. This
sequence would be adjusted periodically according to changing
customer orders.
In Japanese, the word heijunka means, roughly, “levelization.”
See: Demand Amplification; Every Product Every Interval (EPEx);
Just-in-Time (JIT); Muda, Mura, Muri; SMED.
28
Heijunka Box
Heijunka by Product Type
PRODUCT
Customer demand per week
Model A
plain t-shirt
Model B
t-shirt with pocket
Model C
t-shirt with v-neck
Model D
t-shirt with v-neck
and pocket
PRODUCTION
SEQUENCE
Mass producer A A A A A B B B C C D D
Lean producer A A B C D A A B C D A B
(Note that this example does not address heijunka by production quantity.)
Heijunka Box
A tool used to level the mix and volume of production by distributing
kanban within a facility at fixed intervals. Also called a leveling box.
In the illustration of a typical heijunka box (see p. 30), each horizontal
row is for one type of product (one part number). Each vertical
column represents identical time intervals for paced withdrawal of
kanban. The shift starts at 7:00 a.m. and the kanban withdrawal
interval is every 20 minutes. This is the frequency with which the
material handler withdraws kanban from the box and distributes
them to production processes in the facility.
29
Heijunka Box
Whereas the slots represent the material and information flow timing,
the kanban in the slots each represent one pitch of production for
one product type. (Pitch is the takt time multiplied by the pack-out
quantity.) In the case of Product A, the pitch is 20 minutes and
there is one kanban in the slot for each time interval. However, the
pitch for Product B is 10 minutes, so there are two kanban in each
slot. Product C has a pitch of 40 minutes, so there are kanban in
every other slot. Products D and E share a production process with
a pitch of 20 minutes and a ratio of demand for Product D versus
Product E of 2:1. Therefore, there is a kanban for Product D in the
first two intervals of the shift and a kanban for Product E in the
third interval, and so on in the same sequence.
Used as illustrated, the heijunka box consistently levels demand by
short time increments (instead of releasing a shift, day, or week’s
worth of demand to the floor) and levels demand by mix (for example,
by ensuring that Product D and Product E are produced in a steady
ratio with small batch sizes).
See: Every Product Every Interval (EPEx), Heijunka, Kanban, Material
Handling, Paced Withdrawal, Pitch.
700 720 740 800 820 840 900 920
one row per

product type
kanban
Example of a heijunka box.
30
Information Flow
Hoshin Kanri
See: Policy Deployment.
Ideal-State Map
Information Flow
The movement of information on customer desires backward from
the customer to the points where the information is needed to direct
each operation (see illustrations on p. 32).
In companies based on mass production principles, the flow of
information usually takes parallel forms: Forecasts flowing back from
company to company and facility to facility; schedules flowing back
from company to company and facility to facility; daily (or weekly or
hourly) shipping orders telling each facility what to ship on the next
shipment; and expedited information countermanding forecasts,
schedules, and shipping orders to adjust the production system to
changing conditions.
Companies applying Lean Thinking try to simplify information
flows by establishing a single scheduling point for production
and instituting pull loops of information. These go upstream to
the previous production point and from that point to the previous
point—all the way to the earliest production point.
The illustrations (on p. 32) show the multiple paths for information
flows in mass production compared with the simpler flows in lean
production. Note that lean producers still provide forecasts, because
firms and facilities further from the customer need advance notice
to plan capacity, schedule their workforce, calculate takt time,
adjust for seasonal variations, introduce new models, and so forth.
However, the day-to-day flow of production information can be
compressed from schedules, shipping releases, and expediting to
simple pull loops.
31
Information Flow
Current-State Information Flow in Mass Production
Future-State Information Flow in Lean Production
Information flows are shown in blue. Map symbols on

information flow are explained in Appendix A.
32
Inventory
Inspection
In mass production, the practice of quality checking products by
specialized inspectors outside of the process making the products.
Lean producers assign quality assurance to operators and mistake-
proofing devices within the production process in order to detect
problems at the source. Rather than passing defects to subsequent
processes for detection and rectification, the process is stopped to
determine the cause and to take corrective action.
See: Error-Proofing, Jidoka.
Inventory
Materials (and information) present along a value stream between
processing steps.
Physical inventories usually are categorized by position in the value
stream and by purpose. Raw materials, work-in-process, and finished
goods are terms used to describe the position of the inventory within
the production process. Buffer stocks, safety stocks, and shipping
stocks are terms used to describe the purpose of the inventory.
Since inventory always has both a position and a purpose (and
some inventories have more than one purpose) the same items
may be, for example, finished goods and buffer stocks. Similarly,
the same items may be raw materials and safety stocks. And some
items even may be finished goods, buffer stocks, and safety stocks
(particularly if the value stream between raw materials and finished
goods is short).
The size of the buffer and safety inventory levels will depend on
the amplitude of the variations in downstream demand (creating
the need for buffer stock) and the capability of the upstream
process (creating the need for safety stock). Good lean practice is
to determine the inventory for a process and to continually reduce
it when possible, but only after reducing downstream variability
and increasing upstream capability. Lowering inventory without
addressing variability or capability will only disappoint the customer
as the process fails to deliver needed products on time.
33
Inventory
To avoid confusion, it is important to define each type of inventory

carefully.
Buffer Stock
Goods held, usually at the downstream end of a facility or process, to
protect the customer from starvation in the event of an abrupt increase
in short-term demand that exceeds short-term production capacity.
The terms buffer and safety stock often are used interchangeably,
which creates confusion. There is an important difference between
the two, which can be summarized as: Buffer stock protects your
customer from you (the producer) in the event of an abrupt demand
change; safety stock protects you from incapability in your upstream
processes and your suppliers.
Finished Goods
Items a facility has completed that await shipment.
Raw Materials
Goods in a facility that have not yet been processed.
Safety Stock
Goods held at any point (raw materials, WIP, or finished goods) to
prevent downstream customers from being starved by upstream
process capability issues. Also called emergency stock.
Inventories
categorized
by position
in the value
stream
Inventories
categorized
by purpose
The six types of inventory.
34
Inventory Turns
Shipping Stock
Goods in shipping lanes at the downstream end of a facility that are
being built up for the next shipment. (These generally are proportional
to shipping batch sizes and frequencies.) Also called cycle stock.
Work-in-Process (WIP)
Items between processing steps within a facility. In lean systems,
standardized work-in-process is the minimum number of parts
(including units in machines) needed to keep a cell or process
flowing smoothly.
Inventory Turns
A measure of how quickly materials are moving through a facility
or through an entire value stream, calculated by dividing some
measure of cost of goods by the amount of inventory on hand.
Probably the most common method of calculating inventory turns
is to use the annual cost of goods sold (before adding overhead for
selling and administrative costs) as the numerator divided by the
average inventories on hand during the year. Thus:
Annual cost of goods sold

Inventory turns =
Average value of inventories during the year
Using the cost of goods rather than sales revenues removes one
source of variation unrelated to the performance of the production
system—fluctuations in selling prices due to market conditions.
Using an annual average of inventories rather than an end-of-
the-year figure removes another source of variation—an artificial
drop in inventories at the end of the year as managers try to show
good numbers.
Inventory turns can be calculated for material flows through value
streams of any length. However, in making comparisons remember
that turns will decline with the length of the value stream, even if
performance is equally “lean” all along the value stream. For example,
a plant performing only assembly may have turns of 100 or more
but when the parts plants supplying the assembly plant are added
35
Inventory Turns
to the calculation, turns often will fall to 12 or fewer. And if materials

are included all the way back to their initial conversion—steel, glass,
resins, etc.—turns often will fall to four or fewer. This is because the
cost of goods sold at the most downstream step doesn’t change but
the amount of materials in inventories grows steadily as we add
more and more facilities to our calculation.
Inventory turns are a great measure of a lean transformation if the
focus is shifted from the absolute number of turns at each facility
or in the entire value stream to the rate of increase in turns. Indeed,
if turns are calculated accurately using annualized averages of
inventories, they can be “the one statistic that can’t lie.”
See: Inventory.
Inventory Turns Chart for the U.S. Economy
All manufacturing, excluding finished goods at wholesale and retail.

Automotive, excluding finished goods at retail.
Note: The U.S. Government does not gather data on cost of goods sold
but rather on total sales. Inventory turns therefore have been calculated
by dividing total annual sales by average inventories during the year.
36
Jidoka
Isolated Islands
A poor arrangement of work flow so people are not in a position to
help each other; they are isolated islands. The term also can refer to
processes outside of a cell or assembly line that run independently
to their own rhythm instead of to customer demand. Such islands
typically contain a lot of waste, such as excess inventory.
See: Cell, Value Stream.
Jidoka
Providing machines and operators the ability to detect when
an abnormal condition has occurred and immediately stop work.
This enables operations to build in quality at each process and
to separate men and machines for more efficient work. Jidoka
is one of the two pillars of the Toyota Production System along
with just-in-time.
Jidoka highlights the causes of problems because work stops
immediately when a problem first occurs. This leads to improvements
in the processes that build in quality by eliminating the root causes
of defects.
The Evolution toward Jidoka
automatic automatic andon

feed feed light
automatic
ejection
Manual feed and Watch machine cycle. Self-monitoring machine.

watch machine cycle.
37
Jidoka
Jidoka sometimes is called autonomation, meaning automation

with human intelligence. This is because it gives equipment the
ability to distinguish good parts from bad autonomously, without
being monitored by an operator. This eliminates the need for
operators to continuously watch machines and leads in turn to
large productivity gains because one operator can handle several
machines, often termed multiprocess handling.
The concept of jidoka originated in the early 1900s when Sakichi
Toyoda, founder of the Toyota Group, invented a textile loom that
stopped automatically when any thread broke. Previously, if a thread
broke the loom would churn out mounds of defective fabric, so each
machine needed to be watched by an operator. Toyoda’s innovation
let one operator control many machines. In Japanese, jidoka is a
Toyota-created word pronounced exactly the same (and written in
kanji almost the same) as the Japanese word for automation, but
with the added connotations of humanistic and creating value.
See: Andon, Error-Proofing, Fixed-Position Stop System, Inspection,
Just-in-Time (JIT), Multiprocess Handling, Toyota Production System
(TPS), Visual Management.
Jishuken
A type of hands-on, learn-by-doing workshop. The term literally
means “self-learning” in Japanese.
Jishuken can run in length from one week to several months.
Toyota’s Operations Management Consulting Division developed
this process as a means of developing skills and raising the level of
TPS in a certain area, often focusing on supplier operations projects
lasting three to four months. Outside of Toyota, jishuken became
common in the form of the five-day kaizen workshop. Whatever the
length, the goal of any jishuken is to learn by doing and produce an
improvement in an area of operations.
See: Kaizen Workshop, Toyota Production System (TPS).
38
Kaikaku
Just-in-Time (JIT) Production
A system of production that makes and delivers just what is needed,
just when it is needed, and just in the amount needed. JIT and jidoka
are the two pillars of the Toyota Production System. JIT relies on
heijunka as a foundation and is comprised of three operating
elements: the pull system, takt time, and continuous flow.
JIT aims for the total elimination of all waste to achieve the best
possible quality, lowest possible cost and use of resources, and the
shortest possible production and delivery lead times. Although simple
in principle, JIT demands discipline for effective implementation.
The idea for JIT is credited to Kiichiro Toyoda, the founder of Toyota
Motor Corporation, during the 1930s. As manager of the machine
shop at Toyota’s main plant, Taiichi Ohno said his first steps toward
achieving JIT in practice came in 1949–50. (Ohno 1988, p. 31.)
See: Continuous Flow, Heijunka, Jidoka, Pull Production, Takt Time,
Toyota Production System (TPS).
Kaikaku
Radical, revolutionary improvement of a value stream to quickly
create more value with less waste; sometimes called kakushin.
One example would be moving equipment over a weekend so that

products formerly fabricated and assembled in batches in isolated
process villages are made in single-piece flow in a compact cell.
Another example would be quickly switching from stationary to
moving assembly for a large product such as a commercial airliner.
Also called breakthrough kaizen, in comparison with more gradual,
step-by-step kaizen.
See: Kaizen; Plan, Do, Check, Act (PDCA); Process Village.
39
Kaizen
Kaizen
Continuous improvement of an entire value stream or an individual
process to create more value with less waste.
There are two levels of kaizen (Rother and Shook 1999, p. 8):
1. System or flow kaizen focusing on the overall value stream.

This is kaizen for management.
2. Process kaizen focusing on individual processes.
This is kaizen for work teams and team leaders.
Value-stream mapping is an excellent tool for identifying an entire
value stream and determining where flow and process kaizen
are appropriate.
See: Kaikaku; Plan, Do, Check, Act (PDCA); Process Village; Value-
Stream Mapping (VSM).
Two Levels of Kaizen
senior
mgmt. SYSTEM or FLOW KAIZEN
PROCESS KAIZEN
front
lines
focus
Kaizen Promotion Office

See: Lean Promotion Office.
40
Kaizen Workshop
Kaizen Workshop
A group kaizen activity, commonly lasting five days, in which a team
identifies and implements a significant improvement in a process.
A common example is creating a continuous flow cell within a week.
To do this a kaizen team—including staff experts and consultants as
well as operators and line managers—analyzes, implements, tests,
and standardizes a new cell. Participants first learn continuous flow
principles and then go to the gemba to assess actual conditions and
plan the cell. Machines then are moved and the new cell is tested.
After improvements, the process is standardized and the kaizen
team reports out to senior management.
See: Gemba; Jishuken; Kaizen; Plan, Do, Check, Act (PDCA).
A Five-Day Kaizen Workshop
Monday Tuesday Wednesday
Thursday Friday
41
Kakushin
Kakushin
See: Kaikaku.
Kanban
A kanban is a signaling device that gives authorization and instructions
for the production or withdrawal (conveyance) of items in a pull
system. The term is Japanese for “sign” or “signboard.”
Kanban cards are the best-known and most common example
of these signals. They often are slips of card stock, sometimes
protected in clear vinyl envelopes, stating information such as
part name, part number, external supplier or internal supplying
process, pack-out quantity, storage address, and consuming
process address. A bar code may be printed on the card for
tracking or automatic invoicing.
Besides cards, kanban can be triangular metal plates, colored
balls, electronic signals, or any other device that can convey
the needed information while preventing the introduction of
erroneous instructions.
Whatever the form, kanban have two functions in a production
operation: They instruct processes to make products and they
instruct material handlers to move products. The former use is
called production kanban (or make kanban); the latter use is
termed withdrawal kanban (or move kanban).
Production kanban tell an upstream process the type and quantity
of products to make for a downstream process. In the simplest
situation, a card corresponds to one container of parts, which the
upstream process will make for the supermarket ahead of the next
downstream process. In large batch situations—for example, a
stamping press with very short cycle times and long changeover
times—a signal kanban is used to trigger production when a
minimum quantity of containers is reached. Signal kanban often
are triangular in shape and thus often also called triangle kanban.
Although a triangle kanban is the standard used in lean manufacturing
to schedule a batch production process, it is only one type of signal
kanban. Other basic means of controlling batch operations include
pattern production and lot making.
42
Kanban
Pattern production creates a fixed sequence or pattern of production
that is continually repeated. However, the actual amount produced
each time in the cycle may be unfixed and vary according to customer
needs. For example, in an eight-hour cycle, part numbers always
are run A through F. (The difficulty of your changeovers may
dictate this order.) Inventory in the central market is a function of
the length of the pattern-replenishment cycle; a one-day cycle
implies one day of inventory must be kept in the market, or a one-
week cycle means one week of inventory. The main disadvantage
of pattern production is that the sequence is fixed; you can’t jump
from making part D to part F.
A lot-making board involves creating a physical kanban for every
container of parts in the system (see illustration below). As material
is consumed from the market, the kanban are periodically detached
and brought back to the producing process and displayed on a
board that highlights all part numbers and displays an outlined
shadow space for each of the kanban cards in the system. (Adapted
from Smalley 2004, pp. 70–71.)
Lot-Making Board
Market full!
Triggered!
Trigger point
(can vary
by part #)
Next?
Kanban cards returned from central market indicating product consumed
Empty slots
43
Kanban
A returned kanban card placed on the board in the shadow space

indicates inventory has been consumed in the market; unreturned
cards represent inventory still in the market. As predefined trigger
points are reached, the production operator knows to begin making
product to replenish the material in the market.
A lot-making board allows information to come back to the production
process more often, signals what has been taken away, and uses
smaller increments than the signal kanban. It also provides a visual
representation of inventory consumption and highlights emerging
problems in the central market. However, it may require many
kanban cards, and the cards must be brought back in a timely and
reliable manner for the batch board to be accurate. Discipline is
required on the part of schedulers and supervisors not to build
inventory in advance of when needed.
Withdrawal kanban authorize the conveyance of parts to a downstream
process. They often take two forms: internal or interprocess kanban
(for withdrawal from an internal process) and supplier kanban (for
withdrawal from an external supplier). In their original application
around Toyota City, cards commonly were used for both purposes.
However, as lean production has spread, supplier kanban for firms
at considerable distances have typically taken an electronic form.
60 60
Every 60 Every 60
STAMPING
pieces L pieces WELD + ASSY.
Example of Production and Withdrawal Kanban.
44
Kanban
Production and withdrawal kanban must work together to create
a pull system: At a downstream process, an operator removes a
withdrawal kanban when using the first item in a container. This
kanban goes in a nearby collection box and is picked up by a
material handler. When the material handler returns to the upstream
supermarket, the withdrawal kanban is placed on a new container
of parts for delivery to the downstream process.
As this container is taken from the supermarket, the production
kanban on the container is removed and placed in another collection
box. The material handler serving the upstream process returns this
kanban to that process, where it signals the need to produce one
additional container of parts. As long as no parts are produced or
moved in the absence of a kanban, a true pull system is maintained.
There are six rules for using kanban effectively:
1. Customer processes order goods in the precise amounts
specified on the kanban.
2. Supplier processes produce goods in the precise amounts
and sequence specified by the kanban.
3. No items are made or moved without a kanban.
batch
60
Every 600 LH Every 60

or 360 RH pieces
pieces
STAMPING L WELD + ASSY.
R
1.5 days
Example of Signal and Withdrawal Kanban.
45
Kanban
4. All parts and materials always have a kanban attached.

5. Defective parts and incorrect amounts are never sent to
the next process.
6. The number of kanban is reduced carefully to lower
inventories and reveal problems.
See: Heijunka, Heijunka Box, Just-in-Time (JIT), Pull Production,

Supermarket.
Labor Linearity
A philosophy for flexibly manning a production process (in particular
a cell) so that the number of operators increases or decreases with
production volume. In this way, the amount of human effort required
per part produced can be very nearly level (linear) as volume changes.
Toyota calls this concept a “flexible manpower line.”
See: Capital Linearity.
LAMDA Cycle (Look, Ask, Model, Discuss, Act)

The basic learning cycle of lean product and process development
that encompasses five classes of developer activity:
1. Look: Practice first-hand observation, or go and see for yourself.
2. Ask: Pose probing questions to understand the heart of the issue,
e.g., asking why repeatedly to identify potential root causes.
3. Model: Use engineering analysis, simulation, or prototypes to
predict expected performance.
4. Discuss: Talk about your observations, models, and hypotheses
with peers, mentors, and developers of interfacing subsystems.
5. Act: Test understanding experimentally or otherwise take action
to validate learning.
The point of LAMDA is to encourage continuous, substantive
learning and deep understanding within the development
organization. (Adapted from Ward 2007, Prologue xiii.)
See: Lean Product and Process Development
46
Lean Consumption
Lean Consumption
The complementary process to lean production. Lean consumption
calls for streamlining all the actions that must be taken to acquire
goods and services so that customers receive exactly what they
want, when and where they want it, with minimum time and effort.
Companies can streamline consumption by following a six-step
thought process, similar to the one for lean manufacturing
(Adapted from Womack and Jones 2005, p.15.):
Principles of Lean Consumption
1. Solve the customer’s problem completely by insuring that
all the goods and services work, and work together.
2. Don’t waste the customer’s time.
3. Provide exactly what the customer wants.
4. Provide what’s wanted exactly where it’s wanted.
5. Provide what’s wanted where it’s wanted exactly when
it’s wanted.
6. Continually aggregate solutions to reduce the customer’s
time and hassle (bundle a complete range of options from
across many organizations).
Applying the concepts requires producers and providers of goods
and services to think about consumption not as an isolated decision
to buy a specific product, but as a continuing process—a set of
activities linking many goods and services over an extended period
in order to solve a problem.
For example, when a consumer buys a home computer, his or
her objective is not to own a computer but to solve the problem
of accessing, processing, storing, and transferring information.
The act of buying the computer is not a onetime transaction, but
a process of researching, obtaining, integrating, maintaining,
upgrading, and, finally, disposing of the computer, and quite
possibly, following the same process for software, and
peripheral devices.
47
Lean Consumption
Lean consumption requires a fundamental shift in the way retailers,

service providers, manufacturers, and suppliers think about the
relationship between provision and consumption, and the role their
customers play in these processes. It also requires collaboration
between consumers and providers to minimize total cost and
wasted time.
See: Consumption and Provision Maps, Lean Production, Lean
Provision, Lean Thinking, Value Stream.
Lean Consumption and Lean Provision Maps

A consumption map is a simple diagram of all the actions customers
must take to acquire given goods and services. A provision map is
a similar drawing that shows all the actions producers and service
companies must perform to deliver these goods and services
to customers (see illustrations on pp.49–50).
On both the consumption and provision maps, boxes representing
individual actions are drawn from left to right in process sequence.
Each box is drawn in proportion to the time needed to complete
the corresponding action and shaded in proportion to the fraction
of value-adding time in each step. Key information, such as total
time, value-added time, and first-time quality, also is collected
and summarized in a box score for the total consumption and
provision process.
To complete the mapping exercise, the two maps are displayed in
parallel—one above the other—to show a complete consumption/
provision cycle. The combined map helps providers “see” the
whole process so they can identify and eliminate wasteful activities
in consumption and provision and begin a win-win collaboration
by drawing a leaner future-state map. (Womack and Jones 2005,
pp. 22–45.)
See: Lean Consumption, Lean Provision, Value, Value Stream,
Value-Stream Mapping.
48
Car Repair Before Lean Processes
25 min. 5 min. 45 min. 10 min. 35 min.

2. Book repair 6. Discuss
diagnosis, 7. Queue and pay,
authorize repairs receive car
1. Search 3. Drive
for repair to
shop facility
8. Drive home
4. Queue,
discuss problem,
leave car
5. Wait for
Consumer
loaner car
5 min. 5 min. 25 min. 38 min. 14 min. 85 min. 35 min.

1. Answer phone 2. Book repair 7. Pass to 12. Pass to service 15. Pass to 21. Pass to
3. Check in technician technician
13. Call customer, service rep.
discuss diagnosis 16. Collect parts
4. Car to storage 22. Invoice
Provider
8. Diagnose 14. Pass to

5. Fetch loaner problem workshop 23. Fetch car
6. Pass to 24. Hand over
workshop
9. Check parts car
17. Repair car
10. Car to 25. Park loaner
storage
11. Pass to office
18. Road test

= Value-creating time
19. Car to storage
20. Pass to office
= Wasted time
Example of Lean Consumption and Provision Map Before Lean Processes.
49
Car Repair After Lean Processes
Results
5 min. 10 min. 32 min. 22 min. 120

min.
1. Book repair 2. Discuss 6. Receive car
problem 3. Drive
to
facility
7. Drive home
4. Hand over car 69
min.
5. Wait for
diagnosis 53% 94%
confirmation, value- value-
authorize repair creating creating
time time
Consumer
Consumer
Before After
lean lean
5 min. 15 min. 20 min. 54 min. 7 min.
207
1. Book repair 2. Discuss 4. Fetch loaner 9. Deliver parts 15. Hand over car min.
problem, create
repair plan 5. Receive car 10. Collect car 16. Park loaner
3. Order parts 6. Confirm
Provider
diagnosis Provider
7. Park car 11. Repair
car
8. Update plan
101
min.
12. Road test
13. Park car

14. Invoice
27% 59%
value- value-
creating creating
time time
Before After
lean lean
Example of Lean Consumption and Provision Map After Lean Processes.
50
Lean Logistics
Lean Enterprise
A continuing agreement among all the firms sharing the value
stream for a product family to correctly specify value from the
standpoint of the end customer, remove wasteful actions from the
value stream, and make those actions which do create value occur
in continuous flow as pulled by the customer. As soon as this task
is completed, the cooperating firms must analyze the results and
start the process again through the life of the product family.
(Womack and Jones 1996, p. 276.)
A method for performing the needed analysis is described in
Womack and Jones 2002.
Lean Logistics
A pull system with frequent, small-lot replenishment established
between each of the firms and facilities along a value stream.
Let’s suppose that Firm A (a retailer) sells directly to the end
customer and has been replenished by large and infrequent
deliveries from Firm B (a manufacturer) based on a sales forecast.
The adoption of lean logistics would involve installation of a pull
signal from the retailer, as small amounts of goods are sold, to
instruct the manufacturer to replenish exactly the amount sold.
The manufacturer would in turn instruct its suppliers to replenish
quickly the exact amount sent to the retailer, and so on all the way
up the value stream.
Lean logistics requires some type of pull signal (EDI, kanban, web-
based, etc.), some type of leveling device at each stage of the
value stream (heijunka), some type of frequent shipment in small
amounts (milk runs linking the retailer with many manufacturers
and the manufacturer with many suppliers), and in many cases,
various cross-docks for consolidation of loads along the
replenishment loops.
See: Cross-Dock, Heijunka.
51
Lean Product and Process Development

A business system focused on eliminating waste in product and
process development by generating and applying useable knowledge.
It is centered on four core concepts:
1. Grow teams of responsible experts: Organize around product
and process technologies that are central to the organization’s
competitive advantage. These units develop useable knowledge
about their respective areas of expertise, and grow people who
can apply that knowledge, generate new knowledge, and
communicate that knowledge effectively to multidisciplinary
team members. See: Useable Knowledge.
2. Support entrepreneur system designers: Give leadership
of development projects to technically capable and visionary
people who have an entrepreneurial spirit. They provide
integrative knowledge to leverage the knowledge of the expert
teams in innovating new products and production processes.
See: Chief Engineer.
3. Follow set-based concurrent engineering practices: Avoid
the pitfalls of locking onto design solutions too early by (a)
exploring multiple alternatives simultaneously; (b) aggressively
evaluating the alternatives to eliminate weak ideas and improve
Entrepreneur Cadence, flow

system-designer and pull
leadership Value focus
Knowledge for
profitable operational
value streams
Team of
Set-based
responsible
concurrent
experts
engineering
52
Lean Promotion Office
the weak aspects of otherwise strong ideas; (c) applying trade-
off curve knowledge and design guidelines; and (d) deciding
on a solution or solution path only after it is proven feasible.
See: Set-Based Concurrent Engineering.
4. Establish cadence, flow, and pull: Apply principles from lean
production to level the introduction of new projects into the
development organization, eliminate waste in information flows,
and trigger development activities according to the needs of
specific projects. (Adapted from Ward 2007.)
Lean Production
A business system for organizing and managing product development,
operations, suppliers, and customer relations that requires less human
effort, less space, less capital, less material, and less time to make
products with fewer defects to precise customer desires, compared
with the previous system of mass production.
Lean production was pioneered by Toyota after World War II
and, as of 1990, typically required half the human effort, half the
manufacturing space and capital investment for a given amount
of capacity, and a fraction of the development and lead time of
mass production systems—while making products in wider variety
at lower volumes with many fewer defects. (Womack, Jones, and
Roos 1990, p. 13.) The term was coined by John Krafcik, a research
assistant at MIT with the International Motor Vehicle Program in
the late 1980s.
See: Toyota Production System (TPS).
Compare: Mass Production.

A resource team for a lean transformation, often formed from pre-
existing industrial engineering, maintenance, facilities management,
and quality improvement groups.
This team provides value-stream managers technical assistance with:
• Training in lean methods.
53
• Conducting kaizen workshops.

• Measuring progress.
In addition to the traditional functions, the staff for lean improvement
teams often consists of employees freed up in initial transformation
efforts who are available to assist with subsequent kaizen activities.
Senior Management
Value-Stream Manager Product A

Lean
Value-Stream Manager Product B Promotion
Office
Value-Stream Manager Product C
Value-Stream Manager Product D
The Lean Promotion Office assists all value-stream managers

and reports to senior management.
Lean Provision
A term that encompasses lean manufacturing (or lean production) and
all the other steps required to deliver the desired value from producer
to customer, often running through a number of organizations.
Most provision value streams, whether for manufactured goods or
services like healthcare or travel, are even more complicated than
consumption streams. They consume large amounts of provider time
and resources and mesh very poorly with consumption streams,
creating customer frustration and large amounts of waste.
(Womack and Jones 2005, p.8.)
See: Lean Consumption and Lean Provision Maps, Lean Consumption,
Lean Production, Lean Thinking, Value Stream.
54
Lean Thinking
Lean Thinking
A five-step thought process proposed by Womack and Jones in
1996 to guide managers through a lean transformation. The five
principles are:
1. Specify value from the standpoint of the end customer by
product family.
2. Identify all the steps in the value stream for each product
family, eliminating whenever possible those steps that do
not create value.
3. Make the value-creating steps occur in tight sequence so the
product will flow smoothly toward 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, repeat
this process again and continue it until a state of perfection
is reached in which perfect value is created with no waste.
(Adapted from Womack and Jones 1996, p. 10.)
In 2007, Womack and Jones simplified the five steps to these—

Purpose, Process, People:
Purpose: The primary purpose of any organization and first step in
any lean thought process is to correctly specify the value that the
customer seeks in order to cost-effectively solve the customer’s
problems so the organization can prosper.
Process: Once purpose is clarified, focus on the process (value stream)
used to achieve this objective. This is generally the combined result
of three processes: product and process development, fulfillment
from order to delivery, and support of the product and the customer
through the product’s useful life. These primary processes are made
possible by many secondary, support processes inside the
organization and upstream.
55
Lean Thinking
The ideal process is one in which every step (action) is:

• Valuable: Meaning that the customer is willing to pay for the step
because it creates value and would object if the step was deleted.
• Capable: Producing a good result every time.
• Available: Being able to operate whenever needed.
• Adequate: Having the capacity to keep production in continuous flow.
• Flexible: Permitting a range of products within a product family
to move through a process without batching and delays.
In addition, in the ideal process the steps are linked by:
• Flow: So the good or service proceeds immediately from one
step to the next without stopping.
• Pull: So the next downstream step obtains just what it needs from
the next upstream step when continuous flow is not possible.
• Leveling: From some pacemaker point to smooth the operation
of the process while still addressing the needs of the customer.
People: After identifying the primary and support processes needed
to create value for the customer, make someone responsible for
each value stream. This value-stream manager must engage and
align the efforts of everyone touching each value stream to move it
steadily toward the customer while elevating performance from its
current state to an ever-better future state. Doing this requires:
• A master plan for the enterprise, often called strategy deployment.
• Frequent improvement cycles for each process, often performed
with A3 analysis embodying value-stream maps.
• Standard work with standard management for every step in
each process.
See: A3 Report, Strategy Deployment, Toyota Production System
(TPS), Value Stream, Value-Stream Mapping.
Level Production
See: Heijunka.
56
Mass Production
Level Selling
A stance toward customers that presumes the level of demand
for many products is relatively stable but often is perturbed by
production and sales systems.
For example: Monthly and quarterly sales bonuses for sales staffs
tend to bunch orders at the end of the reporting period. Promotional
activities, such as service specials at car dealers, tend to create spikes
and troughs in demand for service parts unrelated to actual customer
desires. And producing large batches of goods far in advance based
on forecasts almost certainly leads to surpluses of some goods,
which then must be sold using special promotions that temporarily
“create” demand.
Level selling involves the elimination of artificial sales spikes—
what Toyota calls “created demand”—by changing sales incentives,
eliminating promotions, producing in small batches to replenish
what customers have just purchased, and forming long-term relations
with customers so that future demand can be better anticipated
and smoothed. Any variations in demand remaining after production
and sales system distortions have been removed are real variations.
A truly lean production and selling system must be capable of
responding to them.
See: Build-to-Order, Demand Amplification, Heijunka.
Machine Cycle Time

See: Cycle Time.
Mass Production
A business system developed early in the 20th century to organize and
manage product development, production operations, purchasing,
and customer relations. Typically:
• The design process is sequential rather than simultaneous.
• The production process has a rigid hierarchy with jobs divided
into thinking/planning and doing.
57
Mass Production
• The product is taken to the process rather than the reverse.

• Suppliers work-to-print after selection through bids for piece
prices rather than total cost to the customer.
• Materials are delivered infrequently in large batches.
• Information is managed through high-level systems instructing each
production step what to do next and pushing products downstream.
• Customers often are subject to push selling to meet quotas
and clear inventories produced to erroneous forecasts.
See: Batch-and-Queue.
Compare: Lean Production.
Material Flow
The movement of physical items through the entire value stream.
In mass production, products travel to centralized processes in
large batches, pushed forward on the instructions of a master
scheduling system (see illustration on p. 59). In lean production,
the process steps for different product families are moved together,
whenever possible, into tight process sequence so small amounts
of product can flow directly from step to step at the pull of the next
downstream process and of the end customer.
See: Information Flow, Just-in-Time (JIT), Lean Production,
Mass Production.
Material Handling
Moving necessary materials through a production process within
a facility.
In a lean production system material handling does much more than
just deliver materials. A lean material-handling system can serve as the
primary means of carrying production instructions. A well-designed
system also can improve the efficiency of production operators by
taking away wasteful activities such a getting materials, wrestling
with dunnage, and reaching for parts.
58
Material Handling
Current-State Material Flow in Mass Production
Material flow is shown in blue. Map symbols on

material flow are explained in Appendix A.
Fixed-time, unfixed-quantity conveyance

In this type of handling system, a material handler performs a standard
route through a facility at precisely determined time intervals such as
every 20 minutes. The amount of material moved each time may
vary, but the time interval is exact. During this interval the material
handler follows a predetermined, standard route, picking up kanban
cards signaling what materials to deliver next, and delivering the
materials to production locations. This system often is coupled with
a heijunka box in which the withdrawal intervals in the columns of
the box correspond to the time required for the standard material
handling route. This type of system often is employed in assembly
operations where a large number of components need to be
delivered to many points along a line. It also is called mizusumashi
or waterspider conveyance.
Fixed-quantity, unfixed-time conveyance
This type of handling system acts on signals from downstream
locations to deliver exactly the materials needed when they are
59
Material Handling
needed and in the right amounts. The material handler is signaled

to collect materials from a preceding process when a trigger point
or predetermined stock level is reached. Because the material handler
collects a standard quantity of materials from the upstream process
(such as one tray or one pallet or one skid), the quantity of material
is fixed but the timing of conveyance varies with need. This type of
system often is employed in facilities with storage areas for materials
that are produced in batches due to long changeover times. As the
cell or machine depletes the materials in the storage area, a signal
is triggered for the material handler to replenish from upstream
processes the amounts consumed. This type of system often is
termed a call system or a call-parts system.
It is less common but possible to use waterspider conveyance in
conjunction with fixed-quantity, unfixed-time conveyance. In this
arrangement, the material handler will dart around from one
production process to another picking up fixed quantities of materials
from varying processes on a route that changes with time.
See: Heijunka Box, Paced Withdrawal.
Milk Run
A method to speed the flow of materials between facilities by routing
vehicles to make multiple pick-ups and drop-offs at many facilities.
By making frequent pick-ups and drop-offs with milk-run vehicles
connecting a number of facilities rather than waiting to accumulate
a truckload for direct shipment between two facilities, it is possible
to reduce inventories and response times along a value stream.
Milk runs between facilities are similar in concept to material
handling routes within facilities (see illustration on p. 61).
See: Lean Logistics, Material Handling.
Mistake-Proofing
See: Error-Proofing.
60
Muda, Mura, Muri
Example of a Milk Run
Manufacturer
A 1
Dayx
1x
Day
Manufacturer
One large shipment
B Supplier to each manufacturer
1xy
Da
once a day.
Manufacturer
C
Manufacturer
A 3x
Day
Manufacturer Three small shipments

B Supplier to each manufacturer
three times a day.
Manufacturer
C
Monument
Any design, scheduling, or production technology with large-scale
requirements and lengthy changeover times that requires designs,
orders, or products to be brought to the technology and to wait in
a queue for processing.
See: Capital Linearity, Right-Sized Tools.
Muda, Mura, Muri

Three terms often used together in the Toyota Production System
(and called the Three Ms) that collectively describe wasteful
practices to be eliminated.
Muda
Any activity that consumes resources without creating value for
the customer. Within this general category it is useful to distinguish
61
Muda, Mura, Muri
between type one muda, consisting of activities that cannot be

eliminated immediately, and type two muda, consisting of activities
that can be eliminated quickly through kaizen.
An example of type one muda is a rework operation after a paintbooth,
which is required to obtain a finish acceptable to the customer from
a paint process that is not highly capable. Because a completely
capable paint process for fine finishes has eluded manufacturers for
decades, it is not likely that this type of muda can be eliminated quickly.
An example of type two muda is multiple movements of products
and inventories between steps in a fabrication and assembly process.
These steps can be quickly eliminated in a kaizen workshop by moving
production equipment and operators into a smoothly flowing cell.
Muri = overburdened
Mura = unevenness, fluctuation, variation
Muda = waste
No Muri, Mura, or Muda
62
Muda, Mura, Muri
Mura
Unevenness in an operation; for example, a gyrating schedule not
caused by end-consumer demand but rather by the production system,
or an uneven work pace in an operation causing operators to hurry and
then wait. Unevenness often can be eliminated by managers through
level scheduling and careful attention to the pace of work.
Muri
Overburdening equipment or operators by requiring them to run
at a higher or harder pace with more force and effort for a longer
period of time than equipment designs and appropriate workforce
management allow.
Muda, Mura, and Muri in Conjunction
A simple illustration shows how muda, mura, and muri often are
related so that eliminating one also eliminates the others.
Suppose that a firm needs to transport six tons of material to its
customer and is considering its options. One is to pile all six tons
on one truck and make a single trip. But this would be muri because
it would overburden the truck (rated for only three tons) leading to
breakdowns, which also would lead to muda and mura.
A second option is to make two trips, one with four tons and the
other with two. But this would be mura because the unevenness
of materials arriving at the customer would create jam-ups on the
receiving dock followed by too little work. This option also would
create muri, because on one trip the truck still is overburdened,
and muda as well, because the uneven pace of work would cause
the waste of waiting by the customer’s receiving employees.
A third option is to load two tons on the truck and make three trips.
But this would be muda, even if not mura and muri, because the
truck would be only partially loaded on each trip.
The only way to eliminate muda, mura, and muri is to load the
truck with three tons (its rated capacity) and make two trips.
See: Heijunka.
63
Multimachine Handling
Multimachine Handling
The work practice of assigning operators to operate more than one
machine in a process village layout. Requires the separation of
human work from machine work, and usually is facilitated by
applying jidoka and auto-eject to the machines.
See: Jidoka, Multiprocess Handling.
Single Machine Handling. Multimachine Handling.
Multiprocess Handling
The work practice of assigning operators to operate more than one
process in a product-flow oriented layout (see illustration on p. 65).
Requires training operators to operate different types of machines
(e.g., bender, crimper, and tester) so they can walk products
through cellularized operations. (Also known as cross-training.)
This practice contrasts with the typical mass production practice of
placing operators in separate departments—turning, milling, grinding
—where they work only one type of machine and make batches of
parts to transfer to other processes in other departments.
See: Multimachine Handling.
Nemawashi
The process of gaining acceptance and preapproval for a proposal
by evaluating first the idea and then the plan with management and
stakeholders to get input, anticipate resistance, and align the proposed
change with other perspectives and priorities in the organization.
64
Obeya
Example of Multiprocess Handling
Mil
l
Lathe
1
1
Grinder
Operator working different types of machines in a cell.
Formal approval comes in a meeting to sign off on the final version

of the proposal. The term literally means “preparing the ground for
planting” in Japanese.
See: Strategy Deployment.
Nonvalue-Creating Time
See: Cycle Time.
Obeya
Obeya in Japanese means simply “big room.” At Toyota it has
become a major project-management tool, used especially in product
development, to enhance effective and timely communication. Similar
in concept to traditional “war rooms,” an obeya will contain highly
visual charts and graphs depicting program timing, milestones and
progress to date, and countermeasures to existing timing or technical
problems. Project leaders will have desks in the obeya as will others
at appropriate points in the program timing. The purpose is to ensure
project success and shorten the PDCA cycle.
See: Plan, Do, Check, Act (PDCA).
65
Ohno, Taiichi
Ohno, Taiichi (1912–1990)

The Toyota executive widely credited as the chief architect of the
Toyota Production System (TPS). Author of several important
books about TPS.
One-Piece Flow
Making and moving one piece at a time.
See: Continuous Flow, Every Product Every Interval (EPEx), Single
Minute Exchange of Die (SMED).
Operation
Work that is done on an item by a machine or person.
See: Process.
Operational Availability versus Operating Rate

Operational availability is the fraction of time a machine functions
properly when needed. (Also called operable rate.) The operating
rate is the amount of time in a time period (shift, day, etc.) that a
machine is used to make something.
Use of an automobile illustrates the difference between the two
terms. The operational availability is the percentage of time the car
runs properly when needed. The operating rate is the percentage
of time per day the car is actually driven.
Lean Thinkers use the distinction to illustrate a trap in traditional
thinking about efficiency. From a lean perspective, a high operating
rate is not necessarily desirable. Whether an operating rate is good
or bad depends on whether or not the equipment is producing just
what is needed (good) or overproducing (bad). On the other hand,
the ideal operational availability is 100% because it refers to how
well a machine runs when needed.
See: Overall Equipment Effectiveness.
66
Operator Balance Chart (OBC)
Operator Balance Chart (OBC)
A graphic tool that assists the creation of continuous flow in a
multistep, multioperator process by distributing operator work
elements in relation to takt time. (Also called an operator loading
diagram or a yamazumi board.)
An OBC (shown on the next page) uses vertical bars to represent
the total amount of work each operator must do compared to takt
time. The vertical bar for each operator is built by stacking small
bars representing individual work elements, with the height of each
element proportional to the amount of time required. Creating an
operator balance chart helps with the critical task of redistributing
work elements among operators. This is essential for minimizing
the number of operators needed by making the amount of work for
each operator very nearly equal to, but slightly less than, takt time.
See: Yamazumi Board.
takt time
40 sec.
35
30
Start Assembly II cycle

25
Get valve and
Get finished piece, place to fixture
attach convolute
20
Start Assembly I cycle
Place and clamp
Get hose and place Pull convolute Place to container
Get LH ferrule, over crimps
15 assemble to hose
Get connector, Get finished part, Remove cap, attach hose
place and clamp Place to fixture inspect crimps
and clamp Reattach cap
10 Start crimper cycle Start tester cycle
Get bent tube, Get hose and RH Place and Remove cap,
place to Assembly I ferrule, assemble clamp LH side attach hose
5
Get SS tube, Place to Get finished piece,
place to bender Assembly II fixture place RH side Place to tester fixture
to fixture
1 2 3 4
Example of an operator balance chart (OBC).
67
Operator Cycle Time
Operator Cycle Time

See: Cycle Time.
Out-of-Cycle Work
Tasks of operators in multioperator processes which require the
operator to break the pace of work or leave the area.
Examples include retrieving parts from storage locations and moving
finished items to downstream processes. These tasks should be
removed from the operator’s standardized work and given to support
staff such as material handlers and team leaders, who work outside
of takt-time-based continuous flow.
Overall Equipment Effectiveness (OEE)

A total productive maintenance (TPM) measure of how effectively
equipment is being used.
OEE is calculated from three elements: The availability rate measures
downtime losses from equipment failures and adjustments as a
percentage of scheduled time. The performance rate measures
operating speed losses—running at speeds lower than design speed
and stoppages lasting a few seconds. The quality rate expresses
losses due to scrap and rework as a percentage of total parts run.
These elements are multiplied to obtain OEE:
Availability Rate x Performance Rate x Quality Rate = OEE
If Availability is 90%, Performance is 95%, and Quality is 99% then

0.90 x 0.95 x 0.99 = 84.6% OEE
OEE typically focuses on what are termed the six major losses—
failures, adjustments, minor stoppages, reduced operating speeds,
scrap, and rework—but some companies add other measures judged
important to their business.
See: Total Productive Maintenance (TPM).
68
Paced Withdrawal
Overproduction
Producing more, sooner or faster than is required by the next
process. Ohno considered overproduction to be the most grievous
form of waste because it generates and hides other wastes, such as
inventories, defects, and excess transport.
See: Batch-and-Queue, Ohno, Seven Wastes.
Example of overproduction.
Paced Withdrawal
The practice of releasing production instructions to work areas and
withdrawing completed product from work areas at a fixed, frequent
pace. This practice can be used as a means of linking material flows
with information flow.
In the illustration on p. 70, the material handler circulates through
the entire route every 20 minutes. The handler begins by
withdrawing production instructions (production kanban) from a
heijunka box, then delivers the kanban to a production process
where they are the signal to produce goods.
The handler picks up finished products from the production
process and takes these to the supermarket. There the handler
picks up production kanban from the collection box, takes these
to the heijunka box for insertion in the box, and withdraws the next
69
Paced Withdrawal
increment of production kanban from the appropriate column in

the box as the cycle starts again.
Paced withdrawal serves to prevent overproduction and quickly
alerts managers—in this case, in less than 20 minutes—if there is
a production problem.
See: Every Product Every Interval (EPEx), Heijunka Box, Milk Run,
Pull Production.
HEIJUNKA BOX
Customer
Requirement
Drop kanban 1 Pick up next
at process kanban
2
Repeat Cycle Every
PACEMAKER
PROCESS Withdrawal Interval
SHIPPING
3 4
Pick up Move finished goods to

finished goods supermarket or shipping
Typical paced withdrawal in a plant environment.
Pacemaker Process
Any process along a value stream that sets the pace for the entire
stream. (The pacemaker process should not be confused with a
bottleneck process, which necessarily constrains downstream
processes due to a lack of capacity.)
The pacemaker process usually is near the customer end of the
value stream, often the final assembly cell. However, if products
flow from an upstream process to the end of the stream in a FIFO
sequence, the pacemaker may be at this upstream process (see
illustration on p. 71).
See: FIFO.
70
Perfection
Selecting the Pacemaker Process
pull pull pull
pull
Pack-Out Quantity
The number of items a customer (whether internal in a facility or
external) wants packed in a container for conveyance and shipping.
Note that a pallet or skid of the product may consist of a number
of containers.
See: Pitch.
Perfection
When a process provides pure value, as defined by the customer,
with no waste of any sort.
71
Pitch
Pitch
The amount of time needed in a production area to make one
container of products.
The formula for pitch is:
takt time x pack-out quantity = pitch
For example, if takt time (available production time per day divided
by customer demand per day) is one minute and the pack-out
quantity is 20, then: 1 minute x 20 pieces = pitch of 20 minutes
Pitch, in conjunction with the use of a heijunka box and material
handling based on paced withdrawal, helps set the takt image and
pace of a facility or process.
Note that the term pitch also is sometimes used to indicate the
span or time of a person’s job.
See: Heijunka Box, Paced Withdrawal, Pack-Out Quantity, Takt Time.
Plan, Do, Check, Act (PDCA)

An improvement cycle based on the scientific method of proposing
a change in a process, implementing the change, measuring the
results, and taking appropriate action (see illustration on p. 73). It
also is known as the Deming Cycle or Deming Wheel after W. Edwards
Deming, who introduced the concept in Japan in the 1950s.
The PDCA cycle has four stages:
Plan: Determine goals for a process and needed changes
to achieve them.
Do: Implement the changes.
Check: Evaluate the results in terms of performance.
Act: Standardize and stabilize the change or begin the cycle
again, depending on the results.
72
Plan, Do, Check, Act (PDCA)
A Common Version of the PDCA Wheel
Toyota frequently employs PDCA, but changes the terminology slightly:
Grasp the Situation or “Go See”
73
Plan For Every Part (PFEP)
Plan For Every Part (PFEP)

A detailed plan for each part used in a production process, showing
everything relevant to managing the process with no errors or waste.
This is a critical tool in the Toyota Production System.
A plan will include the part number, its dimensions, the amount
used daily, the precise location of use, the precise location of
storage, order frequency, the supplier, pack-out quantity, transit
time from the supplier, container size and weight, and any other
relevant information. The point is to precisely specify every aspect
of the handling and use of every part. (Harris, Harris, and Wilson
2003, pp. 15–22.)
See: Material Handling, Pack-Out Quantity.
Plan For Every Person

A training and development schedule for employees, showing the
skills needed and the skills attained.
In the sample plan below, the needed skills are arrayed across the
top with employees listed in the left column. The shading is in
Unable to do operation (LOSS) Factory Foreman:

Skills Training Can generally do operation (TIE)
name:
Matrix Can do operation well (WIN)
By: Date:
PROCESS
External view
Current Target
Corrections
Packaging
Tie bar card
Electrical
Soldering
Mounting
inspection.
No. Operator
Cleaning
inspect.
Coating
Date Date
Priming
Sealing
Powder
Reflow
Curing
Visual
Name
char.
1 Worker A
11/30 11/30 12/30 12/30 12/30 12/30
2 Worker B
12/30 12/30 11/30
3 Worker C 11/30 11/30 12/30
4 Worker D
11/30 11/30
74
Process Capacity Sheet
proportion to the level of skills attained. The dates in empty or
partially shaded boxes are targets for attaining the needed skills.
This tool is particularly useful for assessing progress in training
employees in the multiple skills needed for multiprocess handling.
See: Multiprocess Handling.
Point-of-Use Storage
Storing production parts and materials as close as possible to the
operations that require them.
Poka-Yoke
See: Error-Proofing.
Policy Deployment
See: Strategy Deployment.
Preventive Maintenance
An equipment servicing approach considered a precursor to Total
Productive Maintenance that is based on regularly scheduled
checking and overhauling by maintenance personnel to decrease
breakdowns and increase equipment life.
In lean manufacturing, hourly workers have daily responsibilities
for performing basic preventive maintenance tasks like checking
lubrication levels, the condition of filters, and the tightness of nuts
and bolts.
Compare: Total Productive Maintenance.
Process
A series of individual operations that must occur in a specific sequence
to create a design, complete an order, or produce a product.
Process Capacity Sheet

75
Process Village
Process Village
A grouping of activities by type rather than in the sequence needed
to design or make a product.
Process Village Layout vs. Process Sequence Layout
Tube Tube
Tube Stock Storage Debur
Cutting Miter
Finished Component Parts Frame Parts Frame Tube

Stores and Shipping Storage Storage Welding Bend
Frame Frame Frame

Final Assembly Wash
Storage Paint
Process village layout.
Miter Debur Cut

Bend
Steel Bike Cell Tube
Weld Stock
Wash Paint Assemble and
Parts
Miter Debur Cut

Bend
Aluminum Bike Cell
Weld
Wash Paint Assemble
Miter Debur Cut

Bend Ship
Titanium Bike Cell
Weld
Wash Paint Assemble
Process sequence layout by product family.
76
Product Family
Historically, most organizations created process villages for activities
ranging from grinding on the shop floor to credit checking in the
office. Lean organizations try to relocate process steps, wherever
possible, from villages into process sequences for product families.
The illustration on p. 76 shows two plant layouts contrasting process
village and process sequence material flow in a bicycle plant.
See: Mass Production, Material Flow.
Processing Time
See: Cycle Time.
Product Family
A product and its variants passing through similar processing steps
and common equipment just prior to shipment to the customer.
The significance of product families for Lean Thinkers is that they
are the unit of analysis for value-stream maps, which are defined
from the most downstream step just before the customer.
Note that product families can be defined from the standpoint of
any customer along an extended value stream, ranging from the
ultimate customer (the end consumer) to intermediate customers
within the production process.
For example: In a power tools business, a product family might be
defined as medium-sized electric drills utilizing a common chassis
and passing through a common assembly cell as the last
manufacturing step before shipment directly to end consumers.
Alternatively, the product family might be defined as the drive
motor and its variants assembled in a common cell just prior to
shipment to the drill manufacturer customer.
Or a product family might be defined as the drive motor stator and
its variants going through a common manufacturing process just
prior to shipment to the drive motor customer.
See: Product Family Matrix, Value-Stream Mapping (VSM).
77
Product Family Matrix
Product Family Matrix

A chart constructed by Lean Thinkers to identify appropriate
product families.
In the illustration below, a firm with seven product lines, as perceived
by its customers, arrayed its assembly steps and equipment across
the top of a product family matrix and quickly found a common
path for Products A, B, and C, which it then value stream mapped
as a product family.
See: Product Family, Value-Stream Mapping (VSM).
Assembly Steps and Equipment
1 2 3 4 5 6 7 8
A X X X X X
B X X X X X X
PRODUCTS
C X X X X X X
D X X X X X
E X X X X X
F X X X X X
G X X X X X
Source: Rother and Shook 1999, p. 6.
Production Analysis Board

A display—often a large whiteboard—located beside a process to
show actual performance compared with planned performance.
The board in the illustration on p. 79 shows the performance of a
process on an hourly basis with planned versus actual production.
When production does not correspond to the plan, the problem is
recorded and a cause is sought.
78
Note that a process regulated by pull signals rather than a preset
schedule will record the amounts requested by the next downstream
process, which may vary from plan during a shift or day, and compare
the requested amounts with actual production.
A production analysis board can be an important visual management
tool, particularly as a firm begins its transformation to lean production.
However, it is important to understand that the appropriate use for
the production analysis board is as a problem-identification and
problem-solving tool and not, as often is misunderstood, as a tool
for scheduling production. The tool also is sometimes called a
production control board, a progress control board, or—more
appropriately—a problem-solving board.
Line Team Leader

Fuel Line Cell Barb Smith
Quantity Required Takt Time
690 40 sec.
Time Plan Actual Plan Actual Problems/Causes Sign-off
6-7 90 90 90 90
7-8 90 88 180 178 tester failure
8-9 10
90 90 270 268 supervisor
9 -10
10 10
90 85 360 353 tester failure signs hourly
1010-1110 90 90 450 443
remember
1140-1240 90 90 540 533
breaks
12 -1
40 40
90 86 630 619 bad parts (valves) area manager
signs at lunch
and end of shift
hourly cumulative
Source: Rother and Harris 2001, p. 86.
79
Production Control
Production Control
The task of controlling and pacing production so that products
flow smoothly and quickly to meet customer requirements.
At Toyota, the production control department evolved as the key
corporate function to speed the pace of production when behind
and to restrain it when ahead. This contrasts with typical mass
production firms where production control is responsible for
isolated tasks, such as material requirements planning and logistics.
Production Lead Time

See: Cycle Time.
Production Preparation Process (3P)

A disciplined method for designing a lean production process for
a new product or for fundamentally redesigning the production
process for an existing product when the design or customer
demand change substantially.
A cross-functional 3P team examines the total production process,
developing a number of alternatives for each process step and
evaluating these against lean criteria. Using simple materials,
the team then mocks up the process to test assumptions before
equipment is ordered or installed in the final configuration.
Compare: Kaizen, Kaizen Workshops.
Production Smoothing
See: Heijunka.
Pull Production
A method of production control in which downstream activities
signal their needs to upstream activities. Pull production strives to
eliminate overproduction and is one of the three major components
of a complete just-in-time production system.
In pull production, a downstream operation, whether within the
same facility or in a separate facility, provides information to the
80
Pull Production
upstream operation, often via a kanban card, about what part or
material is needed, the quantity needed, and when and where it
is needed. Nothing is produced by the upstream supplier process
until the downstream customer process signals a need. This is the
opposite of push production.
There are three basic types of pull production systems:
Supermarket Pull System
The most basic and widespread type, also known as a fill-up or
replenishment or a-type pull system. In a supermarket pull system
each process has a store—a supermarket—that holds an amount of
each product it produces. Each process simply produces to replenish
what is withdrawn from its supermarket. Typically, as material is
withdrawn from the supermarket by the downstream customer
process, a kanban or other type of information will be sent upstream
to the supplying process to withdraw product. This will authorize
the upstream process to replace what was withdrawn.
Each process is responsible for the replenishment of its supermarket,
so daily management of the worksite is relatively simple and kaizen
opportunities are relatively easy to see. The disadvantage of a
supermarket system is that a process must carry an inventory of
all part numbers it produces, which may not be feasible if the
number of part numbers is large.
SCHEDULING
DEPARTMENT
order
CUSTOMER
HEIJUNKA BOX
PROCESS 1 PROCESS 2 SHIPPING
FIFO FIFO
Mixed Supermarket and Sequential Pull System.
81
Pull Production
Sequential Pull System

A sequential pull system—also known as a b-type pull system—may
be used when there are too many part numbers to hold inventory of
each in a supermarket. Products are essentially “made-to-order”
while overall system inventory is minimized.
In a sequential system, the scheduling department must set the
right mix and quantity of products to be produced. This can be
done by placing production kanban cards in a heijunka box, often
at the beginning of each shift. These production instructions then
are sent to the process at the upstream end of the value stream.
Often this is done in the form of a “sequence list,” sometimes called
a “sequential tablet.” Each following process simply produces in
sequence the items delivered to it by the preceding upstream
process. FIFO of individual products must be maintained throughout.
A sequential system creates pressure to maintain short and
predictable lead times. In order for this system to work effectively,
the pattern of customer orders must be well understood. If orders
are hard to predict, production lead time must either be very short
(less than order lead time) or an adequate store of finished goods
must be held.
A sequential system requires strong management to maintain,
and improving it may be a challenge on the shop floor.
SCHEDULING
DEPARTMENT
order
CUSTOMER
HEIJUNKA BOX
Supermarket Pull System.
82
Pull Production
Mixed Supermarket and Sequential Pull System
Supermarket and sequential pull systems may be used together in a
mixed system—also known as a c-type pull system. A mixed system
may be appropriate when an 80/20 rule applies, with a small percentage
of part numbers (perhaps 20%) accounting for the majority (perhaps
80%) of daily production volume. Often an analysis is performed to
segment part numbers by volume into (A) high, (B) medium, (C)
low, and (D) infrequent orders. Type D may represent special order
or service parts. To handle these low-running items, a special type D
kanban may be created to represent not a specific part number but
rather an amount of capacity. The sequence of production for the
type D products is then determined by the method the scheduling
department uses for sequential pull system part numbers.
Such a mixed system enables both supermarket and sequential
systems to be applied selectively and the benefits of each are
obtained, even in environments where the demand is complex and
varied. The two systems may run together, side-by-side horizontally,
throughout an entire value stream, or may be used for a given part
number at different locations along its individual value stream.
A mixed system may make it more difficult to balance work and to
identify abnormal conditions. It also can be more difficult to manage
and conduct kaizen. Therefore, discipline is required to make a mixed
system work effectively. (Adapted from Smalley 2004, pp. 17–20.)
See: Just-in-Time (JIT), Overproduction.
Compare: Push Production.
SCHEDULING
DEPARTMENT order
CUSTOMER
SEQUENCE
LIST
FIFO FIFO
Sequential Pull System.
83
Push Production
Push Production
Processing large batches of items at a maximum rate, based on
forecasted demand, then moving them to the next downstream
process or into storage, regardless of the actual pace of work in
the next process. Such a system makes it virtually impossible to
establish the smooth flow of work from one process to the next
that is the hallmark of lean production.
See: Batch-and-Queue, Production Control.
Compare: Pull Production.
Quality Assurance
See: Inspection.
Quality Control Circle

A small group of workers and their team leader who collectively identify
problems in their work area, analyze them, and provide solutions.
In contrast to other companies, particularly in the West, circles at
Toyota are integrated into the overall total quality control system
and shop-floor organization. Toyota circles meet two to three times
per month from 30 to 60 minutes.
Management expert Peter Drucker noted that circles were used
widely in the U.S. during World War II. They reached their greatest
success in Japan after the war. The U.S. re-imported them during
the quality movement of the 1970s and 1980s. Unfortunately,
circles at U.S. companies often were not integrated into an overall
continuous improvement effort. These isolated circles dissolved as
the fad faded in the late 1980s.
See: Team Leader, Total Quality Control.
Quality Function Deployment (QFD)

A visual decision-making procedure for cross-functional product
project teams that develops a common understanding of customer
needs (the “voice of the customer”) and a consensus on the final
engineering specifications of the product to meet those needs that
has the commitment of the entire team.
84
Reuseable Knowledge
QFD integrates the perspectives of team members from different
disciplines, ensures that their efforts are focused on resolving key
trade-offs in a consistent manner against measurable performance
targets for the product, and deploys these decisions through
successive levels of detail. The use of QFD eliminates expensive
backflows and rework as projects near launch.
A hallmark of QFD is the “house of quality” diagram that visually
identifies spoken and unspoken needs of customers, translates
them into actions and designs, and communicates them
throughout the organization. It also allows customers to prioritize
their requirements. Suppliers providing critical components are
often involved in QFD sessions at the start of the design process.
See: Value.
Red Tagging
Labeling unneeded items for removal from a production or office
area during a Five S exercise.
Red tags are attached to unneeded tools, equipment, and supplies.
Tagged items are placed in a holding area where they are evaluated
for other uses within a facility or company. Those with no alternative
uses are discarded. Red tagging helps achieve the first S of the Five S
exercise, which calls for separating needed from unneeded items.
See: Five Ss.
Resident Engineer
A component engineer from a supplier who is sent to Toyota to
work jointly with its engineers on development projects or to solve
problems; sometimes called a “guest engineer.”
See: Design-In.
Reuseable Knowledge
See: Useable Knowledge.
85
Right-Sized Tools
Right-Sized Tools
Process equipment that is highly capable, easy to maintain (and
therefore available to produce whenever needed), quick to
changeover, easy to move, and designed to be installed in small
increments of capacity to facilitate capital and labor linearity.
Examples of right-sized tools are small washing machines, heat
treatment ovens, and paint booths that can be placed in process
sequence in cells to facilitate continuous flow.
See: Capital Linearity, Labor Linearity.
Compare: Monuments.
Safety Stock
See: Inventory.
Sensei
The Japanese term for “teacher.” Used by Lean Thinkers to denote
a master of lean knowledge as a result of years of experience in
transforming the gemba (the place where work actually is done). The
sensei also must be an easily understood and inspiring teacher.
Compare: Change Agent.
Sequential Pull
See: Pull Production.
Set-Based Concurrent Engineering

An approach to the design of products and services in which
developers consider sets of ideas rather than single ideas. To do
this, developers:
• Use trade-off curves and design guidelines to characterize (or
describe) known feasible design sets, and thus focus the search
for designs.
86
Setup Reduction
• Identify and develop multiple alternatives, and eliminate
alternatives only when proven inferior or infeasible.
• Start with design targets, and allow the actual specifications
and tolerances to emerge through analysis and testing.
• Delay selecting the final design or establishing the final
specifications until the team knows enough to make a
good decision.
This approach yields substantial organizational learning. It takes
less time and costs less in the long term than typical point-based
engineering systems that select a design solution early in the
development process, with the typical consequence of false starts,
rework, failed projects, and minimal learning.
See: Trade-off Curves.
Setup Reduction
The process of reducing the amount of time needed to changeover
a process from the last part for the previous product to the first good
part for the next product.
The six basic steps in setup reduction are:
1. Measure the total setup time in the current state.
2. Identify the internal and external elements, calculating
the individual times.
3. Convert as many of the internal elements to external
as possible.
4. Reduce the time for the remaining internal elements.
5. Reduce the time for the external elements.
6. Standardize the new procedure.
See: Changeover, Single Minute Exchange of Die (SMED).
87
Seven Wastes
Seven Wastes
Taiichi Ohno’s categorization of the seven major wastes typically
found in mass production:
1. Overproduction: Producing ahead of what’s actually needed by
the next process or customer. The worst form of waste because
it contributes to the other six.
2. Waiting: Operators standing idle as machines cycle, equipment
fails, needed parts fail to arrive, etc.
3. Conveyance: Moving parts and products unnecessarily, such
as from a processing step to a warehouse to a subsequent
processing step when the second step instead could be located
immediately adjacent to the first step.
4. Processing: Performing unnecessary or incorrect processing,
typically from poor tool or product design.
5. Inventory: Having more than the minimum stocks necessary
for a precisely controlled pull system.
6. Motion: Operators making movements that are straining or
unnecessary, such as looking for parts, tools, documents, etc.
7. Correction: Inspection, rework, and scrap.
See: Changeover, Setup Reduction.
Shingo, Shigeo (1909–1990)

An engineer and consultant whose books and teaching made key
contributions to the dissemination of the Toyota Production System.
Shingo taught industrial engineering methods aimed at plant
supervisors and engineers at Toyota from roughly 1955 to 1980.
Shingo’s teaching contributed to the formulation of internal kaizen
training at Toyota and other companies as well. He also made key
contributions to setup reduction, coining the phrase single minute
exchange of die (SMED) and developing steps to analyze setup
work, especially the distinction between internal and external work.
88
Shusa
The Shingo Prize for Excellence in Manufacturing was established
in 1988 by the College of Business at Utah State University, to
promote awareness of lean manufacturing concepts and recognizing
private and public sector facilities in the United States, Canada, and
Mexico that achieve high levels of implementation.
See: Setup Reduction, Single Minute Exchange of Die (SMED).
Shojinka
One of three similar Japanese words (shojinka, shoninka, shoryokuka)
related in concept but with different meanings. Shojinka means
“flexible manpower line” and the ability to adjust the line to meet
production requirements with any number of workers and demand
changes. It is sometimes called “labor linearity” in English to refer
to the capability of an assembly line to be balanced even when
production volume fluctuates up or down.
Shoninka means “manpower savings.” This corresponds to the
improvement of work procedures, machines, or equipment, in
order to free whole units of labor (i.e. one person) from a
production line consisting of one or more workers.
Shoryokuka means “labor savings” and indicates partial improvement
of manual labor by adding small machines or devices to aid the job.
This results in some small amount of saved labor but not an entire
person as in shoninka. (An accumulation of shoryokuka labor
savings add up to shoninka manpower saving.)
See: Cell, Continuous Flow, Standardized Work.
Shusa
A project leader like the chief engineer in the Toyota product
development system.
89
Single Minute Exchange of Die (SMED)
Single Minute Exchange of Die (SMED)

A process for changing over production equipment from one part
number to another in as little time as possible. SMED refers to the target
of reducing changeover times to a single digit, or less than 10 minutes.
Shigeo Shingo’s key insights about setup reduction, which were
developed in the 1950s and 1960s, were separating internal setup
operations—which can be done only when a machine is stopped
(such as inserting a new die)—from external operations that can
be performed while the machine is running (such as transporting
the new die to the machine), and then converting internal setup
operations to external operations. (Shingo 1985, p. 21–25.)
See: Changeover, Setup Reduction, Shingo.
second die first die second die first die
2 2 1 2 1 1
1
1
Slow changeover due to Quick changeover.

poor positioning of dies.
Example of Single Minute Change of Die (SMED).
Single-Piece Flow
See: Continuous Flow, One-Piece Flow.
Six Sigma
A quality standard of just 3.4 defects per one million opportunities;
99.9996% perfect.
Six sigma methodologies emphasize mathematical and statistical
tools to improve the quality of processes that are already under
control. Application follows a five-step process of define, measure,
analyze, improve, and control often referred to as DMAIC.
90
Spaghetti Chart
Motorola conceived the six sigma technique in 1986 as a way to
achieve the company’s improvement goals in manufacturing and
support functions. The term refers to the number of standard
deviations a point is away from the mean point in a bell curve. It
often is represented as 6!.
Many lean thinkers apply six sigma techniques to solve stubborn
quality problems in value-adding processes that already are under
control and where an analysis of the overall value-stream has
eliminated nonvalue-adding processes.
Compare: Lean Thinking, Theory of Constraints (TOC).
Spaghetti Chart
A diagram of the path taken by a product as it travels through the
steps along a value stream. So called because in a mass production
organization the product’s route often looks like a plate of spaghetti.
See: Material Flow.
Assembly Assembly
Assembly
Assembly
Component Piece Parts Process
Example of a spaghetti chart for product flows along value streams.
91
Standardized Work
Standardized Work
Establishing precise procedures for each operator’s work in a
production process, based on three elements:
1. Takt time, which is the rate at which products must
be made in a process to meet customer demand.
2. The precise work sequence in which an operator
performs tasks within takt time.
3. The standard inventory, including units in machines,
required to keep the process operating smoothly.
Standardized work, once established and displayed at workstations,
is the object of continuous improvement through kaizen. The benefits
of standardized work include documentation of the current process
for all shifts, reductions in variability, easier training of new
operators, reductions in injuries and strain, and a baseline for
improvement activities.
Three basic forms (shown on pp. 93–94) commonly are utilized
in creating standardized work. These are used by engineers and
front-line supervisors to design the process and by operators to
make improvements in their own jobs.
1. Process Capacity Sheet
This form is used to calculate the capacity of each machine
in a linked set of processes (often a cell) in order to confirm
true capacity and to identify and eliminate bottlenecks. This
form determines such factors as machine cycle times, tool
setup and change intervals, and manual work times.
2. Standardized Work Combination Table
This form shows the combination of manual work time, walk time,
and machine processing time for each operator in a production
sequence. This form provides more detail and is a more precise
process design tool than the operator balance chart (shown on
p. 67). The completed table shows the interactions between
operators and machines in a process and permits the recalculation
of operator work content as takt time expands and contracts
over time.
92
Standardized Work
Part # Application
Process Approved by: Entered by:
Capacity Part name Line
Sheet
BASIC TIME TOOL CHANGE
# Process name Machine # Processing
MANUAL AUTO COMPLETION CHANGE TIME capacity per shift
1 Cut cc 100 5 25 30 500 2 min. 896
2 Rough Grind gg 200 5 12 17 1000 5 min. 1570
3 Fine Grind gg 300 5 27 32 300 5 min. 823
Needed units Hand

Standardized Work From: Get SS tube (raw) Date: June 8, 2004 per shift: 690
Walk
Combination Table To: Place finished line to container Area: Truck Cell Takt Time: 40 sec. Auto
Time (sec.)
Work Elements Seconds 2x Takt
hand auto walk 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85
1 Get SS tube, place to bender 3

1
2 Get bent tube, place to Assembly I 3
3 Get connector, place and clamp 4
4 Get hose, place 4
5 Start Assembly I cycle 1

1
6 Get finished piece, attach convolute 6
7 Place to Assembly II fixture 5
8 Get hose, LH ferrule, assemble 4
9 Place to fixture, clamp 3
10 Get RH ferrule, assemble to hose 3
11 Place and clamp 3
12 Get valve, place to fixture 3
13 Start Assembly II cycle 1

1
14 Get finished piece, place to fixture 5
(and so on)
Waiting
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85
Totals
Seconds
93
Standardized Work
3. Standardized Work Chart

This form shows operator movement and material location in
relation to the machine and overall process layout. The form
should show the three elements that constitute standardized
work: the current takt time (and cycle time) for the job, the work
sequence, and the amount of required standard in-process stock
to ensure smooth operations. Standardized work charts often are
displayed at workstations as a tool for visual management and
kaizen. They are continuously reviewed and updated as the
condition of the worksite changes or improves.
These standardized work forms typically are used in conjunction
with two other worksite forms: The work standards sheet and the
job instruction sheet.
Standardized From Date Prepared Prepared by Dept./Location Team Leader Supervisor

Work Chart To
Ship Inspection Clean

Dock Table Debur
3 3
2 2
Raw
Saw Drill Lathe
Material
Quality Safety Standard Units of Takt Time Cycle Time Operator

Check Precaution WIP STD WIP Number
94
Strategy Deployment
The work standards sheet summarizes a variety of documents
that define how to build the product according to engineering
specifications. Typically, the work standards sheet details precise
operational requirements that must be adhered to in order to
assure product quality.
The job instruction sheet—also called a job breakdown sheet or a
job element sheet—is used to train new operators. The sheet lists
the steps of the job, detailing any special knack that may be required
to perform the job safely with utmost quality and efficiency.
See: Kaizen; Operator Balance Chart; Plan, Do, Check, Act (PDCA);
Takt Time.
Strategy Deployment
A management process that aligns—both vertically and horizontally
—an organization’s functions and activities with its strategic
objectives. A specific plan—typically annual—is developed with
precise goals, actions, timelines, responsibilities, and measures.
The example A3 on pp. 96–97 shows the strategy of a finance
department director for returning a company to profitability
(Dennis 2006, p.103). The Performance box in the upper left corner
illustrates that the company missed its revenue and EBIT targets the
previous year. It also shows inventory levels because the director
considers it to be the company’s biggest waste and a serious drag
on cash flow. The “R” for “red” rating in the Reflection box shows
that key improvement efforts didn’t work last year. The Analysis below
it shows the top actions that must be done to achieve this year’s
strategic objective of profitability. The Action Plan on the right
provides the who, what, when, where, and how of the strategy.
The Followup box displays any lingering concerns and how the
director will check on progress.
Strategy deployment, also known by the Japanese term hoshin kanri,
may start as a top-down process when an organization launches a
lean conversion. However, once the major goals are set, it should
become a top-down and bottom-up process involving a dialogue
between senior managers and project teams about the resources
and time both available and needed to achieve the targets. This
dialogue often is called catchball (or nemawashi) as ideas are
tossed back and forth like a ball.
95
Example of Finance Department A3
Strategy Deployment
Revenue/month ($ million) EBIT R Inventory days R

$40.0 12.0% 50.0
10.0%
40.0
$30.0
EBIT target = 10.0% 8.0%
EBIT actual = 1.4% 30.0
$20.0 6.0%
20.0
Revenue target = $252.0 million ($21.0 million/month) 4.0%
$10.0 Revenue actual = $246.7 million ($20.6 million/month)

Inventory target = 20.0 days
10.0
2.0% Inventory actual = 31.2 days
$0.0 0.0% 0.0

Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
Source: Dennis 2006, p.103.

96
Strategy Deployment
97
Strategy Deployment
The objective is to match available resources with desirable

projects so that only projects that are desirable, important, and
achievable are authorized. (This is to avoid the practice in many
organizations of embarking on many improvement initiatives that
are popular in parts of the organization but aren’t completed for
lack of cross-function agreement and resources).
As an organization progresses with its lean transformation and gains
experience with policy deployment, the process should become
much more bottom-top-bottom, with each part of the organization
proposing actions to senior management to improve performance.
A mature lean organization may call this process strategy alignment
or policy management. (Adapted from Dennis 2006.)
See: Nemawashi; Plan, Do, Check, Act (PDCA).
Supermarket
The location where a predetermined standard inventory is kept
to supply downstream processes.
Supermarkets ordinarily are located near the supplying process
to help that process see customer usage and requirements. Each
item in a supermarket has a specific location from which a material
handler withdraws products in the precise amounts needed by a
downstream process. As an item is removed, a signal to make
Diagram of a supermarket.
98
Takt Time
more (such as a kanban card or an empty bin) is taken by the
material handler to the supplying process.
Toyota installed its first supermarket in 1953 in the machine shop of
its main plant in Toyota City. (Ohno 1988, p. 27.) Toyota executive
Taiichi Ohno took the idea for the supermarket from photos of
American supermarkets showing goods arrayed on shelves by specific
location for withdrawal by customers. (Ohno and Mito 1988, p. 16.)
See: Fill-Up System, Kanban, Material Handling, Pull System.
Takt Image
Creating an awareness of takt time in areas of a production process
where products cannot be delivered and taken away at the frequency
of takt time.
On a final assembly line, takt time is easy to keep in mind because the
line produces products at the rate of takt time. However, in upstream
production cells and shared processes, such as stamping, a sense of
takt time—which is the heartbeat of customer demand—may be
hard to achieve.
Takt image often can be achieved by removing finished goods and
delivering production signals at a multiple of takt time proportional
to pack-out quantity or conveyance size. Thus a cell operating to a
takt time of one minute that ships products downstream in pack
sizes of 20 units would have a takt image of 20 minutes. While not as
good as takt time, takt image still makes it possible to know within a
few minutes if the process is out of step with customer demand.
See: Pitch, Takt Time.
Takt Time
The available production time divided by customer demand.
For example, if a widget factory operates 480 minutes per day and
customers demand 240 widgets per day, takt time is two minutes.
Similarly, if customers want two new products per month, takt time is
two weeks. The purpose of takt time is to precisely match production
with demand. It provides the heartbeat of a lean production system.
99
Takt Time
Takt time first was used as a production management tool in the

German aircraft industry in the 1930s. (Takt is German for a precise
interval of time such as a musical meter.) It was the interval at
which aircraft were moved ahead to the next production station. The
concept was widely utilized within Toyota in the 1950s and was in
widespread use throughout the Toyota supply base by the late 1960s.
Toyota typically reviews the takt time for a process every month,
with a tweaking review every 10 days.
See: Cycle Time, Heijunka, Just-in-Time, Operator Balance Chart,
Pacemaker Process, Pitch, Takt Image.
An example of calculating takt time.
100
Team Leader
Target Cost
The development and production cost that a product cannot exceed
if the customer is to be satisfied with the value of the product while
the manufacturer obtains an acceptable return on its investment.
Toyota developed target costing for its small supplier group with
which it has had long-term relations. Because there is no market
price available from taking bids or conducting an auction, Toyota
and its suppliers determine a correct/fair cost (and price) for a
supplied item by estimating what the customer thinks the item is
worth and then working backwards to take out cost (waste) to meet
the price while preserving Toyota and supplier profit margins.
Team Leader
At Toyota, an hourly worker who leads a team of five to eight other
workers; called hancho in Japanese.
Team leaders in the Toyota Production System form the first line of
support for workers, who—unlike their counterparts in traditional
mass production organizations—are at the heart of improvement
activities with responsibility for problem solving, quality assurance,
and basic preventive maintenance.
Team leaders do not take disciplinary action and do not have a fixed
production job. Rather, they provide support by knowing all the jobs
performed by their team members so they can relieve workers, fill
in for absentees, or help workers who need assistance or are falling
behind. They respond to problems such as line stops, andon calls,
and take a lead role in kaizen activities. They also use standardized
work audit sheets to do daily checks of team members to make sure
people are following standardized work and to surface problems.
See: Andon, Group Leader, Preventive Maintenance, Standardized
Work, Toyota Production System.
101
Theory of Constraints (TOC)
Theory of Constraints (TOC)

A management philosophy and a set of tools for organizational
change developed by Israeli physicist Dr. Eliyahu Goldratt and
popularized in the 1984 book The Goal by Goldratt and Jeff Cox. TOC
concentrates on improving profits by managing constraints, factors
that prevent a company from achieving its goals. Its primary focus is
on removing or managing constraints to improve throughput, while
lean focuses on the identification and removal of waste to improve
the flow of value. Both lean and TOC emphasize improving the
whole system rather than individual parts.
Compare: Lean Thinking, Six Sigma.
Three Ms
See: Muda, Mura, Muri.
Three Ps
See: Production Preparation Process.
Throughput Time
See: Cycle Time.
Total Productive Maintenance (TPM)

A set of techniques, originally pioneered by Denso in the Toyota
Group in Japan, to ensure that every machine in a production
process always is able to perform its required tasks.
The approach is termed total in three senses. First, it requires the
total participation of all employees, not only maintenance personnel
but line managers, manufacturing engineers, quality experts, and
operators. Second, it seeks total productivity of equipment by
focusing on all of the six major losses that plague equipment:
downtime, changeover time, minor stops, speed losses, scrap,
and rework. Third, it addresses the total life cycle of equipment
to revise maintenance practices, activities, and improvements in
relation to where equipment is in its life cycle.
102
Total Quality Management
Unlike traditional preventive maintenance, which relies on
maintenance personnel, TPM involves operators in routine
maintenance, improvement projects, and simple repairs. For
example, operators perform daily activities such as lubricating,
cleaning, tightening, and inspecting equipment.
See: Overall Equipment Effectiveness (OEE).
Total Quality Control (TQC)

A management approach in which all departments, employees, and
managers are responsible for continuously improving quality so
that products and services meet or exceed customer expectations.
The TQC methodology relies on the plan-do-check-act (PDCA) cycle
to manage processes and, when problems arise, statistical tools to
solve them. The methodology and tools are used often by employees
during kaizen activities and together form an important subsystem
of lean.
The term “total quality control” was coined in 1957 by U.S. quality
expert Armand Feigenbaum, who saw quality control professionals
as central to promoting TQC. By the 1980s, other experts such as
Philip Crosby, Joseph Juran, W. Edwards Deming, and Kaoru
Ishikawa expanded the concept, now known as Total Quality
Management, to include new tools and, most importantly, the idea
that quality was the responsibility of all employees, managers, and
senior managers.
Toyota implemented TQC in the early 1960s and began transferring
the system to suppliers in the late 1960s.
See: Plan Do Check Act, Toyota Production System.
Total Quality Management

See: Total Quality Control.
103
Toyoda, Kiichiro
Toyoda, Kiichiro (1894–1952)

The son of Toyota Group founder Sakichi Toyoda, who led the
effort to enter the auto industry in the 1930s. Kiichiro believed that
he could keep the entire production process stocked with needed
goods if the preceding process would simply respond to the
precise needs of the next downstream process. He called this
system just-in-time, which became one of the two pillars of the
Toyota Production System.
See: Toyoda, Sakichi; Toyota Production System.
Toyoda, Sakichi (1867–1930)

The founder of the Toyota Group, who invented a self-monitoring
device for textile looms in the early 1900s that stopped the loom
if a thread broke. This innovation allowed one operator to tend
multiple machines and led to the concept of jidoka, which means
“automation with human intelligence.” It is one of the two pillars
of the Toyota Production System.
See: Toyoda, Kiichiro; Toyota Production System.
Toyota Production System (TPS)

The production system developed by Toyota Motor Corporation to
provide best quality, lowest cost, and shortest lead time through the
elimination of waste. TPS is comprised of two pillars, just-in-time
and jidoka, and often is illustrated with the “house” shown at right.
TPS is maintained and improved through iterations of standardized
work and kaizen, following PDCA, or the scientific method.
Development of TPS is credited to Taiichi Ohno, Toyota’s chief
of production in the post-WW II period. Beginning in machining
operations and spreading from there, Ohno led the development of
TPS at Toyota throughout the 1950s and 1960s, and the dissemination
to the supply base through the 1960s and 1970s. Outside Japan,
dissemination began in earnest with the creation of the Toyota-
General Motors joint venture—NUMMI—in California in 1984.
The concepts of just-in-time (JIT) and jidoka both have their roots in
the prewar period. Sakichi Toyoda, founder of the Toyota group of
104
companies, invented the concept of jidoka in the early 20th Century
by incorporating a device on his automatic looms that would stop
the loom from operating whenever a thread broke. This enabled
great improvements in quality and freed people to do more value-
creating work than simply monitoring machines for quality. Eventually,
this simple concept found its way into every machine, every production
line, and every Toyota operation.
Kiichiro Toyoda, son of Sakichi and founder of the Toyota automobile
business, developed the concept of JIT in the 1930s. He decreed
that Toyota operations would contain no excess inventory and that
Toyota would strive to work in partnership with suppliers to level
production. Under Ohno’s leadership, JIT developed into a unique
system of material and information flows to control overproduction.
Widespread recognition of TPS as the model production system
grew rapidly with the publication in 1990 of The Machine That
Changed the World, the result of five years of research led by the
Massachusetts Institute of Technology. The MIT researchers found
that TPS was so much more effective and efficient than traditional
Goal: Highest Quality, Lowest Cost, Shortest Lead Time
Just-in-Time Jidoka
Continuous Flow Stop and notify

of abnormalities
Takt Time
Pull System Separate human
work and
machine work
Heijunka Standardized Kaizen

Work
Stability
Toyota Production System “House.”
105
mass production that it represented a completely new paradigm

and coined the term lean production to indicate this radically
different approach to production.
See: Jidoka; Just-in-Time; Lean Production; Ohno, Taiichi; Toyoda,
Kiichiro; Toyoda, Sakichi.
Trade-off Curves
Describe the limits of performance that are possible with a given
design approach in a simple visual form. They typically characterize
the relationship between two or more key parameters that relate
Trade-off Curve Sheet for Forged Neck Tie Rods
D d
Problem and cause: Fatigue cracking caused by residual stress

caused by low ductility caused by excessive carbon.
life (stress * log cycles)

Data:
D/d
decreasing
stress
%C
An example of a trade-off curve sheet illustrates different stress levels to
achieve the specified life of tie rods. Life is defined as the number of cycles
before cracking. Adapted from Ward 2007, p.138.
106
Tsurube System
design decision(s) to factor(s) that customers care about over a range
of values, for example, diameter and wall thickness of pipe (design
decisions) to fluid pressure and velocity (customer requirements).
Trade-off curve sheets should include a picture of the part and/or
process; a statement of the failure mode being considered; an
analysis of the cause; possible countermeasures; a graph showing
the conditions under which the failure mode occurs and the
relationships between the key parameters (see illustration on p. 106).
Design groups then create engineering check sheets that summarize
the key points from the trade-off curve studies into a compact and
efficient form for use in design reviews. (Adapted from Ward 2007,
pp. 137-138.)
True North
An organization’s strategic and philosophical vision or purpose. It
is a bond that may include “hard” business goals such as revenue
and profits as well as “broadbrush” visionary objectives that
appeal to the heart. (Adapted from Dennis 2006, p.45.)
Tsurube System
A method for maintaining flow between decoupled processes. Such
processes may be separated due to a step outside the line or plant
that is too expensive or too big to move. Using a pull-FIFO technique,
tsurube maintains a standard number of parts exiting and returning
to the system in sequential order. Tsurube houshiki is the Japanese
term for a two-bucket system of drawing water from a well: one
empty bucket goes down for water while a full one—attached to
the same rope running through a pulley—comes to the top.
In the example shown on p. 108, which shows part of a value stream,
a tsurube system maintains flow between the main process and heat
treatment. Every 20 minutes a set number of items arrive at the heat
treatment FIFO lane from the FIFO lane after operation 20. Also every
20 minutes, the same number of treated items are transported from
the FIFO lane after heat treatment to the FIFO lane for the next step,
operation 40. The FIFO lanes maintain the sequence of items to be
processed. (The solid blue arrows show material flow through the
107
Tsurube System
processes.) Because of the paced delivery and withdrawal, managers

will know in 20 minutes if there is any disruption. To improve the
system, managers would ask why heat treatment is isolated and how
it could be coupled with the system. Having stable manufacturing
processes is a precondition for implementing a tsurube system in
order to maintain flow and pull production.
See: Continuous Flow; First In, First Out (FIFO); Pull Production.
Information Flow
20 min.
Operation Operation Operation 20 min.

10 20 40
Material Flow
20 min.
20 min.
Heat Treatment
Example of a tsurube system.
Useable Knowledge
The value created by lean product development processes.
Because almost all defective projects result from not having the
right knowledge at the right place at the right time, lean companies
generally spend proportionately more development time creating
and capturing knowledge, and less creating hardware. Knowledge
captured is then translated into specific applications where it can
be applied (i.e., reused) to other projects, such as design guidelines
and trade-off curves.
108
Value-Stream Manager
Value
The inherent worth of a product as judged by the customer and
reflected in its selling price and market demand.
The value in a typical product is created by the producer through a
combination of actions, some of which produce value as perceived
by the customers and some of which are merely necessary given
the current configuration of the design and production process.
The objective of Lean Thinking is to eliminate the latter class of
activities while preserving or enhancing the first set.
Value-Creating
Any activity that the customer judges of value. A simple test as
to whether a task and its time is value-creating is to ask if the
customer would judge a product less valuable if this task could be
left out without affecting the product. For example, rework and
queue time are unlikely to be judged of any value by customers,
while actual design and fabrication steps are.
Nonvalue-Creating
Any activity that adds cost but no value to the product or service
as seen through the eyes of the customer.
Value-Creating Time
See: Cycle Time.
Value Stream
All of the actions, both value-creating and nonvalue-creating,
required to bring a product from concept to launch (also known as
the development value stream) and from order to delivery (also
known as the operational value stream). These include actions to
process information from the customer and actions to transform
the product on its way to the customer.
An individual assigned clear responsibility for the success of a
value stream. The value stream may be defined on the product or
business level (including product development) or on the plant or
operations level (from raw materials to delivery).
109
The value-stream manager is the architect of the value stream,

identifying value as defined from the customer’s perspective and
leading the effort to achieve an ever-shortening value-creating flow.
The value-stream manager focuses the organization on aligning
activities and resources around value creation, though none of the
resources (money, assets, people) may actually “belong to” the value-
stream manager. Thus, value-stream management distinguishes
between responsibility, which resides with the value-stream manager,
and authority, which may reside inside functions and departments
holding the resources. The role of the functions is to provide the
resources needed to achieve the value-stream vision, as defined by
the value-stream manager. The value-stream manager leads through
influence, not position, and thus can be equally effective in a traditional
functional organization or in a matrix organization, avoiding the
common failure of matrix organizations, which is the loss of clear
responsibility, accountability, and effective decision-making.
The archetype for the role of the value-stream manager is the
Toyota chief engineer, who has only minimal staff and resources
under his direct control.
Value-Stream Mapping (VSM)

A simple diagram of every step involved in the material and
information flows needed to bring a product from order to delivery.
Value-stream maps can be drawn for different points in time as a
way to raise consciousness of opportunities for improvement (see
illustrations on p. 111). A current-state map follows a product’s path
from order to delivery to determine the current conditions. A future-
state map deploys the opportunities for improvement identified in
the current-state map to achieve a higher level of performance at
some future point.
In some cases, it may be appropriate to draw an ideal-state map
showing the opportunities for improvement by employing all
known lean methods including right-sized tools and value-stream
compression.
See: Information Flow, Material Flow.
110
Value-Stream Mapping (VSM)
Current-State Value-Stream Map
Future-State Value-Stream Map
Source: Rother and Shook 1999, pp. 32–33 and 78–79.
111
Visual Management
Visual Management
The placement in plain view of all tools, parts, production activities,
and indicators of production system performance, so the status of
the system can be understood at a glance by everyone involved.
See: Andon, Jidoka.
Waste
Any activity that consumes resources but creates no value for the
customer. Most activities are waste—muda—and fall into one of
two types. Type one muda creates no value but is unavoidable with
current technologies and production assets. An example would be
inspecting welds to ensure they are safe.
Type two muda creates no value and can be eliminated immediately.
An example is a process with disconnected steps in process villages
that can be quickly reconfigured into a cell where wasteful materials
movements and inventories no longer are required.
Most value-stream activities that actually create value as perceived
by the customer are a tiny fraction of the total activities. Eliminating
the large number of wasteful activities is the greatest potential source
of improvement in corporate performance and customer service.
See: Muda, Seven Wastes.
Waterspider
See: Material Handling.
Work
Human actions (motions) involved in producing products. These
actions can be divided into three categories:
1. Value-Creating: Movements directly necessary for making
products, such as welding, drilling, and painting.
2. Incidental Work: Motions that operators must perform to make
products but that do not create value from the standpoint of the
customer, such as reaching for a tool or clamping a fixture.
112
Work Element
Categories of Work Motion Diagram
Examples:
• Weld flange onto part
• Bolt part to product
Value-
Creating Examples:
Work • Walking to get parts
• Waiting time
Work
Motion Waste
Examples:
• Pull down tool
• Unclamp and
clamp fixture
Incidental
Work
3. Waste: Motions that create no value and can be eliminated,

such as walking to get parts or tools that could be positioned
within reach.
Work Element
The distinct steps required to complete one cycle at a workstation; the
smallest increment of work that can be moved to another operator.
Breaking work into its elements helps to identify and eliminate
waste that is hidden within an operator’s cycle. The elements can
be distributed in relation to takt time to create continuous flow. For
instance, in the Operator Balance Chart on p. 67 the small vertical
boxes represent work elements.
See: Operator Balance Chart.
113
Items of work between processing steps. In lean systems,
standardized work-in-process is the minimum number of parts
(including units in machines) needed to keep a cell or process
flowing smoothly.
See: Standard Inventory.
Yamazumi Board
Yamazumi is Japanese for “pile” or “stack.”
See: Operator Balance Chart.
Yokoten
A Japanese term for deploying concepts, ideas, or policies horizontally
across the company.
For example, imagine a defective valve is found on one machine in
the plant. Yokoten would be the process to ensure that all similar
valves in the facility and other relevant facilities are examined for
the same defect as well.
See: Catchball.
114
Yokoten
115
115
term
116
Icon Represents Notes
Value-Stream Mapping Icons

Customer Used to show external and
internal customers.
Outside Sources Used to show suppliers, outside

XYZ or Supplier services, and sources.
Corporation
One process box equals an area

Process of flow. All processes should be
labeled. The small box within
ERP indicates the use of information
technology system.
Data Box Used to record information about

a process, department, etc.
Materials are not stored but

Cross-Dock rather moved from in-bound
trucks to shipping lanes for
out-bound trucks.
Warehouse Materials are placed in storage

locations (binned) and then
picked for out-bound shipment
at some later point.
Plane Shipment Note frequency of shipments.

2x year
Train Shipment Note frequency of shipments.

1x day
Mon. Truck Shipment Note frequency of shipments.

+ Wed.
Boat Shipment Note frequency of shipments.
1x month
Appendix A 117
Inventory Count and time should be noted.
300 pcs.
1 Day
Used to indicate where a physical
In-box or paper queue order backlog exists.
Electronic inbox Used to indicate a backlog that

exists electronically.
Used for delays not caused by

Delay time a backlog. Commonly caused
by unavailable resources.
Push arrow Used to show materials or work

flow that are “pushed” forward
before the next process needs it.
Movement of material
or finished goods
A controlled inventory of work that

Supermarket is used to schedule production at
an upstream process. The open
side faces the supplying process.
Used to show where a down-

Withdrawal stream process is pulling from
an upstream supermarket.
Indicates a “first-in, first-out”

First-In-First-Out flow of work or material between
FIFO Processing (FIFO) processes. Maximum quantity or
time should be noted.
Service Level Used to indicate a handoff

governed by a service level
Agreement agreement. SLAs have specific
Processing (SLA) metrics that define them (like
total lead time or delivery time.)
118

Manual For example, production schedule
information flow or a phone conversation.
Electronic For example, via electronic data

information flow interchange or an on-line form.
Information or Describes an information flow or

Weekly Schedule a scheduling method.
The “one-per-container” kanban.

Production Kanban Card or device that tells a process
20 (dotted line indicates how many of what can be produced
kanban path) and gives permission to do so.
Card or device that instructs the

Withdrawal Kanban material handler to get and transfer
parts (i.e., from a supermarket to
the consuming process).
The “one-per-batch” kanban signals

Signal Kanban when a reorder point is reached
and another batch needs to be
produced. Used where supplying
process must produce in batches
because changeovers are required.
Kanban Post Place where kanban are collected

or Collection Box and held for conveyance.
Kanban Arriving
in Batches
Tool to intercept batches of kanban

Load Leveling and level the volume and mix of
them over a period of time.
Iteration or Shows that a process repeats.

rework Label as iteration (planned) vs.
rework (unplanned).
Appendix A 119
Buffer or Safety “Buffer stock” or “safety stock”

Stock must be noted.
Phone Usually for expedited information.
Milk Run
Expedited Transport
Worker or Operator Represents a person viewed

from above.
w e ld e r Used to indicate specific process

changeov Kaizen Bursts improvement countermeasures
required to achieve the future
er
weldim e state. Can be used to plan
upt
kaizen workshops.
Used to indicate milestones that

Milestone Pacing correspond to specific dates. Can
be used above or below a value-
stream map to indicate a timeline
or the frequency of checks.
Go-See Scheduling Adjusts schedules based on

checking work on the gemba.
120
Lean Acronyms
Lean Acronyms Referred to in This Lexicon
3M—Muda, Mura, Muri

3P—Production Preparation Process
4M—Material, Machine, Man, Method
5S—Sort, Straighten, Shine, Standardize, Sustain
EPEx—Every Product Every Interval
FIFO—First In, First Out
JIT—Just-in-Time
OBC—Operator Balance Chart
OEE—Overall Equipment Effectiveness
PDCA—Plan, Do, Check, Act
PFEP—Plan For Every Part
SMED—Single Minute Exchange of Die
TPM—Total Productive Maintenance
TPS—Toyota Production System
WIP—Work-in-Process
VSM—Value-Stream Mapping
Appendix B 121
Lean Japanese and German Terms
Lean Terms of Japanese Origin in This Lexicon

Andon Seiketsu
Baka-Yoke Seiri
Chaku-Chaku Seiso
Gemba Seiton
Genchi Genbutsu Sensei
Hansei Shitsuke
Heijunka Shojinka
Hoshin Kanri Shusa
Jidoka Tsurube
Jishuken Yamazumi
Kaikaku Yokoten
Kaizen
Kakushin
Kanban
Mizusumashi
Muda
Mura
Muri
Nemawashi
Obeya
Poka-Yoke
Lean Terms of German Origin in This Lexicon

Takt
122 Appendix C
Pronunciation Guide to Japanese Words
Pronunciation Guide to Japanese Words
Here is a simple pronunciation guide to the Japanese terms in the

Lean Lexicon:
1. All syllables end in a vowel. (Almost all, a few exceptions end in N.)
2. All vowels are pronounced the same, every time. Simple vowels
only, no diphthongs.
3. The only consonant that is really problematic is the letter R,
which is trilled once. (This is similar to the trill of a Spanish or
Italian R, although those languages usually trill Rs twice.)
The five Japanese vowels are:

A = “ah” as in “car”, not “can”
I = “ee” as in “idiot“, not “idiot“
U = “ooh” as in “stupid”, not “dumb”
E = “eh” as in “bet”, not “beat”
O = “oh” as in “no”, not “not”
Vowels combined may be pronounced:

A + I together, as in “hai” sounds like “hi” or “high.”
E + I together with an H in front (hei) sounds like “hey” or “hay.”
So, for example, the correct pronunciations are:

Kanban = Kahn-bahn
Pokayoke = Poh-kah-yoh-kay
Jidoka = Jee-doh-kah
Heijunka = Hey-joon-kah
Kaizen = Kai-zen
Do not make plurals of Japanese terms in English: two kanban;

not two kanbans.
Appendix D 123
Cited Works
Cited Works
Dennis, Pascal, 2006, Getting the Right Things Done. Cambridge, MA:
Lean Enterprise Institute.
Harris, Rick; Harris, Chris; Wilson, Earl, 2003. Making Materials

Flow. Cambridge, MA: Lean Enterprise Institute.
Martichenko, Robert, and Von Grabe, Kevin, 2008, Building a Lean

Fulfillment Stream: Rethinking Your Supply Chain and Logistics to
Create Maximum Value at Minimum Total Cost. Cambridge, MA:
Lean Enterprise Institute.
Ohno, Taiichi, 1988. Toyota Production System.

New York: Productivity Press.
Ohno, Taiichi, and Mito, Setsuo, 1988. Just-in-Time for Today

and Tomorrow. New York: Productivity Press.
Rother, Mike, and Harris, Rick, 2001. Creating Continuous Flow.

Cambridge, MA: Lean Enterprise Institute.
Rother, Mike, and Shook, John, 1998. Learning to See.

Shingo, Shigeo, 1985. A Revolution in Manufacturing: The SMED

System. New York: Productivity Press.
Smalley, Art, 2004. Creating Level Pull. Cambridge, MA: Lean

Enterprise Institute.
Toyota Motor Corporation, 1995. The Toyota Production System,

Toyota City, Japan: International Public Affairs Division,
Operations Management Consulting Division.
Ward, Allen, 2007, Lean Product and Process Development.

124 Appendix E
Cited Works
Womack, James, and Jones, Daniel, 1996. Lean Thinking.
New York: Simon & Schuster.
Womack, James, and Jones, Daniel, 2005. Lean Solutions.

New York: Simon & Schuster.
Womack, James, and Jones, Daniel, 2002. Seeing the Whole:

Mapping the Extended Value Stream. Cambridge, MA: Lean
Enterprise Institute.
Womack, James; Jones, Daniel; Roos, Daniel, 1990. The Machine

That Changed the World. New York: Rawson Associates.
Appendix E 125
The Lean Enterprise Institute (LEI) is a 501 (c)(3) nonprofit education, publishing,
conferencing, and management research center founded in 1997 by lean management
expert James P. Womack, Ph.D. LEI’s mission is to promote the principles of lean
thinking in every aspect of business across a wide range of manufacturing and
service industries in order to help organizations transform themselves into lean
enterprises. LEI publications and workshops teach lean methods and principles,
while our management seminars assist managers and executives in developing the
leadership behaviors necessary to create and sustain lean enterprises. LEI Summit
conferences highlight organizations in the process of making lean breakthroughs.
Finally, the Lean Enterprise Partners research program tests new approaches to
lean management.
Your feedback is invaluable to us as we seek to continuously improve. Please send
your comments and suggestions to [email protected]. We also encourage you to visit
lean.org where you can browse our product catalog, view the monthly workshop
schedule, register for free webinars, read case studies and book excerpts, and
participate in our forums.
Workbooks from LEI include:
Learning to See —The classic introduction to value-stream mapping.
Creating Continuous Flow —Begin with your pacemaker process.
Making Materials Flow —Create a lean material-handling system for purchased parts.
Creating Level Pull —Implement a lean production control system.
Seeing the Whole —Map the extended value stream.
Order more copies of the Lean Lexicon at lean.org or call (617) 871-2900
Volume discounts: 10+ copies—20%; 100+ copies—50%
Lean Enterprise Institute

One Cambridge Center, Cambridge, MA 02142 • USA
Tel: (617) 871-2900 • Fax: (617) 871-2999
lean.org
ISBN 0-9667843-6-7

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Compiled by the Lean Enterprise Institute

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Fourth Edition, Version 4.0

© Copyright 2008 The Lean Enterprise Institute, Inc.

Appendix A: Value-Stream Mapping Icons

We receive many inquiries from members of the Lean Community

Jose Ferro, Dan Jones, and Jim Womack

Drawing up a comprehensive list of lean terms is not an easy task.

As editors, we are acutely aware that there will be some differences

Chet Marchwinski, John Shook, and Alexis Schroeder

Definition An andon can indicate production status (for example, which

Planned Production Actual Production

Simple andon. Complex andon.

Treatment of Foreign Terms

ABC Production Analysis

Planned Production Actual Production

Simple andon. Complex andon.

Automatic Line Stop

Automatic line stop.

Building in Quality, Built-in Quality

This is a condition Lean Thinkers strive to achieve because it avoids

Example of a U-shaped cell.

There is a school of thought that material should flow through cells

Continuous flow processing.

Cycle Time—Related Terms Involving Time

Cycle Time (CT)

Value-Creating Time (VCT)

Production Lead Time

Production Lead Time (PLT)

Usually: VCT < CT < PLT

Demand Amplification Chart

% variation Demand Amplification

GAMMA GAMMA BETA BETA ALPHA ALPHA

The demand amplification chart is an excellent way to raise

Current state — 10 operators 100 pieces

Apparent efficiency — 10 operators 120 pieces

True efficiency — 8 operators 100 pieces

Total Efficiency vs. Local Efficiency

A contact-type error-proofing device.

Every Product Every Interval (EPEx)

First In, First Out (FIFO)

max. 5 pieces Downstream

An example of a FIFO lane with five pieces in the lane.

The FIFO sequence often is maintained by a painted lane or physical

The Five Ss often are translated into English as Sort, Straighten,

However, Toyota traditionally refers to just Four Ss:

The last S—shitsuke (sustain)— is dropped because it becomes

Fixed-Position Stop System

Fixed-position stop system.

The fixed-position stop system was pioneered by Toyota to solve

700 720 740 800 820 840 900 920

one row per

Current-State Information Flow in Mass Production

Future-State Information Flow in Lean Production

Information flows are shown in blue. Map symbols on

To avoid confusion, it is important to define each type of inventory

The six types of inventory.