Heijunka is a technique for sequencing production and smoothing out fluctuations. First and foremost, this means harmonising the flow of materials in terms of quantities, ensuring that production runs smoothly and, as far as possible, always results in the same volume of products.

Repeating production cycles frequently

Levelling is the process of breaking down the products that are to be manufactured in a year, month or week into daily rations instead of producing everything shortly before the delivery deadline. Smoothing is the next stage in this process – breaking this daily ration down further. Heijunka means smoothing and therefore describes an extension of levelling in production. The theoretical aim of manufacturing each and every product each and every day is regarded in lean management theory as one of the most cost-reducing and effective production methods.

Minimising queues

When applying Heijunka to boost efficiency, a company’s production system must support the optimum segmentation of work sequences and all efforts must take into account fluctuating demand on the market. However, not all products can be produced in all their variants at least once a day, which is the ultimate aim. If a company is to get close to achieving this goal, the most important thing it can do is massively reduce setup times. If work benches enable users to change over production sequences in minimal time, queues can be minimised and Heijunka improves efficiency. This system is particularly suitable for significantly optimising a complex, multi-tiered production system, even if only in subsections.

Demands on production equipment

For Heijunka to succeed, picking and provisioning systems need to be configured for maximum efficiency, as that is the only way that several different subgroups can be made available in parallel without the need to replace or reconfigure systems. When it comes to the work bench itself, this often means that a large number of tools need to be stowed in an arrangement that is both space-saving and ergonomic.

The just-in-time (JIT) principle is an organisation and control concept used in logistics. Essentially, it means that a product is made available precisely when it is needed. However, the common understanding of the term is not altogether accurate. Although it is true that parts are only supplied when they are needed, the fundamental logic behind the concept is slightly more complex.

Thinking things through in reverse

Traditionally, production moves forward – as soon as a unit has been completed, it is delivered to the next stage in production. However, the just-in-time philosophy moves in the opposite direction to the material. Each workstation “pulls” the parts it needs from the upstream station. The required parts are only actually produced at the individual assembly stations when they are ordered. As a result, intermediary and end-products are always produced at the right place, in the right volume, to the right quality standards and only when they are required. This reduces a company’s material stock levels and minimises capital tie-up. Toyota invented and rolled out this principle in the 1950s and production output increased hugely.

The overall concept

Today, just-in-time is a logistics concept that extends beyond a company’s workshop to encompass its entire supply chain, including all suppliers and the full flow of materials and information. The Kanban system, which was derived from the JIT concept, primarily focuses on managing the flow of materials and information at workshop level.

Just-in-time in the plant

For just-in-time production to function smoothly, it is imperative that requirements and consumption are known at all times. Today, this is mostly done via electronic data capture and parts move through the production system by means of order cards (see Kanban). The individual manufacturing stages and transport need to be planned down to the smallest detail and times and quantities logged. The more flexibility there is in how materials are moved from A to B, the more efficient the system. On the one hand, when production is running smoothly, the just-in-time philosophy delivers a system that requires virtually no stockkeeping. On the other hand, minor organisational errors can have a massive impact on production, even leading to short-term stoppages.

The Japanese word Kaizen refers to continuous improvement in small steps. More loosely translated, it means striving for perfection. In the West, the continuous improvement process (CIP) was developed on the basis of Kaizen principles. When it comes to production systems, both terms mean that each and every product, process and sequence offers room for improvement.

More an attitude than a method

Kaizen is not a specific method that can be applied to solve problems – it is a process-oriented approach, a mindset that is not so much an aim in itself, but more a fundamental way of operating and working. Everybody from the worker at his work bench to the executive in his boardroom is committed to continuous improvement in his tasks and duties.

Innovation in Japanese

In the West, the core element of success is innovation. Major changes are intended to generate growth. The ideal image of a stairway that stretches endlessly upwards is seldom achieved. The reason for this is that systems start to degenerate from the moment they are rolled out. In practice, the principle of innovation cannot meet the theoretical demands. Small-scale, continuous (Kaizen) activities are needed if an innovation is to maintain, or even improve, its status and sustain its impact. Kaizen states that it is advisable to start directly with small changes.

People or technology

Western industrial companies talk about improvements in terms of key figures that are all measured by return on investment (ROI). Because this approach shifts the focus onto short-term gains, it inhibits the development of a culture that promotes continuous improvement. While the innovation-based model relies on improvements in technology, Kaizen creates a climate that is conducive to improvement and therefore focuses on people.

Kaizen in production

Kaizen aims to improve production sequences and boost value creation in companies by increasing efficiency in the flow of goods, systematically organising tools and setting up ergonomic work benches, for example. Changes such as these demand both detailed planning and an understanding of the various methods that are used to implement Kaizen. When it comes to putting strategies into practice, it is the flexibility of the system as a whole that determines whether minor changes are prevented or can indeed be rolled out spontaneously.

Kanban, a Japanese word meaning signboard or billboard, is a method used to control production sequences, usually in just-in-time production. Personnel use cards to communicate with other work benches about parts that are to be produced, usually in regard to placing an order with upstream stations. This "pull" principle cuts the volume of warehouse stock needed for series production and boosts flexibility for dealing with fluctuations in requirements volumes.

Kanban in concrete terms

Fundamentally, Kanban cards depict three types of information that vary within all companies – withdrawal, transport and production information. This information helps ensure that parts and materials are ordered, produced and moved precisely in accordance with requirements. Once a workstation has used up all its parts, a new order is sent as a Kanban card to the upstream production station, which then produces more parts in line with the information on the card. In a narrow sense, the term Kanban therefore describes a production order system – separate production planning is unnecessary. The Kanban system prevents overproduction and capital-consuming buffer warehousing and ensures that faulty products are not passed on downstream. As a result, all end-products are free from faults and do not lead to repairs and returns.

Advanced Kanban

Establishing Kanban is just half the battle when striving to achieve lean production. Indeed, the actual objective of Kanban is to eliminate itself. In other words, by carefully and consciously removing cards from a functioning circuit, stock levels are reduced until problems surface. These problems are then dealt with and the production process improves as a result. Once there are no cards left to initiate a production flow, the company has achieved a one-piece flow (OPF). In an OPF, all the personnel involved in a production process control all the work that takes place and accompany the workpiece throughout the entire sequence from one workstep to the next, right up to completion – without interruption.

Cards vs. containers

Sometimes the flow of information in a Kanban system also uses mobile containers, particularly when it is always the same containers that are involved. On the arrival of a specific container, each source knows what is to be produced. To prevent mix-ups, the size of the container should match the size of the material. Both systems – Kanban cards and Kanban containers – are subject to the same basic requirements: handling, safety and differentiation all need to be safeguarded.

Origins

The Kanban system was developed in 1947 by Taiichi Ohno at Toyota. The initial ideas of the inventor have been quoted as follows: "It simply must be possible to organise the flow of materials in production according to the principles that apply in a supermarket – a consumer picks an item with a certain specification and quantity from the shelf, the gap is noticed and the item is restocked."

The beginnings

After the Second World War, Japan didn’t get as much financial aid from the USA as Germany did, and the country had to find its own way to compete on the global market. The aim was to produce products in ever higher quantities and to an ever higher quality standard while continuously reducing waste. Toyota was very quick to start looking into how exactly it could achieve this aim.

In 1950, the large car manufacturer began gradually rolling out a new production system developed by two engineers, Taiichi Ohno and Shigeo Shingo. It was known as TPS – the Toyota Production System – and it was an unrivalled success. Today, Toyota is one of the world’s biggest car manufacturers and the third-largest company listed on the stock exchange.

Japan overtakes the West

In 1990, a book called "The Machine that Changed the World: the Story of Lean Production" was published as a response to the global astonishment felt at Japan’s new-found success. Large sections of production had succeeded in doubling quantity and quality and halving material consumption in a short space of time. Compared to their Western counterparts, production operations in Japan were often more than 50 percent leaner. What was going on?

Basically, the two engineers from Toyota had formulated the Kaizen philosophy a good 40 years earlier, an approach similar to the continuous improvement process of the West. Kaizen describes the struggle for perfection, which can never really be achieved in its entirety, but is still the overriding objective. Everything – every plant, product, process and sequence – always offers room for improvement. Western companies traditionally focus on large leaps in innovation, which are expensive and require a certain amount of instability in processes. Japanese companies develop ongoing, low-cost improvements that are far-reaching and not dictated from above but rather implemented through collaboration between employees. Using Kaizen as a basis, Toyota developed a number of strategies, including just-in-time production with the Kanban system.

The West can do Kaizen, too

Kaikaku can transform a Western plant into a Kaizen company. The term describes a radical change within a certain timeframe.  Kaikaku is the process of restructuring production and support areas for continuous flow production, anchoring the lean philosophy among personnel and providing training that builds up a lean culture, which creates a "new company" through consistent management, decisions and conduct at all levels. That is what propelled Japanese production to the forefront of global development.

It is worthwhile noting that cultural factors are of little importance to the successful application of these methods – many of the Japanese management techniques are successful because they are simple and effective. However, when seeking to better understand these systems, it is useful to look into certain aspects of the Japanese mindset. 

• The group comes ahead of the individual
• Everything is taken into account as part of a holistic approach
• The main focal point is the solution, not the problem
• There is acceptance for ideas from the workforce
• There is always room for improvement
• The three key "Mu-s" need to be eliminated:
  • Muda – waste is eliminated, unnecessary activities avoided
  • Mura – unevenness is eliminated, a balanced workflow generated
  • Muri – excess strain is eliminated, sources of error eradicated
• Rolling out simple monitoring systems
• Introducing Poka Yoke, keeping systems simple enough that there are as few error sources as possible
• Order and cleanliness boost morale and the quality of work
• Thorough investigation – every cause is scrutinised until its true essence is uncovered
• Company management regularly visit the plant floor to see what is happening 

These principles acted as the breeding ground for the successful Japanese production principles. They also continue to help companies apply these strategies effectively.

Companies often fail to understand that the broad diversity of methods and processes in lean production form a single intermeshed entity – isolated applications do not yield optimum results. In addition to the disciplined application of strategies and methods, genuine success can also be helped a great deal by a company philosophy that has been carefully nurtured over the decades and an openness to new, independent ideas.

Franz J. Brunner – Japanische Erfolgskonzepte (Japanese Success Concepts), Munich 2011

The disadvantage to the push principle is two-fold – firstly, intermediate storage leads to waste and, secondly, short-term changes requested by the customer lead to undesirable and expensive capital tie-up in the product warehouse or problematic bottlenecks in supply.

The pull principle for less waste

The pull principle is a demand-driven production system and a theoretical element of just-in-time production. In the pull principle, it is not the sequence of the production steps that dictates the process but rather a flow of information that runs against the production flow. In other words, the downstream cells in the production process pull production forward. In practical terms, this means that the customer – the primary order-placer – tells the production system what is required. Each production cell then tells the next cell upstream what it needs in order to meet the set requirements. The upstream cell then produces what has been ordered in line with requirements.

The result is that each cell within the logistics chain receives only the volume of materials that it actually needs for production purposes. Ultimately, production becomes highly flexible and delivers the right quantities and quality while largely eliminating the waste associated with stockkeeping.

The disadvantage of this principle is the dependency on suppliers inside and outside the company. Goods have to be supplied on time and in the required quantity and quality, otherwise production stoppages can occur.

The FIFO (first in, first out) principle is applied to storage and organisation methodologies. It dictates that the parts provided first are also the first to be withdrawn or consumed. The principle is similar to the way a supermarket shelf is stocked – fresh goods are inserted into the shelf from behind so that the articles that were put out first are always at the front and are also the first to be sold. The minimum/maximum stock level is precisely specified in this system.

The principle is used in three cases: Firstly, when one production station is working faster than the next one downstream. Secondly, when the production stages cannot be interlinked. Thirdly, when products are required for several stations.

The FIFO principle for lean manufacturing

As a component in lean production, the FIFO principle aims to avoid material waste of all types. In practical terms, FIFO trolleys constitute the core element of this principle. These mobile units can be pushed right up to the workstations so that the necessary parts can be picked under consideration of ergonomic factors. Transport containers are inserted into these trolleys at one side and slide down an incline to the removal side. When a container is removed from a shelf the next container automatically slides into place. This ensures that materials are always available, while the empty containers can also be returned.

FIFO racks and FIFO trolleys

These mobile units can be moved right up to work benches. The gradient on the shelves ensures that loads slide down to the removal point. When a production part is removed from a shelf the next part automatically slides into place, thereby ensuring that materials are always available, while empty containers are easily returned. The required parts can be positioned to ensure optimum ergonomic picking and provisioning.

5S is the abbreviation used to describe a clearly defined range of measures based on the principles of Japanese lean concepts. The method aims to make workstations and their surroundings safe, clean and orderly, as improved organisation and tidiness reduce waste. Originally developed for manufacturing companies, the methodology is now also used by service providers and administrative organisations.

The 5 "Ss" are five Japanese terms

Seiri - tidiness. Only necessary items should be kept at the work bench.

Seiton - orderliness. All parts should be arranged in dedicated places according to ergonomic requirements and be appropriately labelled.

Seiso - cleanliness. Cleaning work carried out at a workstation should create order and reveal faults.

Seiketsu - standardisation. Regular cleaning and tidying should become routine and also make it easier to identify potential improvements.

Shitsuke - discipline. Tidying and cleaning should become part of everyday work. Line managers must demand discipline in working toward this objective. 5S should become a way of life in the workplace.

The addition of another point produces 6S:

Shukan - habituation. Consistent discipline ultimately creates order and cleanliness as a matter of course.

5S in lean production

When rolled out in a business, 5S always starts with training for executives. The next stage is to specify binding targets, including for management staff. This results in individual steps that support the implementation of the 5S principles. The plant in question will often be gradually divided into zones, pilot areas will be identified, project and team structures created and responsibilities regulated. Team leaders are nominated, as are sponsors, guides and team members.

The executives who are managing 5S are subject to rules of conduct that are just as strict as those that apply to the personnel at the work bench who are to put the five "Ss" into practice. For example, sufficient resources must be provided for implementation, each 5S step must be explained in detail, every employee must be involved and the 5S champions and core team members must be kept up to date and trained. However, the most fundamental task is communication!

As with all lean methods, the success of 5S depends on more than just knowing the methodology. It is imperative that companies are aware of all the opportunities and risks and grasp the fact that 5S is primarily used to modify old habits and structures. If they can do that, 5S acts an additional lean management component that supports major company changes – it helps businesses to change their corporate culture.

Six Sigma (6σ) is a quality management method used by companies that employs statistical tools to describe, measure, analyse, improve and monitor business processes. Jack Welch, who popularised the methodology when he was CEO of General Electrics, repeatedly emphasised that Six Sigma keeps an entire company focussed on customer needs. When putting Six Sigma into practice, the entire management team and every part of the organisation must be committed to ensuring that every stage of work is designed to benefit customers.

Standard deviation

In statistics, sigma (σ) is a value that represents variation or distribution from an average. In the case of normal or Gaussian distribution, it is known as standard deviation. One sigma to the right and left of an average value is where the curve turns and is quite close to the average. Standard deviation is expressed in the same units as the values in the measurement series.

The company sets a target range for its performance that centres around the target value. The boundaries of this range are known as the specification limit. However, the aim is not to set the range so that it simply encompasses all the key business data, but rather to run the business so that all the key data falls inside this range. A statistical value of six sigma represents a sensible specification limit.

If these values were to be plotted on a normal distribution curve, the following would apply: 68.3 percent of the values would fall within a standard deviation around the average µ.  95.4 percent of the values would fall within the range µ ± 2σ, that is two sigma to the right and left of the average and thus four sigma in total. 99.7 percent of the values would fall within the range µ ± 3σ. This is the target that gives the system its name – Six Sigma.

The average quality level in most companies is normally between three and four sigma. That corresponds to 93.3 to 99.4 percent success. When a process has reached a Six Sigma (6σ) standard, it results in just 3.4 errors per million possibilities of error. As a result, the number or error-free processes is 99.99966 percent. In short, when it comes to quality management, Six Sigma means zero-error quality.

Method

The most famous Six Sigma method is the DMAIC cycle, which stands for define, measure, analyse, improve, control. The cycle is a way of making existing processes measurable so that they can be improved over the long term. The overriding aim is always customer satisfaction. The method is based on dividing up all corporate processes into the smallest possible steps to produce several individual value-creation targets that will support the design and more importantly the optimisation of individual processes. These processes are modified separately and in the context of the upstream and downstream processes. This approach requires a great deal of communication.

The primary task of Six Sigma managers or consultants is to organise the framework for communication that will ensure the Six-Sigma mindset becomes a work ethic for each and every employee.

Organisation

The psychological management concept of Six Sigma is based on defined roles that follow a clear hierarchy whereby specially trained personnel take on clearly defined tasks. These personnel are ranked using a system of coloured belts similar to that used in Japanese martial arts.

At the top of the hierarchy is the Master Black Belt, who acts as the head coach.  Green belts are usually found in middle management – engineers, state-certified technicians, buyers, planners and master craftsmen. Operating under the guidance of a Black Belt, Green Belts lead projects and appoint others to head up additional projects.

Where the methodology is used

At present, Six Sigma is used by many large companies in the manufacturing industry, the service sector and increasingly in the financial services industry. Since around the Millennium, companies have been using Six Sigma in combination with other lean production methods, which has given rise to terms such as Lean Sigma, Lean Six Sigma and Six Sigma + Lean.

The aim when planning the supply of materials was and still is to optimise material management. However, the methods used to achieve this have changed dramatically. In the past, the flow of materials was usually managed in line with a central production plan. Today, however, materials can be supplied according to requirements on the production line.

Material supply and management

There are basically two principles in physical material supply operations – pull and push. In the push system, logistics personnel feed material from the stores to the production cells. In the pull system, production personnel have to manage the supply of material for their production unit themselves. When it comes to management, a distinction is made between demand and consumption-driven material supply, whereby the main determining factor is the direction in which information flows.

Consumption-driven material supply (pull)

In consumption-driven material supply, the usage of materials triggers the flow of materials, often irrespective of a specific order. This system is intended to create a security of supply conducive to setting up material stores that are of adequate size and ideally dimensioned. The Kanban system developed by Toyota can be used for this purpose (see just-in-time, Kanban, push and pull principle). Production processes are initiated in a slightly different way to normal. The final stage in production – when the end-product is manufactured – reports its requirements to the next production stage upstream, which reports its needs to the next stage upstream and so on, right back to the supply of raw materials. After a certain delay, once the first stage has been reached, the material flow is finally initiated and starts to head back toward the final production stage.

Demand-driven material supply (push)

Demand-driven material supply is fundamentally different from consumption-driven material supply. In this case, material planning is conducted by means of a production planning and control system. Material requirements planning (MRP) is used to plan each process. Secondary requirements and all additional parameters are calculated during the course of quantity planning. Calculations are based on information from the storage facility, knowledge about process times and detailed expertise relating to the company’s product structure. Scheduling specifies all the start and end times of every process. Once the system has been launched, planned and actual capacities need to be compared and amended. Everything is controlled centrally. However, that is exactly what lean principles aim to avoid. The lean concept moves away from the idea of fixed production processes. It demands that a dedicated process is initiated for each product and can be customised to cater for all eventualities and can minimise waste. It can be argued that demand-driven material supply places greater emphasis on planning than on management. The opposite is true of consumption-driven material supply.

The term "lean production" was coined in 1990, when the world was astounded by the Japanese economic miracle. The upturn in the Far Eastern country was mainly down to new production methods that can be accurately summed up in one word – lean. Indeed, the methods were particularly lean compared to the buffered production systems of the West. Since then, the lean philosophy has dominated production halls.

Lean management

Determination is the driving force of a lean company. The success of the Japanese economy after the Second World War was down to an approach that centred around continuous improvements that gradually optimise processes. The only way to achieve the medium and long-term successes that the system promises is to continuously roll out in-house and external methods, concepts and strategies that boost value – and that includes in the West.

Over the years, lean management helps to identify functions that don’t contribute added value and remove them from the system. For this to work, everyone – whether senior managers or employees – has to share a common mindset and work ethic based on the same fundamental principles.

The fundamental principles of lean management:

• Promoting group and team work
• Taking responsibility
• Ensuring information is complete
• Focussing on the customer
• Prioritising value creation
• Standardising
• Continuously improving
• Eliminating errors immediately and at the root cause
• Thinking and planning ahead
• Taking small, controlled steps

The Western world pursues the concept of innovation as a means of driving progress – major changes are intended to generate major growth. Unfortunately, in reality, it doesn’t always work like that.

In his book, Kaizen: The Key to Japan's Competitive Success, Masaaki Imai explains the situation as follows.

As soon as an innovation has been established it begins to degenerate. Continuous efforts are essential just to maintain the status quo and small-scale changes need to be made continuously, which is precisely the principle of Kaizen – making small changes on a continuous basis.

Imai also argues that the situation is compounded by the West’s overriding reliance on key financial figures as reference values. In order to achieve such targets, virtually all activities need to be measured by their return on investment (ROI). This inhibits a culture of continuous improvement, where every employee consciously contributes to a corporate culture that is permanently seeking to improve everything.

A comparison of innovation and Kaizen by Masaaki Imai (1993):

Aggressive pricing by competitors, growing demands from customers, ever-rising quality standards and burgeoning environmental regulations are a continuous source of pressure for small and medium-sized companies. Companies need more than just a collection of disparate activities if they are to influence all of these areas – they need a comprehensive concept.

Lean production is a holistic approach to boosting a company’s competitiveness. It takes into account the fact that everything is constantly changing, reduces warehousing and supply stores, lowers personnel outlay, minimises space requirements and significantly cuts errors in production. It creates a climate that is conducive to ongoing changes designed to accommodate growing challenges.

Buffered vs. lean production

At its heart, lean production is about giving responsibility to the people who are actually doing the work. When it comes to production systems, that means that every production cell is responsible for the quality of the parts it is manufacturing.

Comparison by Franz J. Brunner (2011) from his book Japanische Erfolgsstrategien (Japanese Success Strategies):