LEAN

Lean is an approach developed in the automotive industry where philosophy revolves around working as efficiently and effectively as possible. The main goal here is to deliver the right quantity with the right quality at precisely the right time and thus fully meet the customer's requirements at once. This fits in seamlessly with our vision on purchasing where reduction of costs and risk and the creation of value are central.

Although Lean was originally intended to apply to an organization as a whole or even the entire value chain, the methodology can also be used to improve parts of an organization. This makes it possible to make sustainable improvements with respect to purchasing management by applying the Lean methodology.

The Lean methodology consists of five phases (Womack & Jones, 2003):

  • Phase 1: Value

    This means 'customer value'. A Lean organization must first of all determine which problem the customer wants to have resolved. This is the customer question. By determining this customer demand, activities that lead to products or services that the customer does not request can be eliminated. By clearly agreeing with the customer what is expected, the product or service can be delivered at once. In order to determine what you have to deliver to your (internal) customers, it is necessary to think further than what the customer asks you.

    Here you have to think from the customer's point of view:

    • Solve my problem completely;
    • Do not waste my time (minimize my total consumption costs: price, time & effort that I have to put into it);
    • Deliver exactly what I want;
    • Deliver value where I want it;
    • Deliver value whenever I want and;
    • Reduce the number of decisions that I have to take to solve my problem.

  • Phase 2: Value stream

    When the customer request has been determined, the value stream can be viewed. The value stream, or value flow in Dutch, is the path that products or services take in a company, which starts with the supplier and ends with the customer.

    A Lean tool that can be used here is Value Stream Mapping (VSM). The material and information flows are visualized. In addition, process information such as lead times, switching times, waiting times, stocks and problems are also displayed. This makes it clear to everyone where there are opportunities for improvement in the processes. This first map of the current situation is called Current State Map (CSM). When the CSM is recorded, a Future State Map (FSM) is created. As the name says, this is the future situation. This contains a process that focuses on customer demand, without bottlenecks. The differences between the CSM and the FSM can also be easily picked up, after which you can get started to solve them.

  • Phase 3: Flow

    After determining how the processes should run, it is time for Flow. Products or services are delivered by the organization at an appropriate pace. The starting point for this is the customer demand, expressed in the Takt time (= available effective time / customer demand).

    In addition, Flow means that the organization does its work in a balanced way. All peaks and troughs in the work pressure must be eliminated for this. When there are peaks in the workload, this can lead to reduced quality or higher absenteeism. Lesser quality work should generally be done, which increases the pressure. A trough in the workload means overcrowding in the organization, which is not desirable from a financial point of view.

    As the third part of Flow, products have to go through the whole process as much as possible in a movement, this is called one-piece-flow. This has the advantage that there are no inventories of work in progress, that defects are immediately detected, that employees know the entire process and that changeover times have to be reduced.

  • Phase 4: Pull

    Pull literally means 'pulling': customers 'attract' the products and services from the company when they want it. This means for the organization that there must be a short lead time. To achieve this short lead time, all wastes (Muda) in the process must be eliminated. Within Lean, eight different types of waste have been defined:

    • to wait;
    • faults;
    • stock;
    • overproduction (doing more than is necessary);
    • processes (too complex or to solve errors in previous processes);
    • transport (of the product);
    • movements and movements (of persons and tools);
    • talent.

  • Phase 5: Perfection

    The final stage is perfection, but this phase has no end. In this phase, there is a constant search for areas for improvement by repeatedly going through the first four phases and thereby constantly raising the bar. This makes the processes more efficient, the products and services of a qualitatively higher level and ultimately the organization will benefit financially from this.

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