Introduction
According to Womack and Jones in their book Lean Thinking: Banish Waste and Create Wealth in Your Corporation, a value is defined as the "capability provided to [a] customer at the right time at an appropriate price, as defined in each case by the customer."
Value is the critical starting point for lean thinking and can only be defined by the end customer. The end customer, or the user of the product, is contrasted with interim customers, such as sales, marketing, distribution, suppliers, and more. Value is also product-specific.
The core concepts for lean manufacturing in Dynamics 365 Supply Chain Manufacturing provide a base level understanding of lean concepts that are necessary for working with lean.
In the fundamental work on lean, Womack and Jones defined the following five lean principles:
- Customer value
- Identify the value stream
- Flow
- Pull
- Perfection
Customer value
When identifying the value, you specify what creates value from the customer's perspective. Consider the following example. The customer defines the value of product in a lean supply chain. Value-adding activities transform the product closer to what the customer actually wants.
An activity that doesn't add value is considered to be waste.
Identify the value stream
The value stream encompasses the entire sequence of processes involved in transforming raw materials into a finished product delivered to the final customer. This journey can also be viewed from the inception of a product concept through to its market launch. Each step in this sequence adds value to the product, contributing to its final form and functionality.
Identifying the value stream mapping is an important tool to help model the lean transformation. By identifying and mapping out these processes, you can pinpoint inefficiencies, eliminate waste, and streamline operations.
Flow
You want to create flow wherever possible in the process. For example, you can use a one-piece flow by linking all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste.
With one-piece flow, the waiting time of work in progress between processes is eliminated, which leads to adding value quickly. Make only what the customer needs.
Pull
The pull is the response to the customer's rate of demand. Customer demand drives the supply chain. If you look at the supply chain from downstream to upstream activities, the upstream supplier produces nothing until the downstream customer signals a need.
Perfection
The goal is to produce exactly what the customer wants, when the customer wants it, and in an economical manner. For lean, perfection is an aspiration. Remember, anything and everything can be improved.
This image shows how lean concepts can work with features in Supply Chain Manufacturing.
