Lean Tools – VSM, 5 S and Kanban

Learning Objectives

By the end of this lesson, the learner will be able to:

Explain the principles and objectives of Lean thinking.
Distinguish value-added from non-value-added activities.
Identify the eight commonly recognized forms of waste.
Explain the purpose of Value Stream Mapping (VSM).
Distinguish current-state and future-state maps.
Identify process flow, information flow, inventory, lead time, and cycle time on a value stream map.
Explain the principles and stages of 5S.
Apply 5S to organize and stabilize a workplace.
Explain the purpose of Kanban as a pull-based control mechanism.
Distinguish push systems from pull systems.
Understand WIP limits and visual replenishment signals.
Select appropriate Lean tools for different process problems.
Connect Lean tools with Six Sigma and DMAIC.
Apply VSM, 5S, and Kanban to improve flow, reduce waste, and sustain improvements.

1. Introduction

Six Sigma focuses strongly on reducing variation and defects.

Lean focuses strongly on improving flow, speed, efficiency, and customer value by eliminating waste.

When combined, Lean and Six Sigma provide a powerful process-improvement approach.

A simplified distinction is:

Lean:

Improve flow and eliminate waste.

Six Sigma:

Reduce variation and defects.

Lean Six Sigma:

Improve process performance by addressing both waste and variation.

Lean does not mean simply working faster.

The objective is to design and manage processes so that work flows smoothly toward customer value with minimum unnecessary activity.

Three important Lean tools covered in this lesson are:

Value Stream Mapping (VSM)
5S
Kanban

Each addresses a different aspect of process improvement.

2. Concept / Theory

2.1 What Is Lean Thinking?

Lean thinking focuses on delivering customer value while systematically reducing activities that consume resources without creating that value.

A Lean improvement approach asks:

What does the customer actually value?

and:

Which activities are necessary to deliver that value, and which create avoidable waste?

Lean is therefore strongly connected to:

Customer value
Flow
Pull
Waste reduction
Continuous improvement
Respect for people
Standardized work

2.2 Value-Added and Non-Value-Added Activities

A useful starting point is to classify process activities.

Value-Added Activity

An activity is generally considered value-added when it:

Changes the product, service, or information in a way the customer requires.
Is performed correctly the first time.
Contributes directly to the required customer outcome.

Examples may include:

Machining a component to the required specification.
Performing a required service activity.
Completing a customer-requested configuration.

Non-Value-Added Activity

An activity consumes resources but does not directly create customer value.

Examples:

Waiting
Excess movement
Unnecessary transportation
Rework
Excess inventory
Duplicate processing

Some non-value-added activities may nevertheless be currently necessary because of regulatory, contractual, safety, or operational requirements.

The objective is to identify and reduce unnecessary non-value-added work while protecting necessary controls.

2.3 The Eight Forms of Waste

Lean commonly identifies eight categories of waste.

1. Defects

Errors that require correction, rework, replacement, or additional processing.

Examples:

Incorrect product
Data-entry error
Rejected component
Incorrect invoice

2. Overproduction

Producing earlier, faster, or in greater quantity than required.

Examples:

Producing inventory before demand exists.
Preparing reports nobody needs.
Processing transactions ahead of actual demand.

3. Waiting

People, equipment, materials, or information waiting for the next step.

Examples:

Customer waiting for approval.
Machine waiting for material.
Employee waiting for authorization.

4. Non-Utilized Talent

Failing to use people’s knowledge, skills, creativity, and problem-solving capability.

Examples:

Employees not involved in improvement.
Skilled staff performing unnecessary administrative work.
Ideas from frontline employees being ignored.

5. Transportation

Unnecessary movement of materials, products, documents, or information.

Examples:

Moving materials between distant locations.
Physically transporting documents for routine approval.

6. Inventory

Excess materials, work-in-process, or finished goods beyond what is needed.

Examples:

Excess raw material
Large WIP queues
Excess finished inventory

7. Motion

Unnecessary movement by people.

Examples:

Walking repeatedly to retrieve tools.
Searching for documents.
Reaching or bending unnecessarily.

8. Extra-Processing

Performing more work than required.

Examples:

Duplicate data entry
Excessive inspection
Repeated approvals without value
Formatting information that does not affect the customer outcome

A useful memory sequence is:

Defects → Overproduction → Waiting → Non-Utilized Talent → Transportation → Inventory → Motion → Extra-Processing

2.4 Value Stream Mapping

Value Stream Mapping (VSM) is a visual method for representing the flow of materials, information, and activities through a process or value stream.

VSM helps the team see the process as a connected system rather than as isolated departments.

It can reveal:

Waiting
Inventory
Bottlenecks
Excess processing
Information delays
Long lead times
Uneven flow
Disconnects between demand and production

2.5 Current-State Map

A current-state map represents how the process operates today.

It should reflect the actual process rather than the intended process.

The team may document:

Process steps
Cycle times
Changeover times
WIP
Inventory
Waiting
Information flow
Production frequency
Customer demand
Supplier information
Process lead time

The current-state map establishes the baseline.

2.6 Future-State Map

A future-state map describes a proposed improved flow.

The objective is not simply to draw a prettier process.

The future-state map should address identified problems such as:

Excess WIP
Long queues
Poor flow
Unnecessary transport
Excess processing
Uncontrolled production
Information delays

The future state should be realistic and connected to an improvement implementation plan.

2.7 Lead Time vs Cycle Time

These terms are important in VSM.

Cycle Time

The time required to complete a process activity or unit of work.

Lead Time

The elapsed time from the beginning of the customer’s request or process flow to the completion of the required output, according to the defined process boundary.

A process may have a short cycle time but a very long lead time because of waiting between activities.

Example

Suppose:

Processing time = 30 minutes
Waiting = 3 days

The work may require only 30 minutes of actual processing but have a much longer overall lead time.

This is one reason Lean focuses heavily on flow and waiting.

3. Key Topics

3.1 VSM Components

A VSM commonly represents:

Customer
Supplier
Process steps
Material flow
Information flow
Inventory
WIP
Process data
Push/pull relationships
Lead time
Cycle time
Production or service demand
Control points

The exact symbols may vary by organization or mapping convention.

The important principle is that the map should help the team understand how work and information actually flow.

3.2 Takt Time

Takt time represents the available production time divided by customer demand over the corresponding period.

Conceptually:

Takt Time = Available Production Time ÷ Customer Demand

Example

Available production time:

420 minutes per day

Customer demand:

140 units per day

Therefore:

Takt Time = 420 ÷ 140 = 3 minutes per unit

This means the process needs to complete one unit approximately every three minutes to keep pace with demand, assuming the defined available-time and demand assumptions.

Takt time is a demand-based planning concept.

It should not be confused with actual cycle time.

3.3 Bottleneck

A bottleneck is a process constraint that limits overall flow or throughput.

Typical symptoms include:

Excessive queue before a process.
High utilization of the constrained resource.
Long waiting time.
Downstream starvation or upstream accumulation.

VSM can help identify potential bottlenecks.

However, the team should validate the suspected bottleneck using actual process data.

3.4 5S

5S is a workplace organization and visual-management methodology.

The five stages are commonly described as:

Sort
Set in Order
Shine
Standardize
Sustain

3.5 Sort

Remove unnecessary items from the workplace.

Ask:

Is this item required?
How frequently is it used?
Does it belong here?
Is it obsolete?

Examples:

Remove obsolete documents.
Remove broken tools.
Remove unused materials.
Remove duplicate supplies.

3.6 Set in Order

Arrange necessary items so they are easy to locate, access, use, and return.

Examples:

Designated tool locations
Labels
Visual storage
Point-of-use supplies
Clearly identified document locations

The principle is:

A place for everything and everything in its place.

3.7 Shine

Clean and inspect the workplace.

Shine is not merely cosmetic cleaning.

Cleaning can reveal:

Leaks
Damage
Wear
Loose components
Abnormal conditions
Contamination

Therefore, Shine can support early detection of equipment and process problems.

3.8 Standardize

Develop consistent methods for maintaining the first three stages.

Examples:

Cleaning schedules
Visual standards
Checklists
Photographic standards
Workplace audits
Standard procedures

3.9 Sustain

Maintain the improved condition through:

Leadership support
Training
Audits
Ownership
Visual controls
Regular review
Continuous improvement

Sustain is often the most difficult stage because it requires disciplined behavior over time.

3.10 Kanban

Kanban is a visual, pull-based method for controlling the flow and replenishment of work or materials.

The fundamental concept is:

Downstream demand triggers upstream replenishment.

Rather than automatically producing according to a forecast or schedule alone, the process uses a signal to indicate that additional work or material is required.

3.11 Push vs Pull

Push System

Work is released based primarily on a plan, forecast, or schedule.

This can lead to:

Excess WIP
Overproduction
Queues
Inventory accumulation

Pull System

Work is triggered by actual downstream demand or consumption within the defined system.

Potential benefits include:

Reduced WIP
Better flow
Less overproduction
Improved visibility
Faster response to actual demand

Pull does not mean that forecasting becomes unnecessary.

Organizations may still use forecasts for capacity and resource planning.

3.12 Kanban Signals

A Kanban signal may be:

Physical card
Bin
Electronic signal
Barcode
Digital workflow notification

A Kanban system typically communicates:

What is needed
How much is needed
Where it is needed
When replenishment should occur

3.13 WIP Limits

Work-in-process limits restrict the amount of work allowed within a process or workflow.

WIP limits can help:

Reduce multitasking.
Prevent excessive queues.
Reveal bottlenecks.
Improve flow.
Encourage completion of existing work before starting additional work.

For example:

If a process has a WIP limit of 10 cases, the team should not simply add an 11th case without following the defined replenishment or exception rules.

4. Tools / Methodology

4.1 VSM Methodology

Step 1 — Define the Value Stream

Identify:

Product/service family
Customer
Process boundary

Step 2 — Observe the Actual Process

Go to the workplace or process and observe the real flow.

Do not rely entirely on procedures or assumptions.

Step 3 — Create the Current-State Map

Document:

Process steps
Cycle times
WIP
Waiting
Information flow
Lead time
Customer demand

Step 4 — Identify Waste

Look for:

Waiting
Defects
Inventory
Motion
Transportation
Overproduction
Extra-processing
Underutilized talent

Step 5 — Identify Constraints

Look for:

Bottlenecks
Capacity restrictions
Information delays
Quality problems
Unbalanced workloads

Step 6 — Develop Future State

Design a practical improved flow.

Step 7 — Create an Implementation Plan

Identify:

Actions
Owners
Dates
Resources
Measures

Step 8 — Monitor Results

Measure:

Lead time
WIP
Productivity
Quality
Flow
Customer performance

4.2 5S Methodology

A practical 5S implementation is:

Sort → Set in Order → Shine → Standardize → Sustain

For each stage:

Sort

Identify unnecessary items.

Set in Order

Organize necessary items.

Shine

Clean and inspect.

Standardize

Define the required condition.

Sustain

Audit, reinforce, and continuously improve.

4.3 Kanban Implementation

Step 1 — Define the Workflow

Understand the sequence of work.

Step 2 — Identify Demand

Determine the actual downstream requirement.

Step 3 — Establish WIP Limits

Define reasonable limits for each stage.

Step 4 — Define the Signal

Determine how replenishment is triggered.

Step 5 — Establish Replenishment Rules

Define:

Quantity
Trigger
Responsibility
Timing
Exception handling

Step 6 — Visualize the Process

Use:

Cards
Bins
Boards
Electronic signals

Step 7 — Monitor Flow

Measure:

WIP
Lead time
Throughput
Waiting
Stockouts
Replenishment performance

Step 8 — Improve

Adjust WIP limits and replenishment rules based on actual process performance.

4.4 Selecting the Right Lean Tool

Problem	Potential Lean Tool
Poor visibility of end-to-end flow	VSM
Excessive waiting	VSM / Flow improvement
Excessive WIP	VSM / Kanban
Workplace disorganization	5S
Searching for tools/materials	5S
Excess inventory	VSM / Kanban
Overproduction	Pull / Kanban
Unnecessary movement	5S / VSM
Poor workplace standards	5S
Bottleneck or flow constraint	VSM
Poor replenishment control	Kanban

Tools should be selected according to the actual process problem.

5. Worked Example / Case Study

Case Study: Component Assembly Process

A manufacturing company produces a component used in a larger assembly.

The process consists of:

Material issue
Cutting
Machining
Inspection
Assembly
Final inspection
Dispatch

The team observes the following:

Large WIP between machining and inspection.
Operators frequently search for tools.
Material is produced before downstream demand.
Final inspection identifies recurring defects.
Production information is primarily schedule-driven.

The team decides to apply VSM, 5S, and Kanban.

5.1 VSM Analysis

The team creates a current-state map.

They identify:

Long waiting time before inspection.
Excess WIP.
Imbalance between machining and inspection.
Information delays.
Production quantities larger than immediate downstream requirements.

The team then develops a future-state concept focused on:

Improved flow.
Reduced WIP.
Better synchronization.
Pull-based replenishment.

5.2 5S Application

The machining area is analyzed.

Sort

Obsolete tools and unused materials are removed.

Set in Order

Frequently used tools receive designated locations.

Shine

The area is cleaned and equipment condition is checked.

Standardize

Visual standards and cleaning responsibilities are defined.

Sustain

A periodic 5S audit is established.

The result is not merely a cleaner workplace.

The objective is to reduce searching, movement, delays, and abnormal conditions.

5.3 Kanban Application

The team establishes a controlled replenishment system between machining and assembly.

When downstream assembly consumes a defined quantity, a replenishment signal is generated.

The team establishes:

Standard container quantity
Number of Kanban signals
Replenishment trigger
Responsible personnel
Exception procedure

This limits uncontrolled WIP and makes replenishment visible.

5.4 Results to Monitor

The team monitors:

WIP
Lead time
Cycle time
Defect rate
Productivity
Tool-search time
Stockouts
On-time delivery

The Lean tools are therefore connected to measurable process outcomes.

6. Practical Application

Exercise 1 — Identify Waste

Observe a process and identify examples of:

Defects
Overproduction
Waiting
Non-utilized talent
Transportation
Inventory
Motion
Extra-processing

For each waste, document:

Where it occurs.
What causes it.
What impact it has.
What evidence demonstrates the impact.
Potential improvement.

Exercise 2 — Create a Current-State VSM

Select a process.

Document:

Customer demand
Process sequence
Cycle time
Waiting time
WIP
Inventory
Information flow
Lead time
Bottlenecks
Major waste

Calculate the total lead time and compare it with actual value-added processing time where the measurements are defined consistently.

Exercise 3 — 5S Workplace Assessment

Select a workplace.

Evaluate:

Sort

What is unnecessary?

Set in Order

Where should necessary items be located?

Shine

What abnormalities can cleaning reveal?

Standardize

What standard condition should be maintained?

Sustain

How will compliance be monitored?

Exercise 4 — Kanban Design

For a process with recurring material demand, define:

Demand rate
Replenishment quantity
Container size
Number of Kanban signals
Replenishment trigger
Responsible person
WIP limit
Exception procedure

The system should be validated against actual demand, replenishment time, and process constraints.

6.1 Lean Improvement Checklist

Before implementing a Lean improvement, verify:

Customer value is defined.
Actual process flow has been observed.
Current-state conditions are documented.
Waste has been identified.
Data support the problem definition.
Bottlenecks have been considered.
VSM is based on actual process conditions.
5S requirements are clearly defined where applicable.
WIP is measured.
Pull opportunities have been considered.
Kanban rules are clearly defined where applicable.
Responsibilities are assigned.
Performance measures are defined.
Improvements are validated.
Standard work is updated.
Control mechanisms are established.
Sustainment responsibilities are assigned.

7. Lesson Summary

Lean tools help organizations improve flow and reduce waste.

The key principles are:

Lean focuses on customer value and flow.
Waste consumes resources without creating corresponding customer value.
Eight commonly recognized wastes are defects, overproduction, waiting, non-utilized talent, transportation, inventory, motion, and extra-processing.
VSM provides an end-to-end view of material and information flow.
Current-state mapping establishes how the process actually operates.
Future-state mapping describes a proposed improved flow.
Lead time can be much longer than actual processing time because of waiting.
Takt time connects available production time with customer demand.
5S improves workplace organization, visual management, and process discipline.
Sort removes unnecessary items.
Set in Order organizes necessary items.
Shine cleans and exposes abnormalities.
Standardize defines the desired condition.
Sustain maintains the improved condition.
Kanban supports pull-based replenishment.
WIP limits help control the amount of work in process.
Lean tools should be selected according to the actual process problem.
Lean and Six Sigma can complement each other by addressing waste, flow, variation, and defects.

A useful Lean improvement sequence is:

Observe → Map → Identify Waste → Improve Flow → Standardize → Monitor → Sustain

8. Lesson Learnt / Conclusion

Lean improvement begins with understanding what the customer values and then examining how work actually flows through the process.

The Green Belt should not assume that the largest department, the busiest employee, or the most visible problem is necessarily the primary constraint.

Instead, the Green Belt should:

Observe the process.
Collect relevant data.
Map the value stream.
Identify waste.
Understand constraints.
Improve flow.
Establish appropriate controls.
Sustain the improvement.

VSM helps the Green Belt understand the whole value stream.

5S helps establish an organized and visually controlled work environment.

Kanban helps regulate flow and replenishment according to demand.

These tools become more powerful when they are connected to measurable Six Sigma objectives.

The ultimate goal is not simply:

“Use Lean tools.”

The goal is:

Create a process that delivers customer value with less waste, better flow, controlled variation, and sustainable performance.

Key takeaway:

See the whole flow, remove unnecessary work, establish disciplined processes, and make improvement sustainable.