Lean manufacturing has been around since Toyota introduced its lean production methods back in the 1970s. However, it wasn’t until recently that companies started adopting these techniques at scale. Today, lean manufacturing is being used by almost every significant corporation worldwide.
Implementing lean manufacturing practices is essential. This article will tell you all about lean manufacturing, its principles, how it works, the processes involved, and practical examples.
Table of Contents
What is Lean manufacturing, and how does it work for a business?
Lean manufacturing is derived from Toyota’s 1940s operating model Toyota Production System (TPS). It was known as JIT or Just-In-Time in the 1980s. Later, in 1988, John Krafcik, a quality engineer working with Toyota, coined “Lean.” James Womack, Daniel T. Jones, and Daniel Roos further defined Lean in their book “The Machine that Changed the World” in 1990.
Lean is not just another waste management technique. Instead, it is a production method or set of practices that simultaneously minimizes waste, increases productivity, improves product quality, reduces operation costs and lead times during the manufacturing process.
According to the lean manufacturing technique, anything customers do not see as adding value and are unwilling to pay for is considered a waste. If any process or activity is not valuable to the production process, it gets removed.
The waste might include various aspects of the business like underused talent, excess inventories, and ineffective procedures that do not add value to the company. In addition, such processes and services consume a lot of time, money, and energy of the staff, thereby adding unnecessary costs to the final product that has to be borne by the customer.
What are the principles of lean manufacturing?
The authors Womack, Jones, and Roos laid out the five fundamental principles.
- Precisely specify value by specific product
- Identify the value stream for each product
- Make value flow without interruptions
- Let customer pull value from the producer
- pursue perfection
5 Key Lean Principles
Specify the value
As you already know, lean manufacturing involves identifying the value from the customer’s perspective. To do that, you need to understand how much they are ready to pay for your products and services. To specify the value, you can conduct various activities like interviews, surveys, or web analytics. But, first, understand what drives them to buy a product and what their needs are.
Once the value is specified, it is defined and created by the manufacturer or service provider. Next, you need to design the products by removing unnecessary features and other wastage to meet the specific needs – including the price.
Value Stream Mapping
Once the value is specified, you need to identify and map out the flow of information and materials required to manufacture the product. The entire value stream covers the whole life cycle, right from the raw materials to product delivery.
To identify unwanted features and waste, you need to examine every step and stage in the lifecycle like design, procurement, production, administration, delivery, or customer service.
Waste can be of two types:
- Non-value added but necessary
- Non-value and unnecessary
It would be best to reduce the first one as much as possible and eliminate the second one. But, again, always use the customer value as the reference point.
Create flow
Now that you have eliminated the waste, it’s time to create a smooth manufacturing process. For that, you need to remove all the functional barriers, interruptions, and delays. You should organize the movement of raw materials, equipment, information, and other items from production to shipment.
It would be best if you had various strategies in place to create a smooth flow. For example, it might be value-adding activities like breaking down the process into practical steps, reconfiguring production processes, leveling the workload, creating cross-functional departments, and training employees.
Establish a pull system
Now that you have a proper framework, you need to start manufacturing. But not before you have a demand for your product. There is something called a push system and pull system. These are two types of methods that explain when to manufacture the products.
The push system focuses on first manufacturing the product to meet the forecast. But since predictions are not always accurate, there is a higher chance of producing too much or too little inventory, which will disrupt your business.
That is why lean focuses on the pull system. The pull system involves manufacturing the products based on the customers’ buying behavior and the demand. This system will ensure increased output, reduce unnecessary costs, eliminate over and under production and other wastages. It also reduces the errors during WIP (work in progress).
Pursue perfection
Your business and product lifecycle does not stop with the successful production and delivery of the product. There is always room for improvement. Also, you cannot ignore the customer service after delivery. Get feedback from your customers. Please keep track of their preferences and needs. Then, try to implement it in the future versions of your products and services.
Always strive for perfection as lean thinking involves continuous process improvements and assessments to eliminate waste. With each iteration, you try to find the perfect value for your customer. Make lean thinking a part of your work culture.
What is 3M in lean manufacturing?
You already know that Toyota developed the lean model. The TPS (Toyota Production System) considers Muda, Mura, and Muri – 3Ms indicating wasteful practices to be eliminated. Let’s see what every M means.
Muda
Muda means waste in Japanese. But as you know, lean manufacturing doesn’t consider only scrap materials as waste. Muda includes all the activities that consume resources but gives no value to the customers. TPS defines seven wastes: transport, inventory, motion, waiting, overproduction, over-processing, and defects. Muda includes unused talent too.
Mura
In Japanese, Mura means unevenness or variation. These are the inconsistencies and fluctuations during production, like customer demand. Such variation leads to employees working overtime during high demands and sitting idle when there is no demand. These uneven workloads result in errors during production, and you end up getting defective products.
Muri
The Japanese word Muri means overburden. Uneven workloads may result in too much stress on the staff and the machines. As a result, both your employees and the machines work overtime to meet the demands or targets. This extra time would then lead to defects, downtime, additional processing in the inventory, waiting, and other Mudas.
Every business will have its own sets of Muda, Mura, and Muri. So, you need to find them and eliminate them. Usually, the 3 Ms are inter-related. So, make sure that you don’t end up increasing one of them while you eliminate the other.
What are the best lean manufacturing techniques?
There are a whole lot of lean manufacturing tools and techniques. All of them focus on the one important goal – eliminating waste. Below are some of the best practices:
Kanban – Kanban boards are beneficial to visualize workflows. The boards give visual signals to keep track of the inventory activities.
5S – 5S stands for 5 Japanese words: seiri, seiton, seiso, seiketsu, and shitsuke, meaning organize, tidy up, clean, standardize and sustain, respectively. 5S is a 5-step process that reduces waste to increase productivity.
Heijunka – The word Heijunka means “levelling” in Japanese. This technique aims to maintain the output level irrespective of the circumstances. Production leveling is achieved by manufacturing the goods in smaller batches with varying numbers.
Kiezen – Kiezen means “continuous improvement” in Japanese. This method focuses on both waste reduction and the improvement of the business process simultaneously.
JIT – Just in time production is a practice where you only manufacture the product when there is a demand. This practice reduces overproduction and makes it easier to allocate resources without wastage.
SMED – SMED stands for Single-Minute Exchange of Die. It is a method that reduces the time taken for equipment changeovers.
Poka-Yoke – The Japanese word Poka-Yoke roughly translates to mistake-proofing. This lean technique ensures quality products by shedding light on human errors and manufacturing defects.
How does lean manufacturing eliminate waste?
When a business implements lean manufacturing practices, it eliminates waste during production, improves the quality of the products, reduces business expenses, and increases profits. From Toyota’s 3M model, we touched upon the Muda, the primary seven wastes. So let’s see how lean eliminates them.
Transport involves the unnecessary movement of raw materials and products. Lean eliminates this problem by mapping a sequential flow for the entire product manufacturing operation.
Inventory ends up stockpiling raw materials, unprocessed and finished goods. Lean practices bring in raw materials only when needed.
The motion refers to the unnecessary travel of staff from one location to another that does not add any value. As lean structures and organizes the stages logically, you can save a lot of time and costs.
Waiting for the next step during the production wastes much time for the staff, equipment, and business operation. You can eliminate this by designing processes with little to no buffers between the steps.
Overproduction of products leads to stockpiling of inventory and loss in case of fewer sales. Therefore, lean encourages to manufacture the goods only when there is demand.
Over-processing a product or service than what the customer needs causes more waste to be challenging to eliminate. The continuous improvement principle prevents this.
Defects in the products cause losses, reduction in sales due to untimely deliveries, rework and many more problems. Lean tools like Poka-Yoke easily detect these errors in advance so that you can correct them at the right time.
What is an example of Lean manufacturing?
Had enough of theory? Then let us see a practical example of lean manufacturing apart from Toyota.
Intel is a well-known and leading manufacturer of computer processors. The company implemented lean manufacturing techniques to reduce bugs during production. As a result, Intel could bring down the transport time of microchips from three months to below ten days! This practice also paved the way for the company to produce more high-quality products in time.
In the three years of implementing lean, Intel had a 62% drop in the manufacturing cycle time. Also, the quality of the products increased by 40%. These improvements allowed the company to stay ahead in the game with the ever-changing marketplace and ever-increasing competition.
What is the purpose of Lean manufacturing?
The primary purpose of lean principles is to eliminate waste and continuous improvement of the business. But, along with it, there are a lot more things lean aims at like:
- Lower production costs
- Product Quality Improvements
- Prevent defective products
- Prevent unnecessary inventory stockpile
- Increase labor productivity
- Reduce lead times
- Provide better customer service
- Improve customer satisfaction and
- The overall development of the organization – its business, people, and products.
Why should lean practices be part of any organization’s strategic plan?
1) Better products: As explained below, one of the main goals of lean management is to ensure customer satisfaction with their product. By using an efficient flow from raw materials to finished goods, you’ll end up with higher-quality products. The improved quality means fewer recalls or rework – two things that can cost businesses thousands of dollars if they happen frequently.
2) Lower costs: When done right, lean management will help your company save money. In addition, it helps cut down on waste so that there aren’t as many defects when producing something new. That way, you don’t have to spend time fixing what isn’t broken. Instead, you could start making more stuff!
3) Improved efficiency: One thing that makes lean processes different than other management systems like Six Sigma is that it focuses on improving processes rather than reducing them. Some people say that lean manufacturing increases productivity because everything runs smoother, while others claim it decreases due to less downtime caused by poor planning. Either way, this system aims to improve overall process efficiencies.
4) Increased employee morale: The last reason lean manufacturing is essential is that it improves employee morale. Since employees know exactly where their job fits into the bigger picture, they feel much better knowing that they’re not wasting resources. They also understand that they play a role in helping customers get good service which leads to increased sales.
5) More satisfied customers: Finally, lean manufacturing gives customers great experiences. Because they receive high-quality products faster, they’ll be happier and more likely to recommend your services to friends and family.
Conclusion
Lean manufacturing is not just limited to producing goods. Irrespective of your industry and field, you can implement lean if yours is a service industry because lean is not just a set of practices, tools, and techniques. It is more than that. It is a way of thinking.
Lean thinking is significantly beneficial when you apply it at all levels – not just manufacturing. Its continuous improvement methodology takes your organization to a whole new level in terms of productivity, quality, profits, customer relationship, and a lot more. That is the reason why Lean is quite popular with software development teams as well as startups.
Do you know of any real-life examples of lean? Or got any tips on how to implement lean manufacturing practices? Comment down your thoughts.
Our friends at Propel Software have created an Ultimate Guide To Lean Manufacturing. I recommend reading it too.
