Lean manufacturing, also referred to as lean production, can seem to be a complicated concept. In the simplest terms, however, its objectives are to maximize productivity and minimize waste. Waste, or muda in Japanese, is essentially the performance of any work that could have been avoided with better processes, tools, or communication.
Why is lean manufacturing important?
Reduction in waste is often cited as the primary benefit of lean manufacturing, and that is certainly an accurate assessment. But from a strategic standpoint, the answer goes much deeper. Adopting lean principles helps organizations remain competitive with industry peers that have already adopted lean, accelerate production to meet customer demand, and meet the ever-growing need for product customization. In short, lean principles provide the critically important ability to continually adapt to change.
Although lean thinking is most often associated with manufacturing, lean methodology can be found in many industries, and can benefit almost any company seeking to be more efficient. So, regardless of your industry, take a few moments to understand the concepts behind lean manufacturing and how they might contribute to an environment of continuous improvement for your organization.
8 benefits of lean manufacturing
Before we explore the origins of lean manufacturing, let’s get right to the point of why it matters. Implemented correctly, lean methodology offers a multitude of benefits, including:
- Higher productivity: By minimizing waste in material and labor while maintaining high levels of production, companies can achieve increased productivity.
- Less complexity: Lean helps teams eliminate unnecessary steps and effort, enabling simplified, focused workflows.
- Lower costs: The goal of lean is to produce more goods faster while using fewer resources. This focus on efficiency naturally generates cost savings.
- Faster lead times: The efficiency gains generated by lean enable orders to be delivered faster, which can save money and increase customer satisfaction.
- More efficient manufacturing processes: Lean manufacturing processes remove waste and waiting from manufacturing processes, optimizing the output of each resource.
- More effective change management: The collaborative nature of lean enables rapid feedback to inform what changes are needed and how they can be implemented.
- Better team morale: Because lean requires regular communication between managers and employees, workers feel more empowered to do quality work.
- Consistent focus on delivering customer value: One could argue that while all of these benefits of lean thinking are important, the first seven enable the final, and most important, benefit—delivering customer value. A lean production process is a “pull system” driven by customer demand. Avoiding overproduction that leads to excess inventory, lean thinking allows the pull of customer demand to determine what is created, just in time (JIT) to meet the needs of the customer.
The history of lean manufacturing
Most historians agree that Henry Ford was the first person to create an integrated production system. Many of us learned in school that Ford invented the concept of the assembly line, but there’s much more to his contributions.
Before Ford burst onto the manufacturing scene, the standard practice was to group machines by process. Parts were fabricated independently of the assembly process, using machines not specifically designed for that purpose, and often required adjustments during assembly in order to fit.
Ford, on the other hand, created a production process which placed fabrication in sequence, using machines specifically designed for the parts they were creating. Components could be rapidly created and delivered directly to the assembly line with little to no adjustments required.
Ford’s production process greatly reduced production times. But what he gained in efficiency, Ford lost in flexibility. He could make cars quickly, but struggled to deliver the variety of models and options that consumers were beginning to expect. And as noted earlier, a true lean manufacturing operation is driven by the pull of customer demand, not the push of what a manufacturer has the ability to produce.
Toyota takes the next step
In Japan in the 1930s, Toyota leaders Kiichiro Toyoda and Taiichi Ohno became convinced that it was possible to manufacture vehicles in a manner that was highly efficient while delivering the variety customers desired. When the company operationalized these process improvements, the Toyota Production System was born.
This manufacturing system focuses less on machines, and instead looks at the core principles of how a product flows through the entirety of the production process. We won’t go into too much detail here, except to note that along with echoing Ford’s approach of aligning machines in sequence, the Toyota Production System creates interconnected steps that facilitate efficient communications around crucial information such as the need for raw materials.
Toyota Production System and The Toyota Way
The Toyota Production System and The Toyota Way are sometimes used interchangeably. However, they are actually separate—but interrelated—concepts. They embrace the idea of Kaizen (continuous improvement of operations) but also lean heavily on people-driven ideas such as respect and teamwork.
The waste dilemma in lean manufacturing
Elimination of waste is the beating heart of any lean production environment. Toyota discusses three interrelated types of waste, including:
Muri—This type of waste occurs when unreasonable expectations are placed on people or machines. When defined requirements are in excess of actual capabilities, Muri occurs. When pushed too hard, both people and machines break, causing waste in the form of downtime.
Mura—This type of waste can be thought of as unevenness or inconsistency. It occurs, for example, when an uneven work pace causes teams to work frantically for one part of a shift, then wait idly for another task. To prevent Mura, managers must pay close attention to the pace of work and find ways to level the scheduling of people and tasks.
Muda—In lean thinking, Muda refers to eight types of waste that must be minimized or eliminated in a lean production environment. Let’s take a closer look.
1. Overproduction
You’ll recall that lean thinking relies on the pull of customer demand to determine what is created in a just-in-time manner. Producing materials ahead of demand incurs extra labor and machinery costs. In addition, the cost of holding extra inventory that may prove difficult to sell at a later date can result in further waste.
2. Waiting
Idle time can be the result of broken-down equipment, supply chain delays for materials, ineffective staffing strategies, and more. Over time, waiting can incur significant costs.
3. Transportation
Transportation waste is simply unnecessary, non-value generating movement of materials, products, tools, equipment, or even simple documents. It is often a sign that a production environment needs more integrated and orchestrated processes, and increased digitization of document handling and other tasks.
4. Overprocessing
While lean thinking embraces the pursuit of perfection in process, perfection in output is another matter. Waste occurs when, lacking an understanding of customer needs and attitudes, a company makes excessive design or engineering changes to a product which do not make the product more desirable or increase customer satisfaction. A focus on value stream mapping can help to curb this type of waste.
5. Inventory
Closely tied to overproduction, excess inventory waste refers not just to holding more stock than is justified by customer demand, but also the cost of the materials and equipment needed to create that stock. To tackle this form of waste, work on aligning production rates with predicted demand.
6. Movement
Wasted movement by workers in a manufacturing operation can impact cycle time as well as the physical well-being of the worker. Poorly organized manufacturing environments force workers to walk around to different areas to complete their jobs. And something as simple as a tool stored near the floor can require a worker to bend down repeatedly, causing fatigue that can affect performance.
7. Defects
Even in our quest for perfection, it is virtually impossible to completely eliminate defects that create wasted time and materials. However, the principles of lean manufacturing suggest that even a moderate decrease in defects can add up to significant savings over time. Holistic quality control, automation, stringent training practices, and strict adherence to established processes can all help to minimize defects. In addition, the poka-yoke technique, which seeks to prevent or identify human errors, is helpful in managing defects.
8. Unused talents
In essence, eliminating the waste of unused talents requires that the full potential of each employee is being realized. This type of waste could be the result of placing a team member in a role that is not suited to their skills, poor communication, insufficient training and development, or any other factor that prevents an employee from making their maximum contribution.
Lean manufacturing vs. Six Sigma
Lean and Six Sigma are different, yet related, concepts. Lean seeks to provide maximum value to customers through the elimination of waste, while Six Sigma was developed to reduce defects in the production process through statistical analysis. But wait—there is a hybrid concept known as “Lean Six Sigma.” This approach combines Lean and Six Sigma principles into one methodology improving a process or business.
Lean manufacturing techniques and concepts
A thorough explanation of lean techniques would fill several articles, but you may find the following six techniques particularly useful as you continue your exploration of lean methodology.
Kaizen
Kaizen is all about continuous improvement and the belief that there is always room for improvement. Working together, teams proactively seek ways to improve processes.
Just in Time (JIT)
Rather than manufacturing products based on an expectation of what your customers will want, JIT involves producing a product only when the customer wants it, and in the quantity requested.
Kanban
Kanban is a system of visual signals that helps to regulate the flow of goods. For example, a Kanban card can be placed in a visible area to signal when inventory needs to be replenished.
SMED
Designed to minimize the waste of downtime, SMED (single-minute exchange of dies) is a process intended to significantly cut the time required to complete equipment changeovers.
Heijunka
Heijunka literally translates to “leveling.” It helps organizations meet shifting customer demands by leveling both the type and quantity of production over an established period of time
Poka-Yoke
Poka-Yoke is a technique for quality control. It seems to minimize or eliminate defects by preventing, correcting, or identifying human errors that are hampering the production process.
How can you create a lean production environment? And should you?
Now that we've talked about what lean is and where it comes from, let’s talk about what it might mean for you. As mentioned earlier, while lean thinking is most often associated with manufacturing processes, it can benefit any company looking to eliminate inefficiencies and optimize waste reduction. So, depending on your organization’s needs, you may find that it’s worthwhile to explore lean as a fundamental way to manage your processes. Or, you may find that specific principles of lean enterprises can be incorporated into your work environment in a less holistic way.
Should you determine that lean methodology could have value for your organization, consider these four concepts for implementation.
1. Keep it simple
Keep on hand only the products and materials that you need, and handle them only when doing so creates value. These process improvements will streamline your operations and allow you to focus more effectively.
2. Practice ruthless exclusion
Remember, it’s not about the product. If a tool or process doesn’t create value for the customer, or increase customer satisfaction, it’s an inefficiency. And it needs to be eliminated as soon as possible.
3. Think of lean as a journey
In a lean enterprise, there is no finish line. You have to have a mindset of continuous improvement. Reducing waste and downtime is a daily task.
4. Seek staff buy-in
Implementing lean without staff buy-in can cause big problems. Remember, lean requires new ways of thinking and working. So, look for ways to gather feedback and suggestions from the team.
A final word
Adopting lean thinking, in whole or part, requires a significant commitment on the part of any organization. There’s no switch to flip. It will take time and patience to make lean work for you. But as has been proven in thousands of companies around the world, the benefits of lean can be transformational—not just for your processes but for the customers who depend on you.
