Before we discuss what is lean manufacturing in depth, let's assess these factors - how do you plan production? Do you have a strategy in place to handle fluctuations in demand? Do you always have inventory lying around in your warehouse? Answering these questions accurately gives you a valuable perspective on your business' performance and future direction. It also gives you a comprehensive picture of its present state and prospects for success. Lean manufacturing is a critical approach when it comes to achieving this scalability in business operations, leading to the growth of revenue.
Let's gain an understanding of what is lean manufacturing and how you can use it to your benefit and improve your business profitability.
What Is Lean Manufacturing?
Lean manufacturing is a strategy that is focused on maximizing productivity while minimizing waste within a manufacturing operation. Any activity that does not enhance the customer's experience and hinders smooth efficient workflows and which is not 'lean' must be eliminated.
By implementing lean manufacturing principles, manufacturing companies can reduce costs, streamline operations, reduce lead times, and improve product quality. In lean manufacturing processes, waste is reduced, processes are continually improved, and customer value is delivered. Oftentimes, businesses face losses due to overstocking, outdated processes, unutilized facilities, and unproductive employees. By utilizing lean manufacturing methods they can reduce operating costs due to these reasons and produce superior products.
How Does Lean Manufacturing Work?
The lean manufacturing process is a production method that emphasizes the reduction of waste across all stages of production. This includes overproduction, defects, and waiting time between steps in the process. Lean manufacturing aims to produce what is necessary at optimal times with as little waste as possible.
The first method is to use a just-in-time (JIT) system. In this setting, items are created only as needed, rather than producing large amounts and storing them until needed. Doing so eliminates waste associated with overproduction and storage.
Another essential principle of lean manufacturing is continuous improvement. This means that every aspect of production is constantly assessed and improvements are made to eliminate waste and enhance quality. Lean production necessitates employees to be proactive in identifying problems and proposing solutions.
Why Is Lean Manufacturing Important and How It Benefits?
A lean manufacturing process seeks to eliminate industry wastes, such as idle resource time, poor processes, and unused materials. This can be motivated by many factors, including increasing profits or providing benefits to customers. Whatever the reason for lean manufacturing, the following four benefits stand out:
- Reducing Waste: Excess waste increases costs, delays, and resource consumption. In addition, it does not add value to products or services
- Enhance Quality: A company's quality and ability to meet changing customer needs make it more competitive. In order to stay ahead of your competitors, you should design processes that meet their expectations and desires, while maintaining a constant focus on quality improvement.
- Cost Reduction: By working more efficiently and managing materials better, overproduction or excess materials can be reduced, thus reducing storage costs.
- Time Savings: Time and money can be saved by reducing inefficient work practices while reducing lead times and ensuring faster delivery of goods and services.
When and Who Invented Lean Manufacturing?
Lean manufacturing was popularized by John Krafcik in the 1990s to eliminate waste and create a more efficient workflow. A simple principle of lean manufacturing is to use fewer resources while producing more.
A Japanese automotive engineering revolution is also known to have given rise to lean manufacturing. During his time at Toyota, Taiichi Ohno helped introduce many concepts surrounding lean manufacturing. Today, his belief still stands: processes can always be improved, regardless of their current level of efficiency.
The ideas of Ohno were successfully implemented at Toyota in the 1950s and 1960s. In response to Toyota's success, other companies began implementing lean practices. A wide range of industries around the world utilize lean manufacturing today.
Lean Manufacturing Principles
Lean manufacturing processes are based on four principles: value, flow, pull, and perfection. Today, lean is implemented based on these principles.
Value
A customer's willingness to pay for a product or service determines the value of the customer. It becomes the manufacturer's or service provider's responsibility to generate this value by eliminating waste and still meeting customer expectations.
Through lean management excess manufacturing is eliminated, unnecessary transportation is minimized, excess production and inventory are eliminated, and new skills are utilized.
Value Stream Mapping
The process of identifying waste and enhancing a product or service by analyzing materials and other resources is known as value stream mapping. During the product life cycle, the value stream includes every step, from the raw materials to the disposal of the product. Any part of the production cycle that does not add value must be examined for waste. To help achieve this, chain alignment is frequently recommended.
In modern manufacturing, engineers, scientists, designers, and others are often involved in various activities, with a physical product being just one part of the process.
Creating Flow
Flow entails eliminating functional barriers to improve process flow. This makes processes flow smoothly and is carried out with the least delay or waste possible. When production processes are interrupted or disharmonious, costs accrue, whereas creating flow ensures that production and service delivery are uninterrupted.
Implement a Pull System
In a pull system, work begins when there is a demand for it. It is the opposite of push systems used in manufacturing resource planning systems. In a push system, inventories are determined in advance, and production is adjusted per sales forecasts.
An estimated forecast can be inaccurate, leading to overproduction or underproduction of a product. Consequently, warehousing costs could increase, schedules could be disrupted, and customer satisfaction may be compromised. The success of a pull system depends on flexibility, communication, and efficiency.
The pull method allows teams to respond to new challenges when they emerge, knowing that the work they have already completed can contribute largely to the final product.
Pursuit of perfection
Toyota Motor Corporation founder Kiichiro Toyoda coined the word Kaizen to describe the pursuit of perfection through continuous process improvements. As part of lean manufacturing, processes, and procedures are continuously assessed and improved in order to eliminate waste and find the perfect system to fit the value stream.
Measurements such as lead times, production cycles, throughput, and cumulative flow are essential for making a meaningful and lasting difference through continuous improvement.
Wastes of Lean Manufacturing
Toyota's production system initially identified seven wastes that don't contribute value to customers. This included transport that is not necessary, inventory surplus, movement of equipment, machinery, or people that are not necessary, and the act of waiting - either by people or by equipment. It also included a product that is overproduced, products that have been over-processed or overloaded with features, and correctable defects that cost a lot of money.
In recent years, many lean practitioners have pointed out an eighth waste, which is talent and ingenuity that have been untapped.
It is possible to categorize these types of waste into three categories broadly, based on Japanese terminologies:
- Mura: Unevenness or waste resulting from changes in demand, either due to customer requests or companies introducing new services (and thus creating additional work).
- Muri: Trying to juggle too many things simultaneously leads to excessive burden or waste. It involves resource allocation and excessive demands placed on people. As a result of being overburdened, people can lose motivation or waste time switching tasks.
- Muda: This is unproductive work and waste associated with the process. It is unnecessary to perform an activity if it does not add value to the organization or directly support an activity that does.
Advantages of Lean Manufacturing
Lean manufacturing offers many benefits, such as:
Increased Efficiency
Lean manufacturing aims to boost efficiency and eliminate low-value activities. Numerous benefits will result, including lower production costs, shorter lead times, and superior quality.
Increased Quality
Lean manufacturing techniques can enhance quality by eliminating waste and guaranteeing each step in the production process is executed accurately. This leads to fewer defects and higher customer satisfaction ratings.
Reduced Inventory Costs
Lean manufacturing can help reduce inventory costs by eliminating unused or wasted material. This frees up cashflow and cuts back on storage fees.
Increased Flexibility
Lean manufacturing techniques adjust production processes as necessary, which is advantageous when responding to customer demand or market shifts.
Increased Employee Morale
Employees often feel more engaged and motivated when they're part of continuous improvement initiatives, as they can see the fruits of their labor.
Disadvantages of Lean Manufacturing
Implementing lean manufacturing principles may have some potential drawbacks, such as:
Employee Resistance
Some workers may be unwilling to embrace change and may not be open to lean manufacturing concepts. To overcome this obstacle, extensive training may be needed to integrate employees into the new system fully.
Implementation Costs
Adopting lean manufacturing can be expensive both financially and time-wise. In addition to investing in new equipment and software, you may also need to train employees.
Complexity
The lean manufacturing system can be intricate, and it may take employees some time to learn how to utilize it effectively. There is the potential for errors during this transition period.
Lack of Flexibility
Once implemented, the lean manufacturing system may prove inflexible and difficult to alter due to unexpected shifts in demand or production requirements. This could create issues if changes are necessary due to unforeseen circumstances.
Example of Lean Manufacturing
To understand the benefits of lean manufacturing perfectly, let's consider a real-life example of a company:
Harley-Davidson: Continuous Improvement
As a result of Harley-Davidson's investments in lean manufacturing, its operations were streamlined, and employees were encouraged to improve continuously. The company uses a continuous improvement system to collect lean thinking strategies. They stabilized their techniques by leveraging a combination of Total Productive Maintenance (TPM), 5S, and Standard Work. A lean tool known as Kaizen was also adopted after that to improve operations.
In addition, a value stream mapping process and just-in-time inventory management systems were implemented. The result was optimum stock levels at the right time preventing waste and enhancing customer satisfaction. In addition to increasing productivity, Harley-Davidson improved lead times and reduced transportation costs with these solutions.
How Can Lean Manufacturing Be Implemented?
Lean manufacturing can be implemented within a company in several ways. The initial step is to identify waste areas in the manufacturing process. Once identified, companies can apply lean principles to eliminate or minimize this waste.
As we saw earlier, a popular method for implementing lean manufacturing is value stream mapping. Value stream mapping helps companies visualize their production steps and identify waste areas. They can modify their process to eliminate waste by understanding where it occurs.
Lean manufacturing can also be implemented through just-in-time production (JIT). JIT production involves materials delivered only when needed rather than stockpiling. This eliminates the need for storage space and minimizes resource idle time.
Tips to Implement Lean Manufacturing Process
Implementing a lean manufacturing process involves several key points that must be kept in mind:
Systematize the manufacturing process
The easier you make it to monitor and improve your complex systems, the more easily they can be streamlined and enhanced.
Continue to look for ways to improve
Employees should be encouraged and supported to improve processes and procedures at all levels. Taking a close look at procedures is the best way to determine where improvements can be made. Adapting these improvements to your company's processes and operations will make them more effective.
Improve the design continuously
Seeking improvements alone isn't enough. Your processes, procedures, and designs must incorporate them. Practice in applying improvements is the only way to ensure they are implemented practically. Often, small incremental changes are better than big sweeping changes, and improvements need to be backed up by improvement metrics.
Obtain the buy-in of the staff
Achieving the first three steps effectively requires your staff's support. The whole effort can suffer when management implements a methodology without employee buy-in. Identifying and understanding the true problems needed to be solved is an essential part of waste management and, therefore, a key element of lean.
Eliminate waste first
Lean manufacturing emphasizes this principle. It identifies wasteful activity at a plant through a value stream analysis. Furthermore, you can redouble your efforts to maximize the company's product line.
Eliminate unnecessary inventory
Generally, maintaining excess inventory costs more than it is worth. There is a risk of tying up resources, slowing down response times, and complicating quality-control procedures. Having too much stock may be particularly problematic if some of it becomes obsolete, which happens often.
Respond more quickly
Manufacturers have long stressed the importance of forecasting market needs accurately. When working in a fast-paced environment, this might not be the best approach. Alternatively, you might consider developing a system that can react quickly so that you can capitalize on changing market conditions.
Test all components of the product to ensure quality
To detect problems early, make sure that test procedures and controls are implemented at several checkpoints during the process. Improve the system by identifying potential problems, correcting them, and moving forward.
Give employees more autonomy
Give employees more power to make decisions and provide them with the tools and methodologies to do so. The next step would be to establish teams for measuring progress and improving techniques. There is a common occurrence where employees below the management level can present viable solutions. This type of involvement can also boost morale and productivity.
Tools Used to Implement Lean Management System
Implementing a lean management system requires using various tools. Their purpose is to help businesses reduce waste and boost efficiency. Value stream mapping is a useful tool businesses use to map out the steps involved in their manufacturing process. This helps them identify areas where waste accumulates so they can make changes to reduce it.
Lean also employs visual management methods such as 'Kanban boards'. These boards enable workers to see what needs to be done and monitor their progress, facilitating problem-solving and decision-making on the shop floor.
Lean vs. Six Sigma
There are a few key differences between Lean and Six Sigma manufacturing principles. For one, Lean focuses on eliminating waste in all forms throughout the production process, while Six Sigma aims to identify and correct errors and defects to achieve near-perfection.
Another difference is that lean manufacturing is more concerned with the overall efficiency of the production process, while Six Sigma specifically targets individual steps or tasks within that process.
Implement Lean Manufacturing for High-Value Production
It is challenging for businesses to keep their inventory levels and production cycles always on track. Consequently, they cannot expand their offerings or scale effectively due to inbuilt inefficiencies. TranZact enables businesses to adopt a lean manufacturing approach by automating and streamlining all core processes across inventory, production, and transactions. This helps businesses to reduce their costs, minimize waste and accelerate delivery.
FAQs on Lean Manufacturing
1. What is lean manufacturing in simple terms?
Lean manufacturing is a systematic approach that enables the optimization of every step of the manufacturing process. It focuses on eliminating non-value-added activities, such as overproduction, defects, excess inventory, and similar unnecessary functions to create a leaner, more streamlined process.
2. What are the four principles of lean manufacturing?
Flow, pull, value and perfection are the four principles of lean manufacturing. These methods aim to maximize efficiency while creating the most value for customers.
3. What 5S stands for?
Sort, Straighten, Shine, Standardize, and Sustain are five steps to creating a more organized and productive workplace. Lean production tools and processes can be deployed upon the foundation of 5S.
