lean-manufacturing

Lean Manufacturing In A Nutshell

Lean manufacturing seeks to maximize product value while minimizing waste without sacrificing productivity. According to the Lean Enterprise Research Centre (LERC), 60% of a typical manufacturing process is waste. While the removal of waste is perhaps synonymous with lean manufacturing, the goal of the methodology is the sustainable delivery of value to the customer.

Understanding lean manufacturing

Lean manufacturing began with Henry Ford and his philosophy of production line assembly. However, modern lean manufacturing was established by engineers Taiichi Ohno and Eiji Toyoda in the Toyota Production System (TPS).

The TPS seeks to address wastage resulting from three common scenarios:

  1. Muda – or the Japanese term for “waste” encapsulating anything that creates waste or constraints during manufacturing. Toyota defined eight different waste categories: defects, overproduction, waiting, not utilizing talent, transportation, inventory excess, motion waste, and excess processing.
  2. Mura – or the Japanese term for “unevenness in operations” that describes any factor creating inefficient or inconsistent workflows. 
  3. Muri – the Japanese term describing the “overburdening of people and equipment”. These factors cause employee burnout and lead to equipment malfunction, reducing productivity and quality.

The five key principles of lean manufacturing

Businesses wanting to create a culture of lean excellence should consider these principles:

  1. Value. To deliver value to the customer, the business must first define it. How much is the customer willing to pay for a product or service? With this figure, the business creates a top-down target price with which it can determine manufacturing costs.
  2. The value stream. This encompasses the entire product life cycle from raw material acquisition to product disposal. The value stream should be mapped out to determine which processes add value and which do not. Any process or product step, feature, or material should be eliminated if it does not add value.
  3. Flow. After waste has been removed from the process, the process should be tested to make sure that the remaining value-adding steps flow harmoniously without delays, interruptions, or stoppages.
  4. Pull. The fourth principle argues that businesses should adopt Toyota’s “just-in-time” manufacturing philosophy. This means that products should be built-to-order which avoids inefficiencies associated with large amounts of stockpiled materials.
  5. Perfection. Lean manufacturing advocates continuous improvement. Although perfection is an ideal, businesses that relentlessly strive toward it have an advantage over their competitors. They also become more productive and adaptable to change.

Useful lean manufacturing tools

Since the implementation of the Toyota Production System, many tools and methodologies have been developed for use beyond the automotive industry.

Here are three of the most common:

  • The 5S System – which is a tool for organizing materials for quick access and improved maintenance. The 5S system details the effective and efficient reorganization of a workspace. It is also ideal for businesses that experience waste from poorly maintained tools and equipment.
  • Kaizen – this tool is one of continuous observation and incremental improvement. Kaizen argues that employees and managers should work toward reducing waste, as their combined skills and expertise creates a collaborative and highly effective approach. 
  • Plan, Do, Check, Act (PDCA) – a four-step iterative process utilizing the scientific method to facilitate the continuous improvement of processes and products.

Key takeaways

  • Lean manufacturing focuses on reducing waste from manufacturing processes and adding customer value without sacrificing productivity.
  • Lean manufacturing is based on the Toyota Production System which describes the creation of waste according to three common scenarios.
  • Lean manufacturing has applications beyond the automotive industry. Several tools have been developed to help businesses implement lean principles. These include the 5S System and Kaizen.

Connected Business Concepts

scientific-management
Scientific Management Theory was created by Frederick Winslow Taylor in 1911 as a means of encouraging industrial companies to switch to mass production. With a background in mechanical engineering, he applied engineering principles to workplace productivity on the factory floor. Scientific Management Theory seeks to find the most efficient way of performing a job in the workplace.
poka-yoke
Poka-yoke is a Japanese quality control technique developed by former Toyota engineer Shigeo Shingo. Translated as “mistake-proofing”, poka-yoke aims to prevent defects in the manufacturing process that are the result of human error. Poka-yoke is a lean manufacturing technique that ensures that the right conditions exist before a step in the process is executed. This makes it a preventative form of quality control since errors are detected and then rectified before they occur.
gemba-walk
A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.
dual-track-agile
Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.
scaled-agile-lean-development
Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.
kanban
Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.
toyota-production-system
The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Read Next: Agile MethodologyLean MethodologyAgile Project ManagementScrumKanbanSix Sigma.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"