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).

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.

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

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.

Mura

Or the Japanese term for “unevenness in operations” that describes any factor creating inefficient or inconsistent workflows. 

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:

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.

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.

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.

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, avoiding inefficiencies associated with large amounts of stockpiled materials.

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

5s-system
The 5S System is a lean manufacturing tool that improves efficiency and eliminates waste. First used in the Toyota Production System (TPS). The 5S System seeks to mitigate the factors contributing to process inefficiencies with six areas of concern: sort, set in order, shine, standardize, sustain, and safety.

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

kaizen-approach
Kaizen is a process developed by the auto industry. Its roots are found in the Toyota Production System, which was heavily influenced by Henry Ford’s assembly line system. The word Kaizen is a hybridization of two Japanese words, “kai” meaning “change” and “zen” meaning “good.” Two of the basic tenets of Kaizen involve making small incremental changes – or 1% improvement every day – and the full participation of everyone. 

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 create a highly effective collaborative approach. 

Plan, Do, Check, Act (PDCA)

pdca-cycle
The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

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.

Read Next: Toyota Production System.

What are the three wastes from Lean Manufacturing addresses?

The three core waste reduction principles at the base of lean manufacturing are:

What are the five principles of Lean Manufacturing?

The five core principles of Lean Manufacturing are:

What are some useful lean manufacturing tools?

Some of the key lean manufacturing tools comprise:

Related Agile Business Frameworks

AIOps

aiops
AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.

Agile Methodology

agile-methodology
Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Project Management

agile-project-management
Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

agile-modeling
Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Model Innovation

business-model-innovation
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Continuous Innovation

continuous-innovation
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

design-sprint
A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

design-thinking
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

DevOps

devops-engineering
DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

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.

Feature-Driven Development

feature-driven-development
Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

eXtreme Programming

extreme-programming
eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Lean vs. Agile

lean-methodology-vs-agile
The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

startup-company
A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Kanban

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.

Rapid Application Development

rapid-application-development
RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Scaled Agile

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.

Spotify Model

spotify-model
The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

test-driven-development
As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.

Timeboxing

timeboxing
Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.

Scrum

what-is-scrum
Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.

Scrum Anti-Patterns

scrum-anti-patterns
Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

scrum-at-scale
Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Read Next: MVP, Lean Canvas, Scrum, Design Thinking, VTDF Framework.

Read More: Business Models

Read Next: Business AnalysisCompetitor Analysis, Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Main Guides:

Main Case Studies:

Scroll to Top
FourWeekMBA