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:
- 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 which avoids 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 – 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.
- 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
- Business Models
- Business Strategy
- Business Development
- Distribution Channels
- Marketing Strategy
- Platform Business Models
- Network Effects
Main Case Studies: