Lean Manufacturing: What Is It and How Can It Help You

Editor's Note: Take a look at our featured best practice, Lean - Value Stream Mapping (VSM) (157-slide PowerPoint presentation). Value Stream Mapping (VSM) is a lean management technique used to analyze the flow of materials and information currently required to bring a product or service to a Customer. The goal of value stream mapping is to reduce the end-to-end lead time of a process by highlighting and eliminating [read more]

Also, if you are interested in becoming an expert on Process Improvement, take a look at Flevy's Process Improvement Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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Lean manufacturing refers to business processes with the end goal of minimizing waste in manufacturing.

Wastes are often unavoidable in any industry. But there are many things that companies can do to minimize waste as much as possible. This reduction of waste still results in the maximum productivity of the company. This is what lean manufacturing is all about.

Learn more about lean manufacturing and its benefits below. 

What Is Lean Manufacturing?

Lean manufacturing first came out in 1990. It was Toyota that first applied this principle in its operations. There was a five-million-dollar study conducted by MIT that featured Toyota’s application of the lean production system. The process came out in the publication, “The Machine That Changed The World.”

Lean manufacturing is a systematic method that originated from the Japanese manufacturing industry. Its main goal is to lessen the production waste (such as materials, time, resources, and effort) in the manufacturing system, without sacrificing productivity.

Since then, lean manufacturing, through the application of lean tools, has found its way in many industries across the globe. This includes the service industry, healthcare industry, and even in software development companies.

What Are The Benefits Of Lean Manufacturing?

Lean manufacturing has proven to be useful for many businesses in different industries. The benefits of lean manufacturing include:

• Eliminates Waste – This is one of the essential benefits that companies can gain through lean manufacturing. When successfully applied, lean manufacturing principles can help reduce waste. Each step in the manufacturing process is studied well and highly streamlined to ensure that products are made to the best of its quality. What’s more, lean manufacturing reduces unproductive work hours for employees, under-utilization of machines, and a slow production line.

• Improves The Quality Of Products – Your products must be of perfect quality by the time they reach the hands of your customers. That way, you get to meet the expectations of your customers. Moreover, your products have a higher chance of getting sold than getting tucked away and wasted.

• Prevents Mistakes – Errors in company processes can be costly. And, often, these mistakes are also irreversible. Lean manufacturing eliminates repeat errors. Moreover, lean manufacturing requires you to thoroughly check your products during each step of the manufacturing process.

• Reduces Total Costs – Your company can save money when your processes don’t involve wasting resources, materials, or manpower. This results in an overall decrease in the cost of production. Hence, you can sell products at a much lower price, too.

• Saves Time – Lean manufacturing not only prevents material waste but saves you time as well. When your company maximizes your time, you get to achieve efficiency.

Before you can enjoy these benefits, however, it’s important to understand the principles of lean marketing. It’s only in understanding these principles that you can also start applying lean manufacturing in your company. A poor understanding of these principles could still lead to product wastage.

What Are The Five Principles Of Lean Manufacturing?

A company must understand the principles of lean manufacturing before it can successfully apply the practice. Here, you’ll understand the basics of lean marketing, and why it’s a successful technique.

 1. Identify Value Through A Customer’s Perspective

Every customer places their value on a product created by a company. Value refers to the price that the customer is willing to pay for a product.

Rather than pricing your products without studying the value that customers place on them, lean management requires you to work in a backward process. This means that the customer’s perspective on pricing is one of your focal points when pricing a product. By applying this principle, you’ll be able to adequately address the product value that your customer expects.

 2. Map The Value Stream

A value stream refers to the product’s life cycle from the customer’s usage to the disposal of your products. This principle entails studying the entire cycle of your product, as to how long it stays in the hands of your customers before it’s no longer useful. Taking this life cycle into account will help you identify the materials and features that don’t add value to your customer.

3. Create Flow

This refers to the creation of a value chain, with no interruption in the entire production process.

You can achieve this flow through visual management. There are indicators to show and track how everyone in the team is working. Through visual management, your entire team can know the status of work in as fast as 30 minutes.

Visual management prevents disruptions so your team can achieve flow. When there is anything in the process that needs immediate correction, it can be done immediately before moving forward to the next step.

4. Establish A Pull System

This principle helps ensure that no product is produced ahead of time. This approach is based on the principle that no product is made until a customer demands it. You need flexibility and the ability to produce products in a short amount of time to achieve this practice.

Having a pull system ensures that more than 80% of your products get sold, and don’t just end up stagnant on your shelves. The pull refers to the demand of your customers for certain products.

5. Pursue Perfection Through Constant Improvement Of Processes, Or Kaizen

Products created should be nothing short of perfection. This pushes companies to have the drive to create better outcomes than their competitors. Lean manufacturing and kaizen can guide you so you can quickly improve your processes.

Conclusion

The lean manufacturing process has five principles. This includes value, value streams, perfection, flow, and pull. When put together, these principles can lead to the maximum productivity of your company’s processes. With lean production, there is a better and more systematic approach to the reduction of waste in business. The end goal is to have no production excess. That way, all the resources of the company are maximized to the brim.

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Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.

As we continue to deal with COVID-19 and its economic aftermath, most organizations will prioritize Business Process Improvement initiatives. This is true for a few reasons. First, Process Improvement is one of the most common and effective ways of reducing costs. As the global economy slows down, Cost Management will jump to the forefront of most corporate agendas.

Secondly, a downturn typically unveils ineffective and broken business processes. Organizations that once seemed agile and focused during periods of growth may become sluggish and inefficient when demand drops off.

Lastly, COVID-19 has expedited Digital Transformation for most organizations. One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). Thus, we have included numerous RPA frameworks within this Stream.

Learn about our Process Improvement Best Practice Frameworks here.