What is Lean Manufacturing?
Lean Manufacturing is a production methodology used by manufacturers to eliminate waste, optimize value for the customer, and boost company productivity. By focusing on factors that add value and cutting activities that cause waste, companies can create more value while pursuing greater operational efficiency.
Essentially, Lean Manufacturing is a win-win scenario. If the core principles are followed carefully, lean manufacturing is beneficial to the organization and market consumers as costs are lowered and value is increased.
Lean manufacturing is the process of reducing wasteful activities while increasing value to the product or service.
The most valuable factors of production are those that bring value to the customer.
The fundamental principles behind lean manufacturing were inspired by the Toyota Production System (TPS).
Lean Manufacturing is about finding the right balance. Remove waste as much as possible but don’t hurt the production by going beyond lean.
A Brief History of Lean
Lean Manufacturing was first developed by the Toyota Production System (TPS) between the years 1948-1975. Since then, Lean has gained worldwide notoriety as an incredibly efficient production model that companies aspire to emulate. Taiichi Ohno and Eiji Toyoda, Toyota industrial engineers, primarily created the system as a way to mitigate wasteful inventories in the automotive industry but it has grown to encompass other methods and practices of mitigating waste and adding value across many industries.
Examples of production methods inspired by Lean are Kanban, Kaizen, Lean Six Sigma, DMAIC (Define, Measure, Analyze, Improve and Control), and DMADV (Define, Measure, Analyze, Design, Verify). Each helps to further define and enhance Lean methodology in a manufacturing environment.
What is Value?
To get a clear understanding of Lean Manufacturing, we need to understand value from the perspective of the customer. If a business is not providing value for the customer, then there is no business. In this way, value is a top priority within Lean Manufacturing methodology.
Value within a production line is broken up into three types of activities:
Value-added: This is an activity that provides value to the consumer. This includes useful features and product support.
Business value-added: This is an activity that directly provides value for the business while indirectly providing value for the customer. This includes activities like maintenance, inspections, data storage, etc.
Non-value-added: This is an unnecessary activity that the consumer does not see, does not need, and/or is not willing to pay for. Non-value-added activities are some of the first things to be eliminated in a Lean plan.
Within Lean Manufacturing, value is always considered through the perspective of the consumer. It is the consumers who decide what brings value to a product. Businesses have to adapt their product and their operation to meet that goal. Anything that does not directly or indirectly add value for the consumer is considered waste and should be removed.
The 5 Principles of Lean Manufacturing
Lean Manufacturing is characterized by the 5 following principles.
Identify Value: Companies need to identify what brings value to the customer. Once value has been identified, companies are better able to design products that meet the customers’ needs while also removing features that do not.
Map Value Stream: The value stream is the complete life-cycle of the product. This includes the design, materials, production/assembly, sale, customer use, and eventual product disposal. Once a product’s value stream has been mapped out, manufacturers can remove elements and steps that do not add value within the value stream.
Create Flow: If a production does not flow, then it is wasting time. Items should move from through the value stream without interruption. Lean manufacturers efficiently organize their operations to flow together.
Establish Pull: This principle requires that businesses only produce an item when there is clear demand. Like creating flow within production, the transition from production to customers should also not be stagnant at any point. As opposed to pushing items onto the market, the market pulls items from the production line, effectively cutting out the need for large and potentially wasteful inventories.
Seek Perfection: For Lean Manufacturing to significantly impact a business, the company culture needs to be involved. Every employee and system needs to seek the widespread application and perfection of lean practices across the organization.
What is Waste?
To get an accurate understanding of what “lean” is in a manufacturing setting, we need to have a clear understanding of waste and how it occurs. According to the Toyota Production System (TPS), waste can be split into three separate categories.
Muda (uselessness): Much of the current discussion on waste centers around useless practices. These are any activities that do not add value to the customer. This can be anything from paperwork to inefficient logistical planning. The idea is to eliminate or reduce the activities that produce waste or are useless within the value stream of the product or service.
Muri (overburden): Muri is the result of removing too many supplementary systems from the operation. Though some systems do not add value directly to the customer, they are still useful to the operation. True Lean Manufacturing requires flexibility and resiliency that can stand up to modern manufacturing challenges.
Mura (unevenness): A production line needs to be balanced and to flow. If not, then inefficiencies will inevitably occur. Unevenness can be found in many areas of production, such as customer demand (takt time) or process/cycle times per product and per worker.
Understanding and cutting out waste is about balance. Companies engaging in lean methodologies should eliminate waste but not so severely that they hurt the operation.
The 8 Wastes of Lean
A more in-depth and balanced approach to understanding waste is through the “8 Wastes of Lean”. These can be remembered using the appropriate acronym DOWNTIME.
Defects: If a product is defective, then the materials used and the time spent are wasted. This leads to rework and a stall in customer lead times. Or worse, defects are not caught and passed on to the customer, leading to poor value.
Overproduction: If a product is overproduced, then the company is producing more than the current demand dictates. Meaning that the time spent and materials used are potentially worthless if no one buys them.
Waiting: Any time spent waiting for something is wasted time. As we discussed earlier, the production needs to flow without stagnation or interruption.
Non-Utilized Talent: The talents of every employee needs to be utilized to their fullest. If not, then companies are wasting the skills that they are paying for.
Transportation: Ineffective logistical planning leads to increased lead times, wear and tear on equipment and additional fuel costs. Transportation is necessary but strategic logistical planning saves companies a lot of wasted time and money.
Inventory: The larger the inventory, the greater the cost. Through establishing a pull-based production system, companies limit their inventory levels and save money and space.
Motion: This involves creating an efficient motion within the production line. Employees should have their needed resources close at hand and the flow of people, products, and materials shouldn’t get in the way of each other.
Extra Processing: This waste concerns providing too much or over-engineering a product. The extra processing may not be needed and therefore is wasted.