The Fundamentals of Lean Production

Lean production, in general, emphasizes a focus on maximizing customer value while eliminating waste.

Since the 1930s when Toyota introduced ground-breaking, optimized approaches to production, manufacturers have looked for lean ways to operate. Lean production, in general, emphasizes a focus on maximizing customer value while eliminating waste.  

James P. Womack, the president and founder of the Lean Enterprise Institute, and Daniel T. Jones, founder of the Lean Enterprise Academy, boiled lean methodology down to five principles:

Define Value

The first lean principle is to shift focus from your business’ interest to the value that your customers perceive from your products. What customers value is true north for lean manufacturing -- if you produce items that customers find valuable, you maximize your revenue potential.  

Map the Value Stream

Once value from the customer’s perspective is defined, the next step in establishing lean production is to map out all the activities, materials, and employees necessary to deliver that value. Similarly, the manufacturer should identify anything that doesn’t contribute to that value, in effect, trimming the fat to make the operation lean.

Create Flow

Lean production also requires creating a process in which all necessary steps in the manufacturing process flow smoothly. This may necessitate retraining employees, reapportioning workloads, or creating new teams. Optimizing process flow is essential because, just like raw materials, energy, or shipping and delivery, time is a vital part of the equation, and wasted time can be a significant contributor to profit loss.

Establish Pull

A pull-based system is manufacturing when products are needed, not in advance to fill warehouses. This limits inventory (and inventory costs) and work on process (WIP) and enables just-in-time delivery.

Pursue Perfection

The last principle of lean production is to recognize that optimizing operations is an ongoing process. Manufacturers who successfully run lean operations create a culture in which their entire teams are engaged, looking for ways to maximize value, reduce waste, and contribute to continuous operations improvement.

Putting Lean Production Principles into Practice

Theoretically, lean manufacturing is the ideal path to minimal waste and high-value products that customers demand. However, it takes planning, effort and the right tools to make it work. Before applying lean principles, manufacturers may not have a mechanism for employees to point out any of the seven “mudas” or wastes of lean:

1. Overproduction

2. Idle time

3. Transportation waste

4. Inefficient processing

5. Excessive inventory

6. Unnecessary steps

7. Product defects

Without a process to document issues and address them, employees will lose their motivation to report them and find their own workarounds, which are probably not as efficient, to overcome challenges. If employees make changes to parts, materials, production or assembly processes that prove to be more efficient or enhance product quality, without documentation, that information can become tribal knowledge. When employees leave or retire, the information about how they do their jobs goes with them.

Managing lean production is also crucial to ensure repeatable processes and products that consistently meet specifications and quality standards.

Optimal lean manufacturing management software will give managers complete visibility into operations. Whether the operation collects data with barcode scanners or advanced Internet of Things systems, the software should track each step of the production process, align with specifications detailed in the as-built bill of materials (aBOM), and document any changes.

The software should also provide real-time visibility into inventory, including WIP, so no unnecessary parts or materials are ordered, and production isn’t scheduled for items already in stock.

The software should also enable production planning that takes engineers’ and other employees’ feedback into account so processes can be optimized and waste reduced. Collaboration is a vital part of lean production. Therefore, ensure the management software you use enables your teams to coordinate their activities, keep each other apprised of changes, and always have the visibility they need into operations to perform their jobs successfully.

Lean Production ROI

Each manufacturing operation is unique, so it’s difficult to predict precisely how lean production will impact your organization. However, Villanova University has identified six financial benefits from lean manufacturing:

More Revenue

Running more efficiently enables more throughput within the same time and, therefore, more products to sell.

Lower Costs

Lean manufacturing saves money by minimizing wasted time and materials and minimizing defects that cause rework.

Higher Customer Satisfaction

Satisfied customers are more likely to purchase your products again and provide positive reviews and word-of-mouth recommendations, leading to new business.

Employee Satisfaction

Employees take ownership and see that they’re making an important contribution to their organization. Employee turnover may decrease.

Greater Competitiveness

Offering products that customers perceive as valuable, are high quality and can be sold at a competitive price can give a manufacturer a substantial edge in the market.

Although a transformation to lean production takes an investment of time and resources, and your team will undoubtedly need some time to navigate a learning curve, the transition to lean will pay off.