Lean principles have been used for many centuries, although not quite in the way we understand today. The principles of reducing waste and improving productivity really came to the fore when the industrial revolution took off. Industrialists at the turn of the 20th century saw the benefits of using lean manufacturing principles to improve productivity at a time when other countries were maximizing the advantages of cheap labor, but the ideas solidified at the Toyota Motor Corporation in 1934. There, it was decided that work schedules would be dictated by actual sales, which was more efficient in an era of low demand.
However, the term ‘lean manufacturing’ wasn’t actually coined until 1988, in an article written about the joint venture between Toyota and General Motors. It was then further defined by the book ‘The Machine that Changed the World’, published in 1990.
A definition of lean manufacturing
In today’s world, lean manufacturing is a way to do more with less. We think of it as streamlining operations, so there is less waste, greater productivity, and customers are happier. Lean principles can be applied to all industries, from healthcare to software design, and there are numerous tools available to help managers implement lean into their organization.
The principles of lean manufacturing
There are five main principles of lean manufacturing. They are designed to reduce waste and increase productivity and form the basis of lean:
- Value relates to how much a customer is willing to pay for a product.
- Map the value stream – this is when the manufacturer analyses what’s needed to produce the product. It looks at the lifecycle of the product, examining each stage of production to see if waste can be minimized.
- Create flow looks to improve product lead times by removing barriers that might impede production processes. Anything that interrupts production will incur costs and reduce value.
- Establish a pull system – Toyota implemented a pull system when demand was low. Factory managers realized it was more cost-effective to only commence work when an order was placed. Push systems of continual manufacturing often led to excess product, which incurred extra warehouse space, or not enough product, which was bad for customer satisfaction.
- Perfection, or Kaizen as it’s known in Japanese, is where continual improvements are made to manufacturing processes, by way of ongoing assessments. This helps to eliminate waste, which in turn boosts value.
Reducing waste is a significant part of implementing a lean manufacturing environment. Waste can be many things, but in manufacturing, the main areas of waste are:
- Excess product production
- Excess inventory
- Product defects
- Idle equipment or people
- Inefficient transportation
- Adding unnecessary features to a product
- Underutilized talent in the workforce
Identifying areas of waste is part of the lean process. Some waste might be caused by fluctuating demand for products.
Waste can also be caused by insufficient workers being asked to take on too much work and losing motivation. Identifying problem areas can help you eliminate them and improve productivity.
The pros of lean manufacturing
One big advantage of lean manufacturing is that there is less infrastructure needed. Only the tools, equipment, supplies, manufacturing space, and manpower needed are used. This ensures expensive equipment is not underutilized and you are not paying employees to stand around chatting.
There is also less waste, as you don’t end up with too much inventory taking up valuable space in warehouses. This is especially important in the food manufacturing industry, where products often have a short shelf life and there is a risk that excess inventory would perish before it can be sold. It also ensures inventory doesn’t end up being obsolete, which is potentially an issue in the tech manufacturing sector.
Customer relationships are important in all areas of business, not least in the manufacturing sector. By implementing lean manufacturing principles, you are better able to meet customer expectations. Because lean manufacturing means less waste and greater productivity, the product can be manufactured and delivered on a more predictable schedule. This leads to happy customers and an improved cash flow.
One other big advantage of switching to a lean manufacturing environment is that it is more eco-friendly. You won’t be using equipment unnecessarily, which means less energy expenditure. In addition, as part of mapping the value stream, you might decide to upgrade to more energy-efficient equipment, which in turn will also reduce unnecessary energy expenditure.
The cons of lean manufacturing
One of the downsides of adopting lean manufacturing principles is that there is not as much margin for error. Because you are only manufacturing to order and don’t have a lot of inventory set aside in storage, if a machine breaks down or you don’t have enough workers on-site, you will quickly fall behind your manufacturing schedule. The pandemic has brought these issues to the fore, with many manufacturers experiencing a dramatic drop in available workers due to people needing to self-isolate.
The direct consequence of interruptions to the manufacturing schedule is damage to customer relationships. Since unexpected machinery breakdowns and staff shortages can cause bottlenecks in the manufacturing process, this will inevitably lead to delayed deliveries.
If you supply retailers, they won’t be happy if manufacturing delays mean they can’t ship orders to their customers. Repeated delays could damage your customer relationships beyond repair, and in a cut-throat world, this is not something many manufacturers can take a risk on.
Lean manufacturing involves cutting out unnecessary processes. However, it could be argued that some processes, while not essential, do contribute to a company’s future development. For example, if new products are being developed, or additional features tested, removing these processes will harm the company’s future competitiveness.
Implementing lean principles
There are lots of tools available to help manufacturers implement lean strategies into their processes. It is also worth studying for a masters in lean manufacturing from Kettering Online, as this will give you an excellent foundation in everything you need to know.
Before adopting lean, make sure you have the full support of your workforce. They need to be behind you if lean is to work. Otherwise, they might feel overburdened, which in turn will lead to poor productivity. If necessary, hire coaches to explain the concept of lean manufacturing and how it can help not hinder the workforce, and by extension, the company.