What is Lean Manufacturing? 5 Principles, 8 waste, PDF

Lean manufacturing, or Lean production definition:

We can define lean manufacturing as a production process based on an ideology of maximizing productivity while simultaneously minimizing waste within a manufacturing operation. Many companies are using Lean manufacturing principles to reduce waste, improve processes, cut costs, promote innovation, and reduce time to market in a fast-paced, volatile, ever-changing global marketplace.

Not taking full advantage of all of your resources leads to losing efficiencies and, in so doing, stunt production. For many people, the phrase “Lean manufacturing” is interchangeable with removing waste, and eliminating waste is certainly a key element of any Lean practice. But the goal of practicing Lean manufacturing isn’t simply to eliminate waste, it’s to continuously deliver value to the customer. The lean principle sees waste as anything that doesn’t add value that the customers will pay for.

Some well-established companies that use lean include Toyota, Intel, John Deere, and Nike.

5 Principles of Lean manufacturing:

A widely referenced book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation, which was published in 1996, laid out five principles of lean, which reference as core principles in many fields. They are value, the value stream, flow, pull, and perfection. Let’s discuss each principle separately.

1. Value:

They identified value from the perspective of the customer and relates to how much they are willing to pay for your products or services. The manufacturer or service provider who should seek to eliminate waste then created this value and costs to meet the optimal price for the customer while also maximizing profits.

2. Map the Value Stream:

Map the Value Stream involves analyzing the materials and other resources required to produce a product or service to identify waste and improvements. Value stream mapping comprises the product’s entire life-cycle, from raw materials through to disposal. Each stage of the production cycle needs to be examined for waste and must eliminate anything that does not add value.

We usually recommend chain alignment to achieve this step. Nowadays manufacturing process flows are a little complex, requiring the combined efforts of engineers, scientists, designers with the actual manufacturing of a physical product being just one part of a wider flow of processes.

Read: What is Product Life Cycle?

3. Create flow:

Eliminate functional barriers and identify ways to improve lead time. This principle ensures that processes are flowing smoothly and can be undertaken with minimum delay or other waste. Lean manufacturing relies on avoiding interruptions in the production process and setting up a harmonized and integrated set of processes in which activities operate in a constant stream.

4. Establish a Pull System: 

Lean manufacturing uses a pull system instead of a push system.

With a push system, the needs of inventory are determined in advance, and then the product is manufactured to meet that forecast. However, forecasts are typically inaccurate, which can cause swings between too much inventory and not having enough inventory, this can lead to additional warehousing costs, disrupted schedules, or poor customer satisfaction.

 Lean manufacturing is based on a pull system in which nothing is bought or you only start a new work when there is a demand for it. Pull depends on flexibility and communication between department managers.

5. Perfection:

Lean manufacturing rests on the concept of continually striving for perfection via continued process improvements, which is also known as ‘Kaizen‘ as created by Toyota Motor Corporation founder Kiichiro Toyoda. The perfection principle involves targeting the root causes of quality issues and checking out and eliminating waste across the value stream. 

To make a serious and long-lasting difference, it should integrate the notion of continuous improvement through the culture of an organization and requires the measurement of metrics such as lead-times, production cycles, throughout, and cumulative flow.

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8 Waste of Lean manufacturing

The lean manufacturing framework that was originally established by Taiichi Ohno for Toyota motor company has applications across every industry today. The original 7 wastes identified by Ohno have expanded to include one more related to an organization’s employees.

You can easily recall the 8 wastes of lean by using the acronym, “DOWNTIME”, which stands for:

D- Defects

O- Overproduction

W- Waiting

N- Non-utilized talent

T- Transportation excess

I- Inventory excess

M- Motion excess

E- Excess processing

1. Defects

Defects are the most visible types of waste that can be present in any product or service. These are scrap products or products that don’t meet market specifications and standards. Defects led to delays in delivery and logistics headaches which most likely leads to a decrease in customer satisfaction.

Defects cost more money to rework the product and also takes extra time fixing issues and filing paperwork.

2. Overproduction

Many companies like to produce in bulk because producing in bulk reduces the manufacturing cost. But customer needs change more often, and the market fluctuates and requires change even more frequently. Overproduction causes excess inventory which leads to spending more money on storage, warehousing, and material handling.

3. waiting

Let’s understand waste by this way, a product or your workers might be ready for the next process (packaging or shipping for example), but the next step in your process isn’t ready to execute the task. In manufacturing, this can look like machinery downtime causing packaging delays.

4. Non-utilized talent

Non-utilized talent is overlooked as one of the forms of waste, not utilizing your employees to their full potential, talents, or skills can create a big effect on your company’s bottom line. Poor teamwork, improper training, poor communication, and unnecessary administrative tasks are common examples of non-utilized talent waste.

5. Transportation excess

Transportation means the transfer of goods from one location to another. In the manufacturing process, this might mean performing different operations in different locations. An example of transportation excess is producing product parts in China and then transport them to the USA for assembling. This process doesn’t add any value to the end product, it doesn’t change the final result, but it adds more cost.

6. Inventory excess

Inventory excess is identical to overproduction, inventory waste takes place if your product keeps in the warehouse waiting to be sold. Overproduction often causes inventory excess by making more than market demand or assuming demand will be increase down the road.

7. Moition excess

The unnecessary movement of people, machines, or items that don’t add value to the process is the waste of motion or motion excess. The motion of waste is usually caused by not following the 5s’ manufacturing principle in your organization. Common examples include workers looking for materials or equipment or unorganized workspaces.

8. Excess processing

Excess processing or over-processing refers to doing extra work that is not required. Extra processing means taking extra time, staff, materials, power, etc which costs more and leads to equipment wear. It also makes your process less efficient because workers are performing the extra processing tasks could do value-adding tasks instead.

Example of Lean manufacturing:

1. Toyota is the first major company to use this lean ideology in their manufacturing processes, initially calling the method the Toyota Production System. Not only have they reduced waste but they have also mastered the skills required to minimize faulty products that do not meet customer needs.

Toyota works with two primary processes that allow these goals to be reached. The first is a process called Jidoka, which translates roughly to “mechanization with the help of humans.” This means although some aspects of the work are automated, individuals are regularly checking the quality of the product. There are also programs developed into the process that allows the machines to shut themselves down if someone encounters a problem.

The second part is recognized as the Just In Time or JIT model. This ensures that the next step of a process is only started when the previous phase is ended. This way, if there is a fault in the assembly line, no extra and unnecessary work will be take place.

2. Intel is known for their computer processors, Intel adopted the lean manufacturing approaches to give a higher quality product to an industry that requires zero bugs. This ideology has helped reduce the time to bring a microprocessor to the factory from over three months in the past to less than ten days.

Advantages of Lean manufacturing

1. Eliminate waste

Waste has a negative influence on cost, time, and resources. It’s not providing any value to your products or service. The primary purpose of lean manufacturing is to eliminate waste.

2. Saves Time and Money

More efficient workflows, resource allocation, production, and storage can benefit firms regardless of size or output. Timesaving allows for shortened lead times and better service in providing products quickly to customers, but can also help save money by allowing for a more simplified workforce.

3. Environmental Friendly

Removing unnecessary processes can save costs in energy and fuel use. This has an obvious environmental benefit, as does the use of more energy-efficient equipment, which can also offer cost savings.

4. Improve Quality

To stay competitive in the market and satisfy the needs and wants of customers companies should improve the product and services quality. Design your processes according to those expectations to keep you ahead of your competition.

5. Improved Customer Satisfaction

Improving the delivery of a product or service, at the right cost, to a customer improves customer satisfaction. This is essential to business success as happy customers are more likely to return or recommend your product or service to others.

Dis-advantages of Lean manufacturing

1. Employee Safety

By overly focussing on eliminating waste and streamlining procedures it is possible to overlook the stresses placed on workers who are given a little margin for error in the workplace.

2. Stops Future Development

Lean manufacturing’s fundamental focus on decreasing waste can lead management to over-focus on the present and disregard the future in the way. However, these may be important to a company’s legacy and future development. 

3. Difficult to Standardise

Some experts comment that lean manufacturing is a culture rather than a set method, which means it is impossible to create a standard lean production model. This can create an opinion that lean is a loose and unclear technique rather than a robust one.

Lean Manufacturing tools and techniques

Let’s have a look at common lean manufacturing tools and techniques which can help you eliminate waste and maximize production.

Kaizen:

The Japanese word “Kaizen” means to “change for the better.” The idea behind Kaizen is a continuous striving for improvement. Kaizen makes employees work together proactively to make incremental improvements within the manufacturing process as there is always room for improvement.

A company that practices kaizen accepts and never criticizes suggestions for improvement at all levels. This benefits to create a positive environment of mutual respect and open communication.

5s Lean manufacturing:

The 5S methodology is an organizational method deriving from five Japanese words: seiri, seiton, seiso, seiketsu and shitsuke. These words translate to sort, set in order, shine, standardize and sustain. 5s represent a five-step process meant to eliminate waste and increase productivity and efficiency within the company.

1. Seiri (sort): The first step, Seiri, it involves eliminating clutter and unnecessary items from the workspace.
2.  Seiton(set in order): Employees must set an order by ensuring there is a place for everything, and everything is in its place.
3.  Seiso (shine): This process involves cleaning the workspace and always keeping it in a fresh state.
4.  Seiketsu (standardize): Standardizing all manufacturing processes and keeping them consistent over time, so any worker can step in and perform a job if necessary.
5.  Shitsuke (sustain): Last step, we want to maintain and reinforce the previous four steps.

Kanban:

Kanban means “billboard” or “visual signal”. It relies on visual signals to help employees to control inventory. Kanban helps excess inventory and overproduction waste by carrying out a method for regulating the flow of goods inside and outside the factory. 

With this process, they assembled products only when there is consumer demand, allowing companies to reduce inventory and waste. The Kanban method quickly responds to customers because products can be manufactured according to customer needs instead of trying to predict their future needs.

A basic form of Kanban is having three columns: “To Do,” “Doing,” and “Done.” Once you’ve begun a project or the first step in a process, move a colored sticky note with your name on it to the “Doing” column, so everyone knows where you’re at within the process. They can label columns to match your particular project and there can be as many columns as you need.

Just in Time (JIT):

Just-in-time (JIT) manufacturing comes from Japan in the 1960s and 1970s. Toyota Motor (TM) gave the most to its progress. This method allows organizations to save considerable amounts of money and cut down waste by keeping only the inventory they need to manufacture and sell products. This approach reduces storage and insurance costs, as well as the cost of liquidating or eliminating excess inventory.

It’s still believed to be a risky strategy for some. It can be great for balancing the risks related to inventory management with your manufacturer or supplier instead. If demand suddenly spikes, the company may not source the inventory it needs to comply with that demand, suffering its reputation with customers and driving business toward rivals. Even the shortest delays can be problematic; if a key input does not reach “just in time,” a bottleneck can occur.

Poka-Yoke:

Poka-Yoke is a Japanese term, it means “mistake-proofing“. It is an approach used to ensure your lean process is producing quality products. The purpose of Poka-Yoke is to minimize or eliminate defects by preventing, correcting, or bringing to light any human errors that are taking place within the manufacturing process.

In manufacturing, Poka-yoke must be employed at any step of the manufacturing process where human error can lead to something going wrong. For example, a digital counter that counts the number of spot welds on each manufactured piece to ensure the welder makes the correct number of welds.