The term “lean manufacturing” means different things to different people. However, it can generally be agreed upon that lean manufacturing represents a management philosophy that emphasizes the elimination or reduction of waste in order to increase company profitability. In other words, doing more with less.
Lean manufacturing is often associated with the Toyota Production System (TPS) that helped catapult the car-maker into worldwide prominence. But some industry experts trace its roots back to the Industrial Revolution and Eli Whitney’s systemization involving interchangeable parts. Others link lean manufacturing with the Six Sigma set of practices designed to improve processes. In any event, the TPS is often cited as a successful model for implementation of lean manufacturing principles.
Keeping that in mind, consider the following eight steps for applying lean manufacturing to your business operation:
- Start by eliminating waste. This is one of the core principles of lean manufacturing. Typically, you may use a value stream analysis to identify wasteful activities occurring at the plant. At the same time, you can intensify efforts to find more efficient ways to add value to the company’s product line. (See right-hand box for examples of waste.)
- Reduce unnecessary inventory. The cost of maintaining excess inventory generally outweighs the potential benefits you might realize. It can tie up resources, slow down response time and complicate quality-control issues. Overstocking may become particularly problematic if some of the inventory eventually becomes obsolete-which is often the case.
- Shorten production cycles. What used to take days or even weeks to complete can now often be accomplished in a matter of hours. Utilize the technological capabilities currently at your disposal. Disciples of lean manufacturing preach the production of small batches where you can add “bells and whistles” to later product versions.
- Speed up response time. For years, manufacturers emphasized the need for making accurate forecasts of market requirements. However, this is not always the optimal approach in a fast-paced environment. Alternatively, it may be preferable to develop a system that can react swiftly so you can capitalize on market changes.
- Ensure that all product components have been quality-tested. Develop testing procedures and controls at several check-points in the process to detect problems at the earliest possible stage. Fine-tune the system to identify problems, make the necessary corrections or improvements and move forward.
- Extend employee autonomy. Give more employees authority to make decisions and provide them with the tools and methodology for doing so. You can take this step even further by establishing teams to measure work progress and improve techniques. Frequently, companies find that viable solutions may be presented by employees below the management level. Plus, this kind of involvement can improve morale and performance.
- Solicit customer feedback. After developing core product features, use a systematic approach for obtaining input from customers. The system should be designed to adapt to changes over its lifespan. Taking this step can enable you to satisfy customer needs within your basic framework
- Reach out to suppliers. When it is appropriate, make suppliers “partners” in the lean manufacturing process. By combining cooperation from suppliers with implementation of lean manufacturing principles, benefits can be realized by all parties. This also helps strengthen existing relationships vital to your manufacturing operation.
Waste Comes in Many Forms
In a report published by the Environmental Protection Agency (EPA) on lean manufacturing, the following types of waste were identified as targeted by lean methods.
Type of Waste
|Defects||Production of off-specification products, components or services that result in scrap, rework, replacement production, inspection and defective materials.|
|Waiting||Delays associated with stock-outs, lot processing delays, equipment downtime and capacity bottlenecks.|
|Unnecessary Processing||Process steps that aren’t required to make the product.|
|Overproduction||Manufacturing items for which there are no orders.|
|Movement||Human motions that are unnecessary or straining, and work-in-process transporting long distances.|
|Inventory||Having excess raw material, work-in-process or finished goods.|
|Unused Employee Creativity||Failure to tap employees for process improvement suggestions.|
|Complexity||More parts, process steps or time than necessary to meet customer needs.|
For many companies, adopting a lean manufacturing approach requires a drastic change in corporate culture. But consider the possible long-term repercussions if your company is not willing to adapt. Discuss the implementation of this approach with your business advisers.