Examples of Lean Manufacturing in Practice
Now more than ever before, speed to market and operational efficiency are the determining factors for success in the volatile, fast-paced world of manufacturing. Companies are turning to Lean manufacturing practices to create a sustainable competitive advantage. Lean manufacturing provides a systematic method for minimizing waste within a manufacturing system, while staying within certain margins of control such as productivity and quality -- allowing companies to reach the operational efficiency they need to get ahead of the competition. Read on to learn from these examples of Lean manufacturing in practice.
7 Lean Manufacturing Principles
There are seven fundamental principles of any Lean practice, which are used in Lean manufacturing, but also in all disciplines of knowledge work. A firm, shared understanding of these Lean manufacturing principles is essential for any organization hoping to sustainability and holistically adopt Lean manufacturing practices. These include:
Optimize the Whole
Every business represents a value stream — the sequence of activities required to design, produce, and deliver a product or service to customers. If our goal is to deliver as much value to our customers as quickly as possible, then we have to optimize our value streams to be able to do just that. In manufacturing, this means creating seamless, productive systems on the shopfloor, but also optimizing efforts across knowledge workers - engineers, developers, etc.
Lean manufacturing defines waste as anything that doesn’t add value to the customer. This can be a process, activity, product, or service - anything that requires an investment of time, money, and talent that does not create value for the customer is waste.
Eliminating waste across the value stream, instead of at isolated points, helps manufacturers create processes that require less human effort, less space, less capital, and less time to deliver products and services that cost less and have fewer defects. In fact, industry trends show that companies adopting Lean manufacturing principles are developing products by up to six months faster and staying 35% closer to products’ target costs, than their competitors.
Build Quality In
As businesses grow, the limitations of homegrown systems expose themselves. Lean manufacturers set themselves up for sustainable growth by practicing the Lean principle of Building Quality In. The concept is fairly simple: Automate and standardize any tedious, repeatable process, or any process that is prone to human error. This allows Lean manufacturers to error-proof significant portions of their value streams, so they can reduce risk and time to market and focus their energy on creating value for their customers. Some examples of this Lean manufacturing principle include:
- Pair programming: Avoiding quality issues by combining the skills and experience of two developers instead of one
- Test-driven development: Writing criteria for a product/feature/part before creating it to ensure it meets business requirements
- Incremental development and constant feedback
- Minimize wait states: Reducing context switching, knowledge gaps, and lack of focus
When a piece of work reaches the customer, it’s valuable. Until then, it isn’t. The Lean principle of Deliver Fast by Managing Flow is based on the idea that the faster we can deliver bits of value to our customers, the sooner we can begin to learn from customer feedback. The more we learn from our customers, the better able we are to give them exactly what they want. In order to deliver fast, we have to manage flow — by limiting work in process and maintaining a relentless focus on value delivery. In Lean manufacturing, specifically, there is a heightened need to deliver quickly - because the cost of delay can run upwards of millions of dollars per day. Reducing development cycles and delivering new products or features quickly is essential for sustainability in manufacturing.
The Lean principle of Create Knowledge is related to the concept of Optimizing the Whole. A Lean organization is a learning organization — it grows and develops through analyzing the results of small, incremental experiments. In order to retain that information as an organization, the learning must be shared. The Lean principle of Create Knowledge says that Lean organizations have to provide the infrastructure to properly document and retain valuable learning, so they do not repeat mistakes.
Lean thinking is derived from the manufacturing philosophy of Toyota, which emphasized a just-in-time system of inventory management. The Lean principle of Defer Commitment says that Lean organizations should also function as just-in-time systems, waiting until the last responsible moment to make decisions. This allows Lean manufacturers to have the agility to make informed decisions, with the most relevant, up-to-date information available.
The success of any Lean initiative hinges upon one Lean principle: Respect People. Out of respect for the customer, we make decisions that will bring them the most value with minimal waste. Out of respect for our employees, we create environments that allow everyone to do their best work. Out of respect for our coworkers, we continuously strive to optimize our processes to allow everyone to deliver the most value they can provide. Especially in manufacturing organizations, which often have teams working across the globe with different cultures, languages, and backgrounds, putting respect at the forefront of every interaction is critical for creating the type of safe, innovative workplace that will attract and retain top talent.
4 Examples of Lean Manufacturing Practices
Lean manufacturing offers a holistic approach to improvement, with the methods, tools, and cultural ideals that companies need to stay innovative and agile. These examples of Lean manufacturing practices enable organizations to become nimbler and more innovative.
Value Stream Mapping
Value stream mapping can be used to improve any process where there are repeatable steps – and especially when there are multiple handoffs. It’s easiest to think of a value stream like an assembly line, but there is obviously a large part of the manufacturing value stream that is not done on an assembly line. Most of the engineering, development, research, and design in manufacturing is done inside the heads of knowledge workers - making it trickier to spot inefficiencies.
Much of the waste in knowledge work occurs in the handoffs (or wait time) between team members, not within the steps themselves. Inefficient handoffs in knowledge work may not look like bottlenecks on a car assembly line, but they produce the same effect: decreased productivity, overwhelmed workers, and lower work quality.
Analyzing and aiming to eliminate these inefficiencies at the organizational level is the first step toward becoming leaner. Lean actions can be focused on specific logistical processes, or cover the entire supply chain.
For example, an analysis of a SKU would look like this: First you would aim to visualize its path, evaluating all the participants from material suppliers to the consumer, and then conduct a gap analysis to determine necessary next steps to improve the value stream and achieve the objective. You’d then make these small improvements over time throughout the supply chain, increasing organizational learning and streamlining the process of creating that SKU
Demand-Based Flow (Pull) Manufacturing
In a pull manufacturing system, inventory is only pulled through each production center when it is needed to meet a customer's order. Pull systems allow “just-in-time” delivery of work. Unlike other work methods that allow for an unlimited amount of work at once, a pull system enables everyone at a specific organizational level to focus on one thing (or just a few things) at one time.
Benefits of using a pull system include:
- Ability to manage change
- Ability to quickly adapt work to new information
- Increased ability to scale the team to the appropriate size for the project
As they work through a list of “to-do” items in a backlog, team members pull new tasks only as old tasks are completed. This way, when something changes that impacts the business requirements (as it always does), the team can quickly adapt, knowing that the majority of work they have already completed can still be applied to the project. Finally, because teams using a pull system are self-managed to a certain degree, pull systems contribute to the scalability of a team, or the ability for a team to accommodate different sized projects while remaining cohesive.
For manufacturers, this means teams can be more agile, deliver faster, and innovate faster and more strategically. Organizations who adopt a Lean pull system are also able to significantly improve the reliability and accuracy of forecasting for their suppliers and customers.
Continuous Improvement Mindset
An organization-wide commitment to continuous improvement is essential for sustainable success with Lean manufacturing. At its core, Lean is continuous improvement - it’s improving product and process while eliminating redundant, excessive, or inefficient activities.
Continuous improvement can be viewed as a formal practice or an informal set of guidelines - but it must be well integrated into the culture of an organization in order to make a meaningful and lasting difference.
Measurement, KPIs, and Visualization
Lean manufacturing metrics, such as lead time, cycle time, throughput, and cumulative flow, help organizations measure the impact of their improvement efforts. Collecting, analyzing, visualizing, and socializing these metrics (through shared dashboards) is essential to promoting transparency and driving change.
Successful Lean manufacturers use up-to-date dashboards at the team, leader, and executive levels to paint an accurate picture of the impact that changed processes are having. It should be noted that the emphasis is on surfacing key performance indicators of processes - not people. This reinforces a collective responsibility by teams to pursue opportunities for improvement and focus on value creation for customers.
Examples of Lean Manufacturing
For more examples of Lean manufacturing in practice, we recommend the following resources: