What is Lean Manufacturing?

The term Lean manufacturing refers to the application of Lean practices, principles, and tools to the manufacture of prototypes and products. Manufacturers are using Lean manufacturing principles to eliminate waste, optimize processes, cut costs, and boost innovation in a volatile market. 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. 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. Read on to learn some of the key principles of Lean manufacturing.

A Brief History of Lean Manufacturing

Many early Lean practitioners focused on the tools and methods required to improve. Examples of Lean production methods in use today include SMED (Single Minute Exchange of Die), TPM (Total Productive Maintenance) and Kanban, while examples of methodologies used in Lean Manufacturing include Lean Six Sigma and DMAIC (Define, Measure, Analyze, Improve and Control). Each of those movements has its own unique merits, but it would be fair to say that the style of management they were aiming for is now generally thought of as Lean.

Jim Womack and Dan Jones finally captured the essence of the difference. First in The Machine that Changed the World and then in Lean Thinking, they raised our level of understanding from copying specific practices to seeing the underlying principles that made the whole system work.

While you might not think of them as specifically Lean manufacturing principles, you may recognize some of these concepts:

  • Value stream mapping
  • Demand-based (pull) system
  • Continuous improvement
  • Measurement, KPIs, and Visualization

Key Lean Manufacturing Principles

In order to remain competitive, manufacturing organizations have to be in a constant mode of continuous improvement - finding ways to improve time to market (TTM) and increase innovation, while lowering costs, streamlining processes, and adapting new technologies.

Lean manufacturing offers a holistic approach to improvement, with the methods, tools, and cultural ideals that companies need to stay innovative and agile. These Lean manufacturing principles 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. 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 Kanban control system or 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.

Learn More: Lean Manufacturing

To learn more about Lean Manufacturing we recommend checking out the links below.

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