History of lean manufacturing
The origins of lean manufacturing can be traced back to Toyota in the 1930s, although the term itself was introduced much later in 1988. Toyota realised that maintaining a steady production flow reduced waste caused by frequent stops and restarts. This insight led to the development of the Just-in-Time (JIT) system, which enabled the company to manufacture vehicles consistently, align processes across departments, and deliver finished products quickly while meeting customer demand efficiently.
Principles of lean manufacturing
Lean manufacturing is built on a set of principles that help businesses improve efficiency, reduce waste, and deliver higher value to customers. Below are the eight key principles:
- Identify and create customer value: The foundation of lean is to focus on what matters most to customers. By identifying the features they value and removing unnecessary ones, businesses can create products that meet expectations without wasting resources.
- Value stream mapping: This involves mapping every step of the production process to visualise how value is created. It helps managers identify inefficiencies, bottlenecks, and waste, ensuring smoother operations.
- Identify and eliminate waste (Muda): Waste in lean is anything that doesn’t add value. By analysing workflows, cycle times, and inventory levels, businesses can cut delays, avoid overproduction, and improve resource use.
- Create flow: Streamlining the production line ensures that processes move smoothly without interruptions. Improving layouts, breaking down barriers, and reducing waiting time leads to better flow and efficiency.
- Pull system: Instead of producing in bulk, work starts only when there’s customer demand. This reduces excess inventory, prevents overproduction, and supports just-in-time manufacturing.
- Continuous improvement (Kaizen): Lean emphasises small, ongoing improvements. Kaizen ensures businesses constantly refine processes, solve problems early, and focus on long-term efficiency gains.
- Automation with a human touch (Jidoka): Automation is combined with human intelligence to maintain quality and productivity. Technology supports workers, enabling them to focus on higher-value tasks while ensuring flexibility in operations.
- Level production (Heijunka): This principle balances workloads and smooths out fluctuations in demand. It reduces lead times, controls inventory, and ensures consistent production aligned with customer needs.
Types of waste in the lean manufacturing process
Waste in lean management is a complex concept that requires a thorough approach. Addressing waste superficially can result in only limited reductions. To achieve optimal results in lean project management, it’s essential to identify and eliminate all types of waste.
Taiichi Ohno, chief engineer at Toyota, introduced the seven types of waste as part of the Toyota Production System (TPS):
- Unnecessary transportation: This refers to the inefficient movement of employees, materials, or equipment. By optimising factory layouts, unnecessary transportation can be reduced, saving time and resources.
- Excess inventory: Holding too much inventory can lead to problems such as delayed detection of defects and longer lead times. Lean practices encourage keeping only the necessary stock to avoid these issues.
- Unnecessary motion: Inefficient movements of people, equipment, or machinery during production contribute to waste. This can be minimised by using scientific management techniques to streamline operations.
- Waiting (Idle workers or equipment): Waste occurs when workers or machinery are idle, either because materials or equipment are delayed, or maintenance hasn’t been completed. Efficient planning can prevent these delays.
- Overproduction: Producing more than is needed leads to excess inventory and other inefficiencies. Lean manufacturing promotes just-in-time production, where only the products that are demanded by customers are made.
- Over-processing: Adding features or components that are not required by the customer is another form of waste. Lean practices focus on delivering what the customer values, avoiding unnecessary processes.
- Defects: Defective products lead to waste in terms of rework and customer dissatisfaction. Reducing defects is key to lean management, as it cuts costs and improves quality.
Additionally, lean experts have identified an eighth type of waste—unused talent or ingenuity. This occurs when employees' input is overlooked in identifying waste and improving processes, limiting the potential for innovation and efficiency. Businesses can consider green marketing strategies to leverage these insights for both environmental and operational efficiency.
By addressing all these types of waste, lean manufacturing aims to create more value with fewer resources.
Techniques of lean manufacturing
Applying lean principles requires practical tools and methods that help reduce waste, streamline processes, and improve efficiency. Some of the widely used lean manufacturing techniques include:
- Kanban boards: A visual workflow management tool that helps assign, track, and prioritise tasks. It ensures smoother coordination, avoids idle time, and focuses efforts on activities that add the most customer value.
- Gemba: A Japanese term meaning "the real place," it involves managers physically visiting the production floor to observe processes directly, identify waste, and make practical improvements instead of relying only on reports.
- Andon: An alert system used on the shop floor where operators can signal issues such as equipment failure, material shortage, or quality concerns. This ensures quick problem resolution and prevents production delays.
- Poka-yoke: Also known as error-proofing, it uses simple mechanisms or devices to prevent mistakes. For example, machines that require a safety step before operation reduce the chance of errors and accidents.
- Hoshin Kanri: A strategic planning method where top management sets long-term goals and aligns them across all levels of the organisation, ensuring that every employee’s efforts contribute to the same objectives.
- Total productive maintenance (TPM): A proactive approach where operators are trained to maintain and monitor their machines, reducing downtime, preventing breakdowns, and improving productivity.
- 5S methodology: A workplace organisation practice involving Sort, Set in order, Shine, Standardise, and Sustain. It promotes cleanliness, safety, and efficiency, ensuring an uncluttered and productive shop floor.
- 5 Whys: A simple problem-solving tool where teams repeatedly ask "why?" until the root cause of an issue is identified. This helps in preventing recurring problems and implementing lasting solutions.
- SMED (Single-Minute Exchange of Die): A technique that reduces machine setup or changeover time to under 10 minutes. It allows operators to perform some steps while the equipment is still running, minimising production stoppages.
Benefits of lean manufacturing
By implementing lean manufacturing principles, companies can reap several benefits, including:
- Increased efficiency and productivity: Eliminating waste and unnecessary steps in the production process can increase efficiency and productivity, resulting in a higher volume of quality products produced in less time.
- Better customer satisfaction: The focus on value-added activities and reducing waste results in higher-quality products that meet customer needs and exceed their expectations.
- Cost savings: By reducing waste and optimising processes, companies can lower costs associated with excess inventory, overproduction, and other non-value-added activities.
- Improved employee morale: Involving employees in the lean process and empowering them to suggest process improvements can boost morale and job satisfaction. To enhance overall productivity, understanding the business environment in which lean manufacturing is implemented is crucial.
How to implement a lean manufacturing system
The five core lean manufacturing principles are value, value streams, flow, pull, and perfection. These principles help organisations optimise efficiency while delivering maximum value to their customers. By following this framework, businesses can streamline operations and enhance customer satisfaction. The approach to guerrilla marketing can also benefit lean businesses aiming to attract customers with limited resources.
Here are some key steps to implementing lean manufacturing:
- Identify value: Determine what activities in the production process provide value to the customer and what do not.
- Map the value stream: Identify the steps in the production process and create a value stream map to visualise the flow of materials and information.
- Eliminate waste: Analyse the value stream map to identify non-value-added activities and eliminate them.
- Build a culture of continuous improvement: Encourage employees to suggest process improvements and make changes based on feedback and data analysis.
- Implement just-in-time inventory: With just-in-time inventory, companies bring in materials and resources as they are needed, reducing the costs of holding excess inventory.
- Monitor and evaluate: Track progress and make adjustments as necessary. Continuously monitor for waste and seek opportunities for improvement. By understanding entrepreneurship, entrepreneurs can apply lean principles to their businesses effectively.
How business loans support lean manufacturing implementation
Investing in lean manufacturing requires an initial investment in training, equipment, and facilities. If you are looking to implement lean manufacturing but need funds, consider getting a business loan. You can apply for a Bajaj Finserv Business Loan of up to Rs. 80 lakh with interest rates starting at 14%.
Lean manufacturing offers a revolutionary approach to streamline production processes and create value for customers. By following the lean manufacturing principles and implementing a culture of continuous improvement, companies can improve efficiency, reduce waste, and boost customer satisfaction. If you are looking to implement lean manufacturing in your own organisation, consider getting a Bajaj Finserv Business Loan to help finance the initial investment.
