Lean Manufacturing

by Breenda Shah

What is lean manufacturing?

Lean manufacturing aims to maximize value for customers and minimize waste through continuous improvements in the production process. “Value,” as defined here, refers to any action or activity that a customer is willing to pay for; “waste” refers to any part of the production process that has no added value.

The concept of lean manufacturing was first developed and implemented by Toyota as an approach to eliminate waste and inefficiency from the company’s production processes. The firm created its Toyota Production System (TPS) based on the goal of “completely eliminating waste.” TPS considers three types of waste: demand that exceeds process and equipment capabilities (muri), unevenness in an operation (mura), and any activity that consumes resources without creating any value for the customers (muda). The system has its foundations in two concepts: jidoka, meaning that product quality must be prioritized during the manufacturing process, and “just-in-time,” meaning goods are produced only when they are demanded.

There are five main tools used in lean manufacturing:

1) Time-based management recognizes the importance of time and is concerned with reducing the time required to complete a production process so that inventory, labour, and waste costs can all be minimized.

2) Simultaneous engineering helps firms develop and launch new products quickly. All steps involved in the production process are planned simultaneously (in parallel) rather than separately (in series).

3) Just-in-time production requires firms to receive goods only when they are needed in the production process, thereby reducing storage costs; however, it also requires firms to forecast demand precisely.

4) Cell production involves dividing the workforce into independent teams, with each being responsible for a particular manufacturing process or product. This approach increases productivity and quality, and reduces waste.

5) Kaizen (“continuous improvement”) is a long-term approach through which workers at all levels of the firm work together to achieve regular and incremental improvements in the production processes.

Implementation

Implementing lean manufacturing can be extremely difficult. Challenges may include the following:

1) Supply Issues – When implementing “just-in-time production,” companies must ensure that raw materials and intermediate goods come in at the right time to meet operational demand; this requires very close coordination with a range of suppliers (e.g., integrating automated ordering and order-fulfilment systems between two or more firms).

2) Technological changes – Transitioning to lean manufacturing focuses on business processes but may also require substantial initial investments in technology. For example, new production systems incorporating statistical analysis software can monitor quality improvement on each of the production stages. Choosing the right business systems is crucial for efficient operations—and thus, success—as a lean manufacturer.

3) Cultural issues For some manufacturing companies, lean methods represent a significant shift in the way work is done. Implementing these methods requires employees to take on a wider range of responsibilities (which could blur the lines between formal job descriptions) and involves a strict and meaningful commitment to waste reduction (which can mean changing employees’ familiar work processes). Reforming incentives and bonus structures should be offered to reward positive behaviours and ideas that reduce costs, production time, and waste. Everyone in the company, from senior managers to front-line machine operators, must be committed to the goal of lean manufacturing.

4) Employee developmentImplementing lean methods in an existing business creates a talent gap that must be filled. The technological infrastructure required to manage supply chain issues while maintaining automated production and quality-control systems can only be operated by highly skilled and educated employees. Employees must also be able to inspect, repair, and design the automated production technology. Some employees may need safety certifications and special licences to operate and maintain such systems, and they may demand much higher rewards than others.

In summary, to successfully adopt lean manufacturing methods, manufacturers must have good relationships with their suppliers; a committed, highly educated, and motivated workforce; trust between management and employees; and a culture of quality assurance and continuous improvement.

References

  1. Investopedia. “Just In Time – JIT.”
  2. Manufacturing Tomorrow. “Benefits of Lean Manufacturing.” 2018.
  3. Shinka Management. “Introduction to Lean Manufacturing.” 2014.
  4. Lean Enterprise Institute. “MUDA, MURA, MURI.”
  5. Chron. “Key issues for the implementation of Lean Manufacturing System.”
  6. Toyota. “Toyota Production System.”
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