Lean Manufacturing

Working More Efficiently

Lean manufacturing

Cut waste, increase quality and add value.

© iStockphoto/fotomy

How much waste does your organization produce?

For example, do you ever have to wait for someone else to finish a task before you can get on with your own work? Do you have a large inventory of unsold stock? Do you have more workstations that you need? Or do you order materials months in advance of when they are needed?

How about flexibility? If consumers want a modification to your product, can you quickly change your processes to meet their needs?

Waste costs you and your customers money. And if your customers have to pay more because of it, they might go elsewhere. Being competitive also requires a lot of flexibility. You must be able to meet the changing demands of your customers quickly and effectively, and adapt to a rapidly changing business environment.

So, how can you reduce waste and do things more efficiently? And how can you keep up with the changing demands of consumers?

First mentioned in James Womack's 1990 book, "The Machine That Changed the World," Lean Manufacturing is a theory that can help you to simplify and organize your working environment so that you can reduce waste, and keep your people, equipment, and workspace responsive to what's needed right now.

Tip:

The Lean concept is just as applicable to offices and other work environments as it is to manufacturing plants. It's helpful to relate words like "inventory," "customers," and "production" to whatever you're processing – data, documents, knowledge, services, and so on.

A Brief History of Lean Manufacturing

Henry Ford was one of the first people to develop the ideas behind Lean Manufacturing. He used the idea of "continuous flow" on the assembly line for his Model T automobile, where he kept production standards extremely tight, so each stage of the process fitted together with each other stage, perfectly. This resulted in little waste.

But Ford's process wasn't flexible. His assembly lines produced the same thing, again and again, and the process didn't easily allow for any modifications or changes to the end product – a Model T assembly line produced only the Model T. It was also a "push" process, where Ford set the level of production, instead of a "pull" process led by consumer demand. This led to large inventories of unsold automobiles, ultimately resulting in lots of wasted money.

Other manufacturers began to use Ford's ideas, but many realized that the inflexibility of his system was a problem. Taiichi Ohno of Toyota then developed the Toyota Production System (TPS), which used Just In Time   manufacturing methods to increase efficiency. As Womack reported in his book, Toyota used this process successfully and, as a result, eventually emerged as one the most profitable manufacturing companies in the world.

Lean Manufacturing Basics

The Lean approach is based on finding efficiencies and removing wasteful steps that don't add value to the end product. There's no need to reduce quality with lean manufacturing – the cuts are a result of finding better, more efficient ways of accomplishing the same tasks.

To find the efficiencies, lean manufacturing adopts a customer-value focus, asking "What is the customer willing to pay for?" Customers want value, and they'll pay only if you can meet their needs. They shouldn't pay for defects, or for the extra cost of having large inventories. In other words, they shouldn't pay for your waste.

Waste is anything that doesn't add value to the end product. There are eight categories* of waste that you should monitor:

  1. Overproduction – Are you producing more than consumers demand?
  2. Waiting – How much lag time is there between production steps?
  3. Inventory (work in progress) – Are your supply levels and work in progress inventories too high?
  4. Transportation – Do you move materials efficiently?
  5. Over-processing – Do you work on the product too many times, or otherwise work inefficiently?
  6. Motion – Do people and equipment move between tasks efficiently?
  7. Defects – How much time do you spend finding and fixing production mistakes?
  8. Workforce – Do you use workers efficiently?

Note:

The first seven sources of waste were originally outlined in the Toyota production system, and were called "muda." Lean Manufacturing often adds the eighth "workforce" category.

Lean gives priority to simple, small, and continuous improvement such as changing the placement of a tool, or putting two workstations closer together. As these small improvements are added together, they can lead to a higher level of efficiency throughout the whole system. (Note that this emphasis on small improvements doesn't mean that you cannot make larger improvements if they are required!)

Note:

Although the aim is to remove as much waste as possible by continuously refining your processes, you probably won't eliminate waste completely.

Lean Manufacturing Process

The process has three key stages:

Stage 1 – Identify Waste

According to the Lean philosophy, waste always exists, and no matter how good your process is right now, it can always be better. This commitment to continuous improvement is known as Kaizen  .

One of the key tools used to find this waste is a Value Stream Map   (VSM). This shows how materials and processes flow through your organization to bring your product or service to the consumer. It looks at how actions and departments are connected, and it highlights the waste. As you analyze the VSM, you'll see the processes that add value and those that don't. You can then create a "future state" VSM that includes as few non-value-adding activities as possible.

Stage 2 – Analyze the Waste, and Find the Root Cause

For each waste you identified in the first stage, figure out what's causing it by using Root Cause Analysis  . If a machine is constantly breaking down, you might think the problem is mechanical and decide to purchase a new machine. But Root Cause Analysis could show that the real problem is poorly trained operators who don't use the machine properly. Other effective tools for finding a root cause include Brainstorming   and Cause and Effect Diagrams  .

Stage 3 – Solve the Root Cause, and Repeat the Cycle

Using an appropriate problem-solving   process, decide what you must do to fix the issue to create more efficiency.

Tools to Reduce Waste

Once you have identified wastes using the three key stages above, you can then apply this next set of tools to help you reduce waste further:

  • Just in Time – This is the core idea of Lean and is based on the "pull" model. To minimize stock and resources, you only purchase materials, and produce and distribute products when required. You also produce small, continuous batches of products to help production run smoothly and efficiently. By reducing batch size, you can also monitor quality and correct any defects as you go. This reduces the likelihood of quality being poor in future batches.

    (In manufacturing, a key way of doing this is to use Kanban, below.)

  • Kanban   – This is one of the key ways to involve people in the Lean process. Here, you support the Just In Time model by developing cues in the system to signal that you need to replace, order, or locate something. The focus is on reducing overproduction, so that you have what you need, only when you need it.
  • Zero Defects   – This system focuses on getting the product right the first time, rather than spending extra time and money fixing poor-quality products. By using the Zero Defects system, you'll reinforce the notion that no defect is acceptable, and encourage people to do things right the first time that they do something.
  • Single Minute Exchange of Die (SMED) – This helps you build flexibility into your production. For example, in the automotive industry, it could take days to change a line to produce a different car model. With SMED, the assembly process and machinery are designed to support quick and efficient changeovers. (Here, a "die" is a tool used to shape an object or material.)
  • The 5S Philosophy – Lean depends on standardization. You want your tools, processes, and workplace arrangements to be as simple and as standard as possible. This creates fewer places for things to go wrong, and reduces the inventory of replacement parts that you need to hold. To accomplish a good level of standardization, use the 5S System  .

Tip:

These techniques offer proven solutions for fixing waste within your organization. However, remember first to apply the three-stage Lean process, and to deal with any issues that this raises.

Key Points

Lean Manufacturing focuses on optimizing your processes and eliminating waste. This helps you cut costs and deliver what the customer wants and is willing to pay for.

With a lean philosophy, you enjoy the benefit of continuous improvement. So, rather than making rapid, irregular changes that are disruptive to the workplace, you make small and sustainable changes that the people who actually work with the processes, equipment, and materials will take forward.

This systematic and simple approach is very effective across all types of industries. What's more, ultimately, a process without waste is much more sustainable.

Apply This to Your Life

  1. Overproduction – Do you provide more data or information than is needed? Do you create reports more often than required for example? Or do you spend unnecessary amounts of time formatting these reports?
  2. Waiting – Do you spend too much time waiting for information or data from others, before you can do your work? What can you do about this?
  3. Inventory (work in progress) – Do you have a large stock of materials? Are your supply levels and work-in-process inventory too high?
  4. Transportation – Do things flow efficiently? Could you combine deliveries, or deliver things more quickly?
  5. Overprocessing – Do you needlessly work on something more than once?
  6. Motion – How is work passed along in your team? Do people understand what they're required to do at each step? Do people and equipment move between tasks efficiently?
  7. Defects – How often do you find mistakes? Do you make the same mistakes on a regular basis?
  8. Workforce – Do you use your time wisely? Do you spend most of your time on activities that add value and are a high priority?

* Original source unknown. Please contact customer.helpdesk@mindtools.com if you know what the source is.

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Comments (10)
  • Dianna wrote Over a month ago
    Great tip telshaw! Indeed if you can end with that kind of clear and concise takeaway then your listeners will have something concrete to focus on. And it reinforces the idea that there are improvements to be found everywhere; we just have to be open to looking for them.

    Dianna
  • telshaw wrote Over a month ago
    You comment Fidget reminds me of training I sometimes do. For example on web writing. While I give them all the techniques and reasons, I sum up with the three most important things to do - if you do nothing else. Then if they only apply those three, there will be an improvement where it matters.
    T
  • Rachel wrote Over a month ago
    Hi All

    "The idea of Lean Manufacturing is just as applicable to offices and other work environments as it is to manufacturing plants.

    Find out how you can use the ideas behind it to reduce waste and boost quality, in this week's Featured Favorite."

    Best wishes

    Rachel
  • Dianna wrote Over a month ago
    Hi Rick - welcome to the forums! I think you've hit on an important point - standardization doesn't necessitate rigidity. Processes and systems can be standardized without losing the ability to be flexible and exercise good judgment. When you try to create a black and white system made up of a bunch of "do this, do that, don't do this, and don't do that" you will end up with a mess. And you are so right when you say that people need to have an appropriate amount of discretion within a set of standardized limits. The edges of those limits will be dictated by the type of task or service.

    I was watching a reality TV show where a business had gone so far as to write out a variety of scripts that the receptionist was required to memorize and repeat depending on the inquiry. How happy do you think that receptionist was?

    At some point you have to trust your people to do their job and that requires you to have good hiring, training, and performance management practices.

    Thanks for the reminder and tip!

    Dianna
  • rauterson wrote Over a month ago
    Standardization is the key to employee empowerment. I don't want to just spew the tenants of Lean so I'll explain what this means to me.

    The very detailed work instruction, the one where somebody says 'I want a work instruction so detailed that I can take a person off the street and they can do this job', never works. Work instructions should always be paired with training and the work instruction should explain WHY things are done a certain way. People want to do a good job. When they don't understand why things are done a certain way they tend to improve on what they are taught.

    I prefer a one page work instruction. When people tell me their job is too complicated to put onto a single page I tell them that they have confused an operations manual with a work instruction. You could write a one page work instruction for splitting the atom. Just starting a car can be broken into a mind numbing number of steps. For example: 'Open Door', 'Insert Key' (and here is a picture of the very key) and so on. Is this really helpful? Do you want someone this unfamiliar with driving to start up an automobile?

    Pair work instruction with training and use the work instruction to keep knowledgeable people on the same page. The people doing the work should own the work instruction, keep it up to date and regularly challenge its effectiveness.
  • bigk wrote Over a month ago
    Hi

    Standardization is useful but it might need you to change the standard you have defined to include a greater number of customer needs or to use it as the base from where the standard can be changed or adapted to fit specific customer needs.

    Perhaps defining a standard will only get you the most recent data about your performance or what your customers get from the service.
    After this you need to redefine the standard.

    An SLA could be useful to define what the customer gets as the standard service, but it must still be flexible enough to allow for change.

    Maybe this is a moving target and needs the standards of the service or the product to be known before they are adapted within the constraints you have to find where it can be adapted to a larger number of customers or to retain these customers or get more customers if or as other customers go elsewhere.

    Service and product lifecycle are important as you define how to attract and retain customers.
    This places an emphasis on your service or product and its value.

    a few thoughts...

    Bigk
  • Dianna wrote Over a month ago
    Great points eric_unstone - and welcome to the forums. It's wonderful to hear from you!

    We have a tool on customer experience mapping that will help provide that balance: http://mindtools.com/community/pages/ar ... STR_85.php

    It's easy to get caught up in fixing things in one element of the workplace and not pay attention to the impact it's having in other areas. The examples you give point to that phenomenon exactly. Impact Analysis http://mindtools.com/community/pages/ar ... TED_96.php is another great tool to use to avoid this sort of thing. Thanks for the reminder to continually scan the whole process.

    Cheers!
    Dianna
  • eric_unstone wrote Over a month ago
    Beware though that there are differences between the dynamics of manufacturing and services.

    For example, if you over-standardise you end up with a service that does not meet the needs of enough customer first time around. the result is customers keep coming back (if you are lucky) until they get what they need. Try using an automated call centres and you will see what I mean! The result is that an increasing percentage of the demand on your service is then "failure demand". If you do not put measures in place to detect failure demand your new standardised service might look great, but not in the eye's of your soon to be ex-customers!

    The equivalent in manufacturing is warranty claims, but these are readily identifiable because they don't follow the same process as used to make the product in the first place.

    The key is look at your service holistically from the perspective of your customer.
  • Yolande wrote Over a month ago
    When reading the "apply this to your life" part, I was tempted to sort of read but not read... I am so guilty of overprocessing and of not using my time wisely.
    In the workplace, I am very aware of the "workforce" fact once again: "Are you using your staff efficiently?" Maybe we are too lenient sometimes, feeling sorry for people (that's me), and allowing them to get away with things because we don't feel like going through the disciplining process...or am I the only one?

    Kind regards
    Yolandé
  • Fidget wrote Over a month ago
    This is wise stuff - and if it works for producing a big complicated thing like a car, it can surely help less complex office tasks. A couple of days after I first read this, I had to update a bunch of webpages and realised I was "overprocessing" - I didn't quite get to "single minute update of page" but I definitely speeded up what I wasdoing by applying some lean principles!

    Fiona

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