Lean Manufacturing Explained: Definition, Principles, Wastes

11 min read

There are several schools of thought and practices regarding optimal manufacturing, with one of these being lean manufacturing. The idea of lean manufacturing is to focus on continuous improvement of processes and techniques to optimize productivity while cutting down on waste.

It initially stemmed from production systems crafted by auto manufacturers in the 1930s but didn’t receive the lean manufacturing title until around fifty years later. Let’s take a closer look!

What is Lean Manufacturing and How Does It Work?

The central idea behind lean manufacturing is to improve efficiency by cutting down on waste. By waste, we mean processes, activities, and services that consume time or resources without bringing any value to the customer.

While this is a bit of a simplification of the entire process, the idea alone helps to create manufacturing that not only saves money for the manufacturer but also brings sustainable value to customers.

The 5 Lean Manufacturing Principles

A book from 1996, titled Lean Thinking: Banish Waste and Create Wealth in Your Corporation, detailed five lean manufacturing principles that have become widely referenced.

These are as follows.

1. Value

Determine value as it is defined from the customer’s perspective. Businesses need to understand value from the customer’s eyes and the value they place on a product or service. In turn, this helps to clarify the price that customers are willing to pay for a specific product or service. The business must then work to cut down on waste in an effort to come closer to that agreeable price point.

2. Value Stream

The next step is to delineate the value stream of the product or service—in other words, the flow of actions, information, and materials that create value for the customer. Mapping this stream out helps a business define the points along the production line where they can work to eliminate waste.

Every point of the value stream should be mapped, from initial design to production, distribution, and more. Locating each point allows a business to examine that particular point for potential waste.

3. Create a Flow

The next step of the process is to optimize the value stream to create a continuous flow throughout. This means a flow where products are being completed close to the rate that they are needed for operations. Disruptions to production or supply, incorrect inventory forecasting, and more all lead to significant waste.

A good example of this is an overstock scenario, where so much is made that additional costs are incurred from storage fees or even where some inventory has to be disposed of.

4. A Pull System

A pull system means that new production is only begun when there is actual demand for it. This also places responsibility on the business to accurately forecast inventory and demand to ensure the right time for production. Of course, there is certainly a balance, as businesses don’t want to be left short-stocked either. That’s why accurate forecasting is vital.

5. Aspire to Perfection

The final principle is for businesses to always strive for the perfection of their manufacturing systems. In other words, consistently monitor production metrics, processes, and systems, to locate areas of improvement. Ideally, waste will continue to decline as businesses learn to optimize their systems and eliminate inefficiencies.

At the end of the day, this leads to reduced costs and waste for the business, which translates to enhanced value for the customer. In many cases, literal perfection is likely unrealistic, but this doesn’t mean the business should ever stop attempting or looking for further improvement.

The 7 Wastes of Lean Manufacturing

So, now that we have an idea of what is necessary for lean manufacturing, let’s take a look at the types of waste a business can eliminate. There are commonly said to be 7 wastes of lean manufacturing. However, there is also an eighth that is often debated.

Let’s take a look at the primary seven first and then discuss the eighth. The 7 wastes of lean manufacturing are:

Defects: Defects can lead to costly waste. Not only is it a loss of the raw material and production costs, but it can also lead to additional loss through customer returns and dissatisfaction.
Overproduction: Overproduction of goods is often a telltale sign of poor forecasting and mismanagement of demand. This leads to overstock that then causes further delays in the storage and management areas. Lean management in manufacturing needs to ensure accurate forecasting to avoid overproduction.
Waiting: Idle time from employees and machines causes disruption to the flow as mentioned above. Businesses are paying for waiting time through idle employee wages, power costs, and more.
Non-utilized talent: When employees with certain skill sets aren’t utilized, this can lead to inefficiencies across the whole value stream. One of the greatest lean manufacturing tools any organization has is their staff.
Transportation: Transportation requires a significant amount of resources through fuel, maintenance expenses, and man hours. Meaning, unnecessary transportation can rack up the waste through all of the above. This happens through half-loaded trucks, uncoordinated deliveries, and more.
Inventory: As discussed above, incorrect inventory management can easily lead to increased waste through storage and warehousing costs and difficulties.
Motion: Too much motion can easily cause delays and interruptions to the flow. This means unnecessary motion, so products or materials shouldn’t be getting shifted around or adjusted more than they need to be.

The eighth waste of lean manufacturing is Extra-processing. This one is sometimes debated because it essentially involves cutting down on what is delivered to the customer.

In other words, the product or service features deliver over what the customer is generally willing to pay for said product or service. So, while this is good for the customer, it is often unnecessary waste when it wasn’t asked for.

Moreover, it benefits the whole organization and the employees by cutting down production and processing time.

If you notice the bold letters throughout, that is because, with the eighth type of waste, it becomes an easy-to-remember acronym: DOWNTIME. This offers a perfect summary of what the 8 types of waste can lead to.

5S Lean Manufacturing

Another school of thought on lean manufacturing comes in the form of 5S lean manufacturing. This method is based on Japanese words and is designed to create an organized environment that is conducive to production.

The 5S’s are:

Sort (Seiri): Remove unnecessary tools and objects. Only leave tools and parts required for the primary purpose.
Set in order (Seiton): Organize the objects, tools, parts, and more in a neat way that makes them easy to retrieve and use.
Shine (Seiso): Keep the workplace clean.
Standardize (Seiketsu): Maintain regular cleaning and organization with daily schedules and activities.
Sustain (Shitsuke): Continue the five S’s by keeping the above four in place.

At first, this method can seem oversimplified, but it is excellent in practice. Following the above points can help to bring the workplace to a high standard that makes optimal production much more streamlined.

One example is needing a tool and having to look for it, which instantly creates wasted time. Instead, employees should know exactly where to go for what they need.

FAQ

What is lean manufacturing?

Lean manufacturing means manufacturing that focuses on optimal productivity and efficiency while reducing waste to the minimal amount.

What are the five principles of lean manufacturing?

The five principles of lean manufacturing are:

Value
Value Stream
Flow
Pull System
Aspire to Perfection

What are the types of lean manufacturing waste?

The types of waste are categorized as follows, and form the acronym DOWNTIME:

Defects
Overproduction
Waiting
Non-Utilized Talent
Transportation
Inventory
Motion
Excess production

Is there a lean manufacturing certification?

Yes! There is lean certification offered as part of a partnership between the Association for Manufacturing Excellence, SME, and the Shingo Institute. Certification programs offer training, education, and development to help companies understand and apply lean practices to their production and activities.

How can I begin to implement lean manufacturing?

The first step in implementing lean manufacturing is to understand the above principles and types of waste.

Then, you can try starting with the 5S’s of lean manufacturing. In addition, you should create a value stream of your business and analyze all parts of the stream to locate areas of waste and inefficiency that can be improved.

Wrapping Up

Lean manufacturing can be an excellent way for businesses to save money, effort, and time simply by reviewing their current operations. Although it may require some significant changes, these will benefit both the business and customers in the long run. The business will be able to deliver production more efficiently and customers will be fully willing to pay for the value of the product or service they are receiving.

We hope this article helps you understand lean manufacturing and its benefits. Will you start to implement lean manufacturing into your operations?

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Apr 15, 2024

About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.