Understanding Lean Manufacturing


“The most dangerous kind of waste is the waste we do not recognize.” -Shigeo Shingo

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Lean Manufacturing was originally spawned within the MIT study that led to the book-’ The Machine That Changed The World’ by Womack & Jones, 1990. Lean has had a number of names over the years, developed primarily from the Toyota Production System (TPS) it has been called World Class Manufacturing (WCM), Continuous Flow Manufacturing, and Stock-less Production to name a few. Today, you will even hear Lean Sigma and Agile Manufacturing. Although developed mainly within manufacturing, Lean is equally applicable within your office based administrative functions or within service industries such as healthcare where it is seeing a huge amount of attention.

The history of Lean Manufacturing goes back many centuries, well before Ford’s famous production lines for the model T ford. However, it really starts to begin to be the philosophy that we know today with Toyota and the development of the Toyota Production System (TPS). The concept was brought in by Taicii Ohno. Toyota set out to be far better than Ford and the rest of the US Automobile Industry, an ambition that they quickly achieved despite a lack of resources and infrastructure. They achieved this through the application of Lean Principles and the many Lean Manufacturing Tools. Toyota are far from perfect even by own admission, they are only part way on their never ending journey of Lean Manufacturing.


To understand what lean is, it is helpful to understand why it was developed. If you can understand the purpose of lean then you can better grasp exactly what it is. Lean (and Toyota Production System) has two main purposes-

  • Provide Customer Satisfaction
  • Do So Profitably

Everything within Lean focuses on these two main points, with customer satisfaction taking the fore at all times. However, Taicii Ohno argues that if the customer perceives our product or service to have a specific value they will only pay accordingly. If we raise our prices because our costs increase but the perceived value of our product remains the same our customers will stop buying as our selling price exceeds the value that they perceive. By employing lean, we remove all of the wasteful processes and focus only on providing the customer value; anything that does not provide the customer value is removed or minimized.

The selling price is the price that is fixed by what the consumer is willing to pay for the perceived value of the product. Your profit, therefore, will depend on how you can reduce your costs. Hence, the aim of Lean and the Toyota Production System is to reduce costs so that the company can make a profit. Not to manipulate your selling price, but to create a profit.

Lean is about removing cost, but it is also about removing cost by focusing on what adds value by not just trying to identify the wasteful steps in an isolated process.

Process for Conducting Lean Manufacturing

There are 3 main steps to achieve a lean manufacturing outlook in any organization.

Stage 1- Identify the waste

According to the Lean philosophy, waste always exists, and no matter how good your process is right now, it can always be better. 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 & 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 & repeat the cycle

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

Tools for Lean Manufacturing

1. 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.

2. 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.

3. 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.

4. Single Minute Exchange of Die - 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.)

5. 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.

6. Value Stream Map - Value stream mapping is a lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer.

7. Root Cause Analysis - It is a method of problem-solving used for identifying the root causes of faults or problems. A factor is considered a root cause if removal thereof from the problem-fault-sequence prevents the final undesirable event from recurring. Whereas, a causal factor is one that affects an event's outcome, but is not a root cause. Though removing a causal factor can benefit an outcome, it does not prevent its recurrence within certainty.