Lean Manufacturing

What is Lean Manufacturing?

Lean Manufacturing is a management philosophy aimed at generating the maximum amount of value for the customer with the least amount of waste. Waste is anything that doesn’t add value to the product in the eyes of the customer, or doesn’t add value to the business as a whole. A good example of this is the administration. That’s very important for the company, but doesn’t add any value for the customer.

Where does Lean Manufacturing come from?

Lean Manufacturing used to be known as the Toyota Production System. The continuous improvement whilst striving for the so called one-piece-flow is how Toyota differentiated itself from its large competitors in the United States. This approach toward increasing speed and flexibility in the Toyota production lines resulted in improvement techniques like SMED, Kanban, Poka Yoke, the Andon cord, Ishikawa, Kaizen, 5S Lean Management, Value Stream Mapping and many others. Many companies use these tools to this day in order to improve their own processes.

Lean Manufacturing as a philosophy

The Toyota Production System is a strategic weapon for Toyota. A company culture that makes sure every single employee views their own processes through the eyes of the customer. Where are we wasting time, resources or materials for which the customer is unwilling to pay? How can me remove these wastes from the process? Here, Lean Manufacturing is seen as a mindset, a philosophy. It consists of a set of principles that guide everything that is done within the company. The company is successful because Toyota’s management is committed to investing in their employees and stimulating the culture of continuous improvement all the time. Lean Manufacturing as a philosophy can only be successful in this way, when it is backed by the entire company.

The 5 principles of Womack

James P. Womack marveled whilst researching the fact that Toyota was producing cars at double the speed of Ford. On top of that, Toyota had half the stock Ford had and delivered more quality. To study the Toyota Production System, Womack left for Japan in the late 80s. He wrote two books when he came back: ‘’The Machine That Changed The World (1990)’’ and ‘’Lean Thinking (1996)’’. In his book Lean Thinking he describes the Toyota Production System with 5 principle:

1. Specify value
2. Identify the value stream
3. Create flow
4. Let the customer pull value
5. Pursuit of perfection

These five principles will be explained in detail below.

Specify value

For every organization (and every process) it is important to add value. Without added value, a process or organization doesn’t have the right to exist. This sounds simple, but is often quite hard to define in practice. The customer ultimately decides whether something adds value or not. When looking at a process, you can categorize the activities into three different categories.

1. Customer Value Added (CVA)
2. Business Value Added (BVA)
3. Waste

An activity within a process is CVA when it answers one of the questions below:

• Does the activity add form or function, desired by the customer, to the product or service?
• Does the activity add to a competitive advantage: faster, cheaper, better quality, etc.?
• Is the customer willing to pay for this activity?

An activity within a process becomes a BVA when it answers yes to one of the following questions:

• Does this activity reduce risk for the organization?
• Does the activity support necessary reports?
• Could the delivery of service or products to the customer be impaired when this activity is no longer performed?
• Is the activity mandatory because of laws or regulations?

When activities don’t add value for the customer or organization, it is called a waste. Womack identifies 7 types of waste, which are as follows:

• Transport (of materials)
• Supply
• Movement
• Waiting
• Overproduction
• Over-processing
• Mistakes

Identify the value stream

In most cases a Value Stream Map (VSM) is made when the customer value is defined. A VSM is a process map, rich in data. The information stream, data stream, product streams and ‘process flows’ are made clear in the VSM. It all starts with the customer wishes and ends with fulfilling said wishes.

The VSM is used in many Lean Manufacturing improvement projects. It always aims to map out the current situation. After analyzing the VSM detailing the current situation, a VSM is made of the ideal situation. From there, a plan can be made to reach the second VSM’s situation.

To learn more about Value Stream Maps and how to make them yourself, try our online Value Stream Mapping course, provided on our digital learning platform and sister company ‘The Productivity Company’.

Create flow

There is ‘flow’ when all steps in the production process follow up on each other without creating any queue times, mistakes or re-do’s. Every step adds value. We speak of ‘flow’ when goods, services or materials meander through the production process without interruption.

Let the customer pull value

Many companies produce certain amounts of stock. The production apparatus is planned out as efficiently as possible. The production orders are planned based on local efficiency. Lean Manufacturing calls this ‘push production’.

The pull system works like shelves in a supermarket. As soon as a product is taken out and scanned at the register, the product is ordered from the supplier and will be back on the shelve the next day. This way, stock is limited and the amount of stock bought from the supplier is based on the amount that the customers buy.

Pursuit of perfection

In a Lean Manufacturing organization, everyone is improving the process every day. Each employee acknowledges that it is their job to notice waste, talk about waste and fix these together. Continuous improvement will then become part of the daily routine.