The Ultimate Guide to Lean Manufacturing

From this history of lean manufacturing to pros and cons, this in-depth guide explores everything you need to know about lean manufacturing.

The manufacturing industry offers a vast array of techniques and philosophies to manage all of the granular elements of the production process.

Lean manufacturing boasts a holistic set of principles and tools that have stood the test of time. Read on to learn about lean manufacturing’s roots, goals, and values to see if it’s time for your business to adopt a lean methodology.

What is Lean Manufacturing?

Lean manufacturing is a method of production that aims to reduce waste while maintaining productivity and increasing customer satisfaction. The idea for this new manufacturing system originated over a century ago on the Ford factory line, but its practices hold strong in manufacturing and its principles have even carried over into business management philosophy.

A Brief History of Lean Manufacturing

With its roots in Henry Ford’s assembly line manufacturing methodology, lean manufacturing was established and refined in 1930s Japan by Taiichi Ohno and Eiji Toyoda of Toyota, who wanted to emphasize the value of the elimination of waste, a reduction in excess inventory, and a mindset of constant improvement. They authored The Toyota Way, a comprehensive guide to a new methodology that resulted in the Toyota Production System, or TPS. Many Japanese manufacturers adopted this style of manufacturing operation after World War II. Later, in the 1980s, the concept was renamed lean manufacturing.

The Goals of Lean Manufacturing

• Eliminate waste. The core idea of lean manufacturing revolves around reducing waste, both material and immaterial (for example, inefficiencies regarding time and effort).
• Improve processes. Lean manufacturing aims to make individual processes more effective and implement poka-yoke, or mistake-proofing. The aim is to identify over-processing throughout the production flow, which can surprisingly be more mistake-prone.
• Improve product quality. The result of a well-executed lean manufacturing process is, ideally, a product that delivers more value to the customer.
• Reduce the time it takes to get the product to the customer. By maximizing efficiency, lean manufacturing ensures that the product will be delivered to the customer as quickly as it can be without sacrificing quality.
• Reduce costs. Lean manufacturing ultimately aims to decrease unnecessary costs and maximize revenue, by taking such actions as enacting a robust supplier management strategy to avoid problems with raw materials or implementing automation in the production flow wherever possible.
• Encourage a company culture of innovation and continuous improvement. Lean manufacturing starts on the shop floor, so instilling values of constant improvement and allowing workers to innovate is imperative.

The Core Principles of Lean Manufacturing

Since lean manufacturing was popularized around the world in the 1980s, its founding ideas and values have been discussed and analyzed by industry experts like James P. Womack and Daniel T. Jones in their books The Machine That Changed the World and Lean Thinking. Six Sigma was also founded as a set of tools and techniques for management and production and is based in lean thinking.

The following lean principles summarize these experts’ interpretations of the key tenets of lean methodology.

• Define value from the customer’s standpoint. Lean manufacturing is all about maximizing value at every step of the lean production process. It’s important to remember that this value is intended for the customer.
• Understand your manufacturing processes and how each step adds value to the final product. The flow of value through these processes is known as the value stream and is a key element in a well-executed lean manufacturing process.
• Remove waste, redundancies and processes that do not add value to the final product. This improves the continuous flow of the lean manufacturing process and maximizes value for the customer.
• Control the flow of your processes with a demand-based system. Also known as a pull system, a demand-based flow moves products through the steps of the manufacturing process only when there is demand for the product to be at that step. Again, this is a key element of lean manufacturing as it ties together flow and waste reduction by preventing overproduction.
• Empower the shop floor workers. The Toyota Way emphasizes the practice of load leveling, or heijunka, so that each worker is given a specialized set of tasks that meet their skills and capacities without overloading any worker or team.
• Engrain continuous improvement into your company culture by making it a process in itself. Asking for feedback and ways to make the manufacturing process easier is an important part of a successful lean manufacturing process.

Types of Waste in Lean Manufacturing

As noted in the goals and principles of lean manufacturing, eliminating waste is a major part of lean thinking. In The Toyota Way and TPS, Ohno and Toyoda described three types of waste that are common in manufacturing.

• Mura refers to waste resulting from fluctuations in demand. This could be overall customer demand, but mura also refers to internal demand for products at different points in the manufacturing process. A demand-based system alleviates the creation of mura.
• Muri is waste that comes from the overburdening of workers or processes and is often the result of poor allocation of resources. Heijunka (load leveling) is a way to directly combat mura.
• Muda refers to waste that is created by work that doesn’t add value to the final deliverable product. Muda is the result of redundancies and unnecessary steps in the production process. Understanding the value stream of your process is key to preventing muda.

Key Lean Manufacturing Concepts and Terms

• A pull system is also known as demand-based flow or a JIT (“Just in time”) production method. This system works by only moving, or pulling, products through stages in the manufacturing process when there is demand for the product in those next steps. A great example of a pull system is stocking supermarket shelves. Markets do not keep their entire stock on shelves for customers; instead, they maintain a system of only moving stock to the floor when there is space for it. This allows items to move through the store efficiently and makes purchasing new stock and taking inventory of current stock easier.
• Value stream, as previously mentioned, is a key tenet of lean manufacturing. Value should be defined by what is most important to the customer and each step in the manufacturing process should add value to the final product. The value stream is the visualization of how value is added at each step in the manufacturing process. If there are non-value processes or parts to your product, those should be eliminated. They are considered waste according to lean thinking.
• Kanban is the lean method used to visualize and make changes to the value stream of a manufacturing process. Typically practiced with a board (either physical with paper notes or digital with a software), kanban portrays an entire production path from design to finished product and explains how value is added at each step. The structure of a kanban board is flexible because lean manufacturing is focused on continuous improvement, which means frequent changes. Kanban is a central planning element for lean methodology.
• Kaizen comes from the Japanese kai, meaning change, and zen, meaning good, and idiomatically translates to continuous improvement. As we’ve discussed, striving for improvement at every step in the manufacturing process is imperative in lean methodology.
• Gemba is Japanese for “the real place” and refers to the shop floor, where all manufacturing processes happen. Likewise, this is where changes have to be implemented in a facility that practices lean methodology. Managers are encouraged to spend time at gemba because lean thinking demands hands-on decision making.

If you’re looking to learn more about manufacturing terms, explore our complete manufacturing glossary!

Lean Manufacturing Tools and Techniques

To practice lean methodology, a number of tools and techniques are available to manufacturers.

• Value stream mapping is the analysis of how processes add value to the final deliverable product that is given to the customer. Visualizing this process in a map is a handy way to take steps toward process improvement and optimization. With value stream mapping, you will notice where a pull system can be applied, how to reduce bottlenecks and ways to improve communication between teams like engineers, designers and your supply chain.
• Kaizen, or continuous improvement, can be implemented as a technique by documenting and tracking processes regularly as well as monitoring worker feedback on their responsibilities.
• Measuring tasks and processes is imperative in lean manufacturing so that your business can set benchmarks and evaluate any changes made in processes. The data will show you where processes and productivity may need improvement. Manufacturers should be tracking metrics like lead time, cycle time, throughput rate and yield, but any data that can give insight into processes is valuable.
• A kanban board, as previously mentioned, is a great tool for visualizing a set of complex processes like manufacturing. A digital board can also be updated in real time so processes can be directly monitored and any bottlenecks or challenges can be tackled from a holistic point of view.

The 5S method is a technique to manage work environments in a lean manufacturing process and includes the following elements:

• Sort: Don’t allow any unnecessary items in workspaces.
• Set: Workspaces should be efficiently laid out for maximum productivity.
• Shine: Workers are responsible for keeping their space orderly.
• Standardize: Make expectations easy to understand with tasks and schedules.
• Sustain: Stay committed to workplace management and keep cleanliness and efficiency as part of your workplace’s philosophy.

Pros and Cons of Lean Manufacturing

Like any methodology, lean manufacturing isn’t for every manufacturing business. On the plus side, the benefits of lean manufacturing include optimized time, inventory and, ultimately, revenue. It’s also an environmentally friendly approach to manufacturing since it focuses heavily on waste reduction. Additionally, its emphasis on the customer’s point of view allows the opportunity to improve relationships and gain and retain customers. Finally, lean manufacturing invites workers on the shop floor to get involved, improving overall employee happiness.

On the other hand, a well-implemented lean methodology requires buy-in from all parties, from workers to management, to work properly. Individuals who are not committed may be withholding important feedback needed to truly improve processes. Similarly, lean manufacturing is a company-wide commitment, sometimes requiring a total overhaul in a company’s approach to manufacturing. If the resources needed are not available, converting to a lean manufacturing process can prove difficult.

Is Lean Manufacturing For You?

Lean methodology emphasizes attractive values of customer focus, efficiency, teamwork, continuous improvement and waste reduction. While it’s not for everyone, we hope that this lean manufacturing guide helped you realize the unique process of lean manufacturing and why it might make sense for your company.

In the age of rapid digital transformation, revenue growth is becoming just as important a KPI as costs saved and waste reduced. Technological innovation is a mainstay of lean manufacturing; indeed the two go hand-in-hand. The more advanced the tech, the more extensible its capabilities toward efficiency and maximizing value.

The latest approach related to lean enterprise strategy is called product value management (PVM), which promotes contextual collaboration among every team from the beginning to the end of the value chain, from concept to customer. Constant communication means less time wasted, faster change orders, and a direct connection to customer demand (and therefore inventory control).

Learn more about how PVM can help achieve your lean manufacturing goals in the article, “5 Questions to Determine if Product Value Management is Right for You.”