What is Lean Manufacturing and How Does it Work?

By: | October 17th, 2023

Photo by PilMo Kang on Unsplash

Lean manufacturing is a production strategy designed to address one of the most challenging aspects of manufacturing: waste. At the same time, lean manufacturing also seeks to help businesses streamline their processes and increase efficiency.

In simplest terms, lean manufacturing is all about delivering value to your customers while eliminating unnecessary steps (waste) in your operations. So, if you’re looking to boost your productivity and cut costs at the same time, this is the methodology you’ll want to explore and apply to your business.

The Principles of Lean Manufacturing

Lean manufacturing, or lean production, is built upon several key principles that guide its implementation. By following and applying these principles, practically any business can transform its operations and increase efficiency.

Eliminate Waste

The main principle of lean manufacturing is to cut waste wherever possible in order to improve manufacturing operations.

But what exactly is meant by waste here? In short, anything that doesn’t add value to the final product. This can include excess inventory, waiting times, defects, and overproduction, among other things. There is a reason it’s called lean manufacturing: the goal is to cut out any fat (or excess steps) in manufacturing operations.

Identify Customer-Centered Value

Another key principle of lean production is delivering real value to the customer.

In practice, this means that businesses should focus on making every activity within the production process actually contribute to what the customer is willing to pay for. If a process or a step doesn’t add value, it’s considered waste.

Value Stream Mapping

Value stream mapping refers to recording and analyzing your value stream (mapping it out), or the sequence of activities that bring your product from idea to the customer’s hands.

The goal of value stream mapping is to identify unnecessary activities or processes and find areas that could use improvement. The visual representation is crucial because it allows you to see the whole process better.

Create Flow

Once you have your map, it’s time to work on creating a smooth and continuous flow of work.

The idea is to eliminate bottlenecks and inefficiencies while identifying ways to improve lead time. As you can probably tell by now, this step, too, is crucial for identifying and eliminating waste. This, in turn, can help you prevent interruptions and wait times within your production, creating a smooth flow of work.

Establish a Pull System

Traditional production processes use a push system, which refers to purchasing materials and pushing them through the manufacturing process before there is an order. The pull system is the opposite of this.

Following this system means producing new products or services only when there is demand for them. This reduces the need for excessive inventory (again, it’s all about reducing waste).

Focus on Continuous Improvement

Lean manufacturing also encourages an ongoing pursuit of perfection while understanding that no process can ever be perfect.

This concept, also known as Kaizen, is based on the idea that gradual, small changes can lead to significant improvements. While managers play a crucial role in helping an organization embrace this approach, employees are also encouraged to identify and address problems, no matter how small, in order to refine processes and boost productivity continually.

Lean Manufacturing KPIs: Measuring Success

Clearly, the benefits of lean manufacturing can be manifold – if you apply the principles correctly. But how can you know if you’ve successfully implemented lean manufacturing principles? This is where key performance indicators (KPIs) come in.

KPIs for lean manufacturing are vital in tracking the performance and success of lean practices. These metrics include indicators like cycle lead time, overall equipment effectiveness (OEE), defect rates, work-in-progress inventory (WIP), and more. Monitoring these KPIs provides a clear view of how well lean production principles are being applied and whether improvements are being achieved.

Wrapping Up

Lean manufacturing is a holistic approach to the production process that looks to minimize waste while increasing efficiency and productivity. It’s an ongoing journey to continuous improvement that seeks to create value for customers and cut costs for businesses. 

So, if you’re looking to improve your company’s performance and boost innovation, you may want to look into the most important lean manufacturing practices and implement those that make the most sense for your business.


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