Basics of Lean Production — Super Business Manager

‘Get the right things to the right place at the right time, the first time, while minimizing waste and being open to change.’

In general, lean production is a business philosophy of achieving efficiency and waste reduction in the production process.

What is lean production?

Lean production is a comprehensive manufacturing philosophy that prioritizes minimizing waste and maximizing value throughout the entire production process.

Unlike traditional mass production, which often relies on large inventories and inflexible assembly lines, lean production strives to deliver the right product, in the right quantity, at the right time, while using minimal resources.

This approach translates to significant cost savings, improved quality, and increased customer satisfaction for businesses that successfully implement its principles.

History of lean production

The roots of lean production can be traced back to the Toyota Production System (TPS), developed by Toyota in Japan after World War II.

Witnessing the inefficiencies inherent in mass production methods prevalent in the United States, Toyota engineers sought to create a more adaptable and less wasteful system.

The core Toyota Production System (TPS) principles, which continue to form the foundation of lean production today, include:

Jidoka (Autonomation). Equipping machines with automated features to stop production lines automatically upon detecting defects, preventing the creation of faulty products.
Pokayoke (Mistake-Proofing). Designing processes and systems to prevent errors from occurring in the first place, ensuring quality from the outset.
Hansei (Reflection). Encouraging continuous self-reflection and improvement, both at the individual and team levels.

Features of lean production

What is it? Management philosophy. Pull system though the plant

What it does? Attacks waste. Exposes problems and bottlenecks. Achieves streamlined production.

What it requires? Employee participation. Industrial engineering/basics. Continuing improvement. Total quality control. Small lot sizes

What it assumes? Stable environment.

Here are four rules of Toyota Production System (TPS) for successful implementation of lean production:

All work shall be highly specified as to content, sequence, timing, and outcome
Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses
The pathway for every product and service must be simple and direct
Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization

Cornerstones of lean manufacturing

Lean production is built upon a set of core principles that work in synergy to achieve optimal efficiency and eliminate waste. Here is a closer look at some of these key pillars:

Eliminating waste (Muda). A central tenet of lean production is the relentless pursuit of identifying and eliminating all forms of waste (muda) in the production process. This encompasses waste of materials (mura), time (muri), labor (mutei), and space (muda). By analyzing each step in the production chain, lean practitioners strive to streamline operations and eliminate any activities that don’t add value to the final product from the customer’s perspective.
Just-in-Time (JIT) inventory management system. A cornerstone of lean production, Just-in-Time (JIT) inventory management aims to have materials delivered precisely when needed for production, instead of stockpiling large quantities of inventory. This reduces storage costs, the risk of obsolescence, and the amount of space required for warehousing. Implementing Just-in-Time (JIT) successfully often necessitates close collaboration with reliable suppliers who can ensure timely deliveries.
Kaizen (Continuous Improvement). Lean production fosters a culture of Kaizen (Continuous Improvement), where all employees are encouraged to actively identify and implement ways to streamline processes, eliminate waste, and enhance overall efficiency. This ongoing pursuit of betterment can involve small, incremental improvements made on a daily basis, leading to significant gains over time.
Pull system. In contrast to traditional push production systems that manufacture products based on forecasts, lean production adopts a pull system. This means production is triggered by actual customer demand (pull) rather than pushing products through the production line based on predictions. This ensures that only what is needed is produced, minimizing the risk of overproduction and associated waste.
Employee empowerment and teamwork. Lean production recognizes the value of human capital and emphasizes employee empowerment and teamwork. Workers are seen as valuable contributors to the improvement process, and their suggestions and feedback are actively sought. Cross-functional teams are often established to tackle problems and implement solutions collaboratively, fostering a sense of ownership and accountability.

Benefits of lean production

In short, the principles of lean production enable a firm to deliver on demand, minimize stock, focus resources where they are needed, flatten organizational structure and maximize the use of multi-skilled employees.

By embracing lean production principles, businesses can reap a multitude of benefits:

Reduced costs. Eliminating waste and inefficiencies leads to significant cost savings across various aspects of the production process, including material usage, labor costs, and storage expenses.
Improved quality. The focus on continuous improvement, defect prevention, and employee involvement in quality control processes contributes to a higher overall quality of products.
Increased productivity. Lean production helps to streamline processes, reduce lead times, and eliminate bottlenecks, resulting in increased output and a faster time to market for new products.
Enhanced flexibility. Lean production systems are more adaptable to changes in demand or product design. The emphasis on smaller batch sizes and quicker changeovers allows businesses to respond more efficiently to market fluctuations and customer preferences.
Improved employee morale. Empowering employees, valuing their input, and involving them in the improvement process can lead to higher job satisfaction, increased morale, and a stronger sense of ownership among the workforce.

To reduce downtime, the priority is having the right component, in the right place, at the right time and speeding the retooling time idle machine time costs money.

Advantages of lean production to a business

Lean production offers a range of benefits that can significantly enhance a company’s efficiency and competitiveness. Here is a breakdown of some key advantages:

Faster time to market. Lean principles streamline development processes, allowing businesses to introduce new products quicker. This agility gives them a competitive edge in fast-paced markets.
Reduced waste. Lean techniques identify and eliminate waste in all its forms: time, materials, manpower, and more. This translates to a more efficient operation and reduced production costs.
Lower inventory costs. By minimizing inventory levels, lean production eliminates storage expenses and the risk of damaged or obsolete stock. This frees up working capital for other investments.
Increased profitability. Reduced waste and lower costs directly translate to higher profit margins per unit sold. Alternatively, companies can choose to lower prices to gain a competitive edge and boost sales volume, ultimately increasing revenue and profit.
Improved work environment. Lean practices often lead to a more organized and less cluttered workspace. This can improve employee morale, safety, and overall operational efficiency.

Disadvantages of lean production to a business

While lean production offers numerous benefits, it might not be the perfect fit for every company. Here is a breakdown of situations where lean might present challenges:

Unpredictable demand. Businesses struggling to forecast demand may find themselves with minimal stock if a surge occurs. Lean systems function best with some level of inventory buffer.
Expensive start-up processes. In industries with high costs to restart production lines after a shutdown, lean can be risky. Imagine a steel mill – running out of key materials could force a cool-down, leading to expensive repairs.
Focus on job cuts. Companies solely adopting lean to reduce headcount are unlikely to see long-term success. This approach can damage employee morale and hinder crucial buy-in.
Customer service focus. For businesses where exceptional service is the key differentiator, a less strict lean approach might be preferable. This could allow for more product options and guaranteed delivery times.
Implementation costs. The upfront investment in new technology and staff retraining can be significant. Some businesses might find it more feasible to optimize existing systems rather than fully embrace lean principles.

Is lean production appropriate in all business situations? 

Successfully implementing lean production requires careful consideration of several factors:

Financial resources. Investing in modern, adaptable equipment is crucial for lean to function effectively. Smaller manufacturers with limited resources might find specializing in niche markets a more viable option. Lean also requires retraining employees in multiskilling, which can be expensive.
Change management. Transitioning a traditional business to lean requires preparing the workforce and management for significant changes in working styles and decision-making power. Employees need to understand the importance of their commitment and reliability in a system with minimal buffers and high dependency on individual performance. A successful lean implementation hinges on both adaptable staff and advanced machinery.

These are quite rare situations where lean production might not be applicable, and this suggests that, for most businesses, in most market situations, there remains considerable scope for taking forward the lean production concept in order to improve efficiency and to drive down that all-important statistic – unit costs of production.

In summary, many businesses use lean production methods in order to improve their competitiveness. Lean production aims to lower the costs of production by reducing waste to a minimum while maintaining, or even improving, the quality of the finished product. At the same time, inputs to the production process must be used efficiently.