Waste detracts from the value of your product. It costs you money! If your overhead costs for storing unneeded inventory, or customer service dealing with repetitive ordering issues, you are ultimately passing those costs on to your customer. It's imperative that you develop efficiency and lean manufacturing has the tools to do so. Lean manufacturing principles as a core competency of your team can lead to better products, better strategy, and stronger relationships with clients.
If you work in a non-manufacturing industry, don’t stop reading! This business philosophy applies to any industry, whether you manage a factory or an office. As we discuss these items, relate these to any activities you do on a daily basis that lead to the creation of a product or service.
The purpose of implementing lean manufacturing principles is to identify areas of waste and elevate areas that create value. Doesn't mean cutting corners or reducing quality in any way. It just means generating more value by doing less of what detracts from value.
Toyota Production System (TPS) identifies waste, or “muda” in Japanese, as anything that detracts from the ideal allocation of resources. The original TPS model included seven sources of waste - Womack’s concept of the system included an additional eighth component.
- Overproduction - producing more product than is demanded by consumers
- Time on Hand - productivity lost by waiting for the previous step to be complete
- Inventory - waste created by storing or transporting unnecessary raw or finished materials
- Transport - is inventory moving efficiently and on time
- Overprocessing - does your product management waste too much time checking or re-checking the product
- Motion - is the flow between each step of the process simple and efficient
- Defects - time spent fixing or locating mistakes
- Workforce - waste created by ineffective use of employees
This philosophy of manufacturing focuses on the continual improvement of the process, prioritizing minor improvements that when taken together can lead to a more efficient system overall. The concept of continual improvement, known as Kaizen, is an iterative approach that allows employees of all levels of your company to proactively create value and eliminate waste in the activities and systems they are responsible for.
Step by Step Lean Principles
Phase 1: Survey Your System for Waste
This step is easier said than done but will create enormous progress for finding and reducing the amount of waste lost in your current process. The basis of this business philosophy is that all businesses, even those already using a lean system, are creating waste. The first and last step in this process is an honest evaluation of where you’re losing time or product in the system, and taking immediate steps to improve it.
A Value Stream Map is a visual tool that forces your team to depict how products and services flow from the raw material stage, all the say to the end stage with the customer.
This map should endeavor to include:
- All task steps that pull a product from the planning stage to the end stage with the client.
- A representation of the interactions between departments
- Note any internal process interactions within departments
Once this map has been drawn, create a team of individuals that represents members of all stakeholders in the process. Use that team to develop a list of waste points on the map - where are people waiting? How often is there too much inventory of raw material or the finished product? With that list, you have a better understanding of both what is valuable to the process, and areas that need to be improved to reduce waste.
Phase 2: What is Causing Waste to Occur?
With the information you gathered in Phase 1, you now know where waste is occurring. This step will make that same team of people focus on why those problems are happening.
A few questions that are important to ask include:
- How is the current physical makeup of the production floor inhibiting movement?
- Are there any areas of waste that are user error, that could be addressed through better training?
- Is our inventory strategy adhering to an arbitrary ordering system or is it truly following demand projections?
- If equipment is an issue, what are the specific problems and how can they be resolved?
Phase 3: An Iterative Improvement Process
The first two steps are difficult. They involve many parts of your company that may not work together often to come together, be honest, and is willing to make changes to their daily activities. With solutions drawn up, it’s time to implement those changes and begin to reduce waste in your company.
The second part of Phase 3 is probably the most important step of all. Lean Manufacturing is at its heart, an iterative, continual system of improvement. Put all changes in place based on your original VSM, review, and track to see if we are reducing waste. Continue to implement change where it is needed, continually evaluating and developing your system to reduce waste and continue to provide additional value to your customers.
Lean Manufacturing Tools
- Just in Time - as we mentioned earlier, this is an inventory strategy that allows you to house inventory only when the customer has demanded it. The concept also prescribes producing, smaller batches of products continually to increase efficiency and decrease defects.
- Kanban - This Japanese word meaning “visual signal,” was originally used by Toyota quite literally - workers on the line would hold up a card to let their superiors know their step was complete and the product was ready to be moved to the next step. Today, you use Kanban by creating visual representations of workflow, making it harder for tasks to get lost in a queue and increasing collaboration between teams involved in the same product line.
- Zero Defects - this concept is included in the Six Sigma business methodology, and in theory should lead to the total elimination of defects in all products produced. While that may be more of a ideology than a practical reality, the idea of Zero Defects is to encourage the company as a whole to eliminate waste, and get it right the first time.
- 5S - This is a system of organizing one’s workspace in order to attain a higher level of efficiency. The five components of the system include sort, straighten, shine, standardize, and sustain - they provide a systematic way to maintain your area and have any tools or information you regularly need right at your fingertips.
- Single Minute Exchange of Die - SMED is a lean manufacturing system that makes any production system more agile and flexible, allowing the assembly line to switch from one product to another at a moment’s notice. That quick exchange allows for the small batch and Just in Time concepts to be more resilient, and saves time through using available hours more effectively.
All of these processes focus on making iterative, minor changes that add up over time. is a more sustainable approach to improving your business than making big disruptive changes that impact productivity and morale.
Lean Manufacturing principles can be applied to any industry, even at an individual level in your life. Review these principles and find ways to implement, in some small way throughout your day. Build a VSM of your daily tasks - are you getting the most out of your day? Are you wasting time sifting through files? Are you constantly waiting for another department to complete a step so you can move on with your day? Being able to identify those problem areas and propose solutions to them will lead to a more efficient day for you, and for the teams, you work with!
Going lean is not easy. These are tough questions and require the entire team to be ready and willing to participate in continual change and improvement. If you are an executive looking to implement these strategies and reduce waste, make sure that you are involving the entire team, top to bottom, to identify areas that can be improved. Empower your team to be their own leaders in these changes, and proactively participate in making the entire company better. By taking these intentional, iterative steps, you will ultimately be creating value with your customers and creating internal value for your employees.