Lean manufacturing can make a huge difference to your bottom line
If you've developed a physical product, you're going to need to understand manufacturing. The way your product is manufactured will have an enormous impact on your profitability, your speed to market and your customers' satisfaction. That's the purpose of a method called lean manufacturing.
The history of lean manufacturing
Lean manufacturing is a methodology originally developed by Toyota. After World War II, Toyota came up with a revolutionary idea on how to reduce waste. The idea was implemented to compete with Western automakers, and soon became a manufacturing method worldwide. The method involved three steps:
The practice focuses on how to add more value by reducing waste, to attain efficiency and, finally, to attain customer satisfaction.
Introduction to lean manufacturing
Often called lean production, lean manufacturing is a series of methods applied to a manufacturing or production activity to minimize the waste and cut cost while ensuring a high quality. From design to production to distribution, the method is applicable to all aspects of business.
Lean Manufacturing ensures continuous improvement to gain system-wide efficiency. It seeks value-based productivity that balances the entire productivity chain. If a single manufacturing unit is working more effectively than the other units of the production line, it fails to provide overall efficiency of production. Hence, lean production is about settling for overall production efficiency rather than concentrating on individual unit productivity.
The objective is to identify the weakest link that holds back the entire activity process. It’s about how to get most of the available resources and finding better ways to accelerate business performance. Lean practice provides competitive edge by aligning the manufacturing process, from raw material, to end product to customer, along with minimizing waste.
What is waste and how can we minimize it?
Let’s get to the basic understanding of what waste is. Any activity in the manufacturing process that adds no value and increases the cost and selling price of the product is waste. Here are seven wastes of lean manufacturing which you can eliminate.
Transportation includes the movement of raw materials, work in process and the finished goods from warehouse to the final destination. Sometimes unnecessary movement of vehicles adds up to lots of wastage. An increase in transportation cost is usually due to the following reasons:
Multiple storage localities
Complicated inventory handling system
Often in the manufacturing process, numerous reserves cause potential waste. This excessive inventory can lead towards extra storage expenses. Here are the factors that cause increase inventory waste:
Absence of balance between work processes
Huge batch sizes
The excessive movement of machines and labor which does not add any value is also a factor of lean wastage. Reasons for motion wastage are:
Transferring items from one place to another
Insufficient workstation layout
Miserable workplace conditions
Repositioning of items
This refers to the waiting period for the next segment to begin, or for unsold items to move. The factors involved are:
Ambiguous communication system
Unsystematic work instructions
Producing materials beyond needed is overproduction. It creates a surplus amount of inventory, and hence, waste. Causes are:
Uncertainty about future orders
Taking additional time while setting up packages
Adding extra resources and value to products which are not required by the customers creates unnecessary wastage which must be taken into account. Over-processing is due to:
Complicated market processes
Lack of proper market research
All activities that involve repairs, rework, scrap and defective items are another form of waste. Factors include:
Poor quality control
No standardized work instructions
How to minimize waste
All this waste can be reduced if we properly follow the points given below:
FOR TRANSPORTATION: make sure the warehouses are nearby, streamlining the flow of raw materials to final goods.
FOR INVENTORY: procure the materials when needed, eliminate excessive steps involved in production.
FOR MOTION: organize all the work areas in a systematic way, right placement of equipment.
FOR WAITING: ensure the continuous flow of necessary goods without any ambiguity, consistent instructions at each step of manufacturing.
FOR OVERPRODUCTION: controlling the surplus production, adjust the pace of production with demand of consumers.
FOR OVER-PROCESSING: better research on what customers buy, ensure ways to regulate the manufacturing process.
FOR DEFECTS: be cautious when designing a product, avoiding complex designs to avoid frequent defects, looking for what causes the defects.
Lean manufacturing methods
As lean manufacturing's goal is value creation, here are some tools which are used in lean manufacturing operations:
5S includes five guidelines:
Sort: To maintain a workplace free of unnecessary items (i.e., placing all the right products in the warehouse or inventory).
Set: Ensuring all items are organized.
Shine: Clean and tidy workplace.
Standardize: All roles and tasks should be according to the schedule.
Sustain: Commitment towards long term goals.
Just in Time
Just in Time is a method for inventory control. JIT ensures customer demands, production quantity and its deliverance. JIT means that adequate stock is available in the warehouse.
Gemba is a Japanese word for "the real place." In lean practice it refers to the manufacturing field. The Gemba Walk revolves around the philosophy that one must regularly visit the site to address daily issues.
Value Stream Mapping
This tool involves mapping out various diagrams. It depicts each process in value creation and evaluates all the steps to minimize wastage and inefficiencies
Kai's literal meaning is "change," while zen means "good." This is a concept to ensure continuous improvement. This tool involves the process of documenting, aligning procedures and getting feedback from all the members of the organization.
The Bottleneck method is used to identify all the weak areas that hold back the process of producing goods. It often determines the slowest process. Speeding up the one or two units can increase the speed of the entire production process.
This Japanese system refers to signs. It’s a scheduling process which determines what to produce, how to produce and how much to produce.
This method is related to JIT and Kanban, and involves the integration of all production elements through continuous examination, evaluation and improvement.
How does it affect your physical product
When we think of lean, we equate it with a minimization of waste. But in reality our goal is not waste elimination, but value creation. Adopting the tools above, companies can see huge benefits to their products.
It improves the quality of your product
Improved efficiencies create better ways for employees to think innovatively. This is how we gain business agility through the process of creating value.
Better lead times
As the production lines are streamlined without any ambiguity, your firm can quickly respond to fluctuations of customer demand or other variables that occur spontaneously. This will result in fewer delays in getting your product to market.
The more efficient the process is, the more sustainable your business and product. Less waste of product and improved adaptability means less waste of raw materials and energy.
This is the most obvious benefit of lean manufacturing. Less waste equals more profit. If you can keep selling your product for the same price, but produce it cheaper and more efficiently, that's more money in your pocket.
The overall purpose of going lean is to learn what our customer needs and wants; to increase the value of your product and deliver it on time to overcome whatever problems your customer might be facing. Applying this methodology gives you a competitive edge by cutting your cost. If you carefully examine each step of production, you may be able to discard unnecessary processes and procedures. And who doesn't want to be faster, better and more efficient?