What is lean manufacturing?
Lean is both defined as a mindset or philosophy and a set of principles that can be employed within the context of production as well as in management. Therefore you will often hear or read about lean manufacturing or lean management.
The Toyota Production System (TPS) is widely recognized as the ancestor of lean. Originating in Japan, the TPS is based on the concepts of Jidoka (autonomation) and Just-in-Time.
Jidoka stops processes immediately after an error occurs and therefore prevents the manufacturing of defective products. In combination with Just-in-Time, a demand-focused concept that produces only that which is needed, when it is needed, the TPS produces high-quality products efficiently.
By employing popular tools, known as lean tools, a lean strategy focuses on continuous improvement and the reduction of waste within different processes.
Lean aims to identify areas that are referred to as non-value-added waste. This includes any processes, services or operations that are identified as non-essential and add no value to a product or service and are therefore worthless to a potential customer or client.
Lean’s goal is to remove these inefficiencies by analyzing all processes and applying various principles in order to cut down on any waste. Like this, operations can run more smoothly and become more efficient, therefore saving you time, resources and money while offering the best value to the customer.
In this guide, we will discuss:
1. What the 8 wastes of lean are
2. How you can avoid the 8 wastes
6. Lean manufacturing vs. lean management
The 8 Wastes of Lean
As the originator of Lean Manufacturing, Taiichi Ohno also developed the 7 Muda (無駄), a term that in Japanese refers to something that is considered pointless, useless, meaningless or wasteful. Each of the 7 Muda therefore represents a process or element that does not add any value to the production process and should be eliminated or reduced. These Muda in English also go by the acronym TIMWOOD which refers to each of the 7 Wastes which are defined as Transportation, Inventory, Motion, Waiting, Overproduction, Overprocessing and Defects.
As Lean practices were further developed, introduced and adopted in the Western world, an eighth element was added to the original seven: the waste of unused talent.
Here are the 8 Wastes of Lean:
- Transportation
- Inventory
- Motion
- Waiting
- Overproduction
- Overprocessing
- Defects
- Unutilized Talent
How To Identify & Avoid The 8 Wastes Step By Step
In order to address issues properly, they need to be discovered and identified first. Taking a look at the 8 wastes of lean and analyzing them within the context of your own organization can help you get to the bottom of any inefficiencies and may point out areas worth improving that you have not considered before.
1. Transportation
Unnecessary transport of material goods that fails to directly support the production is considered the first waste or muda. This can occur due to poor planning or an inadequate section layout that results in unnecessary transport.
In order to avoid high costs and pair down transportation you should:
- make an effort to create an efficient workflow
- reconsider the layout of production
- enforce WIP limits
2. Inventory
Marie Kondo, a Japanese lifestyle consultant, popularized the KonMari method for organization. Generally used within the private sphere, her system is based on the importance of considering every single item within the home and asking yourself whether it sparks joy. If it doesn’t, then it is considered a burden and is to be tossed.
While possessing many things can be considered an asset, too many belongings can also weigh on a person, the same way, that a large inventory can end up using up costly storage space, falsely “cater” to a demand that does not exist and are proof of inefficient capital allotment and/or forecasting systems.
While it is important to manage your inventory efficiently, it is equally essential to recognise when inventory has become excessive.
Make sure to address this issue by
- only purchasing materials when needed
- only purchasing materials in the required quantity
- creating a queue system
3. Motion
Not to be confused with transport, motion waste refers to any unnecessary movement made by people in the production process. This involves any kind of bending, reaching or tool gathering, or procedures that have been set up in a complicated manner.
In order to address any issues detected in this area, consider putting employees who work in a team in the same location on the premises, especially if their work depends largely on one another. Further, you could assess and organize workstations using the 5s system, another Japanese creation and a lean tool.
4. Waiting
Waiting waste is created when processes that are dependent on one another are not fully synchronized and thus create unnecessary waiting times, queues and moments of idle time.
In production you can consider the following questions in order to identify a waiting waste: Do your employees have to wait for equipment? Do some operations create so-called bottlenecks? Is there unplanned downtime that holds up processes?
A waiting waste can even be as simple as someone waiting for approval via email before their work can begin. Ask yourself if it is certain outdated structures that are holding your workers back: How independent are they? Have they earned enough trustworthiness to be allowed to work more autonomously? Are there any skill monopolies or any people that are the only ones who are capable of using a certain machine?
5. Overproduction
Potentially related to any inventory issues, you may want to look into overproduction wastes. If you struggle with overproduction you may lack an efficient system, have planned poorly or fallen into the trap of producing even during idle times.
Consider revamping your systems and creating better automation to address such issues.
6. Optimization
Optimization is great and often necessary. However, it can also become a burden really quickly, if you fall into the trap of endless refinement, reviews and excessive information that leads to over-processing.
How efficient are your policies? You need to be honest with yourself and assess whether there are additional workflows in place that consume effort, resources and manpower without adding significant value to a product or service.
Ask yourself this simple question: Is the additional value something the customer will gladly pay for? If the answer is no, then you find yourself facing an over-processing waste that needs to be curbed immediately or reframed and reevaluated.
7. Defect
Productivity loss due to the rework and correction of certain products is labeled as defect waste. As you need additional space, time and money to invest into a product that may well end up being scrapped, you need to carefully consider your production processes that lead to defects, examine whether employees lack sufficient training or whether other processes cause defects to products.
8. Unused Talent
The final add-on and eighth waste is defined as the waste of unused talent. Are some employees being underused when they could be performing with more variety? Further, are you engaging in open and honest communication with your employees, listening to their feedback and using their critical thinking skills appropriately?
The more open the communication, also between departments, workflows and locations, ensures that knowledge is not monopolized and that even once an employee leaves the organization, their knowledge can still be banked upon. Consider the human potential that your employees offer and value them to keep them satisfied.
What are Lean Principles?
Born within the realm of manufacturing, Lean has been adapted for many different industries and the so-called lean principles are now frequently used in management in order to improve workplace efficiency.
Lean is focused on continuous improvement and cutting down on as much waste (in whichever shape or form it appears) as possible in order to concentrate on the impactful. Even healthcare sectors have begun to employ elements of lean methodology with the aim of offering more efficient patient care. Like this, healthcare providers can, for example, reduce a patients’ time spent in waiting areas, aim to reduce their inventory in order to avoid the expiration of medical products and increase patient comfort by decreasing their movements between stations and/or doctors.
Next to the 8 wastes of lean, James P. Womack and Daniel T. Jones, founders of the Lean Enterprise Institute (LEI),
published the 1997 business book entitled Lean Thinking: Banish Waste and Create Wealth in Your Cooperation in which they outline the five key principles of lean:
1. IDENTIFY CUSTOMER VALUE
What is the customer willing to pay for? What do they expect? This is the value of your product or service. In order to define it you need to figure out the customer’s needs and his or her profile. Consider timelines, pricing, additional requirements and ramp up the customer focus for every activity.
2. MAP OUT VALUE STREAMS
In order to be able to cater to the now defined value, you need to begin mapping the so-called value stream. Value stream mapping (VSM) is used to sketch out the entire lifecycle of a product, service or good, beginning with the raw materials needed and ending with its disposal.
Identify process steps in detail, define problem areas (while considering the 8 wastes) and record or establish every single action that goes into the product distribution to the consumer. This way you also gain better knowledge of your operations.
In production you therefore map out the entire product journey, whereas a hospital may use VSM to identify unnecessary waiting times for patients or figure out where administration slows down processes. VSM as a lean technique is applicable to many domains from HR to any kind of customer service and can be adapted easily.
3. ALLOW PROCESSES TO FLOW
Eliminate wastes in the value stream and condense your workflow to its most productive state. Now it is time to arrange every step so that it can run smoothly and efficiently. Break down the steps, train employees and allow for better cross-communication between departments.
4. ESTABLISH A PULL SYSTEM
As another way to ensure that you don’t find yourself overproducing and creating waste by clogging your inventory, it is helpful to establish a demand-pull system rather than relying on a supply-push strategy. This means that all production, as well as all goods and services should be demand-based. For this to work, you need to ensure that services are ready to be provided at the correct time and that you can meet the demand in quantity and offer a consistent supply-chain.
5. AIM FOR PERFECTION
The 5s system, a lean tool itself, has as its final principal the pillar of Shitsuke (躾), a term that translates to sustainment or maintenance where the newfound structural changes are introduced into the company culture as fixed components. This way the new system becomes a habit and allows for continuous improvement in every department.
In a similar fashion, Lean, according to Womack and Jones, the fifth principle of lean thinking closes the circle and asks you to repeat steps 1-4 over and over again, thus repeating it until a state of (near) perfection is reached where value can be created without any unnecessary waste. Ingrain Lean into your corporate culture and maximize customer value effortlessly.
Purpose, Process, and People: Lean Principles Simplified
Almost a decade after their initial publication of the Lean Principles, Womack and Jones simplified the above steps into three: Purpose, Process, People. Here a short overview:
- Purpose: Establish the customer value in order to figure out the organization’s purpose of creation.
- Process: Create the process that needs to be followed in order to fulfill the customer’s demands (VSM)
- People: Assign responsibilities for each value stream to ensure that all team efforts align, tweaking wherever necessary.
Lean Tools, Techniques & Practices
There is a plethora of different tools and techniques that can help you lean into lean. Some practices were already touched upon in this article, such as Kanban, the 5s System, Bottleneck analysis or Value Stream Mapping.
If you want to incorporate Lean into your organization, you can look into equipping your toolkit with some of the following techniques:
- The Gemba Walk
What is Gemba? The word translates to “the real place” and refers to places where value is created. Originally developed for manufacturing purposes, “the real place” therefore referred to the factory floor, where work was taking place, but can also apply to any other place where value for customers is being created.
So Gemba encourages you to spend time in the places where the real activity occurs, so that you can observe the actual work, converse with workers and collect data.
- Poka-Yoke
Have you ever noticed that your microwave won’t turn on if the door is open? Or how the car signals when someone is not wearing a seatbelt? These are all everyday examples of the lean principle Poka-Yoke that is designed as an error-proofing system. Originally developed for the Toyota Production System (TPS) by Shigeo Shingo, the principle has been adapted and expanded over time and is useful in many contexts today.
- Root Cause Analysis
Root Cause Analysis (RCA) helps you figure out underlying errors in processes, treating the root cause of an issue rather than the symptom in a holistic manner.
One typical RCA sequence utilises the so-called 5 Whys-Method in order to get to the core of an issue by asking 5 why questions that each delve deeper into the origin of a problem.
- SMART Goals
Developed in the 1980s and more recently popularized within the self-help industry, SMART helps you set achievable goals by making sure they are specific, measurable, attainable, realistic and timely.
Pros and Cons of Lean
There are certainly advantages to introducing Lean into your workflows though as with any optimization system there are also some drawbacks that you need to consider. Overall, it is best to assess your structures, consider different implementations of lean and make an informed decision based on data and research in order to determine whether Lean is the way to go for you.
Benefits of Lean
- The main goal of lean is to reduce waste by implementing the system into your own operations, you can reduce any kind of waste (time, energy, resources) significantly.
- Reducing waste and planning properly according to the lean principles saves you not only time but money as well. By paying attention to storage and cutting unnecessary processes, you can run operations that are much more cost efficient.
- Not only does reducing waste help you save costs, it also makes you more eco-friendly and sustainable. Save energy and fuel costs by paying attention to the wastes of transportation or moving, for example.
- Less waste of any kind will likely lead to increased productivity. For example by shortening the workflows or clustering teams together.
- Increased productivity in turn also influences the product and raises its quality resulting in more customer satisfaction and higher profits.
Disadvantages of Lean
- Whereas implementing lean can lead to customer satisfaction, employees might be dissatisfied as they might feel micro-managed or struggle to accept the new guidelines. Explain and introduce lean by incorporating your employees to combat this.
- While waste may be cut down, the streamlined processes of lean can cause problems as soon as equipment fails. As there is very little wiggle room for operations to be moved and almost no margin for error, equipment failure in one area can hold up work in every department.
- Lean can cause supply problems during unprecedented times. Lean generally calls for a pull system that can fail if supply demand suddenly increases. During the beginning of the global pandemic, medical supplies, equipment, and masks were out of stock all around the world, as the demand had suddenly exploded. This is certainly an extreme example, yet still an argument to consider a hybrid system between a demand-pull and supply-push strategy.
What Is Lean Management?
In their essence, lean manufacturing or lean production and lean management share the same root. They also work quite similarly. The only difference is their target. Whereas lean manufacturing focuses on continuous improvement and waste reduction during production processes, lean management is designed to address issues in business management by striving for continuous improvement. It is helpful to develop a management approach that integrates lean strategies into your ISO 9001 quality management system for a holistic approach to top management.
In short: lean manufacturing and lean management employ nearly the same techniques, the only difference is the targeted areas. Lean production remains focused on product journeys and manufacturing operations, whereas lean management is designed to optimize less tangible processes within management and direction of an organization.
