manufacturing

Lean manufacturing principles – What is it, and where is it used?

The global manufacturing industry is worth over $40 trillion, which is over half the world’s GDP. Out of this, 20% of this is rendered useless as manufacturing waste. This equals about $8 trillion or 10% of global GDP worth of waste each year. Waste is also in the form of time and human resource utilisation.

The cause of waste may be overproduction, excess processing, rejection due to defects, extra inventory, waiting period and more.

This article explains the role of lean manufacturing in reducing waste in the manufacturing industry.

What is lean manufacturing?

Lean manufacturing aims to streamline the process, reducing waste and maximising production. Toyota or Toyota Production Systems (TPS) introduced the concept of lean manufacturing in the 1950s for its automobile assembly lines. Modern-day businesses use the lean methodology in several industries other than manufacturing.

By reducing waste and non-value-adding processes, businesses can achieve a massive improvement in efficiency, productivity, cycle time, and material costs. This makes the business and its products highly competitive in the market.

Why is lean manufacturing important?

Wastage of unused or scrap material, man-hours of the workforce, and poor processes are a huge drain on the productivity of a business. From improving efficiency to providing better products to customers, these are the main benefits of lean manufacturing –

1. Eliminate waste – Waste provides no additional value to the business and is an overhead. It demands resources for transportation for disposal or recycling. By reducing or eliminating manufacturing waste, businesses can save money and time spent on managing it.
2. Elevate product quality – Stay competitive and meet the changing needs of the customer by raising the quality of your products. Lean production streamlines various processes within the manufacturing cycle while considering quality as the most important factor.
3. Reduce production cost – Without a production plan, you could end up storing more material than needed, which adds up to the storage cost. Lean manufacturing reduces this cost through efficient material management.
4. Lower the production time – Inefficient processes waste precious man-hours of the workforce. It causes a waste of money, too in the form of production and wages. By designing shorter lead times, you can produce and deliver the goods faster and better utilise the manpower.

5 principles of lean manufacturing

The following principles of lean manufacturing guide you towards reducing waste and achieving perfection in the production process –

Value

It is the value of the product or service that the customer is willing to pay. The manufacturer or service provider then creates this value by eliminating the waste and costs to meet the desired price while maximising the profits.

Value stream

Analyse the materials, manpower, and other resources needed to produce the product or service while reducing waste. The value stream covers the full lifecycle of the product, from procuring raw materials to disposal of waste.
Examine the waste each step of the production cycle produces. Remove if that stage does not add any value, a step often called chain alignment.

Flow

You incur a cost for a disharmonious production process. Remove any functional barriers to improve the lead times to make the process flow smoothly with minimal delay or waste for seamless service delivery.

Pull

The pull system is the opposite of the push system. Push system plans for the inventory in advance to meet the sales and production forecasts. However, inaccurate forecasting can incur additional warehouse costs and schedule disruption.
The pull system works only when there is a demand. It starts production only when there is a demand and relies on excellent communication, flexibility, and efficiency.

Perfection

Perfection is a result of continuous process improvement, a process called ‘Kaizen’ by Toyota Motor Foundation. In lean manufacturing, you need continuous assessment and process improvement to eliminate waste. The process has well-defined metrics such as production cycles, lead time, cumulative flow, and throughput.

Implementing lean manufacturing

You can approach lean manufacturing by either taking waste elimination or workflow improvement as the focus point. Both methods have the same goal, but waste elimination is a natural outcome of workflow improvements. The two approaches follow the same set of steps –

1. Automation
2. Great supplier relationships
3. Continuous improvement
4. Load levelling
5. Flexibility
6. Pull processing
7. High production quality the first time
8. Production flow and visual control
9. Waste removal

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How can Infosys BPM help?

Automation, digital manufacturing, value engineering, and process transformation are ways to achieve lean manufacturing. The support services by Infosys BPM that help achieve these are should costing, documentation support, performance management, analytics, planning and control, quality management, MES support, and MRO parts and tooling management.

Read more about the digital manufacturing service support at Infosys BPM.