In today’s episode, we’ll talk about:
1. What is Lean Manufacturing and what principles and tools does it use?
2. What does the Lean concept have in common with the Toyota Production System?
3. Which industries use the Lean concept?
4. What are the benefits for companies of using the Lean concept?
What is the easiest way to explain what Lean Manufacturing is? It is a method of production management that has been developed based on the principles and tools of the Toyota Production System (TPS). It assumes that the primary goal of the company should be to maximize value for the customer, while eliminating waste (overproduction, excess inventory, processing, unnecessary traffic, etc.). By the Lean standards, waste is any action that consumes resources without adding value to the customer.1 And that’s also why the name “Lean” fits perfectly. Lean production is more… well, lean than the traditional mass production because it uses less human labour, production space or engineer work.2
The term Lean Manufacturing was proposed in 1988 by John Krafcik, who first used it as the term to describe an alternative system to popular mass production, in a publication entitled “The Triumph of the Lean Production System.”3 The concept was then popularized by a group of scientists: James Womack, Daniel Jones and Daniel Roos after the publication of their book “The Machine That Changed the World.” in 1990.4
In the book, they introduced terms such as: “Lean Manufacturing”, “Lean Production”, “Lean Organization”, “Lean Enterprise”. The Lean concept is common nowadays. An extension of the concept of Lean Manufacturing is Lean Management, which applies not only to production, but also the whole management, and makes all participants of the organization interested in continuous cost reduction, increase in the quality level and shortening the delivery time.5
The principles of Lean Manufacturing include: defining value for the customer, determining the value stream for each product, creating a free flow of materials and raw materials, implementing a pull system in the customer-supplier relationship and continuous pursuit of perfection.6
The Lean concept characterizes its customers as a beginning and end point, which in simple terms means optimization from the point of view of customer needs and not the internal capabilities of a given company.7
The basic Lean Manufacturing tools are:
• Value Stream Mapping (VSM) to collect data on the actual flow of physical elements and information;
• 5S (five steps: sort, set in order, shine, standardize, sustain), a tool to create a well-organized and orderly workplace;
• Total productive maintenance (TPM), thanks to which every person employed in the company will be able to freely use the tools needed for work;
• SMED (Single-Minute Exchange of Die) – a set of techniques and tools enabling the quick changeovers of machines and production processes. It is used wherever high assortment production flexibility is desired, or where changeovers take too much time or are very complicated;
• Poka-Yoke (Error Proofing) – a tool that helps eliminate mistakes. It is based on the assumption that errors are caused by processes, not people;
• Kaizen (Continuous Improvement) based on the belief that employee commitment and their constant pursuit of excellence have a greater impact on the company’s development than significant but sporadic improvements. 8
All these tools should be implemented as a comprehensive system of interdependent and mutually supportive practices.9
As it was mentioned at the beginning, the Lean Manufacturing concept refers mainly to the Toyota Production System and this is where its basic tools were derived from.
The Toyota Production System is based on two concepts: jidoka and “just-in-time”. Jidoka is – simply put – an “automation with a human touch”. It is a method of quickly identifying and correcting problems that could lead to production defects. The concept of “just-in-time” is about improving and coordinating all production processes in such a way as to produce only what the next process requires.10
How does TPS work?
The customer starts the process by ordering a car at a dealer. The Toyota dealer issues a demand through headquarters, i.e. a kanban for a car in a car assembly plant. The order is quickly implemented on the production line according to the Heijunka principle, i.e. level scheduling. This means that the manufactured products and their quantity are balanced in such a way as to meet customer requirements and to minimize the inventory. The assembly plant sends the kanban to the component factory, and the factory turns to its suppliers. First, the body of the car is created, followed by painting and assembly. Only the parts ordered by the customer in a pull system are produced and delivered. The finished cars are transported by water or land to a Toyota dealer, and then they are delivered to a satisfied customer.
The Toyota production system assumes that the car is to go smoothly through the production line. This means that the right parts are delivered to the right place, in the right time when they are needed and in just enough quantity to avoid stockpiling at the factory. By focusing on small production batches and producing only what customers want, Toyota has developed flexibility and responsiveness to market needs, which has become an industry standard. By “striving for continuous improvement” (Kaizen), Toyota has achieved significantly shorter times for changing production dies and machine configurations than their competitors. The ability of the Toyota production system to react quickly to new trends makes it an ideal model in a dynamically changing business environment.11
Not only does Toyota use the Lean Manufacturing system. The concept is also used by such giants as: Ford, Parker Hannifin, John Deere, Caterpillar, Textron, Intel, Kimberley – Clark Cooperation and Nike.
Lean management principles outside of industry have been reflected in various other sectors:
– in the service sectors (lean service), incl. banking and financial services, hotels, restaurants and air transport,
– in health care (lean healthcare),
– in logistics (lean logistics)
– in the supply chain,
– in construction (lean construction),
– in IT (lean IT),
– in higher education (lean higher education),
– in public sector (lean government).
From the text “How to use Lean Manufacturing methods to introduce innovation”12 by prof. Tomasz Koch, we learn that:
“Applying [the lean concept] in practice allows to achieve shorter production period, better quality and significantly lower costs compared to the traditional approach. In traditionally organized companies, the material from which the product is made spends weeks (often even months) in the plant, while its processing time is measured in minutes or hours. (…) Based on the analysis of over fifty case studies from various industries, carried out by the Lean Enterprise Institute Poland, the most frequently improved indicators thanks to the use of Lean Manufacturing are: increase in efficiency by up to 66%, increase in the use of machines measured by OEE by as much as 59%, reduction of inventory in the course of production up to 80%, reduction of the production space by up to 61%, shortening the time of transition from raw material to finished product by up to 70%, exchange of dies time reduction by up to 96%. In addition, many companies also mention other benefits, such as: significant improvement in quality, reduction in the number of complaints, increase in the number of ideas for improvement presented by employees, improved communication or reduction of waste. “
Right now, management in accordance with the Lean philosophy is one of the most effective methods in the world and gives development opportunities to all those who want to become involved in the role of a creator and to pursue the perfection.13