Principles of Lean Manufacturing To Simplify and Scale
7 minutes, 47 seconds read
The principles of lean manufacturing can help companies to operate more efficiently. Implementing lean concepts is beneficial for the bottom line since greater efficiency leads to better profitability. It also creates a positive customer experience which improves overall satisfaction and enhances your brand’s reputation. So, what are the principles of lean manufacturing and how can you apply them to your production systems?
A Little Bit About Lean Manufacturing
The concept of lean manufacturing was made famous by Toyota back in the 1980s. Their continuous improvement culture and efforts to eliminate waste made them one of the most efficient companies around. Many corporate leaders and business analysts tried to study and replicate these Toyota production systems, including founders of the Lean Enterprise Institute, James Womack and Dan Jones.
In the mid-nineties, Womack and Jones published ‘Lean Thinking: Banish Waste and Create Wealth in Your Corporation’. This book is considered the ultimate guide to running a lean enterprise and set out five key principles that underpinned the process. These focus on maximizing value to the customer while eliminating waste along the way. They are now known as the principles of lean manufacturing and have changed the world of assembly lines and production plants.
Rever’s CEO, Errette Dunn, gives a breakdown on lean manufacturing in this video to help set the stage on the main principles:
What Are The 5 Principles of Lean Manufacturing?
The five principles of lean manufacturing are value, value streams, flow, pull, and perfection. They guide organizations on how to create the most amount of value for their customers while maximizing efficiency at the same time.
Applying lean concepts helps manufacturers to continually improve their offering and the way in which they deliver it. It’s helpful at every stage of the production process, from research and development to packaging and delivery. This approach can be used to improve a specific product or an entire assembly line. It’s flexible enough to be applied on a small or large scale which means it can benefit a wide range of organizations. Let’s look at the principles of lean manufacturing in more detail.
The first principle begins by identifying value to the customer. It involves isolating exactly what the customer finds valuable about your product or service from their perspective. This is the driving force behind why they will buy from you so it’s crucial to get it right. If you don’t deliver enough value to customers, then they simply won’t purchase and your sales will suffer.
Establishing value allows companies to define a target price. This top-down approach enables you to set pricing based on the amount of value you deliver and what that is worth to the customer. It’s a very different model to the bottom-up method of calculating your costs and then adding a fixed percentage as margin. Pricing based on value is often more profitable while still being acceptable to the end-customer.
It’s worth noting that what your company thinks is valuable and what your customers actually value may be different things. This is why it’s important to do the research and ask them rather than guessing. Understanding their pain points, requirements, and expectations will ensure that you accurately identify value. This step is the most fundamental of all the principles of lean manufacturing since it is the basis on which others are built upon.
The value stream refers to the complete product or service lifecycle, from inception to disposal and every stage in between. It encompasses the entire supply chain, source materials, production processes, features, and transport that bring about the end product. Mapping the value stream is most commonly the stage where waste is identified and improvement areas are suggested.
A key lean concept is the elimination of waste so as to keep everything as streamlined as possible. Creating value stream maps are therefore important in order to evaluate where there are opportunities for removing wasteful steps or optimizing the work in process. Some things will be necessary to create value and others will be unavoidable due to technological limitations. But there will also be types of waste that fall into a third category – these are areas that can be eliminated to improve overall efficiency.
Flow refers to the consistent creation and movement of the value stream. It’s one of the most abstract of all the principles of lean manufacturing but is worth taking time to understand. When the value stream flow is blocked or stops moving forward, waste is created. This may be in the form of lost time, additional movement, or extra storage costs. Delays lead to customer value disruptions and also result in reduced efficiency, both of which defy the principles of lean.
In order to flow smoothly, there needs to be a shift from batching and siloed thinking to levelized production. When this happens, companies are able to launch products more quickly by taking them from concept to manufacture in significantly less time. They can deliver products and services more quickly, improving their turnaround or cycle times from ordering. This improves efficiency and allows large companies to be nimble so they can take advantage of any opportunities that present themselves.
The traditional Western approach to manufacturing involves producing things based on forecasts. Sales teams are asked to estimate how much of a product they’ll be able to sell ahead of time. Raw materials are ordered and manufacturing schedules are created based on these predictions so that the future orders can be met. But when sales exceed forecasts, it can be difficult for production to keep up. Conversely, when demand doesn’t meet supply, profitability suffers.
A pull system avoids this problem entirely. It helps to maintain flow by ensuring that nothing is made in advance of being ordered. This means that every item is manufactured to order based on a quantified demand from customers. It’s one of the key manufacturing principles that ensures supply doesn’t outstrip demand. This approach reduces waste and an essential element of lean operations.
However, implementing a pull system successfully isn’t always easy. It requires a manufacturing process that is flexible and speedy enough to deliver products quickly. Lean leadership and strong internal communication are also required to ensure that every step in the value chain knows what is ahead and what’s coming up from behind. Fortunately, the previous three principles will have helped eliminate waste and focus efforts on the truly valuable. This puts companies in the best possible position to establish pull successfully.
To seek perfection is one of the principles of lean manufacturing that sometimes surprises people. Lean companies are not satisfied once they’ve completed the previous four stages and implemented a pull system. They are always looking for other ways to improve and creating steps that facilitate further innovation. As companies continue to improve, more waste is removed, and greater value is created. This results in a continual upward spiral of efficiency, profitability, and customer satisfaction.
Applying lean principles like value stream maps and pull systems is a powerful approach. It creates a distinct competitive advantage while delivering lower cost operations and increased profits. Using lean tools can give you a huge business advantage and set you up for long-term success well into the future.
Lean Thinking with Rever
Our digital platform can help you to implement the principles of lean manufacturing. Rever is all about sharing and reusing, doing and tracking. Continuous improvement becomes a hundred times easier with our innovative kaizen software. Using Rever’s dashboard, you can monitor the performances of your teams, the summary of their impact, and easily identify the people making the biggest difference at your company.
Rever Cycle is our version of the PDCA methodology and guides your teams on the exact steps to follow to execute their own ideas. It allows them to capture the entire process, from identifying a problem to experimenting and implementing a solution. They can use it to capture the before and after with pictures, notes and drawings, making their ideas a reality in no time. The time of your team is too valuable to be wasted in handmade drawings and complex explanations.
At Rever, we believe that anybody can be a knowledge worker and thrive. What makes us human is the capacity to grow our intellect and will, and to use them for good. We observe, especially at work, that most people are asked to stop thinking and do as they are told. We want to change that. We enable people to achieve their full creative potential.
Interested in learning more about Rever or how the principles of lean manufacturing can benefit your business? Then get a demo today with one of our friendly lean management experts.
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