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What is Lean Production?
Lean is about doing more with
less: less time, inventory, space, labor, and money. "Lean manufacturing", a
shorthand for a commitment to eliminating waste, simplifying procedures and
speeding up production.
The idea is to pull inventory through based on
customer demand.
Lean Manufacturing (also known as the
Toyota Production System) is, in its most basic form, the systematic
elimination of waste overproduction, waiting,
transportation, inventory, motion, over-processing, defective units
and the implementation of the concepts of
continuous flow and customer pull.
Five areas drive lean manufacturing/production:
-
cost
-
quality
-
delivery
-
safety, and
-
morale.
Just as mass production is recognized as the production system of the 20th
century, lean production is viewed as the production system of the 21st
century.
In fact, the processes involved in
lean are ideal for any business whose inventory accumulates in buffer
stocks.
Benefits of Lean Production
Establishment and mastering of a
lean production system would allow you to achieve the following benefits:
-
Waste
reduction by 80%
-
Production cost reduction by 50%
-
Manufacturing cycle times decreased by 50%
-
Labor reduction by 50% while maintaining or
increasing throughput
-
Inventory reduction by 80% while increasing
customer service levels
-
Capacity in current facilities increase by
50%
-
Higher quality
-
Higher profits
-
Higher system flexibility in reacting to
changes in requirements improved
-
More strategic focus
-
Improved cash flow through increasing
shipping and billing frequencies
However, by continually focusing
on waste reduction, there are truly no end to the benefits that can be
achieved.
A Management Philosophy
Toyota
perfected lean manufacturing in the 1990s, and now the concept is being put
to use in other areas, such as organizational structures, distribution and
logistics.
The Toyota Way: 14 Principles
Though books have been written detailing the steps to achieving
lean manufacturing and many manufacturers have tried to emulate Toyota's
success, few have actually done so. Why? Because they have failed to adopt
lean manufacturing as a management philosophy that encompasses the entire
organization. Instead, they see it only as a departmental solution.
Basic Elements of Lean
Manufacturing
The basic elements are waste
elimination, continuous one piece workflow, and customer pull. When these
elements are focused in the areas of cost, quality and delivery, this forms
the basis for a lean production system.
The lean production concept was to
a large extent inspired by the
Kaizen
the Japanese strategy of
continuous improvement. Employee empowerment and
promotion among them of a way of thinking oriented at improving processes,
imitation of customer relationships, fast product development and
manufacturing, and collaboration with suppliers are the key strategies of
leading lean companies.
Five Ss:
The Five Ss refer to the five dimensions of of workplace
optimization:
Seiri (Sort),
Seiton (Set in order), Seiso (Shine), Seiketsu (Standardize), and
Shitsuke (Sustain).
Lean Production Overview
-
Non-value added activities or waste are
eliminated through continuous improvement efforts
-
Focus on continuous improvement of processes
rather than results of the entire value chain
-
The lean manufacturing mindset: concept,
way of thinking
not techniques;
culture
not the latest management tool
-
Continuous product flow is achieved through
physical rearrangement and system structure & control mechanisms
-
Single-piece flow / small lot production:
achieved through equipment set up time reduction; attention to machine
maintenance; and orderly, clean work place
-
Pull reduction /
Just-in-Time
inventory control
Applications
Lean techniques are applicable not
only in manufacturing, but also in service-oriented industry and service
environment. Every system contains waste, i.e. something that does not
provide value to your customer. Whether you are producing a product,
processing a material, or providing a service, there are elements which are
considered 'waste'. The techniques for analyzing systems, identifying and
reducing waste, and focusing on the customer are applicable in any system,
and in any industry.
Lean thinking may also be applied
for
getting
rid of bureaucracy in your home office. To run your home office more
effectively and faster you may need just as little as 10% of its current
staff. Only executives who have a direct
involvement with finding, keeping, or growing customers as well as key
support staff accountants, tax, legal and human resources people should
stay. Others can be rehabilitated by sending to an operating unit.
Characteristics
of Lean Manufacturing Systems
-
Close integration of the whole
value
chain from raw material to finished product through partnership
oriented relations with suppliers and distributors.
-
Team based work
organizations with multi skilled operators empowered to make decisions
and improve operations with few indirect staff...
More
Case
in Point
Three Small- and Medium-Sized Firms, U.S.A.
Smaller and
mid-sized organizations pride themselves on being nimble quick to respond
and to
seize
opportunities. Many believe smaller size is more manageable; and that
internal communications in a
smaller group
can be maintained so employees can take ownership of more than their own
corner of the enterprise. One key to success is maximizing resources and
discovering inventive ways to overcome budget limitations. Another trend is
moving from a PUSH system
building to
forecasts
to a PULL system, building in response to
orders...
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