Glossary

Lean

Lean is an approach that focuses on maximizing productivity while simultaneously minimizing waste. Toyota was one of the first early adopters of the lean manufacturing strategy during the 1990s. Companies that use this strategy focus on using the least possible resources to accomplish a specific production goal. 

The lean approach is now very popular amongst startups, which is understandable since most startups don’t have a lot of resources to waste. Besides the manufacturing industry, companies in several other sectors, including tech, logistics, and automotive, have all adopted the lean approach in order to minimize waste in their operations. 

How does lean manufacturing work

With this approach, all the processes, activities, and products/services that require time, money, and skills but do not create value for the customer are minimized or eliminated from the daily company operations. Implementing this strategy requires the company to do a study to identify all the sources of waste.

For instance, one of the sources of waste in manufacturing could be old equipment that uses significantly more energy than newer versions to achieve the same results. In that case, the company can plan to replace the old equipment with a newer version in order to lower energy costs. In the long term, the lower energy and maintenance costs can compensate for the initial expenses incurred to purchase the more efficient equipment. 

Companies using the lean approach can also eliminate or combine certain stages in the production process to cut the cost per unit item produced. Removing waste from operations requires thinking outside the box to identify areas in the production line that can be streamlined without compromising productivity. 

The five principles of lean manufacturing  

1. Value 

In lean manufacturing, value refers to how much the customer is willing to pay for the product the company makes. After determining the value (price) of the product, there is a need to look for ways of manufacturing the product at a fraction of that price to generate profits. 

2. Map the value stream

This principle is all about analyzing the materials and other resources required to produce a product and then identifying the improvements that can be made to minimize waste. 

3. Create flow

This principle is about eliminating all the barriers in the production line to reduce lead times. It ensures that all processes in manufacturing operations go on smoothly while minimizing waste and delays. 

4. Establish a pull system 

With a pull system, production is based on the demand for the product in the market. Companies that use lean manufacturing have to build systems that allow them to reduce or increase their production based on demand. 

5. Perfection 

In lean manufacturing, there is always an ongoing effort to minimize waste in all operations. Companies that use the lean approach believe there is always something that can be improved in the production line to reduce waste. 

Benefits of lean manufacturing

There are four primary benefits of lean manufacturing, and these include; 

  • Eliminating waste
  • Reducing costs
  • Improving quality
  • Reducing time

In this article

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