Lean manufacturing might sound familiar to factory managers. Whether they learned about it in university industrial engineering courses or from their consultants’ recommendations, it is a must-have for any production facility.
Yet, what is lean manufacturing exactly? Is it as handy as many practitioners claim? In this article, we will introduce you to lean manufacturing, its five principles, the eight wastes in lean manufacturing, real-world examples, and the tools you need to achieve perfection.
At the end of this article, we also provide a lean manufacturing e-book PDF that you can download for free. With it, you can immediately start implementing the 5 lean manufacturing principles and permanently remove the 8 waste forms from your factory.
What Is Lean Manufacturing?
Lean manufacturing is, in essence, a mindset in manufacturing. It aims to remove all unnecessary waste in the entire production process. With all of the waste removed, your production process will become “lean” and is expected to be able to produce more output while consuming less cost and time.
It aims to achieve this “leanness” by implementing the 5 lean manufacturing principles to remove the 8 recognized types of waste. In the following sections of this article, we will explain these 5 principles and 8 waste types.
History of Lean Manufacturing
The idea of having efficient, cost-effective manufacturing has been around since the early days of the Industrial Revolution and keeps progressing as time goes by. For example, Henry Ford introduced the moving assembly line system to the automotive industry in 1913. This innovation cuts Ford Model T’s production time from over 12 hours to only 93 minutes per unit.
However, lean manufacturing is strongly attributed to the Toyota Production System (TPS). The TPS was introduced and developed by Taiichi Ōhno, an industrial engineer from Toyota, after he visited the US in 1956.
He developed the TPS system by learning from American automakers’ shortcomings and the American concept of supermarkets (where customers can just pull products that they want directly from the shelves). The TPS’ motto of “making only what’s needed, when it’s needed, and in the quantity needed” is a textbook example of lean manufacturing.
The TPS minimizes wasted resources, severely cutting Toyota’s production costs and allowing the company to manufacture affordable cars. This strategy cemented Toyota’s dominance in the global automotive industry. In 2022, Toyota sold around 10.5 million vehicles, making it the world’s top-selling automotive manufacturer for three consecutive years.
What Are the 8 Wastes of Lean Manufacturing?
Before going deeper into the 5 principles, it’s essential first to understand the idea of 8 forms of waste in lean manufacturing. After all, the primary purpose of lean manufacturing is to create a waste-free production process. Here are the 8 forms of waste that should be eliminated in lean manufacturing:
A defective product means that it doesn’t satisfy the existing quality requirements. Sometimes, a defect is barely noticeable and doesn’t affect the product’s performance and safety at all, such as a tiny stain in a newly-made shirt. However, defects can also lead to fatal consequences, such as a loose brake disc on a car.
In any case, defective products must be avoided at all costs. A defective product can force you to have product recalls, which will drain your organization’s funds and time. For example, Samsung had to recall over 2 million Galaxy Note 7 phones due to overheating & explosion-prone batteries, estimated to cost the company USD 5.3 billion.
Hence, this form of waste can be financially and time-consuming for your organization. Even worse is that should your defective product cause a fatal incident, the reputational damage will be devastating. Therefore, avoid this form of waste at all costs.
As stated above, a product that doesn’t fulfill the quality requirements is a waste. However, a product with overly high quality can also be a waste.
A product’s quality corresponds to its value-adding process in the assembly line. Each value-adding process costs your organization’s resources, such as materials used for the product, your employees’ time, and electricity or fuel consumed by the production machinery.
Sometimes, a product has many features that customers don’t need, for example, intricate decorative carvings on furniture aimed at the low-budget market segment. Carving woodwork requires hours of work from a skilled carpenter who uses special carving tools.
These extra processes can quickly balloon the production cost, leading to a higher price tag. Meanwhile, low-budget furniture customers generally don’t care about intricate decorations; they only need affordable furniture that can serve their function well. Thus, your higher production cost due to overprocessing will severely disadvantage your product’s competitiveness in the market.
Therefore, it’s crucial to balance your product’s quality. If it’s too low, defects will occur, leading to costly recalls and reputational damage. Meanwhile, overprocessing it will waste your organization’s resources and needlessly increase its price on the market.
Another form of waste is producing more goods than necessary. Often, companies make so many goods that distributors always have a sufficient stock of your products.
With that in mind, customers will always get your products. This is the example of a “push system” in manufacturing – where manufacturers produce as many as they can and then “push” these products to be bought by the customers.
Although this strategy sounds good, it can waste your organization’s resources. Customers are never guaranteed to buy 100% of your products, so you must constantly replenish the distributors’ supplies.
Especially in products that have expiration dates, such as food and medicine, using the push system is a risky move. If a product has passed its expiration date and hasn’t been purchased, it no longer has a positive value and should be removed from the shelves. This means that the resources spent on producing this product have been wasted.
As a solution, lean manufacturing advocates for a “pull system” – where manufacturers produce an item only when there’s an order (hence a “pull”) from the customer’s side. Thus, your products will always have a designated customer and will never be a waste.
The pull system is vital to the whole concept of lean manufacturing and is also the core idea of Toyota’s TPS system. In fact, the fourth principle of lean manufacturing is dedicated to establishing a pull system in your manufacturing plant to prevent overproduction. We will further discuss the comparison of pull vs. push systems when explaining the fourth principle of lean manufacturing.
Idle resources are resources (such as machinery, employees, buildings, etc) that are not working because they have to wait for something. For example, when a machine in your assembly line breaks down, you must call a technician, find the required spare parts, and execute the repair. This process might take a few days or even longer if there are further obstacles.
During this downtime, the affected assembly line will not produce goods as it should, and your employees will not work as they’re meant to. This enormous waste of resources still charges your organization with costs such as employee salaries and plant maintenance while your production is still halted.
This problem can be solved by taking preventive measures, such as undergoing regular Total Productive Maintenance (TPM).
Having to Store Items
Many would assume that having large storage facilities is a must for any manufacturing company. The need to store items in your plant can come from many directions, such as:
- The materials and components that will be used in your production process
- Your finished products which are waiting to be sent to distributors or customers
- Any surplus materials, components, products, machinery, and production tools
While it might seem essential, it can burden your organization’s finances. Needing storage space means that you have to either build or lease warehouses.
If your plant is located in a prime industrial area, the per square meter cost of land tends to be costly. Add that to costs for warehouse staffing and running a warehouse inventory system, and your production costs will pile up significantly.
This is why lean manufacturing practitioners advocate for a pull system to minimize storage needs whenever possible. Toyota’s TPS system’s phrase “making only what’s needed, when it’s needed, and in the quantity needed” perfectly aligns with this goal of minimizing storage needs.
Transporting goods from point A to point B can also be a form of waste. To build complex products, manufacturers often prefer to outsource some components to third-party vendors. The automotive industry is a good example.
The chassis of a car might be produced in country A, the engines in country B, the tires in country C, and they all will be assembled into a complete vehicle in country D. Afterwards, this car will be sold in country E. This process requires immense transport and warehousing costs, not to mention import taxes each time it enters a new country.
The proximity to raw materials and competitive labor costs sometimes justify this complex supply chain. If not, it’s best to have a source of materials, component vendors, production facilities, and distribution centers close to each other to cut wasteful transportation costs.
This form of waste shares many similarities with the one above. However, this one highlights the excessive movement of people within a production facility. Yes, even the movement of your employees within your plant can waste your organization’s resources. But how come?
For example, you have a regular-sized factory with a floor area of 20,000 square meters. Production stations are located tens of meters apart from each other. There’s a central tools station in the middle of the factory.
Meanwhile, employee cloakrooms, lockers, cafeterias, and toilets are only available at the ends of the building. With this layout, employees must walk between production stations to take and return production equipment at the central tools center. When taking and returning equipment, they occasionally need to bow down, bend their body, climb a ladder, and any other form of extra physical movement that requires effort and time.
Additionally, employees are only humans who need to take breaks occasionally. Add the walking time for these activities as well. As you can see, the time required for walking and other physical movements starts to pile up. Manufacturing workers are often paid by the hour, and this unproductive time is also charged to your coffers.
Imagine how many minutes are spent every day just for walking. It can even be counted in hours instead of minutes if accumulated yearly.
A good solution is to install an automated assembly line in your plant. So employees don’t have to walk to do their tasks; the tasks themselves will come to the employees.
Thus, employees will have a fixed workstation for the whole day and don’t have to move every time. Placing amenities such as toilets, lockers, and snack & drink machines near their workstations is also a good addition.
Underutilized Human Resources
The last form of waste, and perhaps the hardest one to spot, is not using your employees’ resources to the fullest. These resources can come in various forms, such as knowledge, skills, and time.
For instance, shop floor workers possess substantial production insights and experience from their exposure to day-to-day plant operations. Yet, major corporate decisions are made mainly by those from upper management, often without asking the opinions of these experienced and insight-rich shop floor workers. Or when upper management’s business-related concerns override shop floor workers’ technical concerns.
As a result, this information gap in decision-making naturally affects the quality of the upper management’s policies. Sometimes, this neglect leads to corporate disasters. For example, Boeing’s upper management has been accused of neglecting employees’ concerns about the safety of Boeing 737 Max aircraft. This event eventually led to two fatal crashes that killed 346 lives. Thus, never underutilize your human resources.
What Are the 5 Principles of Lean Manufacturing?
In lean manufacturing, 5 principles must be followed. Moreover, these principles must be implemented sequentially, as they are interconnected. The main goal of these principles is to have a waste-free production process. Here are the 5 lean manufacturing principles:
Principle 1: Identifying What Your Customers’ Value
What is Value?
The first step in implementing lean manufacturing principles is identifying what your customers value from your products. Value refers to the benefits that your customers get from obtaining your products. Thus, what do customers want from your products? What aspects of your products do customers expect?
- Is it because of the quality of your products?
- Your products’ affordability?
- The features of your products compared to your competitors’?
- The simplicity of maintaining your products?
- The ease of finding service points and spare parts?
- Because of your brand’s overall reputation?
- Or a combination of everything?
It’s crucial first to understand why your customers are willing to spend their money to obtain your products before moving further.
How to Know What Your Customers Value?
There are multiple ways to find out what your customers value. Internally, you can organize a brainstorming session within your organization. This brainstorming session should involve the sales and customer relations departments, as they’re the ones who have the highest amount of exposure to your customers.
In this activity, ask your sales and customer relations team members;
- Why do customers choose/not choose our products?
- Are our products superior or inferior to our competitors? And in which aspects are they superior or inferior?
- After purchasing your products, what are our customers’ common compliments and complaints?
- Are your customers willing to recommend your products to their acquaintances? And why so/not so?
You can also involve your production-related departments so that your production employees can directly implement the inputs from your sales and customer relationship departments.
Externally, you can always do a customer satisfaction survey. You can take this survey through various methods, from email questionnaires to interviewing them when they’re physically present in your store/facility.
Customer feedback is integral to any business, even if they’re not planning to implement lean manufacturing. According to Microsoft’s Global State of Customer Service survey in 2019, 89% of customers want producers to provide a channel where customers can give feedback. Hence, listening to your customer’s voices is essential for any organization.
Reaching your customers to hear their ideas is indeed a challenging step to execute – yet critical for lean manufacturing. The results of this step will tremendously impact the next phases of your transition into lean manufacturing.
Principle 2: Value Stream Mapping
If the values are identified, it’s time to move to the following principle of lean manufacturing: value stream mapping. But what is a value stream? And how do you map your value stream?
A value stream refers to the flow of resources in your product’s entire life cycle, which includes:
- The materials and components needed to make this product
- The transporting of these materials and components to your manufacturing plants/warehouses
- The storage of these materials and components in your manufacturing plants/warehouses
- The entire production process of this product (including quality control)
- The transporting and distribution of this product to customers
- The use of this product by your customers
- The disposal of this product by your customers (including recycling, resale, and scrapping process – if any)
After identifying the value stream, it’s best to visually map them in a flow chart to give you a better idea of the bigger picture. It’s recommended to have a value stream map for each product your organization makes.
This example below from the US Department of Commerce’s National Institute of Standards and Technology illustrates what a value stream mapping looks like.
It’s also important to explicitly include the resources (including time) needed in that product’s entire production process. With this information, you can manage your resources better, which we will cover in the next steps of the lean manufacturing strategy.
Principle 3: Creating a Lean Manufacturing Flow
Now that your products’ value stream has been visually mapped, it’s time to analyze it. Check whether there are any of the following 8 forms of waste within your value stream map:
- Defective Products
- Excessive Processing
- Idle Resources
- Having to Store Items
- Unnecessary Motions
- Underutilized Human Resources
Waste Example: Idle Resources
If a form of waste has been detected, you should eliminate it immediately. For instance, a commonly found example of waste is where a production bottleneck occurs due to a quality control process. This waste can fall under the “idle resources” and “overproduction” categories.
Manufacturing plants generally have a quality control process to comply with industry standards. Sometimes, the number of products that the quality control team can check is only a fraction of the number of products that a plant produces at any given time.
Many products have to wait before they finally get reviewed by the quality control team. Consequently, the workers in the next steps in the production and distribution process also have to wait, making them idle for some time. Or if a quality control process is so rigorous and time-consuming, products must wait before the quality control team can finally inspect them. This issue is usually found in industries with remarkably tight safety standards, such as the automotive industry. Cars have to pass various tests such as safety, emission, and performance checks before being declared roadworthy.
As a result, your products sit idle for some time instead of immediately going to the next step of the production process or going directly to the distribution process. If idle goods have significantly piled up, you might need to build or rent a storage facility, such as a warehouse, which also adds to your production cost.
Kanban Board: Example of a Lean Manufacturing Tool in Action
A good solution against this form of waste is introducing a Kanban board to the assembly line. It’s a board that visualizes your entire production process. It shows the existing production phases and which products are currently under those phases. A kanban board can be physical or digital.
The most basic phases included in a Kanban board include “To Do” (for things that haven’t started yet), “In progress”, “Testing”, “Done”, and “Backlog” (for delayed processes). Of course, different industries will have different sets of production phases.
A Kanban board provides a bird’s eye view of your plant’s production activities. With it, you can easily find backlogs and direct your efforts in solving them. Additionally, your production team can see how many products are still waiting for the quality control process.
With this information, they can adjust their production speed so that there won’t be too many products sitting idle waiting for the quality control process. This strategy will prevent idle products from occupying too much storage space in your production facility.
The Importance of Eliminating Waste in Lean Manufacturing
Eliminating waste is crucial for any manufacturing plant wishing to implement lean manufacturing. Removing the 8 waste types is the main idea of lean manufacturing.
A manufacturing plant is considered “lean” if it no longer has waste. As illustrated in the quality control backlog example, waste will cost your organization money, time, and space. Hence, detecting and eliminating waste as soon as possible is in your best interest.
Principle 4: Establishing a Pull System
If the first 3 principles have been correctly applied and all waste is removed, your manufacturing plant can already be considered “lean.” However, we can enhance your production facility’s efficiency by establishing a pull system per the lean manufacturing ideals. Yet, what is a pull system?
What is a Pull System?
The pull system in lean manufacturing refers to the concept where a product will only be produced when there’s already a customer demand for it. It is as if the customer “pulls” the product from the factory, hence the name. Without customer demand, products will not be manufactured under the pull system.
The push system is the opposite of the pull system. Under a push system, a product is produced without any demand, generally based on market forecast, and then “pushed” or marketed and distributed towards potential customers.
Why is a Pull System Better Than a Push System?
From the perspective of lean manufacturing, a pull system is always preferred over a push system due to the following advantages:
- Lowers likelihood of over- or under-production
- Less storage space needed
- The production team is less likely to be over- or understaffed
- Generates less waste
- More efficient distribution system
- No risk of market forecast errors
How to Establish a Pull System in Your Manufacturing Plant
There is no specific protocol for establishing a pull system within a manufacturing plant. The pull system itself is merely a concept, not a concrete procedure.
The simplest way of commencing a pull system is by using kanban boards (preferably digital) in your production facility. That way, everyone can see the existing customers’ orders and their production process in your assembly line.
Moreover, you can integrate Customer Relationship Management (CRM) software into your digital Kanban board. That way, whenever there are purchase orders from your customers, your team will automatically be notified and will start the production process for these orders.
Principle 5: Continuous Improvement (Kaizen)
Last but not least, the fifth principle of Lean Manufacturing is continuous improvement (or kaizen in Japanese). Unlike the previous four principles that include concrete steps, this principle is rather philosophical.
The idea of lean manufacturing must be ingrained into every single employee in your organization. Doing lean manufacturing is not enough – everyone must also “think lean.” Employees who “think lean” will automatically eliminate any form of waste they see, even without instructions from their supervisor.
There are various ways to internalize lean manufacturing to your employees. The simplest way is, of course, through having lean manufacturing training programs and seminars.
There’s no better place to learn lean manufacturing than from the company that developed it: Toyota. In its Toyota Lean Academy, you can request employee training programs and access their expertise through their advisory services.
Additionally, you can start organizing a daily stand-up meeting. In this short meeting, employees should answer these questions:
- What did you work on yesterday? How did it go?
- Which tasks will you do today?
- Do you see any obstacles to these tasks?
With it, every employee’s work progress is accountable, and any obstacle will be immediately dealt with.
Azumuta as a Lean Manufacturing Tool
Now that you’ve understood lean manufacturing principles, it’s time to apply them to the real world. To implement the 5 principles of lean manufacturing, you will need the best tools available in the market.
Azumuta is your one-stop companion when implementing the 5 lean manufacturing principles and eliminating the 8 waste types. Here’s how:
Digital Work Instructions
Tired of continuously finding defective products in your assembly line? Has your organization ever had to organize a product recall? If so, our Digital Work Instructions module is your solution. The digital work instructions module is the perfect tool to prevent defects and excessive processing, two types of waste in lean manufacturing.
With our drag-and-drop interface, you can effortlessly make visually intuitive work instructions in just a few minutes. No graphic design or coding skills are necessary. Our work instructions slo allow you to easily include videos, symbols, schematics, and other visual elements.
Moreover, our work instructions are 100% paperless and can be displayed on any PC, tablet, smartphone, and other supporting devices with a screen. Say goodbye to defective products and excessive processing.
Additionally, you can create a lean manufacturing value stream mapping. Simply use our user-friendly designer tool and draft a visually intuitive value stream map.
Interestingly, not only can our module be used to make and share work instructions digitally, but it can also be used to source feedback from your shop floor workers. Should they find issues or have concerns in the assembly line, your shop floor workers can directly report them to their supervisors. Say hello to a defect-free assembly line thanks to this 2-way communication feature.
As a supervisor or project manager, do you have to continuously go back and forth between numerous production stations in your plant? Do you wish you could gather data from your assembly date and have complete oversight from the comfort of your desk?
With our Quality Management module, you can do precisely that. It can connect to various peripheral devices, from digital torque wrenches to weighing scales.
Data from these peripherals can be fed directly into your PC, tablet, and smartphone. Thus, there is no need to waste your time and energy between different production stations.
As a result, you will have a real-time data visualization dashboard, granting you 100% situational awareness of your shop floor. In lean manufacturing, you can easily track your production pace, allowing you to adjust it anytime to prevent over & under-production. You can also check whether machinery or employees are idle, ensuring that none of your resources are wasted.
Skill Matrix & Training
The final principle of lean manufacturing is kaizen, continuous improvement. And there’s no better way to continuously improve your team’s performance by organizing routine training programs than with our Skill Matrix & Training module,
With this module, you can easily plan short and long-term employee development programs. Thanks to its multi-device and multi-account access, your training plans can be shared with your team members.
Moreover, our app sends automatic notifications to their devices or necessary information, such as an imminent training session.
Besides that, you can also grade and track their skill level through our skill matrix functionality. With a skill matrix, you can delegate tasks and plan work rosters according to your needs so that the right employee will do the right tasks according to their skills.
Audits & Digital Checklists
You have implemented all 5 principles of lean manufacturing in your plant. Have you also eliminated all 8 forms of waste in the process… or not?
Implementing lean manufacturing on any plant is rigorous, and keeping track of everything on your own is never easy. Remember, you can’t afford to skip a single step, as it might derail and ruin your plan to transition into a lean manufacturer.
The Audits & Digital Checklists module is the answer to this problem. With it, you can seamlessly create comprehensive digital checklists so that you will never unintentionally skip a single step. You can also share them with your team to ensure total accountability and allow your peers to crosscheck and contribute to them.
Even if you’re finished with your transition into lean manufacturing, you can always check whether there is still room for improvement. Use its audit functionalities to conduct an internal audit within your organization to check whether any forms of waste remain. Thanks to our performance-supporting and time-saving features, your audits will feel like a walk in the park.
Free Lean Manufacturing E-Book PDF
In addition to the powerful tools above, it’s equally important to understand the 5 lean manufacturing principles and 8 waste forms theoretically. And more importantly, it’s crucial to internalize the “lean mindset” to your team to ensure continuous improvement in your factory.
To help you get started, we’re providing a lean manufacturing e-book PDF, which you can download for free below
Check out how our client’s use of Azumuta has led to impressive improvements: 60% fewer customer complaints, 50% less time spent on creating and managing work instructions, 40% quicker problem resolution, 40% less time spent on employee training, and an overall 20% full-time employee gain due to increased work instructions efficiency in their own words.