Lean Manufacturing is a set of management practices that are based on the Toyota Production System. At its core, Lean focuses on minimising waste and maximising customer value. Lean was traditionally used in the manufacturing sector, but it is now an agile set of best practices that have been used in a variety of industries to drive efficiency and profitability.

When an organisation adopts Lean, wholesale change to the corporate culture is required. The way everyone in the organisation thinks and acts needs to change. Once this has occurred, the organisation will transform and evolve. Adopting Lean thinking should be thought of as an ongoing journey because continual improvement is a vital characteristic of Lean manufacturing.

Lean Manufacturing – Remove waste

In Lean Manufacturing terms, waste is any activity that the customer isn’t willing to pay for or that doesn’t have a positive impact on the final product or service. When an organisation successfully adopts Lean Manufacturing, they eliminate waste and reduce costs. By achieving optimal workflows, organisations are able to get their products or services to the right place, at the right time and in the right quantity. Employees and managers work together to achieve corporate goals, injuries are minimised and staff morale is heightened.

Lean Manufacturing focuses on identifying and eliminating hidden waste in manufacturing and service industries. These can be:

  • over-processing – doing or adding more than the customer is willing to pay for
  • movement and transport – needless movement of people or things
  • excess inventory – holding work or inventory in excess of what is needed
  • over-production – creating products or services beyond what is needed for immediate use
  • waiting – any delay between one step and the next
  • defects – errors or any aspect that doesn’t meet customer needs
  • unused creativity –the loss of time, skills, improvements or opportunities when employees’ ideas are not listened to.

Lean Manufacturing – reduce costs

Lean thinking is not about endless cost cutting; it’s about identifying process inefficiencies to produce cost savings. Many manufacturers today compete with imported products from countries where labour is cheaper. Adopting Lean thinking is the answer. Understanding where customer value lies, eliminating waste, driving efficiency and harnessing workforce value will keep costs down and deliver a competitive advantage for Australian manufacturers.

Lean organisations understand that avoiding unnecessary costs is more profitable than increasing sales. When an organisation needs to increase revenue, they often immediately look to increase sales. But when businesses with inefficient processes increase sales, their costs usually skyrocket and their problems are magnified. When Lean businesses increase sales, they realise higher profits and deliver optimal client value without a disproportionate increase in costs.

Lean tools

Tools to support Lean implementations include:

Value stream mapping is an analysis of the processes required to get a product manufactured and delivered to the customer.

Single-Minute Exchange of Die analysis looks at the most efficient way to change manufacturing from the current product to the next.

Five S analysis encourages the efficient and effective organisation of a workspace. The areas for focus are sort, straighten, shine, standardise and sustain.

Kanban is a Lean scheduling system that is also used for just-in-time production.

Poka-yoke looks to eliminate product defects caused by human error.

Visual workplace management promotes open communication and information sharing throughout an organisation.

Mini business teams view an organisation as a set of smaller teams that control their own function.

Continuous improvement

For an organisation to become world-class, it must continually improve and evolve. As an organisation grows, a number of issues can arise. Nothing remains the same, and a Lean enterprise knows it’s vital to continually search for opportunities to improve and drive value delivery.