The fundamental principle on which lean manufacturing is based is the elimination of waste. This approach also involves the continuous improvement of production processes and a focus on meeting customer needs. The concept was defined in academic works over 30 years ago. However, when describing the lean management system, it is essential to mention its origins – it was initially based on the philosophy followed by Japan’s Toyota. In the article below, you will learn how lean manufacturing developed, what elements it borrowed from the famous car brand, and what its key principles are.
Lean Manufacturing – Origins of the Concept
The principles of lean management were developed based on practices used in the automotive industry. After World War II, Toyota in Japan began implementing a set of techniques and work organization principles known as the Toyota Production System (TPS). TPS encompassed both production processes and the company’s culture, and adhering to it contributed significantly to Toyota’s rapid growth.
The term “lean production” was first used in 1988 in an article published in Sloan Management Review by John Krafcik. However, it was the 1990 publication that permanently added “manufacturing” to the name and popularized the system internationally. In the book The Machine That Changed the World, researchers James Womack, Daniel Jones, and Daniel Roos analyzed the performance differences between Japanese automotive companies and their competitors in the U.S. and Europe.
As a result, the principles of lean management began to be gradually adopted by other businesses, even those not involved in mass production. The system has been adapted, for example, to the needs of the service sector, IT industry, and public institutions. Since these sectors do not deal with manufacturing, the term “lean management” is more commonly used instead of “manufacturing.”
Lean Manufacturing – Wasteful Behaviors
One of the core principles of lean manufacturing is the elimination of behaviors that contribute to waste. In the Toyota Production System, these behaviors were referred to as “muda,” the Japanese term for waste. Toyota identified seven key areas that generate the most waste:
– Overproduction
– Excess inventory
– Defects and poor quality
– Waiting
– Overprocessing
– Unnecessary transportation
– Unnecessary motion
Often, an eighth area is added to this list: the underutilization of employee potential.
Producing in large batches, the need for storing goods, and consequently creating unnecessary inventory are interrelated behaviors that lead to waste. Losses also result from producing substandard products, which requires fixing errors. “Muda” also involves wasting time, such as during unnecessary transportation of goods or excessive worker movement caused by poor work organization. It also includes delays related to waiting for materials or for proper functioning of IT systems. Furthermore, overprocessing—understood as inefficiencies in production paths or imposing unnecessary tasks on workers—also leads to unacceptable waste in lean manufacturing.
Lean manufacturing offers solutions to help minimize company losses and fully leverage its potential.
Lean Manufacturing – Fundamentals
In their book, Womack, Jones, and Roos identified five principles that define the idea of lean manufacturing. These should be implemented by companies seeking to eliminate waste and improve work efficiency. The foundations of lean production management, upon which efficient operations are built, are as follows:
- Defining value for the customer
- Identifying the value stream for each activity
- Continuous flow
- Pull system
- Striving for perfection.
Fundamentals of Lean Management – Overview
What do we mean by the pillars of lean management mentioned above?
– Defining value for the customer means that all company activities should be undertaken with the end consumer in mind. Adopting the customer’s perspective is the starting point for setting priorities that will later translate into profits and eliminate waste. Values for the consumer may include the product’s quality, functionality, and appearance, as well as its price, availability, and the time it takes to receive the product.
– Identifying the value stream is the second key element of lean manufacturing. A company’s operations consist of many interconnected processes and decisions. From the start of production to delivering the finished product to the customer, all steps and actions should be analyzed and optimized to create the most efficient system possible.
– The outcome of this analysis should also result in continuous flow, the third pillar of lean manufacturing. Unnecessary delays, disruptions, and breaks that cause waste should be eliminated from the company’s operations. Ensuring throughput and optimizing production will enhance the efficiency of the entire process.
– The pull system, also known as the Pull approach, is one method of production logistics. It contrasts with the Push approach, which is based on producing and stocking products in anticipation of demand. Forecasting demand can be inefficient—if the predictions are wrong, the company is left with excess inventory. Lean manufacturing suggests starting the production process only when there is real demand for the product, thus avoiding waste and costs related to storage and disposal of surplus goods.
– The final principle of lean manufacturing is striving for perfection. Every stage of production should be continuously improved. Managers are responsible for finding solutions that make the entire process even more efficient and help minimize losses.
Lean Manufacturing and Industry 4.0
The Fourth Industrial Revolution, which began more than 10 years ago, has provided business owners with access to numerous innovative IT solutions. Industry 4.0 and lean manufacturing complement each other. New digital technologies and advanced ERP systems are tools that many managers use to optimize production management and adapt to the demands of Industry 4.0.
With the help of automated and flexible software, industrial managers can not only better plan the work of their employees but also gain access to vast amounts of data and reports. This allows them to quickly conduct analyses and, based on those insights, introduce improvements across the entire production system as well as within specific departments of the plant.
Lean Manufacturing – Summary
The concept of lean management, based on post-war solutions used by Japan’s Toyota, is one of the leading approaches to efficient production management. Initially implemented in industrial plants, particularly in the automotive sector, lean manufacturing gained recognition in the 1990s in non-production businesses and institutions as well.
Lean manufacturing is built on five pillars: defining value for the customer, identifying the value stream, ensuring continuous flow, utilizing the pull system, and striving for perfection. The aim of adhering to these principles is to identify areas that generate waste, eliminate inefficiencies, and streamline the production process to make it as efficient as possible.
