What Is Lean Manufacturing?

Definition

Lean Manufacturing is an operational strategy oriented toward achieving the shortest possible cycle time by eliminating waste. It is derived from the Toyota Production System and its key thrust is to increase the value-added work by eliminating waste and reducing incidental work. The technique often decreases the time between a customer order and shipment, and it is designed to radically improve profitability, customer satisfaction, throughput time, and employee morale.

Characteristics of Lean Processes

The characteristics of lean processes are:

Lean Manufacturing incorporates the use of Heijunka, level sequential flow, Takt time, the heartbeat or pace of the production system, continuous flow manufacturing, cellular manufacturing, and pull production scheduling techniques such as Kanban.

Traditional vs Lean Manufacturing

A key difference in Lean Manufacturing is that it is based on the concept that production can and should be driven by real customer demand. Instead of producing what you hope to sell, Lean Manufacturing can produce what your customer wants...with shorter lead times. Instead of pushing product to market, it's pulled there through a system that's set up to quickly respond to customer demand.

Production Methods Traditional Lean
Production schedules are based on Forecast — product is pushed through the facility Customer Order — product is pulled through the facility
Products manufactured to Replenish finished goods inventory Fill customer orders (immediate shipments)
Production cycle times are Weeks/months Hours/days
Manufacturing lot size quantities are Large, with large batches moving between operations; product is sent ahead of each operation Small, and based on one-piece flow between operations
Plant and equipment layout is By department function By product flow, using cells or lines for product families
Quality is assured Through lot sampling 100% at the production source
Workers are typically assigned One person per machine With one person handling several machines
Worker empowerment is Low — little input into how operation is performed High — has responsibility for identifying and implementing improvements
Inventory levels are High — large warehouse of finished goods, and central storeroom for in-process staging Low — small amounts between operations, ship often
Inventory turns are Low — 6-9 turns pr year or less High — 20+ turns per year
Flexibility in changing manufacturing schedules is Low — difficult to handle and adjust to High — easy to adjust to and implement
Manufacturing costs are Rising and difficult to control Stable/decreasing and under control

The Core Disciplines of Lean

The True Cost of Inventory

Reducing inventory is an important goal of the lean organization. Carrying inventory has many costs associated with it. Obvious costs include: capital tied up in inventory and the associated loss of interest on that capita., loss due to material handling damage, increased labor costs for material handling, and increased space and storage requirement. A cost from excess inventory that is not so obvious is quality. In fact, many companies have seen quality improvements resulting from inventory reductions while not focusing on quality. The reasoning is that if an upstream process is producing parts on a machine and defects occur halfway through the batch, in an organization with low levels of inventory the next downstream process will discover the defects sooner. An organization with low inventory levels can stop the process when the defect is discovered, throw out the defective inventory, and request the previous process to start another batch. The organization with lower inventory levels will also be more effective at determining what caused the defect because the batch that the defect occurred in is fresh in the minds of both production and maintenance.

Benefits of Lean

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