What is Lean Manufacturing?

“Lean Manufacturing” is part of a business wide strategy aimed to increase market share whilst at the same time attempting to minimise operating costs. In the face of ever increasing global competition businesses are driven to improve flexibility, sharpen market responsiveness, improve output and simultaneously to reduce overall costs. Lean manufacturing is one of the key but not only, means by which this is being achieved.

Lean Manufacturing is thought by many to have been the brainchild of American Academics. It is in fact, a term coined by the authors of ‘The Machine that Changed the World’ published by MIT to describe an evolutionary concept at a point in its history as applied with stunning effectiveness in the Toyota Corporation.

At the core of this strategy is a series of related processes aimed to continuously and perhaps relentlessly to minimise the consumption of resources that add no value to a product.

“Lean Manufacturing” may be defined as:

Lean Manufacturing  is now the name used for a collection of business performance improvement tools and concepts that focus on enhancing Quality, Cost, Delivery and People’s contributions through the application of World Class manufacturing principles, the elimination of waste and continual improvements in workplace safety.

Lean Manufacturing has its roots in the scientific management era of the first half of the 20^th century. The work of Fredrick W Taylor, Frank and Lillian Gilbreth being fundamental to its development. By the 1950s, through concepts developed directly from their work, the United States had become the most productive country on Earth. However, the management systems which had evolved, were powerful but by no means perfect. The method as it was in those days relied upon breaking all work related tasks down to their basic elements and devolving all problem solving upwards to management.

In effect, ‘Management managed and direct employees just did as they were told. No one asked them anything or gave them any opportunity to be involved. From a productivity point of view this was devastatingly effective and vastly superior to the so called ‘craftsman’ approach which it replaced. However, there was a price to be paid. It was anti social and whilst the workers liked the larger pay packets, they resented the way in which they were being treated. As a consequence, labour relations deteriorated alarmingly and companies needed to spend huge amounts on labour relations departments and other consequences of the approach.

A further problem not appreciated at the time was that management was not sufficiently close to the effect of daily operations that huge inefficiencies began to develop in the organisations. Excessive downtime in operations due to long and poor set up procedures, unexpected plant breakdowns due to poor maintenance. Excess inventory resulting form the difficulties of managing large complex plant and supply chains with fluctuating customer demands.

During the 1950s, the emerging post war Japanese Industrialists began to challenge some of the precepts of this management approach and amongst the foremost of the pioneers were Toyota, Honda and a number of other volume producing organisations.

First of all they challenged the social system of scientific management. Management managing with the employees being treated as robots was not working for them.

Realising that they could not go back to the craftsmanship approach because it was not economical, they tried to bring it back to groups or teams under the leadership of their own foremen or supervisors. They called these teams Quality Circles at Toyota and Gemba Kaizen activities in Nissan. This concept wad formally launched at the Nippon Wireless and Telegraph Company in early 1962 and before the end of the year 35 other companies had followed suit including the Toyota Corporation.

This concept was incredibly successful and proved to eliminate all of the disadvantages of so called scientific management whilst retaining all of its advantages. In fact it enabled the concept of self management at the workplace.

Once established, it enabled management to begin building and developing not only the supervisor but also the management skills of the workforce. This all took place in the mid to late 1960s by which time workers were skilled in process control using simple but effective statistical methods known as Statistical Process Control (SPC).

At this point in 1972 the Japanese Plant Maintenance Institute (JPMI)postulated that perhaps the workers could also carry out local plant maintenance. In effect, manage the operating efficiency of their own plant and equipment. This included responsibility for the general management of the housekeeping in their own work areas. This concept became known as ‘the 5S’s’ which is explained in the paper ‘what is Total Productive Maintenance’ in this segment of the web site.

In parallel to all of this, the development of local quality control through the use of statistical methods had produced an unexpected by product. When process related problems had been identified and eliminated, not only did quality improve but also the process itself became more predictable. As a consequence, run times were longer with fewer breakdowns, this in turn made scheduling easier, set up times shorter and less waste in the production process. This in turn enabled the advent of ‘Just in Time’ production and the ‘Pull’ system – never making anything until there was a customer.

By the late 1970s – early 1980s, what is known today as 'Lean Manufacturing’ was in operation in all leading Japanese organisations. However, whilst specific elements of it had been identified by Western observers, this was only on a piecemeal basis. Some thought that Quality Circles were the secret.

Others saw ‘Just in time’ as a panacea, or 5S/5C, SMED (Single Minute Exchange of Dies), Single part manufacture – including Kanban and Theory of Constraints etc), Jidoka and ANDON set ups, Takt time. The fact is and this is very important, none of these concepts stands on its own. Whilst each might produce some return individually, the real power comes through the integration of not only the tools currently referred to as ‘Lean Manufacturing’ but everything included in integrated management systems and particularly Quality Circles.

Curiously, none of the Western approaches to Lean Manufacturing appear to recognise the fundamental importance of Quality Circles or to use a more generic name ‘Self Managing Workgroups’. This is strange given the fact that both Toyota and Honda in particular have a vigorous policy to globalize employee involvement in Quality Circles towards 100% in all locations in the world. Concepts such as 5S/5C, SMED, Total Productive Maintenance cannot work efficiently without them.

In a truly Lean Manufacturing organisation today everyone is recognised as being the expert in his or her own job and are working together for mutual success.

Many of these terms are also common to Six Sigma and other business improvement concepts

Customers can be both internal and external and include everyone upstream from any given point in a process through to the eventual end user. In its ideal state, nobody makes anything until it is required by the immediate customer. In practice, stocks must be kept at some points for practical reasons but these should be continually challenged and where possible eliminated without risk to the organisation or to create unnecessary delays further up stream or to the ultimate user. To be effective, it is paramount that the specific needs of these customers is understood and satisfied.

Most processes include activities that are either unnecessary or inefficient. Value Stream Mapping is a process mapping tool that enables a searching analysis of all processes in order to eliminate all forms of waste.

1. Equipment Failure - causes production downtime. Equipment failure requires maintenance assistance and can be prevented with the use of appropriate preventive maintenance actions.

2. Set up and adjustments - this refers to loss of productive time between product types, and includes the warm-up after the actual changeover. Changeover time should be included in this loss opportunity and it should not be part of the planned downtime.

3. Small stops - typically less than 5-10 minutes and they are typically minor adjustments or simple tasks such as cleaning.

4. Speed losses - caused when the equipment runs slower than its optimal or designed maximum speed. Examples include machine wear, substandard materials, operator inefficiency, equipment design not appropriate to the application, etc.

5. Losses during production - include all losses caused by less-than-acceptable quality after the warm-up period.

6. Losses during warm up - all losses caused by less-than-acceptable quality during the warm-up period.

Reversible and Irreversible .

Reversible means that the problem can return if the situation is not regularly monitored. This can involve a ‘Process Audit’

Irreversible solutions are those where the methods have been changed in some way making it impossible for the problem to return. This is known as ‘mistake proofing’ or in Japan ‘Poke Yoke’ (pronounced poka yokee)

1. Over production

- Producing more than the customer requires.

2. Waiting

- Waiting for process

- Excessive machine time/downtime

3. Transportation

- Work in progress

- Bad organisation

- Double handling

- Moving things long distances

4. Over Processing

- More than the customer requirement

- Doing more than necessary

5. Inventory

- Stocks of parts or materials not being worked upon and stored between operations

6. Motion

- Excessive walking

- Searching for tools / parts

7. Scrap/Rework

- Making defective parts

- Re-work

Check our series of Fast track courses on Lean Manufacturing