As a management philosophy, lean manufacturing is all about continuous elimination and reduction of waste in the production and business processes. Small, incremental improvements constantly take place in an organization so that it helps lower costs, increase productivity and maintain top quality products. All these things could be achieved along with profits, and at the same time, put waste to a minimum. For the most part, lean manufacturing has the Japanese improvement principle, kaizen, at its core. However, lean manufacturing is founded solidly as a production standard that represents both just-in-time (JIT) production and autonomation.
To better understand this, JIT is about producing only the quantity required to be manufactured for a given period. On the other hand, autonomation or automation with a human touch is putting in place machines that would stop operating as soon as errors are detected. In both methods, wastes in production are eliminated, and hence, lean manufacturing is a principle that many industries live by in the past few decades. More so, it is also about giving utmost consideration to customer value and ensuring that the values reflect what an organization produces. When viewed as a business improvement philosophy, gears are shifted so that the actual products and services rendered are the results of what the market demands or desires.
In any business, waste is anything that is not needed, expensive, time-consuming, unsafe and defective. Many more things fall under waste, but to sum up, wastes according to Japanese lean manufacturing expert Taiichi Ohno are overproduction, excess labor, unnecessary transportation and human motion, over processing and inventory, waiting time, defects and unused spaces.
With lean manufacturing in place, these wastes could be eliminated. For example, there would be less labor expense when only needed people are working. The whole workplace area will be maximized, and there will be very little need for transportation. At the same time, unnecessary motion among employees will be eliminated. Hence, they become more efficient at what they do and focus on producing top quality output. Inventory frequency could also be lowered, along with breakdowns in machines, vehicles and processes. In all these, there would be higher customer satisfaction and profits.
We discuss in detail below how all these benefits would take place.
Improved financial impact
With lean manufacturing, those involved in the accounting routines of an organization will definitely find things more manageable. As opposed to having a lot of stock, which costs money in terms of storage and movement, there would be less stock and corresponding expenses that come with it. Note that stock mean inventory and this would need use of space, and additional expenses related to handling equipment and damage. But savings can be had and this is because lean manufacturing eliminates inventory, and lessens the workload of accountants. This would be a welcome financial impact on any business. In addition, customer satisfaction is going to be the end-result, as more and more clients come in along with returning customers. Only positive financial impact will be a company’s experience with lean manufacturing. It’s like hitting many birds with a single stone because spaces and human resources are well maximized, target market is captured, inventory is reduced, and then costs are reduced greatly.
Any industry desires a safer work environment where the employees can carry on their tasks quickly and produce the best output. Such efficiency can be achieved in lean manufacturing, foremost because problems in the processes are eliminated. Issues at hand are immediately investigated and solutions are readily put in place. Implementing root cause analysis is vital to the lean principle, and thus, any problem gets the level of attention it needs to be corrected right away. To improve efficiency, businesses can also reduce space needed for completed and raw inventory. They can also improve workplace safety and security. Doing all these things would lead to to greater efficiency in the overall processes within the workplace or business.
Improved product quality
It’s every organization’s target to only produce the best. This is why most would opt to follow the single-piece flow in their business process, and hence, they can achieve top quality output, be it in services or products. In lean manufacturing, issues of quality are faced right then and there. There are problem-solving techniques for any concern in the production process that is determined to cause defects and flaws in the product. The recurrence of such mistakes is prevented, and potential quality issues can be quickly and rightfully addressed as they occur.
Improved labor situation
The workplace situation will be greatly improved when lean manufacturing is implemented, mostly because the process and people involved follow standards. The repeatability and consistency and immediate corrections of any observed flaws create positive outcomes. As everything becomes standardized, there is less manpower required, and the processes can be done efficiently even with fewer workers. As for those freed from the previously over-staffed tasks, they could be trained to enhance skill levels for different purposes so that there’s no need to hire new employees. The retention of this group of employees would also mean fewer costs and effort at training newcomers. It further translates to easier management of the whole workforce, which, as a whole, is totally involved in the lean manufacturing principles.
Competition in any industry these days is getting tougher by the day. Companies must be constantly changing and developing methods to ensure they stay at the top of their game. It’s not just about producing the best product for the customers, but it’s also about ensuring commitment of the key players to sustain business success. In this way, any organization will achieve their goals of growth, profits and longevity in the industry.