What is Lean Production?
Lean is about doing more with
less: less time, inventory, space, labor, and money. "Lean manufacturing", a
shorthand for a commitment to eliminating waste, simplifying procedures and
speeding up production.
The idea is to pull inventory through based on
Lean Manufacturing (also known as the
Toyota Production System) is, in its most basic form, the systematic
elimination of waste overproduction, waiting,
transportation, inventory, motion, over-processing, defective units
and the implementation of the concepts of
continuous flow and customer pull.
Five areas drive lean manufacturing/production:
Just as mass production is recognized as the production system of the 20th
century, lean production is viewed as the production system of the 21st
century. In fact, the processes involved in
lean are ideal for any business whose inventory accumulates in buffer
A Management Philosophy
perfected lean manufacturing in the 1990s, and now the concept is being put
to use in other areas, such as organizational structures, distribution and
logistics. Though books have been written detailing the steps to achieving
lean manufacturing and many manufacturers have tried to emulate Toyota's
success, few have actually done so. Why? Because they have failed to adopt
lean manufacturing as a management philosophy that encompasses the entire
organization. Instead, they see it only as a departmental solution.
Case in Point
IBM regularly compare part counts, bills of
materials, standard versus custom part usage, and estimated processing costs
by tearing down competitor products as soon as the latter are available.
"Through such tear-downs during the heyday of the dot matrix printer, IBM
learned that the printer made by the Epson, its initial supplier, was
exceedingly complicated with more than 150 parts. IBM launched a team with a
simplification goal and knocked the part count down to 62, cutting assembly
from thirty minutes to only three."1
3 Strategies of Market Leaders
Basic Elements of Lean
The basic elements are waste
elimination, continuous one piece workflow, and customer pull. When these
elements are focused in the areas of cost, quality and delivery, this forms
the basis for a lean production system.
lean production concept was to a large extent inspired by the
the Japanese strategy of continuous improvement. Employee empowerment and
promotion among them of a way of thinking oriented at improving processes,
imitation of customer relationships, fast product development and
manufacturing, and collaboration with suppliers are the key strategies of
leading lean companies.
Lean techniques are applicable not
only in manufacturing, but also in service-oriented industry and service
environment. Every system contains waste, i.e. something that does not
provide value to your customer. Whether you are producing a product,
processing a material, or providing a service, there are elements which are
considered 'waste'. The techniques for analyzing systems, identifying and
reducing waste, and focusing on the customer are applicable in any system,
and in any industry.
Lean thinking may also be applied
getting rid of bureaucracy
in your home office. To run your home office
more effectively and faster you may need just as little as 10% of its
current staff. Only executives who have
a direct involvement with finding, keeping, or growing customers as well as
key support staff accountants, tax, legal and human resources people
Others can be rehabilitated by sending to an operating unit.
More in the mini-course
Improvement Firm (CIF)