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Wealth Creation through Lean Manufacturing
Akhilesh N. Singh
Apr 2010
Apr 2010
Ministry of MSME, Government of India has recently launched a countrywide initiative to implement Lean Manufacturing in 1000 MSMEs of one hundred clusters. This article is especially written for Lean Cluster Members to facilitate clear understanding of Value and Waste.
Every organization whether large, medium or small is striving to create wealth through its business operations, which is possible only by production and delivery of 'value' to the customers. But due to ignorance of right manufacturing practices, organizations are producing more waste instead of value. Lean Manufacturing is recognized as one of the most effective techniques to create value for the customer and wealth for the organization.
Lean Manufacturing in simple terms can be described as elimination of waste. Therefore the very first requirement for every person involved in Lean implementation is to have clear understanding of value and waste.
Concept of Value and Waste
In any activity of a business process, at any moment of time we are doing only two things:
a. Either adding value to product or service through useful activities or
b. Generate waste by doing a non-value added activity
To improve the performance of organization, people have to learn to see the quantum of waste being generated in their business processes, lesser the better. By minimizing waste value gets enhanced.
Waste (in Japanese language called as “muda”) is defined as "any business activity that adds no value but absorbs resources". As per "Toyota Production System” wastes are classified in 7 main categories: over-production, excess inventory, defects, waiting, inappropriate processing, unnecessary motion, and transportation. Later on an eighth category was added as; untapped human potential.
Eight Types of Waste
For the lean manufacturers, waste is the sole enemy. It is viewed as a roadblock to customer satisfaction and company's profitability.
Defined in broad terms, lean manufacturing is a performance-based strategy for maximizing customer value by elimination of waste, while improving profit for the company. The goal of lean is “to eliminate waste and non value-added steps at all points in the manufacturing processes”. To accomplish the objective of Lean, people have to learn to see and eliminate following types of wastes:
„h Waste of overproduction occurs when operations continue after they should have stopped. The results of overproduction are; products being produced in excess of what's required, being made before time and faster than the required speed. This is the cause of all other waste. As well, producing and storing the products for a customer before they are actually ready to take delivery wastes both space and capital.
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