Special Reports

The most effective way to become a value and wealth creating world-class organization

Akhilesh N. Singh
Mar 2010
Lean Manufacturing

Lean is the term used to describe the production system developed by the Toyota company in the post World War II years. "Lean" comes from the ability to achieve more with less resource, by the continuous elimination of waste. The concept of Lean is not restricted to manufacturing and applies to the whole enterprise, including the supply chain, the new product development process and the provision of service.

In 1990 James Womack, Daniel Jones & Dan Roose wrote a book called "The Machine That Changed The World". This book was a straightforward account of the history of automobile manufacturing combined with a study of Japanese, American, and European automotive assembly plants.

"Lean Manufacturing" caught the imagination of manufacturing professionals in many countries. Lean implementations are now commonplace, every progressive company is trying to become lean. The knowledge and experience base is expanding rapidly. The essential elements of Lean are described in "Principles of Lean Manufacturing." They are based on the techniques developed by Ohno, Shingo and the people at Toyota.

This article on implementation of Lean provides a "Mental Model" to assist the thinking process and guidance on strategy and planning. There is no cookbook for manufacturing. Each firm has its own unique set of products, processes, people, and history. Toyota is Toyota, your company is your company, and you can't copy Toyota but can definitely learn and apply the essence of proven principles in your own way. Manufacturing methodology is a "science", be unique to every product and organization. Implementation strategy is still, largely, an art. Therefore implementation of Lean Manufacturing is combination of science and art, significantly depends on the characteristics of processes, people and culture of the organization.

Benefits of Lean Manufacturing
 
  • Reduces cost by eliminating wasteful use of resources
  • Improves delivery speed by eliminating un-necessary time consuming activities
  • Improves quality by eliminating root-causes of defects
  • Reduces Inventory by balancing the process capacity and linking with customer demand rate (Takt Time)
  • Reduces order to delivery time by eliminating delay causing activities
  • Reduces space requirement by reducing inventory
  • Improves cash balance by reducing cash outflow due to low inventory
  • Enhances production capacity of the plant without any investment
  • How does Lean brings dramatic improvements?
  • In any activity of a business process, at any moment of time we are doing only two things:
  • Either adding value to product or service through useful activities or,
  • Generating waste by doing a non-value adding activity.
Success of your company and profit margins depend on "how less waste" you are generating in your processes? To improve the performance of your organization, you have to focus on the quantum of waste being generated in your business processes, lesser the better.

Waste is defined as any business activity that adds no value bust absorbs resources. All resources have a cost. Any waste is increase in your cost.

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