Lean manufacturing is essentially a business philosophy aimed at continuously improving business processes by eliminating waste in an incremental manner. Identifying and trimming down the different wastes ideally enhances the efficiency of the operations and quality of the resultant deliverables. These are in fact the key benefits or rather primary goals of lean implementations, which directly translate into customer satisfaction and financial rewards for the company. This seemingly easy transformation into a lean organization is replete with challenges. It is indeed a life-time project as perfection is elusive and there is always scope for improvement and innovation.
Based on the Toyota Production System (TPS) that governs the automobile production at Toyota, well-known for quality offerings, Lean Manufacturing goes by 5 basic principles.
- Define value from customer perspective
- Detect /Create value streams
- Infuse value at every stage of the stream (raw material – customer)
- Produce to order
- Strive for excellence
Working on the lines of these principles tend to automatically eliminate idle time, idle resources, unnecessary inventory, movement and transport, over production and processing as well as related errors.
Benefits of Lean Manufacturing
Benefits of Lean are definitely not instant, and may go unnoticed if the right parameters are not measured and tracked. That said, a well-planned and implemented lean transition has its own rewards.
Lean implementations focused on improvements, strive to identify and flush out superfluous, excessive, outdated processes and actions that do not in any way add value to the final product that reaches the customer. Waste is a major guzzler of energy/ effort and money, undermining the efficiency of the entire production process.
Faster Response times
Trimming the waste automatically enables the system and its processes to function more efficiently, increasing the end-to-end response times, and enabling the system to make best use of available capacity to service more customer orders.
Efficient and speedy processes with lesser waste tend to result in quality deliverables with fewer defects. Standardizing or optimizing processes also improve quality by doing away with defects that arise due to minor process variations.
Enhanced Customer Satisfaction
The entire Lean implementation effort is aimed at delivering a product that meets customer expectations (perceived value) in a timely manner. Achieving the intended goal will not only keep customers happy, but also result in increased business from returning customers. Positive word-of-mouth marketing and online reviews and feedback may also herald better business prospects.
Financial benefits are both hidden and explicit. Satisfied customers bringing more business, simply mean more sales and profits, going by just sales numbers. Getting rid of waste (inventory, transport, and over production) also results in monetary benefits while addressing idle time and over processing release idle capacity, making it possible to take up additional orders. Changing the layout of the shop floor most likely cuts down movement and number of people needed to handle the different machines, again resulting in financial benefits.
Re-investing at least a part of these monetary benefits to sustain continuous improvement initiative is a must to differentiate product offerings and stay ahead of competition!