A quick lean manufacturing guide
Blog //02-09-2021

A quick lean manufacturing guide

by Daniel Docherty, Head of SaaS operations

There are many tried and tested production methods in manufacturing. Different strategies are appropriate for different businesses, so it’s always worth putting in the research to learn which is most suitable for your company. One such strategy is called lean manufacturing.  

In this quick guide, we look at exactly what lean manufacturing is, as well as some of the benefits it brings. We also discuss the five principles of lean manufacturing, highlight how it differs from Six Sigma, and explain how our software makes it easier to implement this approach.

What is lean manufacturing?

As the name suggests, lean manufacturing is a philosophy that aims to trim down the production process. This can include cutting down the time it takes, as well as the amount of resources needed to generate a product. The underlying aim behind lean manufacturing is to diminish waste as much as possible (which in turn increases efficiency). 

It also, however, has a large emphasis on the customer, and looks to provide the highest amount of value to the consumer. With faster production runs, customer service is improved instantly, as delivery expectations can be met. Lean processes can lead to better prices for customers too, as the costs associated with production are reduced.  

It’s not only about speed and price though, it’s also about creating a finished product that is high in quality. If a stage of production doesn’t add value to the item then it should be removed (so long as this doesn’t cause detriment). With lean manufacturing the key is to maintain the expected output whilst using the smallest input possible.

Some of the main benefits of lean manufacturing include:

  • Reduced waste
  • Fewer costs
  • Faster production
  • Higher efficiency
  • Increased product quality
  • Greater profitability
  • Improved customer satisfaction  

What are the five principles of lean manufacturing?

  1. Defining value

The first principle of lean manufacturing is all about identifying the value of your products. But not from your perspective, from the customer’s (in terms of what they would be willing to pay for it). Manufacturers must strive to amend processes so that they can reasonably sell at this price, whilst still making a profit. A product should only include a specific component if it adds to the customer’s vision of value.

  1. Mapping value stream

This principle states that you should then map out the entire lifecycle of a product, from design, through to creation, all the way through to being used, and discarded too. By using the information gained from the previous step, and by gaining awareness of a product’s journey, it should be easier to determine if more can be done to enhance a product’s value stream.      

  1. Build a flow

Once all the valueless stages have been removed from the production process, manufacturers must then ensure the remaining steps flow in a seamless and efficient manner. If this isn’t done, you could suffer unexpected delays or errors, which will be completely counterproductive. This could involve careful planning (or trial and error) to ensure the product creation naturally flows from one step to the next with no gaps.

  1. Use a pull system

You should then address the method used for triggering production. Using a pull system (as opposed to push) means that you only produce items once an order has been placed, rather than trying to predict order quantities. This should mean you’re always in sync with demand, rather than having too much or too little stock. The pull approach requires you to have strong supply chain management and reliable suppliers. It’s perhaps worth using local suppliers so that you can attain materials quickly when needed. 

  1. Refine and perfect

The final principle is centred around scrutinising the process going forward, to ensure that it still fulfils its function (and to see if it can be improved). The previous steps shouldn’t only be carried out a single time. Aspects like value and flow will constantly change, so you’ll need to continuously ensure you’re being optimally lean. Production can always be tweaked upon inspection, as it’s impossible to be flawless. But you can strive for perfection nonetheless.   

What are the seven wastes of lean manufacturing?      

  1. Stock

The first waste of lean manufacturing is stock. An excess of inventory can lead to unused or damaged items. They’ll take up valuable warehouse space and generate unnecessary storage costs.

  1. Transport

The next waste is associated with any transportation that is not needed. This not only creates additional costs that could be avoided, but there’s also a higher risk of product damage occurring (if items are in transit for long periods of time).  

  1. Movement

This constitutes the motion of any resources (most notably your employees or machinery), that doesn’t contribute anything to the finished product. It’s simply a waste of energy if the movement isn’t facilitating the end goal. 

  1. Time

Whether it’s people not working when they should be, downtime between production runs, or bottlenecks caused by faulty equipment. Any time that is not spent productively is deemed as waste within the world of lean manufacturing.

  1. Defects

When mistakes are made, and products become defective, it can be extremely wasteful for your operation. Not only do the affected items get thrown out, but it can take a lot of time, effort, and money to remedy the situation (and to ensure it doesn’t happen again). 

  1. Overproduction

This is likely when the number of products required was overestimated, or production continued despite the levels of demand being met. A lack of insight (sometimes caused by unsophisticated processes) can lead to excess production.

  1. Overprocessing

If an unnecessary amount of processing is taking place during a product’s creation (i.e., there are too many steps that serve no real purpose), then this is wasteful. There may also be a feature you’ve given a product that doesn’t match the needs of customers. By removing such features, you may also be able to remove production steps.  

What is the difference between lean manufacturing and Six Sigma?

Lean manufacturing and Six Sigma are seen as the same thing by some manufacturers. Both strategies have the objective of increasing efficiency and reducing waste. However, there are some notable differences to these approaches.

As we’ve already discussed, lean is more focused on waste from a value perspective, and is heavily influenced by the needs of the customer. Whereas Six Sigma is more driven by the actual production processes, and looks to eradicate defects from these cycles. The theory states that higher variation during production (compared to a typical production run) inevitably leads to more errors.

So the main aim is to strictly keep activity in line with the expected path. The Six Sigma term is related to the degrees of variation that can statistically take place before a mistake will be made. This approach is heavily fuelled by data.  

It’s also worth mentioning Just-In-Time (JIT) manufacturing, which is another very similar methodology. JIT is more acutely focused on increasing efficiency via the timesaving and stock control route. Demand is literally met ‘just in time’, as production runs are only started when they’re absolutely needed. It’s a risky strategy but is also high in reward (thanks to the increased efficiency it leads to).   

How to implement lean manufacturing

If you’re looking to adopt lean manufacturing to enhance performance, it must become the central philosophy of your operations (in terms of strategic decisions surrounding production).  

The first step is to incorporate the principles we discussed earlier, using them as a reference point, and repeating the cycle continuously. You’ll want to do all you can to eliminate every bit of waste, and to add as much value as possible to your product catalogue.

This could involve analysing your warehouse to see if there’s any excess inventory that has perhaps been forgotten. These can be removed or sold, so that they aren’t the source of storage costs. You can also analyse the layout of your workspace to ensure items like machinery are positioned logically. A cluttered and chaotic factory can lead to inefficient processes.

You’ll also want to take a general look at your entire supply chain. Not just production, but the way you source from suppliers and deliver to customers too. There are always ways to make the supply chain stronger, and to make operations more cost-effective.  

One method that can really help with implementing lean manufacturing is by using the assistance of technology. If you carry out all processes manually (or with outdated IT systems), then a sure-fire way to streamline your business is to adopt sophisticated MRP software.

Such a solution will instantly decrease instances of errors and save your company time, as it can carry out calculations and store information far more effectively than a human being. It will also allow your employees to focus on more complex tasks, rather than the repetitive activities that they perhaps don’t enjoy.

One example of such a system is Advanced’s Manufacturing Software. It provides businesses with a degree of automation, which can be key when looking to utilise lean manufacturing. It has specific functions for the likes of stock control, production planning, accounting, payroll, contact management and e-commerce. Plus, all these modules influence one another.

This means that if an online sale is made on your e-commerce platform, this will automatically update stock levels and finances, and this information can be used to trigger production runs (as well as the sourcing of materials from suppliers if inventory drops below a certain threshold). This massively reduces the risks associated with a pull production strategy.  

The fact that Manufacturing Software unites all your departments within a single solution means that there is one version of the truth. As a result, duplication is reduced, visibility is increased, and communication is improved. It’s also a cloud-based solution, which allows employees to access their work remotely (ensuring data can be kept up to date).    

When you combine cohesion and automation with sophisticated reporting capabilities, your data suddenly becomes a powerful weapon. It can be harnessed to extract valuable insights, that can subsequently drive key business decisions. These decisions will likely relate to elements that reduce waste, increase efficiency, and improve product quality, thus satisfying the mantra of lean manufacturing.

If you’re looking to implement the lean manufacturing production method, take a more detailed look at our Manufacturing Software, which will enhance your processes (and is perfect for small to medium-sized manufacturers).    

 

Blog Manufacturing Business Cloud Essentials
Daniel Docherty

Daniel Docherty

PUBLISHED BY

Head of SaaS operations

Daniel joined Advanced in May 2019 to lead our Software as a Service portfolio and brings with him over 15 years of experience in core business and finance solutions, working with customers from a wide background of industries and scale.

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