The Principles of Lean Manufacturing (and Why They Matter)

The lean concept is one that is receiving broad applications today by managers, although it initially began to improve manufacturing workplaces specifically. With that in mind, what are the five principles of lean manufacturing, and why is knowing about them important?

5 Principles of Lean Manufacturing and Their Purpose

Lean is a concept that Toyota created to abolish waste and inefficiency within their manufacturing processes. As it proved successful, the concept has been adopted by manufacturing facilities globally.

Specifically, it is in use by highly competitive American sectors to compete against countries that can produce lower-cost goods. The purpose of the five lean principles is to eradicate waste within any process to which it is applied.

The five principles are:

• Value
• Value stream
• Flow
• Pull
• Perfection

A process might be put through the lean principles multiple times to remove waste from it fully.

When waste is removed, there are many benefits for manufacturers (and other organizations), including:

• Less material costs
• Higher productivity
• Boost in efficiency
• Better team coordination
• Improved inventory management
• Faster cycle time

To fully understand how the five principles of lean manufacturing can achieve the listed benefits, let’s look at them one by one. The first principle is value.

Putting a Definition on Value

Customer value refers to what the customer is willing to pay for. Sometimes they may not know what they’re looking for, especially with a totally new product or service.

To help uncover what customers want, you can use one or more of the following techniques:

• Surveys
• Interviews
• Demographic analysis
• Website analysis

By understanding what customers want, from the nature of the product or service to how they want it delivered to them, you can assign a target price to the item. From there, your business can determine the cost to produce the goods or services.

The focus here is on eliminating waste within your organization by delivering the value the customer is looking for without spending more than necessary to manufacture the associated item or service. As a result, your business can achieve the highest profit level possible.

Value Stream

Now that you have the end value, the next thing to do is to determine the map to reach that value. This is the “stream.”

Mapping the stream is straightforward but illuminating.

It involves writing down every step the product must go through in the manufacturing process. That begins with design and ends with delivery, with many activities in-between, including HR decisions and customer service.

When mapping, the purpose is to determine which steps are not essential and to eliminate them for being wasteful. A bonus of identifying the value stream as a manufacturer is that you see everything that goes into producing a product.

Establish Flow

Once you take out any waste from the stream, the next part of the process is to ensure that there are no obstacles in the steps that are left. The goal is:

• To have steps that flow well
• Eliminate stoppages that could create inefficiency raise costs

A big issue that many manufacturers face is how to communicate effectively between departments within the organization. If they can get this sorted out, it has the potential to boost productivity and efficiency significantly.

Repeated reviews and other tasks are then eliminated, along with creating a tighter manufacturing process overall. Preventing waste of time is one of the lean manufacturing concepts taught at Ketterling University’s Master of Science-Lean Manufacturing program. Click here to learn more about the courses.

Start to Pull

Having a better flow can speed up how long it takes for a product to get through the manufacturing process to the end customer. The advantage here is that when a customer needs an order relatively quickly, the manufacturer is not scrambling to do so and delivering low-quality output due to time constraints.

The word “pull” that characterizes this fourth principle of lean manufacturing refers to:

• The customer can pull the product as they need it
• Nothing is made until the customer orders it

The “pull” is also known as just in time manufacturing or delivery. It requires having enough resources available to meet a new order without products being previously created.

Being able to provide this type of manufacturing involves having a flexible operation that is streamlined. It won’t involve stockpiling products, which would otherwise tie up funds for a business and require managing inventory.

By establishing pull, your organization can ensure that the products are crafted on an as-needed basis. By getting this principle right, you’ll likely find that you receive better feedback on your customer service, all while lowering operational costs.

“Good customer service costs less than bad customer service.” – Sally Gronow

Search for Perfection

The fifth principle is also the most important one: Perfection. It refers to incorporating lean manufacturing within the company culture.

In other words, lean thinking is something that each person in the organization practices and is integral to all manufacturing processes. It also applies to suppliers.

Maintaining this type of operation, though, requires constantly re-examining the principles and adjusting things as needed. Businesses that regularly map the value stream, and do so effectively, can see positive changes.

If you go on to sell your business, the lean processes have the potential to increase the sale price as you have remained competitive and offer great workflow. Lowering the cost of business and increasing its future value is in your best interests.

Conclusions on Implementing Lean

The five principles provide a framework for an effective organization, as shown above. That explains why numerous manufacturers use them.

When you apply the principles of lean manufacturing, your team will likely notice the difference quickly. Over time, your customers will see the results, too, including shorter cycle times and quality products delivered to them.

Your suppliers, as well, will note improvements, and they will probably start to apply the lean principles to other manufacturers they work with too. The benefits of cost-reduction, improved time management, more productivity, and overall better use of resources, makes a lean operation a smart one.