Why Does Your Business Need Lean?

Tags: lean

Alex Pejak

Nowadays, competition on the global market is tough. Companies need to constantly enhance and evolve. Implementing Lean Manufacturing and Lean Tools are a proven method to improve business and beat the competition.

Lean Manufacturing is a business improvement philosophy which focuses on the true needs of the customer by preventing waste from being built into the system. Waste is regarded as non-value adding operations such as transport, inventory, motion, waiting, over-processing, overproduction and defects which are irrelevant for a customer. Some studies suggested that added value takes place around 5% of the time within operations and the remaining 95% is waste.

What is Lean Manufacturing?

Lean Manufacturing originated from the Toyota Production System, one of the most successful automotive manufacturers, ever. MIT study of the success of Toyota sets the five Lean Manufacturing Principles:

· Specify Value - as seen by the Customer

· Identify and Create Value Streams

· Make the Value flow from raw material to Customer

· Pull Production not Push

· Strive for Perfection

Once a customer sets the value, a value stream flows meeting the needs of the customer by preventing the creation of waste and according to the customer preferences. As a company reduces these wastes and strives for single piece flow, many other benefits will follow.

Improved Customer Service

The first principle of Lean is identifying value as perceived by the customer; customers need to be provided with what they want, when and where they need it.

A company is successful as long as the customers are satisfied. If a company always supplies top quality products and services on time, at the right place, those satisfied customers are going to keep on returning, allowing the business to thrive.

Easy Management

One of the major advantages of implementing Lean into organization is getting more done with less people. As waste is reduced there is less space and manpower required to manage.

The workflow results in manufacturing cells which puts machines close together so that a single operator can manage many pieces of equipment with the minimal energy. The workers’ main task is to enhance skill level and properly maintain the system, once it is implemented.

The Lean approach starts at the bottom of an organization and proceeds up unlike Six Sigma which is a tops-down management philosophy, in which the management imposes changes on the work process. In Lean system, each individual worker within a work cell tries to improve his or her performance. A role of the management is to go on the factory floor and check what is happening and in accordance provide additional training, promotion, and learning.

Improved Quality and Fewer Defects

A lot of the activity in a lean environment is focused on quality improving. Without waste and its additional costs such as transport or inventory, the product gets added value and better quality. In a top quality production there are fewer defects and if they occur they are easily eliminated.

Reduced Waste

Waste is a significant product within any process.

The Lean Approach is focused on improving process speed and quality through reduction of process waste. Waste consumes energy, money, and is of no value to the customer.

Another approach, Six Sigma, which also aims to make processes and the business more efficient, identifies waste as results from variation within the process and tries to reduce it by eliminating variations in the process.

In The Lean Approach, reduced waste means less transport, less moving, less waiting, less space required and reduces all variations throughout the process.

Financial Benefits

If the Lean principles are properly set in the company, the financial benefits are highly significant. A satisfied customer will make any business operate smoothly. The reduction in waste and defects adds additional money which should be set into quality improvement and the better product quality ensures higher profit.

The money saved on product storage and inventory management adds additional cash flow in the company. However, less employees means additional training for workers but with clear work instructions and standardized work the job is easily and more eagerly performed. Managing satisfied workers is easily conducted and makes any business prosper on the long run.

Lean Manufacturing is a business philosophy which has proven highly successful since it can reduce costs, eliminate waste, increase productivity, maintain high levels of quality and thus make a significant increase in your profit.