What is lean manufacturing?

Brahm Meka
August 26, 2022
5 min
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Lean manufacturing

Lean manufacturing goes by many names: “Just-In-Time (JIT),” “The Toyota Way,” “The Ohno System” (after Taiichi Ohno, who was instrumental in its development within Toyota), and “quick-response manufacturing.”

It’s a technique used across the world by countless major brands to address the needs of their customers. So, let’s look at how lean manufacturing works and how you can use it in your business. 

What is lean manufacturing?

What started as a way to produce goods to meet exact customer needs, such as timeframes, quality, and quantity, has turned into a complete methodology that helps businesses create products with minimal waste. 

Lean manufacturing applies Lean practices, principles, and tools to the development and manufacturing of products. Businesses that use lean manufacturing can benefit from a reduction in waste, better-optimized processes, lower costs, reduced time to market, increased innovation, and much more. 

Adopting lean manufacturing can be tough, just like any change to how we work. Despite this, there are significant benefits for the businesses that can make it work. Here are just a few of the benefits you can expect when adopting lean manufacturing. 

Lower inventory holding costs

Warehouse real estate is one of the highest costs in the manufacturing sector. Every product you make, and the resources required to make them, must compete for space. With lean manufacturing, businesses can reduce costs by only stocking the resources they need and holding minimal products in the warehouse.

Less dead stock and waste

Building on the last benefit is the reduction of dead stock. Dead stock represents the long-term consequences of poor inventory management, which lean manufacturing can help to eliminate.

Improved cash flow

Lean manufacturing helps increase the ROI of each of your products. On top of lower wastage and a reduction in wasted warehouse costs, the practice allows products to be shipped quickly, reducing the chance of any other costs associated with holding the product. 

How did lean manufacturing start?

Lean manufacturing has roots in early 20th century Japan, more specifically, the Toyota Motor Corporation. The company was moving from textile production to the automotive sector, but they were struggling to manage their massive resource wastage.

Shigeo Shingo and Taiichi Ohno took influence from Frederick Winslow Taylor’s 1911 monograph, "The Principles of Scientific Management," and worked with the company’s “Kaizen” improvement teams to build what is now known as “The Toyota Way.” This way of working was also made popular by the poor economic situation in Japan post-WW2. Ohno, having visited supermarkets in the US, recognized that the scheduling of work should not be guided by sales and production targets, but by actual sales. This would help businesses manufacture only what was needed to address the needs of their customers.

Over time, the system was adopted and altered by companies across the globe, eventually being rebranded in 1988 by John Krafcik in his article entitled “Triumph of the Lean Production System”. In the article, Krafcik stated that lean manufacturing plants have a higher level of productivity and quality and that risks associated with Lean implementation can be reduced by "developing a well-trained, flexible workforce, product designs that are easy to build with high quality, and a supportive, high-performance supplier network."

From there, lean manufacturing continued to evolve and grew into the methodology we know today. 

Key principles of lean manufacturing

As with any methodology, lean manufacturing is centered around a clear set of principles. By following these principles, businesses can easily reap the benefits of lean manufacturing.

Identify Value

The first principle of lean manufacturing also doubles as the first step in your journey into becoming a lean business. The business needs to identify what its customers value and how its products can satisfy those values. 

In the case of manufacturing, these values require businesses to: 

  • Design products to meet the needs of customers
  • Remove features that do not specifically meet those needs

By doing this, companies can create products that are tailored for their customers while reducing waste.

Map the Value Stream

A value stream is the complete life cycle of a product. This includes the product’s design, the customers’ use of the product, and the disposal of the product. 

By mapping out the value stream, it offers teams a clear visualization of the product’s life cycle that will make it easier to find and minimize steps that do not add value.

Create Flow

Product flow is crucial when it comes to lean manufacturing. An efficient product flow requires items to move from production to shipping without interruption. This is achieved by strategically organizing the work floor. A well-organized work floor results in reduced production time, inventory size, and material handling.

During this third step, it’s important to take into account every factor, from people and equipment to materials and shipping, to ensure products seamlessly move through the production process.

Establish pull

Traditional production systems utilize a “push” system (also known as “just-in-case” manufacturing), which involves pushing resources through the manufacturing process, even when there isn't an order. While push systems are easy to create, they often result in large inventories and a significant amount of waste.

A pull system is a far more lean-friendly production method that only gets to work when a customer makes an order. This allows businesses to only order resources as and when they need them and reduces the amount of stock sitting in a warehouse at any one time.

Using a pull system offers businesses additional benefits, including:

  • Increased output
  • Maximized usable workspace
  • Reduced inventories
  • Less chance of overproduction and underproduction

Seek Perfection

The final lean manufacturing principle is one that all businesses are working towards, regardless their methodologies. As you might expect, seeking perfection is often one of the most difficult principles to successfully apply in the workplace, as it requires continuous improvement and a shift in culture on an organizational level.

Looking to adopt lean manufacturing? You don’t need to go it alone! Get in touch with us today and let the experts at Brahmin Solutions help you get started on your journey.

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Brahm Meka
Founder & CEO

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