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Lean manufacturing is back

Numerous tools, principles and technologies are available for production development when action is called for. Since the days of Frederic Taylor and Henry Ford, production development has always found new ways to maintain productivity in changing business environments. A large number of principles and approaches have been developed and applied to develop production further. One of the most commonly used is Lean.

The origin of Lean development principles lies in Japanese car manufacturing of the 1950s. After the Second World War, Japan needed to build a competitive manufacturing environment with very limited funding for machinery. Instead of investing in expensive machinery, they decided to focus on the operational aspect of manufacturing. 

All this remained a secret to the western world until the 1980s when the US car manufacturing industry started questioning the low cost and high quality of Japanese cars. What they found was a completely new way of developing manufacturing operations where the focus is on effective material flow instead of manpower and machinery utilization rates. They decided to name it Lean, based on a key aspect of the Toyota Production System (as the Japanese called it) – as low as possible material flows in the factory.

Reducing waste at the core of Lean thinking 

At the core of Lean thinking is the concept of waste, which can include unnecessary movements, inventories, work in progress, and waiting. Lean provides methods and tools that can reduce this waste.

Success in Lean is measured by lead time, for example, the time when a process is started (value added work to customer) until the last process step. The shorter the lead time is the less waste is involved in the operations and the more productive they are. Lean can be summarized as an operations strategy that prioritizes efficient production flows over utilization rates.

Lean is fashionable again

Lean has recently become fashionable again. It was widely utilized in manufacturing in the 1980s and 1990s, after which it was forgotten, but it has now made a comeback. Industries such as healthcare, banking and construction where operations are based on repetitive processes have also recognized the potential of Lean.

One of the most tempting characteristics of Lean is its cost/benefit ratio. With a relatively small investment (personnel time allocation) a Lean development project can provide a substantial return on investment. Conversely, if the project does not deliver the desired results the loss is minimal. From this perspective the threshold to start lean activities should be low, in theory at least.

Easy to understand, hard to implement

Lean ideas and tools are often easy to understand, but most companies, however, fail to implement Lean in their operations to the extent that they would achieve a noticeable improvement in productivity. This is mostly this is due to a lack of understanding regarding what Lean tools to implement and in which order. The amount of work required is also commonly underestimated. If a company wants to gain a competitive advantage from Lean, it needs to be seen as a permanent activity with allocated resources (create a Lean culture), rather than a time-limited project.

There are numerous different methods, tools and principles that exist under the Lean umbrella. Some of them are easy to understand and very straightforward to implement, while others are rather complex and require a lot of understanding, discussion and development work to be implemented in operations.

In the beginning it is demanding to separate the Lean philosophy (the idea of Lean), from the Lean methodology (used to identify potential and implementation areas), and Lean tools (that you can implement in operations).

It is often challenging to define which Lean tools fit certain operations. Another surprise might be finding out that each Lean implementation is unique. There is no model that can be copied directly or guide that can be followed. In each project one needs to be creative to define a Lean solution for the particular operations and company culture. Companies commonly fail to understand that this creative work should be done by a group that contains representatives from the shop floor all the way to management level executives.

The fundamentals of Lean are deeply ingrained in industrial managers’ thought processes, even though most do not consciously consider their thoughts to be Lean-based. The concepts of waste or customer demand, which are cornerstones of Lean thinking, are common discussion items in production meeting rooms. This implies that the value of Lean as a development principle is clearly understood, but that there is a capability gap in implementing it.

Key implementation questions are potential stumbling blocks 

Even though Lean principles are easily understood, key questions regarding its implementation often prove to be potential stumbling blocks: How should the occasionally vague instructions and guidelines be adapted to suit unique production environments? Where should one start with Lean implementation? What methods should be applied and in what order? How should these methods be linked with each other? 

To the inexperienced, these questions often prove daunting or overwhelming. Without previous Lean experience or a Lean company culture, problems may be too extensive or the impact of implementation disappointing. The scale of the project may also be too small, or the improvement in one sub-process may not be enough to show any meaningful measurable benefits.

When implemented correctly and systematically, however, Lean has the potential to optimize processes and add considerable value and competitive advantages.

Author: Mika Kuhmonen

Contact Mika Kuhmonen  

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With a relatively small investment a Lean development project can provide a substantial return on investment.