History and Background
Lean manufacturing is a Japanese approach to management that focuses on cutting out waste, while ensuring quality. This approach can be applied to all aspects of a business – from design, through production to distribution. It is a management philosophy derived mostly from the Toyota Production System (TPS).The term was first coined by John Krafcik in his 1988 article. The TPS has two pillar concepts: Just-in-time (JIT) and Autonomation (smart automation).
Just in time (JIT : “Flow”) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. To meet JIT objectives, the process relies on signals or Kanban between different points in the process, which tell production when to make the next part. Kanban are usually signals, such as the presence or absence of a part on a shelf. Implemented correctly, JIT focuses on continuous improvement and can improve a manufacturing organization’s return on investment, quality, and efficiency. JIT is making only “what is needed, when it is needed, and in the amount needed!”
Another concept, Vendor-Managed Inventory (VMI) employs the same principles as those of JIT inventory, however, the responsibilities of managing inventory is placed with the vendor in a vendor/customer relationship. Whether it’s a manufacturer managing inventory for a distributor, or a distributor managing inventory for their customers, the management role goes to the vendor. Advantage of this business model is that the vendor may have industry experience and expertise that lets them better anticipates demand and inventory needs. The inventory planning and controlling is facilitated by applications that allow vendors access to their customer’s inventory data. Another advantage to the customer is that inventory cost usually remains on the vendor’s books until used by the customer, even if parts or materials are on the customer’s site.
Autonomation (“Tools”) may be described as “smart automation”. This type of automation implements some supervisory functions rather than production functions. At Toyota this usually means that if an abnormal situation arises the machine stops and the worker will stop the production line. Autonomation prevents the production of defective products, eliminates overproduction and focuses attention on understanding the problem and ensuring that it never recurs. It is a quality control process that applies the following four principles.
- Detect the abnormality.
- Fix or correct the immediate condition.
- Investigate the root cause and install a countermeasure.
Traditional Manufacturing Approach
Traditional manufacturing is often called mass production or batch-and-queue production. In traditional manufacturing, similar processes are grouped together and a large batch of parts is processed and then held in a queue waiting for the next process. In this system a batch of parts is put through Process A and set aside. They are then moved to the next area where Process B is done to the batch. The parts then wait in a pile for the next process. After a while they are shifted to another area where Process C is completed on the batch. This batch-and-queue process is continued until the part is completed and shipped.
Figure 1. Traditional Manufacturing Approach
Lean Manufacturing Approach
As mentioned earlier Lean uses set of “tools” that assist in the identification and steady elimination of waste. As waste is eliminated quality improves while production time and cost are reduced. The second approach to Lean focuses upon improving the “flow” or smoothness of work, thereby steadily eliminating unevenness through the system.
The seven key wastes which are attacked in Lean thinking derive from the original seven wastes defined in the Toyota Production System. These seven sources of waste are:
- Transportation (moving products that are not actually required to perform the processing)
- Inventory (all components, work-in-progress and finished product not being processed)
- Motion (people or equipment moving or walking more than is required to perform the processing)
- Waiting (waiting for the next production step)
- Overproduction (production ahead of demand)
- Over Processing (due to poor tool or product design creating activity)
- Defects (the effort involved in inspecting for and fixing defects)
The primary difference between Lean and the TPS is the focus of efforts. In Lean thinking, the focus is on the set of tools used to assist in the identification and steady elimination of waste. These tools include Value Stream Mapping, Five S, Kanban (pull systems), and Poka Yoke (error proofing), among others.
Figure 2. Lean Manufacturing Approach
Lean is more than just about cutting costs in the factory. These waste reduction principles that were originally designed with a manufacturing setting in mind may be applied to other aspects of the business such as design, shipping, and customer service. Lean thinking has also been applied in service industries such as restaurants, hospitals, and call-centers.
Lean implementation is therefore focused on getting the right things to the right place at the right time in the right quantity to achieve perfect work flow, while minimizing waste and being flexible and able to change.
- Toyota Production System