There are many definitions of lean manufacturing. Some include words about value added activities and waste reduction.
Our definition is the “continuous elimination of all waste resulting in a system of value added activity”. The key word is continuous. The journey to a state of lean never ends.
All systems have waste. Lean manufacturing classifies these into 7 or 8 categories. Waste is often called “muda”, which is the Japanese word for waste.
Once all of the waste is removed from a system, all that is left is value added activities, which is what the customer actually wants and is willing to pay for.
The system waste is removed using the collection of lean manufacturing tools. These tools range from value stream mapping and 5s, to TPM, OEE, and kaizen events.
As an example, when someone calls in to order a product, and is placed on hold for 10 minutes, are they willing to pay the additional markup the company must receive for its 800 number? If someone goes for diagnostic imaging, are they willing to pay for several people at the hospital to handle questions regarding the procedures and financial information?
An example in the manufacturing world would be the movement and storage of product. For example, when a computer is purchased, are customers willing to pay for the PC to be moved six times by a fork lift prior to shipment? Are they willing to pay the interest charges the manufacturer incurs if they are storing too much?
The answer to the above questions is obviously “no”. Customers are willing to pay for value. When a customer has a diagnostic at a hospital, they are normally willing to pay for the 30 minute test, but many of the other activities are either non-value added or incidental. The computer buyer wants the PC, not the extra charges for movement around the factory, interest charges, or any other non-value added activity the supplier incurs.
Lean manufacturing attempts to eliminate all of this non-value added activity. When you think about all of the products and services you purchase, you begin to “see the waste”. When you begin to understand and implement lean manufacturing, you cannot help but see the waste in the world.
Companies waste time, product, motion, inventory, transportation, and intelligence. They often produce more or process more than necessary. These are all the “muda” which comprises the 8 wastes.
The lean manufacturing experts see this waste everywhere they go. They see it at the bank, grocery or department store, hospital, government offices, and the manufacturing plant. The waste is often so obvious it is hard to believe a profit could be made with such excess.
However, luckily for most businesses, it exists everywhere. Many competitors also have a lot of waste. The lean companies have eliminated much of it, and continue to locate and destroy all they can find.
Lean manufacturing is a journey. It never ends. Just because some waste is found today and eliminated, does not mean some won't crop up tomorrow. Even the most prominently “lean” companies continue “kaizen events” every day to seek out and eliminate waste.
Lean manufacturing is now very popular in the manufacturing sector. However, it has only scratched the surface in white collar and service activities. For example, how many times does a professional walk down the hallway to a printer or copier every day. Every time they walk down the hallway, several potential “lean wastes” are committed. There is the additional motion, possible waiting time, and often a conversation along the way.
How long does it take a company to provide a quote? The actual process takes a minute but several days to receive. The lean company might do it in two minutes and is working on eliminating the extra minute.
Think of the obvious waste people encounter in their lives. Traffic sits at a red light when there is no traffic moving the other way with the green light? A 15 minute checkup at the doctor's office requires a 60 minute wait. The checkout process at the grocery store is 3 minutes but has a 15 minute wait. The 5 minute passport completion process takes 3 months to receive.
None of this needs to happen. When a system operates in a state of lean, only the value is created. When no traffic is coming the other way, you get the green light. If the paperwork and mail takes 2 days and 5 minutes, you get it in 2 days. You show up for the appointment, and 20 minutes later you're on your way home.
Lean manufacturing is often called “common sense manufacturing”. However, it often is not “common practice”.
The next time you see “waste”, it will be obvious. It will also become obvious when you're being served or interacting with a company that has achieved and is in pursuit of a “state of lean”.
In the business world, some of this waste requires the use of “lean tools” to eliminate. For example, SMED reduces setup waste. Value stream mapping helps see and eliminate system waste. OEE analysis helps identify the large buckets of downtime, setup, speed loss, small stop loss, and quality loss. Kaizen events help provide a focused improvement effort from a cross functional team to eliminate waste.
There are many other tools used in lean manufacturing. The trained lean manufacturing expert easily identifies the “muda”, and pulls out the most relevant tools to solve the problem.