How Lean Manufacturing Principles Apply to Manufacturers Today

Lean manufacturing systems were created by the Toyota Production system in Japan in the 1990s. They encompass five steps that aim to eliminate waste in a manufacturing process, leading to better customer value and reduced costs.

While Lean methodology has been around for decades, how to apply these principles to manufacturing are new. Manufacturing faces an increasingly difficult landscape. Learn more about how Lean methodology can be implemented.

What Are the Five Lean Manufacturing Principles?

Define Value

While price is always a key decision factor in manufacturing, are you accurately defining the value of your product? Value is what the customer is willing to pay for, not necessarily the price of your product. Often with novel products or new technologies, customers are unable to articulate what the value is or they may not understand it themselves.

Using techniques like market research, interviews, demographic information and web analytics can help better understand what value your manufactured product holds.

Key Takeaway: A true understanding of what benefit your product adds for a customer is key, especially as many businesses continue to contend with economic uncertainty and supply chain issues. According to Deloitte’s Manufacturing Industry Outlook, 80% of surveyed manufacturing executives were heavily impacted by supply chain disruptions over the last 12-18 months. Manufacturers can safeguard their value by diversifying their supplier base to keep momentum and boost their local capacity to avoid problems with transportation.

Mapping the Value Stream

The next step in lean manufacturing principles is to identify and map the value stream. What this means is that you should take the customers value, then pinpoint all the activities your business takes to contribute to these values. So-called “Value Added Activities” must be:

• Work that the customer is willing to pay for
• Work that physically transforms the product (or document/information)
• Work that is done right the first time

In manufacturing, this can mean drilling a product or welding a seam. But when using lean manufacturing principles to transform a whole business, it can also mean hiring, developing talent and improving processes.

Other business operations may be considered waste. Waste can be broken into two categories: necessary but non-value added or non-value added waste. An example of a necessary but non-value added resource may be extra inventory a customer has asked you to store. Waste in general is work that is not completed right the first time or extra transportation necessary due to poor layout.

By reducing and eliminating the unnecessary waste, you can work to get customers what they want while also reducing costs.

Key Takeaway: Eliminating waste is more important than ever. And many manufacturers are taking steps to reduce waste through sustainable pr