Customer considerations: what you need to know about lean manufacturing
Lean manufacturing is a method that maximises customer value while minimising waste. Originating in Japanese car manufacturing — it was Toyota who became first associated with it. In fact, Toyota first used the principles of lean manufacturing in the late 1940s, before the term ‘lean’ was even coined.
Toyota flourished practising lean manufacturing. Their core values were comprised of the elimination of waste, continuous improvement and importantly respect for people. These were essentially the founding principles of lean manufacturing. So with them in mind, how can your business benefit from a lean process?
Breaking down the principles
If you’re thinking about implementing lean manufacturing, understanding it should be a priority. So here are five principles at the heart of the lean process:
- Customer consideration
It’s necessary to identify what the customer wants and to recognise that only a small amount of the total work that is put in during manufacturing will actually add value for the customer. It is therefore important to uncover unnecessary activities, or ‘wastes’.
- Customer satisfaction
When you know what your customers are looking for, you can identify the processes that are being followed in order to cater to their requirements. This can relate to types of packaging and delivery practices for instance.
- Waste management
The third step is to eliminate waste, so as to create ‘flow’ in these processes. Once flow is achieved – when waste is eliminated – the processes by which customers receive their products will be more efficient.
- Customer demand
You need to know about customer demand – making only what is necessary and when it is required. Understanding this principle will not only build trust with your customers, but can also optimise your supply chain more through eliminating unnecessary packaging for certain customers and/or products.
The final principle is to seek perfection, so that waste is constantly identified and eliminated with the aim of fine-tuning the process. This principle ties into each of the points above and in theory can be achieved when the first four are successfully implemented.
With continuous improvement at the core, there is a focus on the long term, so there is a constant need for the management and the workforce to challenge themselves in order to achieve their aims.
What are wastes?
There are seven wastes that affect your ability to meet your customers’ needs and which need eliminating:
- Transport: the unnecessary movement of people between processes.
- Inventory: goods such as packaging that aren’t having any value added to them.
- Motion: the unnecessary movement of people within processes.
- Waiting: people or parts that must wait until a work cycle has been completed.
- Over-processing: going beyond the requirements of adding value to a product.
- Overproduction: products that are produced too soon, or in too large a quantity for customer demand.
- Defects: the need for the process; in whole or in part, to be repeated or corrected.
To eliminate these wastes it may be necessary to reassess how work is carried out and implement changes to your premises. Waiting and motion wastes, for example, can be reduced with the aid of shelving and racking, as well as packing stations and workbenches. When set up properly, these will enable you to organise your warehouse or storage space for maximum efficiency.
How your business can benefit from lean manufacturing
Going lean will not only be good for your customers, but also for your workforce. Remember that respect for your customers is at the heart of the lean idea, so you must recognise the need for your employees to share that ethos in order to be motivated. It may seem a fanciful idea on the surface, yet it works when everyone is on the same wavelength — especially if that wavelength is customer satisfaction as priority number one.
When the lean system is implemented, employees will be ‘empowered’ and this can enable them to contribute to the growth and improvement of your business individually and collectively. This isn’t to say that lean manufacturing benefits just customers and staff though. It is self-evident that, when staff are motivated and customers are satisfied, business is better.
Besides all this, waste reduction and supply chain efficiency is good for your profits. Consider inventory waste, for example. Stock costs money to store, whether through storage fees or because it’s using up valuable space in your warehouse. You will need to protect it too, with the appropriate packaging and storage; such as boltless shelving. It also costs money to move stock and whether or not you use a 3PL.
Eliminating stock will free up space, reduce the amount of handling equipment (trolleys and pallet trucks) needed for moving stock and decrease the potential for damage to be caused. This effectively releases cash back into your business.
Practical applications of lean manufacturing
Today, many companies have followed Toyota’s example and used lean manufacturing to achieve success.
Computer technology company Intel once needed 14 weeks to introduce a new chip to its factory in Ireland. After five years of working according to lean principles, this period was cut to 10 days.
Nike is a multinational sportswear brand that outsources work to factories over the world. Some of these factories use the lean approach, and some use other systems. During the 2010-11 financial year, in the lean factories, defects were 50% lower, delivery lead times were 40% faster on average and productivity increased by as much as 20% compared with the factories who didn’t implement the system.
These companies are large, but lean manufacturing is a philosophy that can be applied to any size of business. After all, Toyota wasn’t always one of the world’s largest automotive manufacturers. Whether you have an ecommerce business with a staff of five or a warehouse with fifty employees, you will benefit from improved profits, staff morale and customer satisfaction. Lean manufacturing delivers these results, so why not adopt the method?
For more information on manufacturing, check out our Manufacturing Centre for a multitude of other tips and advice.