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A Brief History of LEAN Manufacturing

U.S. manufacturers have always searched for efficiency strategies that help reduce costs, improve output, establish competitive position, and increase market share. Early process oriented, mass production manufacturing methods common before World War II shifted afterward to the results-oriented, output-focused, production systems that control most of today's manufacturing businesses.

Japanese manufacturers re-building after the Second World War were facing declining human, material, and financial resources. The problems they faced in manufacturing were vastly different from their Western counterparts. These circumstances led to the development of new, lower cost, manufacturing practices. Early Japanese leaders such as the Toyota Motor Company's Eiji Toyoda, Taiichi Ohno, and Shingeo Shingo developed a disciplined, process-focused production system now known as the "Toyota Production System", or "lean production." The objective of this system was to minimize the consumption of resources that added no value to a product.

The "lean manufacturing" concept was popularized in American factories in large part by the Massachusetts Institute of Technology study of the movement from mass production toward production as described in The Machine That Changed the World, (Womack, Jones and Roos, 1990), which discussed the significant performance gap between Western and Japanese automotive industries. This book described the important elements accounting for superior performance as lean production. The term "lean" was used because Japanese business methods used less human effort, capital investment, floor space, materials, and time in all aspects of operations. The resulting competition among U.S. and Japanese automakers over the last 25 years has lead to the adoption of these principles within all U.S. manufacturing businesses.

WHAT IS LEAN MANUFACTURING?

Lean Manufacturing can be defined as:

"A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection."

VALUE

In lean production, the value of a product is defined solely by the customer. The product must meet the customer's needs at both a specific time and price. The thousands of mundane and sophisticated things that manufacturers do to deliver a product are generally of little interest to customers. To view value from the eyes of the customer requires most companies to undergo comprehensive analysis of all their business processes. Identifying the value in lean production means to understand all the activities required to produce a specific product, and then to optimize the whole process from the view of the customer. This viewpoint is critically important because it helps identify activities that clearly add value, activities that add no value but cannot be avoided, and activities that add no value and can be avoided.

CONTINUOUS IMPROVEMENT

The transition to a lean environment does not occur overnight. A continuous improvement mentality is necessary to reach your company's goals. The term "continuous improvement" means incremental improvement of products, processes, or services over time, with the goal of reducing waste to improve workplace functionality, customer service, or product performance (Suzaki, 1987). Continuous improvement principles, as practiced by the most devoted manufacturers, result in astonishing improvements in performance that competitors find nearly impossible to achieve.

Lean production, applied correctly, results in the ability of an organization to learn. As in any organization, mistakes will always be made. However, mistakes are not usually repeated because this is a form of waste that the lean production philosophy and its methods seek to eliminate.

CUSTOMER FOCUS

A lean manufacturing enterprise thinks more about its customers than it does about running machines fast to absorb labor and overhead. Ensuring customer input and feedback assures quality and customer satisfaction, all of which support sales.

PERFECTION

The concept of perfection in lean production means that there are endless opportunities for improving the utilization of all types of assets. The systematic elimination of waste will reduce the costs of operating the extended enterprise and fulfills customer's desire for maximum value at the lowest price. While perfection may never be achieved, its pursuit is a goal worth striving for because it helps maintain constant vigilance against wasteful practices.

FOCUS ON WASTE

The aim of Lean Manufacturing is the elimination of waste in every area of production including customer relations, product design, supplier networks, and factory management. Its goal is to incorporate less human effort, less inventory, less time to develop products, and less space to become highly responsive to customer demand while producing top quality products in the most efficient and economical manner possible.

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Essentially, a "waste" is anything that the customer is not willing to pay for. Typically the types of waste considered in a lean manufacturing system include:

Overproduction: to produce more than demanded or produce it before it is needed. It is visible as storage of material. It is the result of producing to speculative demand. Overproduction means making more than is required by the next process, making earlier than is required by the next process, or making faster than is required by the next process. Causes for overproduction waste include:

 Just-in-case logic.

 Misuse of automation.

 Long process setup.

 Unlevel scheduling.

 Unbalanced work load.

 Over engineered.

 Redundant inspections.

Waiting: for a machine to process should be eliminated. The principle is to maximize the utilization/efficiency of the worker instead of maximizing the utilization of the machines. Causes of waiting waste include:

 Unbalanced work load

 Unplanned maintenance

 Long process set-up times

 Misuses of automation

 Upstream quality problems

 Unlevel scheduling

Inventory or Work in Process (WIP): is material between operations due to large lot production or processes with long cycle times. Causes of excess inventory include:

 Protecting the company from inefficiencies and unexpected problems

 Product complexity

 Unleveled scheduling

 Poor market forecast

 Unbalanced workload

 Unreliable shipments by suppliers

 Misunderstood communications

 Reward systems

Processing waste: should be minimized by asking why a specific processing step is needed and why a specific product is produced. All unnecessary processing steps should be eliminated. Causes for processing waste include:

 Product changes without process changes

 Just-in-case logic

 True customer requirements undefined

 Over processing to accommodate downtime

 Lack of communications

 Redundant approvals

 Extra copies/excessive information

Transportation: does not add any value to the product. Instead of improving the transportation, it should be minimized or eliminated (e.g. forming cells). Causes of transportation waste include:

 Poor plant layout

 Poor understanding of the process flow for production

 Large batch sizes, long lead times, and large storage areas

Motion: of the workers, machines, and transport (e.g. due to the inappropriate location of tools and parts) is waste. Instead of automating wasted motion, the operation itself should be improved. Causes of motion waste include:

Poor people/machine effectiveness

 Inconsistent work methods

 Unfavorable facility or cell layout

 Poor workplace organization and housekeeping

 Extra "busy" movements while waiting

Making defective products: is pure waste. Prevent the occurrence of defects instead of finding and repairing defects. Causes of processing waste include:

 Weak process control

 Poor quality

 Unbalanced inventory level

 Deficient planned maintenance

 Inadequate education/training/work instructions

 Product design

 Customer needs not understood

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Underutilizing people: not taking advantage of people's abilities. Causes of people waste include:

 Old guard thinking, politics, the business culture

 Poor hiring practices

 Low or no investment in training

 Low pay, high turnover strategy

Nearly every waste in the production process can fit into at least one of these categories. Those that understand the concept deeply view waste as the singular enemy that greatly limits business performance and threatens prosperity unless it is relentlessly eliminated over time. Lean manufacturing is an approach that eliminates waste by reducing costs in the overall production process, in operations within that process, and in the utilization of production labor. The focus is on making the entire process flow, not the improvement of one or more individual operations.