Lean Manufacturing

Adding Value and Reducing

Waste in your Operations
 Table of Contents

What is Lean Manufacturing? 3

History of Lean Manufacturing:
Training Within Industry, Toyota
7
Production System (TPS), and
Beyond

Lean Manufacturing Principles 11

Kaizen: Continuous Improvement 14

Lean Manufacturing Tools 16

Lean Manufacturing in the Age of 19

Industry 4.0

2 Lean Manufacturing: Adding Value and Reducing Waste in Your Operations

 What is Lean Manufacturing?
Lean manufacturing is a systematic framework for eliminating waste from a manufacturing
system, or value stream, without sacrificing productivity. The value stream comprises all of the
activity and information streams that exist between the raw material supplier and the possession
of the customer. Lean is about empowering people at all levels of an organization to identify and
eliminate waste in order to continuously increase the value delivered to customers.

A lean mentality and culture adds value and reduces activities that decrease value. Put simply,
lean manufacturing aims to create more value for customers while reducing waste.

In lean, “value” is defined as any action or process that a customer would be willing to pay for.
Meanwhile, “waste” is defined as anything that doesn’t add value to a product, or cost without
benefit. Lean practitioners commonly agree on 7 wastes, which are derived from the Just in Time
mentality to reduce costs and increase value:

● Overproduction: producing more, sooner, or faster than is required by the next process or
customer
● Waiting: operators standing idle while machines cycle, equipment fails, parts delay, etc.
● Transport (or conveyance): movement of parts and products beyond the absolute
minimum necessary
● Overprocessing: unnecessary or incorrect processing
● Inventory: keeping more than the minimum stock of raw materials, parts, work in process
(WIP), and finished goods necessary.
● Motion: movements made by operators or machines beyond what is necessary
● Defects: time and effort spent correcting and inspecting rework and scrap

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 The 8 wastes of lean manufacturing: transport, inventory, motion, waiting,
overproduction, overprocessing, defects, and unutilized talent.

Some practitioners include an 8th waste: unutilized talent. While the first 7 wastes are directly

related to manufacturing processes, the waste of unutilized talent is specific to manufacturing

management. Remember that lean is focused on humans; without humans, there is no lean

culture.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 The Lean Enterprise Institute established a 5-step cycle for implementing lean.

The Lean Enterprise Institute lays out a 5-step cycle for implementing lean:

1. Specify value from the standpoint of the end customer by product family.

2. Identify all the steps in the value stream for each product family, eliminating whenever

possible those steps that do not create value.

3. Make the value-creating steps occur in tight sequence so the product will flow smoothly

toward the customer.

4. As flow is introduced, let customers pull value from the next upstream activity.

5. As value is specified, value streams are identified, wasted steps are removed, and flow and

pull are introduced, begin the process again and continue it until a state of perfection is

reached in which perfect value is created with no waste.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 To accomplish this goal, organizations implement lean thinking both in their management and

production philosophies. According to the Lean Enterprise Institute, “lean thinking changes the

focus of management from optimizing separate technologies, assets, and vertical departments to

optimizing the flow of products and services through entire value streams that flow horizontally

across technologies, assets, and departments to customers.”

Lean manufacturing is a continuously evolving effort that requires understanding and

participation from all levels of an organization. Just as important to achieving a lean operation as

the technical implementation is lean thinking. There are a variety of strategies for reducing waste

in a production process, but it is also important to understand and internalize the underlying

philosophies in order to sustain a lean operation and continue to strive toward a perfect,

zero-waste operation.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 History of Lean: Training Within Industry,
Toyota Production System (TPS), and Beyond

Early Lean Concepts

The core principles of lean manufacturing can be traced

to as early as Benjamin Franklin.

The core principles of lean manufacturing can be traced

to as early as Benjamin Franklin, who documented
examples of waste reduction in his experiments in the
mid-1700s. He foreshadowed the lean principle of
avoiding costs in the famous adage now known as “a
penny saved is a penny earned” in Poor Richard’s
Almanac: “A penny saved is two pence clear. A pin a-day
is a groat a-year. Save and have.”

Franklin also warned against carrying unnecessary inventory, writing in The Way to Wealth: “You
call them goods; but, if you do not take care, they will prove evils to some of you. You expect they
will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no
occasion for them, they must be dear to you.”

n 1911, Frederick Winslow Taylor introduced what would become known as standardization and
best practice deployment. Taylor wrote in The Principles of Scientific Management:

“And whenever a workman proposes an improvement, it should be the policy of the management
to make a careful analysis of the new method, and if necessary conduct a series of experiments to
determine accurately the relative merit of the new suggestion and of the old standard. And
whenever the new method is found to be markedly superior to the old, it should be adopted as the
standard for the whole establishment.”

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Soon after, Henry Ford developed his mass assembly manufacturing system, which recognized
and eschewed material and motion waste, to great success.

In his autobiography My Life and Work, Ford summarized lean manufacturing in one sentence: “We
will not put into our establishment anything that is useless.”

Training Within Industry

In 1940, the United States Department of War created Training Within Industry, a service
designed to provide job training in war-related industries that were impacted by the shortage of
skilled personnel due to military conscription. Training Within Industry consisted of four core
programs:

● Job Instruction (JI), which teaches a method to instruct an operator on how to perform a
process correctly, safely and conscientiously
● Job Relations (JR), which teaches the foundations of building positive employee
relationships, increasing cooperation and motivation, and effectively resolving conflict
● Job Methods (JM), which teaches employees to evaluate their work and suggest
improvements
● Program Development (PD), which teaches those in charge of training to assist line
supervisors in problem-solving

By the end of World War II in 1945, over 1.6 million workers in over 16,500 plants had received a
certification in Training Within Industry.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Toyota Production System

Heavily influenced by Training Within Industry, which spread to Japan after the end of World War
II, the Toyota Production System (TPS) was developed in Japan between 1948 and 1975 by Taiichi
Ohno and Eiji Toyoda, industrial engineers at Toyota. The Toyota Production System has been
widely lauded as the system that made Toyota as successful as it is today.

Production line at Toyota

TPS is grounded on two main conceptual pillars: just-in-time–the principle of producing only what
is needed, only when it is needed, and only in the amount that is needed–and jidoka, the concept
of “automation with a human touch.” The main objective of TPS is to eliminate waste (“muda”) by
designing out overburden (“muri”) and inconsistency (“mura”).

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 TPS is grounded by 6 principles, known as The Toyota Way:

● Continuous improvement
● Respect for people
● Long-term philosophy
● The right process will produce the right results
● Add value to the organization by developing your people and partners
● Continuously solving root problems drives organizational learning

Evolution of Lean

While lean manufacturing has been influenced and evolved over the decades, it is based largely on
the Toyota Production System (TPS). The term “lean” was first coined by John Krafcik in 1988 in
his article, “Triumph of the Lean Production System,” based on his experience as a quality engineer
at the Toyota-GM NUMMI venture in California. TPS soon became widely known due to the
publication of the book by James P. Womack, Arthur Roos, and Daniel Jones, based on Krafcik’s
research, titled The Machine That Changed the World.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Lean Manufacturing Principles

The following principles underlie the techniques of lean implementations:

Just in Time production

Just-in-time (JIT) production refers to a system of production that makes and delivers what is
needed, just when it is needed, and just in the amount needed. Just-in-time is comprised of three
elements: takt time, continuous flow, and pull system.

Takt time refers to how often a part or product should be produced to meet customer
requirements based on the rate of sales. Takt time is calculated by dividing the available working
time per shift by the rate of customer demand per shift. Producing to takt time means that a
manufacturing system is able to respond quickly to problems, eliminate causes of unplanned
downtime, and reduce changeover time.

Continuous flow means producing and moving one item at a time (or a small, consistent batch) to
match takt time. Each item is passed immediately from one process step to the next, without any
wasted time (or any other waste) in between.

Continuous flow was developed through the Ford System and includes concepts such as using
consistently interchangeable parts so that cycle times can be consistent; the assembly line itself;
arranging machines so that parts could flow smoothly between tasks; and ensuring that the rate
of parts fabrication matched the consumption rate of parts in final assembly.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Jidoka
Jidoka translates to “automation with a human touch,” or “autonomation.” It refers to providing
machines and operators the ability to detect when an abnormal situation has occurred and
immediately stop work to institute countermeasures. Adopting Jidoka enables work to be more
efficient because operators are freed to do work that creates value rather than keep watch at
machines to prevent defects.

The concept of jidoka was developed when Sakicho Toyoda, founder of the Toyota Group,
invented an automatic loom that would stop automatically when a thread broke, quickly eject
near-empty shuttles, and insert a new one at just the right moment. This invention enabled
operators to do more value-creating work rather than monitor the looms. The concept of
designing machinery that would stop automatically when problems arose and call attention to
issues eventually became a crucial part of every process at Toyota.

Heijunka (level production)

Heijunka refers to leveling the type and quantity of production over a fixed period of time. This
enables production to efficiently meet customer demands while avoiding batching. Heijunka also
minimizes inventories, capital costs, manpower, and production lead time throughout the value
stream.

An example of heijunka is alternating between producing small batches of product A and product
B rather than producing all of product A in the morning and all of product B in the afternoon.

Standardized Work
Standardized work is the principle of establishing precise procedures to make correct products in
the safest, easiest, and most effective way based on current technologies. Standardized work
requires three elements: takt time, work sequence, and standard inventory (or in-process stock).

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Standardized work results in benefits such as the documentation of current process for all shifts,
reductions in variability, easier training for new operators, and reductions in injuries and strain.
Having standardized work for procedures also provides a basis for continuous improvement, as
improvement can only be truly measured from consistent processes.

Kaizen
Kaizen, which translates to “changing something for the better,” is the concept of continuous
improvement. With kaizen, manufacturers continuously improve standardized processes,
equipment, and other daily production procedures. We’ll cover kaizen in depth in the next chapter
of this guide.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Kaizen: Continuous Improvement
Continuous improvement is also known as “kaizen,” which translates to “changing something for
the better” in Japanese. Lean manufacturers use kaizen to help eliminate waste. With kaizen,
manufacturers continuously improve standardized processes, equipment, and other daily
production procedures. Kaizen is famously exemplified in TPS, where employees are required to
stop the line if an abnormality arises and, along with their supervisors, suggest an improvement.

Kaizen is guided by several principles, the foremost of which is that good processes create good
results:

Improvements are based on small changes

Rather than wait for a major change to be implemented begin improving, change should be
approached in small, incremental steps. This increases the speed to improvement and reduces the
pressures of implementing a major change. In addition, small changes are often less costly and
therefore less risky.

To this end, a key to making incremental improvements is identifying and solving the root causes
of issues. This allows employees to catch and contain small issues before they become larger and
costlier to eliminate, and it prevents the same problems from reoccurring.

Improvements must be measurable, standardized, and repeatable

In kaizen, it’s important to “speak with data and manage with facts.” In order to evaluate
improvements objectively, existing procedures must be standardized and documented. Measuring
performance against existing benchmarks allows you to demonstrate ROI from your kaizen
efforts and keep the company aligned around improvement. It also allows you to identify areas
where your efforts are working–or not–so you can make strategic decisions about future
improvements.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Empowering the Employees

Kaizen places emphasis on the value of employees at every level of an organization. Employees
who are closest to the problem are the best-equipped to solve them. Further, engaging team
members to identify problems and suggest improvements in their work areas encourages a sense
of ownership over their work, which can improve overall motivation, morale, and productivity.
Training and empowering employees to grow should be a part of your company’s continuous
improvement.

Continuous Improvement Cycle and other implementations

According to John Shook, chairman and CEO of the Lean Enterprise Institute, the Continuous
Improvement Cycle consists of three steps: seeing the workplace, identifying problems, and
implementing solutions.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Lean Manufacturing Tools
The following are some of the most common techniques used in lean manufacturing:

Value Stream Mapping

Value stream mapping refers to the process of identifying and charting flows of information,
processes, and physical goods across the entire supply chain from the raw material supplier to the
possession of the customer. Basic planning tool for identifying wastes, designing solutions, and
communicating lean concepts

Poka Yoke

Poka yoke refers to “mistake-proofing” or “error-proofing” a process. The goal of poka yoke is to
prevent product defects from reaching customers by catching, correcting, and eliminating
mistakes at the source. By integrating poka yoke inline, mistakes are either prevented or caught
shortly after they happen. This prevents defective products from making it to the end of the
process. As a result, a higher quality of output naturally follows.

5S

5S is a systematic framework for workspace organization based on the idea that a better work
environment results in better operations, which in turn leads to better products. 5S provides five
key steps for maintaining an efficient workspace in order to improve the quality of products: sort,
set in order, shine, standardize, and sustain.

Total Predictive Maintenance (TPM)

Total Predictive Maintenance provides strategies for creating employee ownership and
autonomous maintenance of production equipment. TPM strategies include designing products

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 that can be easily produced on existing machines, designing machines for easier operations,
changeover, and maintenance, training workers to operate and maintain machines, purchasing
machines that maximize productive potential, and designing a preventive maintenance plan that
spans the life of the machine.

Visual Management

Visual management involves making information about production processes and fundamental
daily activities visually available in a coherent, timely, and regular manner. This makes it easier to
determine production status and makes abnormalities, waste, and scrap obvious. Examples of
visual management include kamishibai boards and kanban.

Kamishibai boards are used to audit kaizen in processes. Modern Kamishibai boards are simple
and flexible visual controls to perform mini-audits within a manufacturing process. When used
correctly, they are powerful tools to perform, manage and audit tasks of specific duties.

Kanban, which translates to “card” from Japanese, is a signaling device that gives authorization
and instruction for the production or withdrawal of items in a pull system. Kanban visualizes the
flow of materials and information in a system, most commonly using kanban cards.

Root Cause Analysis

Root cause analysis is a method of problem solving aimed at getting to the root cause of the issue.
Methodologies used in lean manufacturing include the fishbone diagram (also known as the
Ishikawa Diagram) and the 5 Whys.

Gemba Walk

A gemba walk is defined as a tour of the shop floor. Gemba is a Japanese term defined as “the
actual place”. The “gemba walk” bridges theory and practice by bringing leaders to the shop floor
to observe processes as they happen. This result is the definition of “gemba walk”.
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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Andon

Andon is a system that notifies management of a quality or process problem. This is often
accomplished using a light stack or other video or audio signal that alerts management of a defect,
shortage, or other issue.

Kitting

Kitting is the process of organizing components and parts needed for a process prior to delivering
them to the point of use in order to save time on the production line. Kitting can help free up
space, reduce inventory, and increase productivity, improving the efficiency of the assembly
process.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Lean Manufacturing in the Age of Industry 4.0
While lean methodologies have been tried and true for decades, the emergence of Industry 4.0
has given rise to new technologies that can augment traditional lean strategies.

● Error-proofing and quality at the source with smart sensors and devices
● As IIoT sensors, device integrations, and manufacturing software become more accessible,
it is becoming easier than ever to error-proof manufacturing processes. Here are a few
examples of using smart sensors and devices to ensure quality:
● Use pick-to-light systems to light up the correct bin or part needed during a process step
● Use break beams to detect whether the operator has reached into the correct bin, and
prevent the process from advancing to the next step until the correct part is obtained
● Use a digital scale to detect whether a product weighs as it should and halt the process if
the weight does not meet the requirements
● Integrate tools such as torque drivers and calipers to perform operations to exact
specifications
● Require products to pass machine vision inspections before allowing them to proceed
down the line

Using a pick-to-light system to guide the operator to the right bins

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
 Digitizing Standard Work

Gone are the days of printing tens of pages of work instructions every time you update a process.
There are many options available for digital work instructions software that offer a
much-improved experience for the operator. Digitizing work instructions allows manufacturers to
incorporate multimedia and integrate with IoT tools and devices to make standard work more
efficient and engaging for operators. Digitizing standard work also has the benefits of being highly
customizable and allowing changes to automatically update across a plant, ensuring that work
instructions are always up-to-date.

Data Collection

We’ve already established the importance of “speaking with data and managing with facts” in lean
manufacturing. After all, measuring performance against existing benchmarks is the only sure way
to demonstrate ROI from your lean efforts. One of the key benefits of the digital transformation of
manufacturing is the ability to automatically collect data from machines, tools, operators, and
processes. Integrating IoT (Internet of Things) tools and hardware with manufacturing software
enables manufacturers to get an accurate view of production and quality metrics such as
production rate, defect and scrap rate as well as defect causes, and process timing such as
process and step cycle times.

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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations
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Lean Manufacturing: Adding Value and Reducing Waste in Your Operations