Lean manufacturing applications have evolved greatly since the 1980s, when the term was coined in association with the Toyota Production System. Lean was originally focused on the manufacturing floor, but its methodologies have reached all levels of operations, from procurement to marketing. It has been adopted across a range of industries, from healthcare to hospitality.
“Today, people are finding value in applying Lean principles and methods to almost any type of human endeavor including nonprofits like the governments, the military, educational institutions, religious organizations, and other nongovernmental organizations,” says Frank Murdock, ASQ Lean Enterprise Division.
Essentially, Lean is about identifying waste and eliminating it, which boosts the bottom line, says industry veteran and Quality columnist Jim L. Smith, president of Jim Smith Quality Institute. Reducing inventory, shortening production cycles and speeding up response time saves money. Some companies have reported up to billions of dollars in savings by implementing Lean solutions.
However, companies can go too far. Murdock says Lean was initially used to justify massive layoffs, which understandably resulted in fear and resistance. To combat this, leaders should focus on using Lean to upskill and retrain workers instead of laying them off — and should communicate this approach to staff.
Investing in staff is key.
“Non-utilized talent is a waste of staff abilities and can hold a manufacturer back when it comes to innovation because employees aren't being mined for their ideas on improvement suggestions,” Smith says. “It could also result in losing talented workers who have realized their talents might be better utilized elsewhere.”
The pandemic has also impacted Lean in manufacturing, particularly with the global disruptions in the supply chain, Murdock says.
“With Just-In-Time inventories, the disruption was aggravated because, up to that point in time, the supply chains were very reliable. Locally increasing inventories is a reasonable response when shortages begin to occur in order to smooth out the disruptions. However, when everyone throughout the supply chain and the customer based begins increasing inventories at the same time, that is when the system fails.”
Lean organizations with resilient and engaged workforces were able to pivot production, Murdock says. Many manufacturers became involved in producing pandemic-related equipment such as PPE and respirators, and Lean production systems enabled that.
The pandemic also accelerated the digital transformation and the adoption of Industry 4.0, enabling people to both work safely in the COVID environment with increase detection, as well as helping industrial engineers and others to work remotely, Murdock says.
“This is ultimately transforming much of manufacturing and allowing reshoring of operations sent overseas because of low labor costs,” he explains. “With automation and the application of Lean principles and methods, we are now seeing the expansion of manufacturing closer to the markets they serve. This allows manufacturers to be more responsive to changes in local markets as well as greatly improves supply chain reliability by dramatically shortening lead times by sourcing to local suppliers.”
Some are grateful for Lean helping to grow their businesses; Others unfairly blame Lean for the pandemic’s supply chain issues, Murdock says. “With shortages, Lean manufacturing, especially Just-In-Time (JIT) inventory management, got a lot of bad press,” Smith says. “Many began (and some still are) questioning if supply chains were made too lean.” There is certainly truth to this, Smith says, as some managers try to squeeze as much out of their pipelines as possible.
“Some begin questioning if manufacturers needed to do away with JIT altogether and start producing more inventory,” Smith says. “In my opinion that is not going to happen. However, those who truly embrace Lean concepts will see the pandemic as a catalyst for change.”
The pandemic has underscored areas where manufacturing processes fall short, and Lean enthusiasts will attack those weaknesses and be better for it, Smith says.
Smith wonders if new Lean initiatives have been adversely affected with so many people working from home or out of the office.
“Not having office staff on hand to implement changes would have certainly brought a halt to a lot of improvement,” Smith says.
Lean can be somewhat controversial, but its methodologies have withstood the test of time because they fundamentally make sense, Murdock says. Although contexts and technologies change, waste categories are timeless.
Lean lists the following categories of waste:
- Over-production or making more earlier or faster than the customer needs it.
- Motion, or any person’s movement that does not add value as defined by the customer.
- Inventory, or any supply of more than one of each item needed for each step of the process.
- Transportation, or moving material or information around the organization that does not add value.
- Waiting, or time lost pausing for machines, materials, information, products, services, etc.
- Under-utilized people, or not utilizing their knowledge, skills, experiences, or ideas.
- Defects, or products, parts, information, or services that require rework or are scrapped.
- Over-processing, or effort that adds no value to the product or service from the customer’s point of view.
As Industry 4.0 takes hold, the same principles hold strong, he says.
Deeply understanding customer needs, eliminating waste throughout all levels of production, respecting and engaging the entire production staff, seeking continuous flow throughout, and continuing to improve will never go out of style. They just require different applications.
Murdock says Lean is needed more than ever because we are becoming more connected.
“The rate at which information is flowing and decisions are needed, it has never been more important to apply Lean,” Murdock says. With data collected at lightning-fast rates, errors have the potential to overwhelm our automated systems and could cause massive variation and quality or safety problems.
“Fortunately, we can avoid this by applying Lean principles and methods, sometimes in quite novel ways such as using drone-based cameras to study layout and production flows for instance,” Murdock explains.
Lean manufacturing is primarily focused on ridding a process of all possible waste and maximizing the activities that add value.
An organization considering a Lean journey must decide what's important before embarking, Smith says. “Implementing lean will help clarify what your business really needs and help you plan other projects more effectively,” he explains.
Leaders must also make sure there is buy-in before getting started, Murdock says. “Often there are several competing solutions depending on those engaged in developing them. This is where jumping directly to implementation is unwise.”
Lean promotes experimentation through Plan-Do-Check-Act. In many cases, none of the original solutions works as expected, but rather a hybrid solution emerges and is implemented, Murdock says.