What Is Lean Manufacturing? (With Objectives, Pros And Cons)

By Indeed Editorial Team

Published 25 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Lean manufacturing helps production processes become more efficient and cost-effective. Businesses that follow a lean manufacturing framework can improve resource utilisation and reduce wastage. If you are a manufacturing manager, business leader or project leader, you can benefit from learning about this production strategy. In this article, we define lean manufacturing, discuss its key business objectives, describe the five key principles of lean manufacturing, explain how to implement it and share its advantages and disadvantages.

What is lean manufacturing?

Knowing the answer to 'What is lean manufacturing?' can help you understand why it is crucial for business operations. Lean manufacturing refers to using lean practices and tools during the development and manufacturing of goods and products to minimise wastage of resources. Manufacturers also use lean manufacturing principles to reduce costs, optimise processes, reduce production timelines and boost innovation.

Lean manufacturing focuses on removing waste from the manufacturing process, continuous improvement and delivering value to the customer. Some examples of investments or resource wastage can be excess inventory, inefficient processes, under-utilised production facilities or idle employees. By adopting lean manufacturing principles, businesses can reduce operating costs and deliver products of superior quality to their customers.

Related: What Does A Manufacturing Engineer Do? (Salary And Skills)

Objectives of lean manufacturing

Here are the top objectives of lean manufacturing:

Reducing wastage of resources

Lean manufacturing aims to eliminate wastage of resources, minimise product inventory and streamline the production processes for maximum efficiency. This helps manufacturers eliminate waste and reduce costs, allowing them to price their products optimally for the customer while also maximising profits. Waste in this approach can mean the physical wastage of raw materials or wastage of intangible resources like time or employee effort. It can also be unnecessary transportation, over-processing raw materials or production defects.

Related: What Is Material Management: Definition And Primary Objectives

Optimising quality

Lean management aims to achieve better results continuously, and this helps in providing the best quality of products to customers. This can also improve innovation and the product enhancement process. After improving a process, businesses can reassess it again after some time in search of further improvements to deliver the optimum quality to their customers.

Increasing production agility and capacity

By increasing production agility, a manufacturer can serve a larger market without expanding their production facilities or making intensive investments. The more agile a business is, the greater its production capacity. Lean manufacturing helps all production processes operate in synergy to produce at their maximum capacity.

Minimising business expenses

Elimination of wastage, better utilisation of time and production at maximum capacity help reduce manufacturing expenses. This enables companies to remain competitive and offer superior quality products and lower prices in the market. It also allows businesses to increase profits, provide better customer services and invest more in product research and development.

Improving the workplace environment

Lean manufacturing helps improve the work environment and increase productivity. It creates a workplace where employees feel secure and satisfied with their work. Lean manufacturing also promotes better compliance and safety regulation at manufacturing facilities, making the workplace safer for employees.

5 principles of lean manufacturing

Lean manufacturing has five basic components:

  1. Value: Value in lean manufacturing is determined from the perspective of the customer and signifies how much they can pay for a product. Defects, overproduction, waiting, transportation, excess processing, excess inventory, unused talent and unnecessary motion are some elements that help in reducing wastage and creating value in lean management.

  2. Value stream: This involves analysing the materials and other resources which are necessary to manufacture a product and identify waste and scope of improvement. The value stream includes the complete product life cycle, right from the procurement of raw materials to disposal.

  3. Flow: Creating flow in the production process refers to removing functional barriers to improve lead time. This ensures that processes flow smoothly in a business, with minimal delay or wastage, and creates a constant production stream.

  4. Pull: A pull system works when teams move only when there is demand. It involves a system where all production units move into new tasks only when the previous steps are complete, as this allows teams to adapt to any challenges that may arise in the production cycle.

  5. Perfection: Lean manufacturing works on the principle of attaining perfection through continuous process improvements. It requires ongoing reassessment and refinement of the production process to eliminate waste and create a perfect value stream.

How to implement lean manufacturing

Here is how businesses can implement lean manufacturing strategies and techniques to reduce wastage and reduce production time:

1. Eliminate wasteful processes

Limiting or eliminating wastage is one of the core principles of lean manufacturing. You can begin by identifying wasteful activities and intensifying efforts to find more efficient ways that add value to the production line. The elimination of wasteful processes helps in increasing efficiency and building a more sustainable supply chain. You can audit existing manufacturing processes to determine which steps utilise the most resources and time.

2. Reduce inventory

Maintaining excess inventory can hold resources, slow down responses and complicate quality control mechanisms. Overstocking can also cause other challenges, as extra inventory risks going out of stock and becoming obsolete. Companies can invest in methods like demand forecasting, purchasing, logistics and smart inventory management to reduce inventory costs.

Related: What Is An Inventory Manager? (Plus How To Become One)

3. Increase response time

Manufacturers require accurate and reliable forecasts of market demand trends and requirements. By increasing their response time to such trends and demand, businesses can leverage them to increase profitability and production agility. Develop a system that can react swiftly to the changing market requirements to capitalise on them by following just-in-time (JIT) production techniques.

4. Quality test products

Implement procedures and controls at the earliest possible stage in the manufacturing process to detect problems and maintain quality control. Design and implement comprehensive quality control and assessment frameworks that collect data from different sources. This can also help create a continuous cycle of product development and enhancement.

5. Increase employee autonomy

Try to give employees increased autonomy and authority to make business decisions. Encourage innovation and creative problem-solving in the team and implement viable solutions presented by employees. This can also help improve employee engagement and performance.

Related: How To Motivate Employees: 18 Steps For Workplace Success

6. Solicit customer feedback

Obtaining customer feedback can help in improving core product features. Conduct customer surveys, focused group discussions, and randomised tests to assess whether customers prefer your product over business competitors. Determine desirable features, price points and quality standards to ensure that you maintain and deliver value to end customers.

Pros and cons of lean manufacturing

Here are some advantages and disadvantages of lean manufacturing strategies:

Advantages of lean manufacturing

Lean manufacturing offers the following benefits to businesses:

  • Improves employee satisfaction: Implementing lean principles requires input from employees and trusts them with greater responsibilities. This can lead to higher employee satisfaction as they respond positively to efforts to involve them in the manufacturing and improvement processes, making them a stakeholder.

  • E**nables Just in time implementation:** The just-in-time production or manufacturing strategy helps minimise wastage, suppress inventory and improve delivery. Lean manufacturing allows businesses to become more agile in their strategic decision-making.

  • Enhances customer loyalty: Lean manufacturing accounts for the feedback, concerns and suggestions of customers. It can help in increasing customer loyalty and building a trustworthy relationship with customers.

Related: Customer Satisfaction: How To Measure And Tips For Improvement

Disadvantages of lean manufacturing

Lean manufacturing can have the following limitations:

  • E**mployee frustration:** Lean manufacturing processes help make production processes more efficient and ensure strict quality control. If employees reject the new methods or refuse to implement them diligently, it can become challenging.

  • Low margin for error: Lean manufacturing principles require strict delivery times for raw and finished goods, and such schedules with little margin for error can leave companies vulnerable to systemic bottlenecks. Any unexpected vendor delivery issues can cut off the supply of raw materials and interrupt production flow.

  • Equipment failure: Lean manufacturing methods require equipment and machines to work at their highest capacity. Any resulting equipment failure can lead to significant inconsistencies in the production line and delay the entire operation.

  • Delivery inconsistency: A delay at any stage of the production process can hamper the delivery timeline for the customer. This can result in inconsistent delivery during peak demand or holiday season.

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