The following are characteristics of Lean manufacturing:
Waste minimization without sacrificing productivity
Considers waste created through overburden and waste created through unevenness in work loads
Emphasizes what adds value and reduces everything that does not add value
Derived from the Toyota production system
Known for its focus on the original Toyota seven wastes
In their fundamental work for Lean, Womack and Jones defined the five Lean principles:
- Customer value
- Identify the value stream
When identifying the value of product, you would specify what creates value from the customer's perspective.
- The customer defines the value of product in a Lean supply chain.
- Value-adding activities transform the product closer to what the customer wants.
- An activity that does not add value is considered to be waste.
Understanding the value stream
The value stream is the sequence of processes from raw material to final customer that creates value, or from product concept to market launch. The value stream can include the complete supply chain.
Value stream mapping is an important tool to help model the Lean transformation.
Create the value process flow wherever possible in the process. You can use one-piece flow by linking all the activities and processes into the most efficient combinations to maximize value-added content while minimizing waste. The waiting time of work in progress between processes is eliminated; hence, adding value more quickly.
Pull is the response to the customer’s rate of demand; so, the actual customer demand that drives the supply chain. In other words, make only what is needed by the customer (short-term response to the customer’s rate of demand).
With a pull concept, based on a supply chain view from downstream to upstream activities, nothing is produced by the upstream supplier until the downstream customer signals a need.
Striving for perfection
The last Lean principle is to strive for perfection. In striving for perfection, Lean is a journey of continuous improvement. The goal is to produce exactly what the customer wants, when the customer wants it, and in the most economical manner. Perfection is an aspiration; anything and everything can be improved.
The objectives of the Lean enterprise are to correctly specify value to the ultimate customer. Additionally, Lean analyzes and focuses the value stream so that it does everything, from product development and production to sales and service, in a way that actions that do not create value are removed and actions that do create value proceed in a continuous flow as pulled by the customer.
The basic Lean core elements are as follows:
- Value Stream - A value stream is the processes of creating, producing, and delivering a good or service to the market.
- Kaizen - Japanese for "continuous improvement." Kaizen is a management philosophy that emphasizes employee participation, where every process is continuously evaluated and re-evaluated to eliminate waste.
- (Work) Cell - A (work) cell is a manufacturing or service unit consisting of several workstations and the materials transport mechanisms and storage buffers that interconnect them. A work cell is a resource group, where resources are grouped to run a process flow. The work cell represents the effective capability of all resources that are assigned to the cell. It is handled as a black box, meaning that the internal structure of the cell is not documented in the system.
- Cycle time - The cycle time of a product refers to the time between completion of two discrete units of production.
- Takt time - Takt time sets the pace of production to match the rate of customer demand and becomes the rhythm of any Lean production system. It is computed as the available production time divided by the rate of customer demand.
- Supermarket - Supermarket areas should be grouped together to enable the material handler to visit on his or her regular routes. It is called a supermarket because that is where the material handler “goes shopping” for parts.
- Production flow - The flow of material and products throughout work cells and locations for a specific production or supply scenario can be described as a sequence or small network of process or transfer activities, called a production flow.
- Backflush costing - Backflush costing omits recording some or all of the journal entries that relate to the stages from the purchase of direct materials to the sale of finished goods. Because some stages are omitted, the journal entries for a subsequent stage use normal or standard costs to work backward to “flush out” the costs in the cycle for which journal entries were not made.
- Kanban - Japanese for “visible record.” Kanbans have been adopted by many industries as a method of controlling production and internal supply. A kanban can apply to a paper ticket or a physical container.
- Heijunka leveling - A production leveling technique using either volume or product mix. In Supply Chain Management, the Kanban schedule board is designed to be used as a Heijunka board to level production load on a cell.
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