Lean Manufacturing is a business approach focused on reducing waste in the production process while maximizing productivity and customer satisfaction with the product. It challenges organizations to work smarter and continuously improve their product.
Lean Manufacturing is based on five so-called Lean Principles: defining value, mapping the value stream, creating flow, establishing a pull system, and pursuing perfection. When the 5 Lean Principles are correctly implemented during the production process, they significantly positively affect various aspects that determine the outcome: operating costs, product quality, customer satisfaction, and ultimately, profit.
The first of the five Lean Manufacturing principles is defining value. The ultimate goal of Lean Manufacturing is to increase the product's value for the end-user. Defining this value is, therefore, an important first step. During this process, you ask yourself the following questions: who is the customer, what exactly do they want, and what are they willing (to pay extra) for? Examples include good customer service, and fast delivery.
Once it's clear what the customer values, it's crucial to know which activities within the organization add this value and which do not. For this, you map out the value stream. The value stream simply encompasses the entire lifecycle of the product: from the purchase of raw materials to waste disposal. The 'value stream' shows how 'value' for the customer is realized. Once mapped, it becomes clear which processes do not contribute to this 'value.' The next step is to eliminate these processes or activities.
The third principle involves tackling the waste that occurs during the production process. Remove all identified waste from the process so that only value-adding processes and activities remain. Creating a natural flow is of great importance. Analyze the remaining production processes and ensure they run smoothly and that bottlenecks, which slow down or interrupt the process, are removed. After all, they only cost time and money.
The so-called pull system is the fourth of the five Lean Principles. With the pull system, you ensure that you only produce what is needed to add value to the customer in the production process. Essentially, only produce when needed, when a customer has placed an order. This limits unnecessary intermediate and final inventories, storage costs, disrupted production schedules, and – the most critical element you want to avoid – low customer satisfaction.
Supermarkets make extensive use of pull systems. A simple example makes the principle immediately clear: when a bottle of cola is bought, it is automatically placed on the next purchase order. This keeps the stock level right without the warehouse overflowing with too much stock.
The last principle is perfection. You might think: 'perfection is a utopia, it doesn't exist.' But you have to see it slightly differently in this context. In this last phase, striving for perfection is central. A continuous process intended to elevate the entire production process to a higher level. The idea is that you keep repeating the 5 Lean Manufacturing Principles and raise your level a bit with each iteration. It's a circular process, an ongoing loop. Customer values, and thus the wishes that customers have, can change – it's normal to expect them to change over time. Not only that, but technology also develops non-stop. As a result, new 'wastes' may make their appearance in the production process – they will, in turn, have to be filtered out of the process. In other words, quality management – as we know it from many other business sectors.
As we said, these five principles of Lean Manufacturing are not meant to be printed out and then pulled out once in a while as a memory aid to go through the five phases again. The principles need to be incorporated into the DNA of all levels of the organization. It never fades into the background because it's a continuous process. Only when you remain engaged with it and it remains a high priority within business operations will you continue to minimize waste and optimize customer satisfaction and ultimately profit. In short, Lean Manufacturing is a process you need to stay on top of!