Lean Thinking - Finding Waste and Reducing Costs

Any industry is able to apply the key concepts of lean thinking which we will describe in this article.

Rather than the common scenario where each business unit attempts to reduce its costs in isolation, integrated approach lean manufacturing aligns all business functions with the common goal of reducing the overall costs of the organization. This results in an overall stronger organization than what you find when each business function is independently trying to achieve only its particular goals. When implementing a lean manufacturing system, each function must understand the goals and techniques within the entire manufacturing system.

Each business function has the goal to eliminate waste in the manufacturing environment during the transformation to a lean environment. Within the context of lean thinking anything that is above the minimum resources required to complete a task is thought of as waste. With wasteful activities you end up with costs added to products that add absolutely no value.

Lean thinking makes it possible to find hidden wastes and problems within the organization. Before the implementation of lean thinking, waste was able to hide the root causes of many problems. For example, the real problem of a process, long changeover times, can be hidden by the obvious effect of a huge inventory left after a process. Large batches were probably necessitated by the long changeover times.

Lean thinking exposes these root causes that will need to be solved in order to eliminate the problems that they cause. The manufacturing process will become for efficient and consistent as these problems are solved. Many companies have systems without any flexibility, which leaves them to constantly “fight fires”. Many times companies will need to bring in additional personnel in order to deal with shifting customer demands or other changing requirements. A lean system will give a company the flexibility it needs in order to deal efficiently with business variability.

Lean manufacturing leads to the standardization of processes that can insure that improvements are consistently maintained. Of course these standards are not set in stone, but constantly challenged to see if further improvements can be made. The Japanese use the word kaizen when speaking of the continuous drive for improvement.

Ownership for each particular process is transferred to those closest to the process as quality is standardized. Over time it has been seen that it is only when those who are responsible for the actual tasks have ownership that lean manufacturing is truly successful.