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Lean Production Essentials: Basics and the 8 main wastes

lean-production

In this blog article, we take a detailed look at the lean production management approach. We look at the definition, the historical classification, the basic principles, the advantages and benefits, but also the limitations of this management approach. Practical tips on the eight typical wastes and the contemporary lean production approach round off this article.

Introduction

"Efficient production is not just a competitive advantage, it is at the heart of successful companies in a world that is moving faster than ever before."

This quote emphasizes the central role of efficient production in a rapidly changing world. In an era where speed and adaptability are crucial, lean production is becoming the key to sustainable success for companies that want to operate flexibly and efficiently.

 

Lean Production: Definition

The term lean production is to be understood as a management approach that aims to minimize or ideally avoid waste in production while increasing productivity, reducing costs and improving product quality.

The aim is to design production processes in manufacturing in such a way that they are more efficient, more flexible and also more customer-oriented. Lean production considers changing customer requirements as a relevant influencing factor.

 

Historical classification of lean production

Lean production, also known as "lean manufacturing", is based on the Toyota Production System (TPS). It was developed in the late 1940s and early 1950s by key figures such as Taiichi Ohno and Shigeo Shingo at Toyota Motor Corporation in Japan.

Lean production became popular in the West in the 1980s, especially after the publication of the book "The Machine That Changed the World" by James P. Womack, Daniel T. Jones and Daniel Roos. This book introduced the principles of lean production to a wider audience and showed how they could be applied in various industries outside the automotive industry.

Lean methods have since spread to many sectors and are a central element in modern production and operations management.

 

The fundamental principles of lean production

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  • Added value from the customer's perspective
    Any activity that does not create value for the customer is considered waste and should be eliminated or minimized.

  • Continuous improvement (Kaizen)
    The constant search for ways to improve processes and increase efficiency.

  • Just-in-Time-Produktion (JIT)
    Production and delivery of products at the exact time and in the exact quantity required to minimize storage costs and waste.

  • Jidoka (automation with human intervention)
    Machines and workflows are designed in such a way that errors are detected immediately and the process is stopped so that problems can be rectified straight away.

  • Respect for people
    Mitarbeiter werden als wichtigste Ressource angesehen. Ihre Fähigkeiten und Kenntnisse werden genutzt, um Prozesse und Qualität kontinuierlich zu verbessern.

 

Advantages of lean production

Lean production offers numerous advantages for companies that implement it correctly. Here are some of the most important:

1. cost savings: By reducing waste in production processes, companies can achieve significant cost savings. This can include direct material costs as well as indirect costs such as storage costs and overtime.

2. increasing efficiency: lean production aims to make production processes more efficient. This leads to shorter throughput times, faster response times and smoother production overall.

3. improved product quality: By identifying and eliminating waste, production errors are minimized. This leads to higher product quality and reduces rejects and rework costs.

4. customer orientation: Lean production is strongly oriented towards the needs of the customer. This leads to higher customer satisfaction and long-term customer loyalty.

5. flexibility: Lean production enables companies to react more flexibly to market requirements and changes in demand. This is particularly advantageous in rapidly changing markets.

6. sustainability: By reducing waste and using resources more efficiently, lean production contributes to sustainability and can reduce environmental impact.

 

Importance of lean production for companies

The importance of lean production for companies cannot be underestimated. In a highly competitive and rapidly changing business world, lean production offers the following important aspects:

1. competitive advantage: companies that successfully implement lean production can gain a decisive competitive advantage. They are able to manufacture products faster and more cost-effectively, which makes them more competitive in the market.

2. sustainable success: In an ever-changing business environment, the ability to adapt and operate efficiently is critical to a company's long-term success. Lean production provides the tools to ensure sustainable success.

3. customer loyalty: By focusing on the needs of customers, companies can build strong customer loyalty. Satisfied customers are more likely to make repeat purchases from a company.

4. cost control: Lean production helps companies to better control and reduce their costs. This can improve the financial stability of the company.

5. innovation capability: Efficient processes enable companies to free up resources for innovation. This can promote the development of new products and services.

 

Critical reflection: challenges and limitations of lean production


While the benefits of lean production are undoubtedly considerable, it is also important to consider potential disadvantages and challenges. One critical point is the possible overworking of employees, which can result from too intensive implementation of lean principles. This often happens when the streamlining of processes is taken too far without taking into account the workload of employees.

Another consideration concerns the cultural and organizational challenges of implementing lean production, especially in companies that have traditionally worked according to other principles. Critics also point out that the strong focus on efficiency can impair the ability to innovate and that reducing buffers and reserves too much can make companies vulnerable to unexpected fluctuations.

Finally, while the importance of employees is emphasized, there is a lack of in-depth consideration of how lean production can affect employee satisfaction and motivation, both positively and negatively. These aspects are essential to paint a comprehensive picture of lean production and to realistically evaluate its application in different business contexts. In the next paragraph, we look at 8 of the biggest types of waste in the lean world:

 

The 8 main wastes in lean production

1. defects:

The main focus is on minimizing defects, as these affect time, capital, resources and customer satisfaction. Methods such as proper documentation of manufacturing (traceability), standardization of the manufacturing process and consistent quality controls are critical to reducing defects.

Specific causes of defects include:

  • Poor quality control at production level
  • Poor machine/plant repair and maintenance
  • Lack of proper documentation
  • Lack of process standards
  • Ignorance of customer needs
  • Inaccurate stock levels

2. process complexity:

This refers to poorly designed processes, which can be attributed to management or administrative problems such as lack of communication, duplication of data, overlapping areas of responsibility and human error. It can also be the result of equipment design, inadequate tooling in the workplace or inappropriate arrangement of equipment.

Examples:

  • Poor communication
  • Ignorance of customer needs
  • Human error
  • Slow approval and release processes
  • Excessive reporting

3. overproduction:

If components are produced before they are needed by the next downstream process, this results in unnecessary idle times or temporary overproduction. This leads to the formation of excess work in process (WIP) and thus to additional workload due to WIP transfers. Rejects are usually detected later than is usually the case with balanced processes (avoidable waste).

Lean manufacturing avoids or at least reduces the risk of overproduction. The cycle time is used to coordinate the production quantities between cells or production areas. Measured and process-mapped orders lead to shorter set-up times and enable an efficient material flow. In many industries, "pull" systems such as Kanban can be used to control or eliminate WIP.

The most common causes of overproduction include:

  • Unstable processes
  • Inaccurate demand assessment and forecasts
  • Lack of or only weakly developed digitaliz
  • No real-time data and transparency
  • Low degree of automation
  • Missing or limited manufacturing information platform

4. waiting times:

Waiting times can be caused by workers (short-term absence, qualification, etc.), material (missing, not provided, pre-process not completed, etc.) or malfunctioning systems/machines (downtime, production cycle, excessively long retooling, etc.).

This ultimately leads to increased or additional direct labor costs and overhead costs (overtime, acceleration costs and spare parts). The "rush to catch up" can lead to errors and additional scrap.

Waiting leads to inefficient production and additional costs. Waiting times are often the result of poor process design. They can be easily identified by automated KPI measurement in order to subsequently initiate the right measures based on objective and trustworthy data.
The most common causes include:

  • Uncoordinated or unstable processes
  • Lack of or only weakly developed digitalization
  • No real-time data from production and a lack of transparency
  • Missing or limited manufacturing information platform
  • Poor communication

5. stock:

From the lean production perspective of waste, inventories - especially intermediate stocks on the store floor - represent a potential for improvement due to the capital tied up in them. Inappropriate stocks of raw materials and finished parts can be caused by excessive order quantities from purchasing due to forecasting/planning errors or poor coordination between purchasing and production. WIP stocks on the store floor and their causes have already been discussed above.

Purchasing, scheduling and forecasting can be improved by setting defined minimum and maximum stock levels and order points that are aligned with the current status and performance in production. The aim should be to purchase raw materials and start production only when required. Any necessary safety stocks must be carefully considered.

The most common causes of inadequate stock levels include:

  • Poor communication between the procurement and production divisions
  • No real-time data from production and a lack of transparency
  • Missing or limited manufacturing information platform
  • Incorrect assessment of customer behavior

6. transportation routes:

Poor design of the process flow in production and suboptimal positioning of systems, workstations and warehouses can lead to unnecessarily long transport routes. This represents a waste in terms of working time (waiting/transport movements) and also has a negative impact in terms of indirect costs, such as higher fuel and energy costs, as well as costs for forklift trucks or cranes, for example.

The value stream analysis and subsequent adjustment of the production layout can significantly reduce transportation costs. This is a complete documentation of all aspects of the production process and not just partial aspects of sub-processes.

Common types of inappropriate inventory include:

  • Suboptimal production layout
  • Long distances between the systems/workstations of the individual operations
  • Several distributed storage locations
  • Missing production specifications

7. movement:

All movements involve time and energy. Efforts are made that are ultimately reflected in costs. Not only raw materials are moved in production, but also people and equipment. The consideration of movements also includes excessive physical movements such as gripping, lifting and bending. All unnecessary movements lead to non-value-adding time and increase costs.

From a lean production point of view, the production layout and workplace design should be analyzed with regard to movements and distances. Parts, consumables and tools should be analyzed with regard to their optimal positioning.

Common examples:

  • Poor production layout
  • Poor workplace design
  • Poor process design
  • Tools that are needed at different locations on the store floor
  • Lack of use of robotics
  • Insufficient degree of automation

8. employee potential:

Employee potential is the only lean production aspect mentioned in this article that is not directly manufacturing-specific. This "waste" occurs when management fails to ensure that employee talent is utilized or available.

Assigning employees to tasks for which they are not adequately qualified or trained can lead to increased process time, temporary inventory and waste. Poor communication and a lack of information should also be considered here. Please also note the management approach "Operational Excellence", which aims to continuously improve the performance of a company.

Typical aspects:

  • Poor management of the people involved in production
  • Poor communication
  • Insufficient training/instruction
  • Lack of qualification
  • Missing or limited manufacturing information platform
  • No real-time data from production and a lack of transparency

Lean production in modern industry

Flexibility and adaptability: In today's fast-paced business world, the ability to be flexible and adaptable is essential for companies. Lean manufacturing promotes this flexibility through efficient processes and continuous improvement.

Use of lean principles in different industries: Lean production is applied in various industries such as healthcare, retail and services. Each industry adapts lean principles to its specific needs.

Technology and digitalization in lean management: The use of technologies such as big data, cloud computing and AI in lean production enables even more precise analysis and optimization of processes. Digitalization helps companies to increase efficiency and reduce costs.

Employees as a key resource: The role of employees is of central importance for lean production. The effectiveness of lean principles is maximized through training, involvement in the continuous improvement process and recognition of their contributions.

 

Future prospects and further development of lean production

Future perspectives and the further development of lean production are of crucial importance, as companies must continuously adapt to changing production factors and market conditions. Here are some important aspects that will play a role in the future development of lean production:

1. integration of new technologies: Lean production is expected to continue to focus heavily on the integration of advanced technologies. Automation, robotics, the Internet of Things (IoT), Manufacturing Information Platform and Artificial Intelligence (AI) will help to make production processes more efficient and flexible. These technologies enable more precise control of production processes and real-time monitoring of production factors such as machine performance and inventory management. This can increase productivity and further minimize waste.

2. sustainability and lean production: Increasing concern about environmental impact and resource scarcity requires the integration of sustainability principles into lean production. Companies will strive to make processes more environmentally friendly by improving energy efficiency, minimizing waste and using renewable resources. The concept of "green" lean production will become increasingly important in order to avoid waste not only from an economic but also from an environmental perspective.

3. global perspectives and challenges: The application of lean production in different cultural and economic contexts requires adaptation of lean principles to local conditions and market requirements. Companies must be flexible and adapt their production methods to different production factors and customer requirements. This may mean that lean methods need to be adapted and extended in a global context to meet different needs.

4. production factors and efficiency: The identification and optimization of production factors will continue to be of central importance. This includes not only physical resources such as machinery and labour, but also the organization of workflows, supply chains and information flows. Lean production will focus on minimizing bottlenecks and ensuring smooth production to increase efficiency.

5. avoidance of waste: A central principle of lean production remains the avoidance of waste in all areas of production. This includes the reduction of material waste, overproduction, waiting times, unnecessary transportation, underutilized employee potential and errors. The continuous search for and elimination of waste will remain an essential part of the lean strategy.

 

Conclusion

Lean production makes production systems more efficient and successfully implements the principles of lean production, resulting in a continuous increase in efficiency, product quality and competitiveness.

Getting started with lean production begins with obtaining up-to-date information about conditions and processes in production. Management needs trustworthy data and facts to identify, measure and evaluate waste and potential in order to take the right measures and make the right decisions. A digital (real-time) image of production is the foundation and technical tool for successful lean production implementation.

With an innovative Software-as-a-Service (SaaS) approach, SYMESTIC makes it possible to lay the foundation for lean production in just a few days. The entry into digitalization is quick, easy and cost-efficient using SaaS tools, so that all those involved can access trustworthy and objective data, analyses, notifications, etc. in no time at all. High benefits can be achieved quickly without long lead times and investments.

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