Lean manufacturing is a business strategy focused on continually achieving efficiency. While this concept is not new, it remains relevant to this day. This is particularly true in the digital age, when new technologies can make organizations leaner than ever before.
A global CEO survey conducted by PwC in 2019 found that 81% of CEOs in industrial manufacturing rely on operational efficiency to increase competitiveness and drive growth. Yet the report also notes that “many industrial manufacturing companies have not implemented digital tools across their business lines that would give them a low cost and lean operating environment.”
In this article, we outline the key principles of lean manufacturing. More importantly, we look at the ways you can apply these principles across your organization, with automation tools that go beyond the factory floor.
What is lean manufacturing?
The principles of lean manufacturing focus on removing waste from the entire product or service lifecycle. The goal is to deliver optimum levels of customer value while maximizing profitability.
Lean thinking defines waste as any activity or resource that does not help create customer value. This includes excess time, effort, raw materials, and inventory. It can also involve unnecessary process steps, wasted skills, and systems that are slow or outdated. These issues impact efficiency and performance, which is bad news for both customers and the manufacturing enterprise itself.
Getting rid of waste can help your business to:
- Reduce lead times
- Shrink operating costs
- Decrease risk
- Improve output quality
- Increase business success and sustainability
How can you achieve these objectives?
In their book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation, James P. Womack and Daniel T. Jones outline five principles of lean manufacturing.
- Define value: First, seek to understand the value that customers allocate to your products or services. Knowing how much they’re prepared to pay helps you to set a production budget. Ideally, you want to deliver the expected customer value at the lowest possible cost to your business.
- Map the value stream: This covers the entire product or service lifecycle, from conception to final disposal. By mapping the value stream, you can identify where value is added. Then, eliminate any steps, actions, or resources that do not contribute value. (These elements are classified as waste.)
- Create flow: You want your value stream to flow smoothly and consistently. Any bottlenecks create waste. Ensure all processes in the product or service lifecycle are streamlined and flowing evenly from one into the next.
- Establish pull: Inventory is one of the greatest sources of potential waste. Limit inventory and work-in-progress items to only those directly required by the customer (i.e. customer orders). Ideally, aim for just-in-time delivery, in the exact quantities required, to remove waste.
- Seek perfection: At its core, lean thinking focuses on creating a culture of continuous improvement. You need to monitor and measure each process carefully. With a clear picture of where you stand, you can continuously find ways to reduce effort, time, cost, and mistakes.
How to apply this thinking across your business
The beauty of the principles of lean manufacturing is that they can be applied beyond your production line. You could use lean thinking to streamline processes in every department across your enterprise. This includes any function from marketing, sales and customer service to HR, IT, purchasing, and accounts payable.
Here are six ways you could apply the principles of lean manufacturing beyond the factory floor:
1. Leverage automation
Automation can reduce manual work to save time and effort in virtually any process. With the right software, you can also connect multiple systems to improve the flow of data along your value chain.
A lean way to introduce digital process automation is via low-code application development technology. With this approach, you can design custom apps, digital forms, and workflows with little to no need for coding. And you can create—and update—these digital assets in a fraction of the time it would take with conventional software development.
Low-code automation allows you to:
- Map processes visually using customer-grade tools
- Build apps, forms, and workflows in a drag-and-drop environment
- Use app templates and wizards to accelerate and guide development
- Re-use solution components to save time and effort
- Integrate with existing data using smart data connectors
With this approach you can fast-track process digitization and benefit from automation in every area of your enterprise. At the same time, you can maximize the value of existing systems and data.
2. Remove IT bottlenecks
When processes rely on slow, inflexible legacy systems, this places undue pressure on your IT team. Skilled developers waste time on endless maintenance and workarounds, just to keep business moving at the desired speed.
With low-code technology, app development cycles are much shorter. And as employees can map their own processes, build forms, and create lightweight workflows, developers spend a lot less time delivering or updating assets for every department.
Overall, this helps to optimize more processes, more quickly. It also eliminates IT bottlenecks, which disrupt flow.
3. Reduce mistakes
Mistakes are considered waste in the lean manufacturing environment. Even the smallest data entry blunder can impact flow and be costly to correct.
By nature, automation eliminates human error. It also cuts down on costs associated with fixing mistakes. This protects the organization against downtime, health and safety breaches, compliance violations, and so forth.
4. Cut out paperwork
Paper-based forms and documents can negatively impact productivity, visibility and data quality. Rather than easy-to-lose documents, bulky spreadsheets, and data shared over email, you can build digital forms to manage information in a structured format.
When content is captured and collected via digital forms, there’s no need for error-prone and time-consuming manual data entry. Also, with digital forms, your users can easily work with data from third-party apps and existing enterprise systems such as SharePoint and Salesforce. This way, everyone has access to accurate information at the right time.
5. Improve data flow
When data and content management systems don’t connect well with each other, this leads to poor visibility and data accessibility. In this environment, it’s difficult to gather intelligence and analyze data.
Low-code apps can solve this issue by connecting your productivity and communication tools to the content services you already use. Examples include SharePoint, Google Drive, Box, and Dropbox. Being able to process data between these sources breaks through data barriers to enhance data flow, accuracy and collaboration across your value chain.
This way, your users can create, share and update content from any device, with version and access control rules firmly in place.
6. Gather insights for continual improvement
When processes are run digitally, every step is automatically logged. This provides insights into process performance and bottlenecks—informing further optimization. You also have a digital audit trail for every process, so you can easily prove compliance with internal policies and regulatory obligations.
Additionally, low-code tools make it easy for you to update processes quickly. This combination of agility and insights allows you to meet the continual improvement goals of lean manufacturing.
Keep thinking lean
Process optimization is an ongoing exercise, so it’s well worth giving your teams and departments the tools to remain agile and competitive. With a foundation for low-code application development in place, there’s no end to the ways your enterprise can apply the principles of lean manufacturing to continually enhance performance and customer value.