Lean manufacturing is a manufacturing technique that boosts productivity by removing excess waste. Waste, in this context, means anything that slows production workflows or delays good or service deliveries to consumers.

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Not sure how to eliminate waste or execute lean manufacturing to maximize your optimizations? No worries.

This extensive guide will cover lean manufacturing principles, common wastes, benefits, disadvantages, real-world examples and Six Sigma manufacturing practices.

Table of Contents

• What Is Lean Manufacturing?
  • Principles
    • Identify Value
    • Map Value Streams
    • Create Flow
    • Establish Pull
    • Seek Perfection
• Common Manufacturing Wastes
• Benefits
• Disadvantages
• Use Cases
• Six Sigma Manufacturing
  • Principles
  • Benefits
  • Disadvantages
• Next Steps

What Is Lean Manufacturing?

Lean manufacturing is the process of simultaneously optimizing production efficiency and minimizing waste to increase customer satisfaction and revenue.

Principles

This manufacturing methodology requires several principles, from finding values and creating flows to seeking perfection.

Identify Value

Determine your company’s and client’s values when searching for your products. These two factors may overlap or deviate from each other entirely.

For example, you may own an armchair factory that uses leather and cotton-based materials. Implementing CRM or business intelligence (BI) tools can provide in-depth analytics for client buying patterns.

The data may show that your clients appreciate environmentally-friendly armchair materials or prefer cotton over leather goods. These analytics can determine which products to keep in rotation.

This step is all about meeting your customers’ needs, even if you have to alter your company’s objectives. Otherwise, you’d lose revenue to your competitors.

Map Value Streams

Value streams are workflows that exhibit a product or service’s lifecycle from the cradle to the grave.

Product lifecycle management (PLM) and project management systems help you develop and maintain lifecycles in all stages. A product or service’s life cycle has four essential phases.

Some companies add or subtract phases, but these four are the template:

1. Introduction: Brainstorm ideas and designs for product and service goals. Prepare and execute preliminary tests for prototypes.
2. Growth: Determine product availability, mass selling numbers, advertising plans, strategies and more if the prototypes pass essential tests.
3. Maturity: Sell the product in physical or online retailers to gain profits. Marketing and production fees decrease over time.
4. Decline: Evaluate if you need to upgrade the product. Other organizations may attempt to develop similar products that outperform the original. Eventually, the original product can decline and die.

Some PLM tools also allow you to maintain and alert others of changes with real-time notifications. You may receive slight compliance changes during mid-production for your armchairs.

You can make additional notes to production designs and workflows for manufacturers and engineers in real time instead of recalling distributed products.

Create Flow

Flow, in this context, means keeping products moving through the production to shipping stages without delays or mishaps.

Think of this process as rain rushing through your house gutters. Water should keep pushing out, but if leaves or other foreign objects are lodged at the top, middle or bottom of the downspout, it can’t run freely.

If bottlenecks, delays or chaos occur on your production floor, you can’t get your products out on time, draining production times, client satisfaction and profitability.

Armchair and furniture industries usually execute the discrete manufacturing method.
Discrete manufacturing produces different product pieces in different regions and combines each component into the final product at a centralized worksite.

To ensure a good flow of armchairs, you need to plant and organize the right amount of machinery, employees, raw materials and other resources across numerous worksites at all production times.

Alexander Graham Bell, the inventor of the first telephone, once said: “Before anything else, preparation is the key to success.” If you plan and organize your materials accordingly, success is usually bound to happen.

You can also do your best to plan for things outside of your control, such as weather, shipping delays, disease outbreaks, customer demand, and more, with detailed analytics and awareness of patterns in your surroundings.

These contingency plans may fail. Nevertheless, having some actionable steps, even if they’re not always successful, can save you from looking like a deer in headlights when things go awry.

Establish Pull

Before lean manufacturing came to fruition, most manufacturers liked getting an excess amount of raw materials and ingredients to create products ahead of time so they could have an excess amount of goods.

However, if client satisfaction dipped for whatever reasons, manufacturers would have all of these products in warehouses, all dressed up with no place to go.

Pull is the concept of constructing products when people quantify them in orders. In other words, you don’t make the merchandise until people ask for them. This concept can save money on materials, production time, storage and more.

Let’s apply this principle to a restaurant setting. Your main special is a deli burger with lean meat, pickles, lettuce, tomatoes and fresh cheese. You don’t want to create the deli burger until someone orders it because it won’t be fresh when it gets to the customer.

There are other caveats to this example. If no one orders the special that day, you have a tray full of cooked burgers that will go to waste. Also, you don’t want to buy too many raw ingredients because they can spoil.

Pull allows you to buy and develop what’s needed at the right time. You need flexible and speedy manufacturing processes for seamless execution. You also need good communication skills to alert workers and engineers of real-time changes.

Work order and inventory management software can help you manage orders as they come in and determine how much raw materials are needed to complete specific orders. These systems can establish minimum quantities and replenishment plans to avoid running out of materials.

Seek Perfection

Lastly, lean manufacturing helps companies strive for constant perfection. You’re always looking for ways to improve workflows, increase productivity and enhance customer delivery times.

There’s no room for dormancy in manufacturing. You have to consistently improve methodologies and operations to stay at the top of your game and ahead of the competition.

You may have maximum efficiency with your armchair products for now, but your competitors will always look for ways to outdo you and hold dominance. You must stay abreast of the latest industry trends and economic patterns to stay relevant.

There are also manufacturing technological trends to consider investing in for maximum production, including internet of things (IoT) technology, AI, local shoring and near-sourcing, robotics, employee safety and more. But you have to find what works for your company’s objectives.

Think of this principle as a quarterly or yearly challenge. How can you improve workflows and resource allocation to maintain your customer base and increase revenue? After all, who wants to dwell in complacency?

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Common Manufacturing Wastes

Lean manufacturing’s ultimate goal is to eliminate production waste, but how do we define what is and isn’t waste? In essence, waste is whatever obstacles or bottlenecks hinder delivering your products and services to customers.

Let’s talk about some waste examples and how to diminish them on your production floor when implementing lean manufacturing.

Transport

Moving products from Point A to Point B should be simple, right? Yet, you can run into problems that cause waste in and out of the warehouse.

For your armchair company or other discrete manufacturing practitioners, your waste could involve moving parts from plants in different regions. Sure, getting the frame of the chair crafted is no problem. Transporting that frame from China to New York during the winter may be another problem.

Since the COVID-19 pandemic, many manufacturers have looked into local shoring and near-sourcing to keep production in the same country of origin.

To avoid transport, you could implement near-sourcing and keeping plans within the same area for quicker operations, reduced transportation fees, minimizing fuel and so on.

Transport waste can also apply to moving objects from one workstation to another in the same facility. You can establish different factory layouts to streamline how you move objects.

Inventory

Unprocessed inventory items can cause numerous obstacles and waste for storage, capital loss from unprocessed inventory, moving stock items and more. You can also waste items by over or understocking them.

As mentioned previously, inventory management software can help you maintain minimum and maximum quantities and save you from overstocking raw goods. You can also invest in stock objects when you receive specific customer orders to save money.

Motion

This waste is when you move or perform actions that don’t add value to creating the product or delivering a service. For example, if you don’t bend your knees when lifting heaving objects, you could strain your back then or later during the day.

There’s a saying that goes: “Work smarter, not harder.” In other words, you want to get the job done without overexerting or harming yourself or others.

When crafting the legs for your armchairs, you can keep the worktables at waist level for easy reaching and lifting of wood, tools and other materials. Also, keeping wood storage bins next to the operating tables before the shift starts keeps you from taking too many steps to get more wood because it’s closer to you.

In lean manufacturing waste, it’s the little details that matter in boosting productivity.

Waiting

Unexpected downtime or waiting for people on the operation floor to finish tasks before going to the next production step costs money, time and happy customers.

The best way to avoid backlogs is to use manufacturing ERP software’s real-time analytics and production management tools to analyze and rectify bottlenecks. Some resolutions include hiring more people, rearranging work floor layouts, using preventive maintenance for machinery or more training.

When workflows require unnecessary idling, the client waits longer for their item to arrive on the front porch.

Overproduction

Creating excess products when client demand is low causes unsold products, unused stock items and other problems. Mapping out value streams, establishing takt time and initiating the pull principle of only creating products when consumers order them helps you overcome overproduction.

You can also delegate other jobs when certain client demands are met, such as assessing inventory, cleaning up the work floor, relaying important process changes to other facilities and other internal tasks.

Overprocessing

This waste boils down to overthinking a product or operation during workflows. Painting a product that no one will see or adding features that no one will use creates overprocessing waste.

For example, you may want to add cup holders or seat covers to your armchairs for more appeal. Unfortunately, most of your client base isn’t interested in these features or may want to get these additional accessories from another company.

Effective process mapping and product designs with the right PLM and project management software can reduce this waste.

Defects

Defects are anything that strays from standard operations, be it product designs, production tasks, inventory variances and more. This waste negatively affects time, money, customer satisfaction and other factors.

For better compliance adherence and quality management, you could invest in enterprise quality management software (EQMS). This system keeps you aware of ever-changing measures for the FDA, International Organization for Standardization (ISO), Code of Federal Regulations (CFR) and more.

Distributing high-quality products establishes trust and a strong reputation with your customers. Consumers will pay for top-notch products instead of average or mediocre ones.

Unutilized Talent

You have unused talent waste when you assign tasks to the wrong employees, don’t give workers the proper training materials to perform the job effectively or lack management communication.

Investing in HR software or modules lets you keep tabs on all employee details, from obtained certifications and training to PTO and payroll data.

When employees know what they’re doing, they can implement high productivity levels, boost on-time delivery rates and earn more revenue.

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Primary Benefits

Lean manufacturing brings several perks and advantages to the table.

Boost Employee Satisfaction

Implementing lean manufacturing allows you to increase employee collaboration and satisfaction. When evaluating work waste, the workers are in the trenches. They may notice things you don’t and can identify hindrances to expand production.

For example, your armchair manufacturers and supervisors may notice that the floor layout may need slight rearrangements to move materials from one workstation to another swiftly.

Employees take pride when their supervisors and other higher-ups listen to and mull over their queries and suggestions. You may not always agree with suggestions, but taking the time to listen shows workers that you care, which boosts honesty and motivation to meet your objectives.

Increase Product Quality

Adhering to product quality standards and regulations enables you to establish a high reputation among your client base.

Implementing high-quality checks and following proper design protocols increases productivity and saves time fixing products or starting over. You also save on materials and production times.

If you’re creating environmentally safe reading chairs, you want to verify that your practices and materials adhere to FDA and other ecologically safe compliances.

Improve Lead Times

When you reduce waste, you save time, money, inventory, defects and more to create products in reasonable timeframes and increase customer satisfaction. You also earn more profits.

Utilizing all talent, avoiding defects and diminishing wait times ensures you consistently deliver recliners to your clients.

Disadvantages

Like all things, lean manufacturing has its cons.

Increase Frustrated Workforce

Although you’re opening the gates for employee collaboration and increasing morale, lean manufacturing can also enhance dissatisfaction. Too many production workflow changes to meet consistent perfection can seem unattainable and discouraging.

For example, modifying how to create chair armrests every month or quarter to boost proficiency can reduce waste but can also increase employee stress. Your workers may get the feeling that whatever they’re doing isn’t enough to meet the company’s goals.

This resentment can lead to worker strikes, a lack of motivation or higher quitting rates. To avoid strife, you must find equilibrium. Know when to make the right amount of changes without making them too frequent. Sometimes, that’s easier said than done.

Has a Low Margin of Error

Investing in lean manufacturing means buying into perfection. Perfection with every single order is impossible to obtain. You have to consider outside factors.

As aforementioned, you can think of contingency plans for outside forces like severe weather, shipping delays, customer demand shifts and so on. However, these plans may also fall apart.

Reaching perfection in an imperfect world is like driving along an open road in the middle of the night with your headlights on. Your view of the future is limited.

When applying lean manufacturing, make sure it aligns with your company’s objectives, standards and circumstances.

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Use Cases

It’s great to talk about lean manufacturing in theory, but how does it work in the real world? Let’s review some companies that implement this manufacturing technique.

John Deere

A well-known equipment manufacturer, John Deere serves numerous industries, from agriculture and construction to government and military services.

It implements lean manufacturing across its production sectors to reduce waste and increase revenue with quality tracking technology to assess and rectify issues early. This company also supervises machinery yields and trends to ensure maximum efficiency and high-quality products.

Toyota

This automobile giant implements lean manufacturing with their Toyota Production Systems (TPS) concept. TPS enables Toyota to create high-quality cars one at a time to meet client needs.

TPS relies on jidoka, or the concept of automation with a human touch, for its manufacturing technology to work and come to a safe stop when it detects abnormalities. Through continuous manual improvements, jidoka implements simple controls for all users to operate with ease for increased automation.

TPS also believes in creating products as needed when needed to avoid wasting inventory or overproduction.

Six Sigma Manufacturing

After covering everything about lean manufacturing, it’s time to discuss its counterpart, Six Sigma manufacturing. Six Sigma manufacturing is a manufacturing technique that eliminates process variations to improve production times, product quality and satisfied customers.

In essence, Six Sigma and lean are similar. The main difference is that lean focuses on waste as a factor that doesn’t bring consumer value. Six Sigma sees waste as anything that deviates from effective production practices. Let’s review Six Sigma’s top principles.

Principles

Six sigma manufacturing consists of several principles, from focusing on the customer and pinpointing root causes to eliminating variation and increasing teamwork.

Customer Focus

Putting the customer’s needs first is the initial step in this manufacturing practice. After all, consumers are the heart of your company. If they aren’t pleased with your merchandise, you’ll lose loyalty and profits.

Your armchair company may be unique, but there are hundreds of other furniture companies across the globe. What makes your business different from the others? Those that value client demands will thrive against competitors.

Root Cause Identification

Think of this concept as dealing with weeds in your garden. Sure, you can chop the heads off, but if you don’t pull them or spray weed killer at the root, weeds will keep growing.

You have to find the root cause of your bottlenecks and address them for maximum efficiency. If you manage obstacles partially, the problem will keep coming back.

For example, your overall on-time delivery rate is 80% satisfactory. If you want to achieve 100%, you have to investigate why you’re missing 20%. Maybe some delivery drivers aren’t meeting their target.

You can evaluate supplier performances weekly, monthly or quarterly, remove the low-scoring suppliers and add new drivers that want to help you meet your goals.

Variation Elimination

Take time to remove defects and other areas that leave room for mistakes or waste.

You may have production issues with your conveyor belt when moving pieces along the assembly line. You can take time to fix the unit for better mobility.

Some of your drilling and turning machinery may cause unexpected downtime. Preventive maintenance and IoT technology can help you regularly maintain and run your machines at full capacity.

Teamwork

Six Sigma manufacturing can only work when everyone on the team is on board. In other words, providing training materials on how to keep production running at full capacity is a must.

When engineers, manufacturers, stakeholders and supply chain members understand your methodology, you reduce human errors and boost on-time delivery rates. You also keep everyone on the same page so nothing falls through the cracks.

Flexibility and Thoroughness

Similar to lean manufacturing seeking perfection, developing a flexible work environment leaves the door open for growth and improvement.

You’re constantly looking for new ways to improve production and customer relationships. When deciding how to strengthen your business, remember to do it in reasonable steps without overworking your employees or setting unrealistic expectations.

Benefits

This manufacturing technique offers several benefits, from increasing profits to strengthening client retention.

• Increase Efficiency and Revenue: When you boost productivity, reduce variation and keep employees on the same page, you increase profits and can allocate your products and services at maximum speed.
• Control Quality: Better products mean more clients and fewer chances of your company getting fined or immediate closure for violating compliances.
• Enhance Customer Relationships: Score big with your current client base and gain new customers when you make on-time deliveries and allocate orders that follow order specifications.

Disadvantages

Six Sigma manufacturing also comes with some drawbacks.

Additional Production Costs

Implementing Six Sigma can incur more workstation fees if you add more technology and employees to meet your distributional needs. Other expenses may include raw material usage and replenishment, workflow time and hikes in merchandise costs.

If your products are more expensive, patrons may start buying less-costly versions of the product from your competitor down the road, causing profit losses.

Little Room for Creativity

This manufacturing practice leaves little wiggle room for creative ideas, especially for small businesses. Since risk-taking is a variance, innovation violates Six Sigma.

When you risk something, you don’t know the odds of success or failure. Randomness is the enemy of structure.

Require Certified Training Materials

Teaching employees how to implement Six Sigma requires help from a Six Sigma-certified institution. This institution is expensive for small and large companies alike.

Would you pay thousands of dollars for a certification course if you weren’t sure it was right for you? This thought is similar to enrolling in a college and not picking a major. Picking a field of study and then changing it later is a bit better because you have a little more certainty about your career path.

Let’s say you decide to invest in Six Sigma training, but after the first few classes, you’re unsure of how it will work with your practices. That’s a heap of money you could’ve used for new machinery, facilities or other business ventures.

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Next Steps

Implementing lean manufacturing requires sacrifices and ridding your company of excess hindrances that stand in the way of higher profits and an increased consumer base.

Are you ready to take the next step? Review our free, in-depth comparison report of the best lean manufacturing software in the market to streamline production, manage client orders, review customer demands and more.

How has lean manufacturing or Six Sigma manufacturing improved your operations? Let us know in the comments.