What is Lean?

Lean is the term used to describe the production system developed by the Toyota company in the post World War II years. "Lean" comes from the ability to achieve more with less resource, by the continuous elimination of waste.

The concept of Lean is not restricted to manufacturing and applies to the whole enterprise, including the supply chain, the new product development process and the provision of service.

In the book, 'Lean Thinking', five Lean Principles are defined :

• Specify what creates value from the customer's perspective
• Identify all the steps across the whole value stream
• Make those actions which create value flow
• Only make what is pulled by the customer just-in-time
• Strive for perfection by continually removing successive layers of waste
  

But what does that mean ?

Consider the following definitions for each of the key words :

VALUE : what the customer is willing to pay for (ie processes which transform the product, eg : bending, welding, etc).

VALUE STREAM : the sequence of processes to deliver value to the customer. (The complete value stream flows through the complete supply chain, from raw materials to finished goods).

FLOW : movement between value adding processes without delay or interruption.

PULL : activating a process when the customer wants to receive, not when the supplier wants to provide.

What are the Benefits of Lean Manufacturing?

Lean Manufacturing essentially aims to compress time.

Typically, if you quarter your leadtime, you will double productivity and take 20% off your costs.

This is known as the ¼:2:20 rule. Typical results are as follows:

• Halving of leadtimes; doubling of stockturns
• 30% to 50% reduction in floor space requirements
• 20% to 40% increase in Overall Equipment Effectiveness (OEE)
• 20% to 25% labour productivity gains
• Reduction in administration and co-ordination roles