Lean Manufacturing is a concept that bringing value to customers by maximising productivity while simultaneously minimising waste within a manufacturing operation. The benefits of lean manufacturing includes reduced lead times with lowered wastes and operation costs, improved product quality and increased profits and revenue. Businesses would like to implement Lean Manufacturing, the methodology is based on a specific five manufacturing principles.
The first principle of Lean Manufacturing is defining value. Value, in Lean Manufacturing, is determined from the perspective of what businesses are able to offer to their customers which customers are willing to pay for no matter it is a product or service. By creating value which able to meet a optimal price for the customer while also maximising profits, the manufacturer or service provider should seek to eliminate waste and costs.
The second principle of Lean Manufacturing is map the value stream. After defining the values of your business, next is to identify and map out the value stream. This involving analysing all the needed materials and other resources required to produce a product or service. The value stream covers the entire lifecycle of a product, from raw materials to disposal. Any processes or actions that do not contribute to providing values to the products or services will be considered as waste and thus should be eliminated from the value stream.
The third principle of Lean Manufacturing is create flow. After defining with a value stream map, businesses should focus on ensuring the processes are able to be carried out smoothly by removing functional barriers to reduce lead times with minimal delay or other waste. Creating flow means ensuring a constant stream for the production or service delivery.
The fourth principle of Lean Manufacturing is establishing a pull system. A pull system works by only start purchasing materials when there is a demand. This is the opposite of push systems. Push systems determine inventories in advanced purchased and stored in the inventory first to meet these sales or production forecasts. However, due to the inaccuracy of many forecasts, this can result in either to much or not enough of a product being produced to meet demand which are considered losses. This can lead to additional warehousing costs, disrupted schedules or poor customer satisfaction. A pull system starts act when there is demand and relies on flexibility, communication and efficient processes to be successfully achieved. The pull system helps businesses reduce the amounts of losses through the reduction of WIP and stocks amount.
The fifth and last principle of Lean Manufacturing is pursuing perfection. Lean manufacturing requires ongoing assessment and improvement of processes and procedures to achieve perfection which is the main concept of Lean Manufacturing. One of the most effective ways of achieving Lean Manufacturing is through the implementation of an ERP system. ERP system is a business management software that able utilizing technology so as to ensure business processes are integrated and automated. An ERP system encourages businesses to get their work done smoothly while costs reduced, which match the concept of Lean Manufacturing. If you are uncertain about how ERP system implementation is able to help your business achieve Lean Manufacturing, feel free to talk to our ERP consultants. With our expertise and knowledge, we will be always ready to serve you, and your business.
Summary of five manufacturing principles: