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What is Lean Manufacturing?

By Dan Blacharski
Updated May 17, 2024
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Ever since Henry Ford invented the assembly line, industrial innovators have constantly focused on improvement through a variety of different manufacturing strategies. Lean manufacturing is a manufacturing strategy that seeks to produce a high level of throughput with a minimum of inventory.

Originally a Japanese methodology known as the Toyota Production System designed by Sakichi Toyoda, lean manufacturing centers around placing small stockpiles of inventory in strategic locations around the assembly line, instead of in centralized warehouses. These small stockpiles are known as kanban, and the use of the kanban significantly lowers waste and enhances productivity on the factory floor.

In addition to eliminating waste, lean manufacturing seeks to provide optimum quality by building in a method whereby each part is examined immediately after manufacture, and if there is a defect, the production line stops so that the problem can be detected at the earliest possible time. The lean method has much in common with the Total Quality Management (TQM) strategy. Both strategies empower workers on the assembly line, in the belief that those closest to production have the greatest knowledge of how the production system should work.

In a lean manufacturing system, suppliers deliver small lots on a daily basis, and machines are not necessarily run at full capacity. One of the primary focuses of lean systems is to eliminate waste; that is, anything that does not add value to the final product gets eliminated. In this respect, large inventories are seen as a type of waste that carries with it a high cost. A second major focus is to empower workers, and make production decisions at the lowest level possible.

Additionally, supply chain management factors heavily into lean manufacturing, and a tight partnership with suppliers is necessary; this facilitates the rapid flow of product and parts to the shop floor.

Lean manufacturing strategies can save millions of dollars and produce excellent results. Advantages include lower lead times, reduced set-up times, lower equipment expense, and of course, increased profits. It gives the manufacturer a competitive edge by reducing costs and increasing quality, and by allowing the manufacturer to be more responsive to customer demands.

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Discussion Comments

By anon974100 — On Oct 15, 2014

It's sad to see so many posts about so called lean implementations gone bad or perceived to be all about cutting jobs. I have been a plant manager for over 20 years. I cut my teeth with a Japanese tier 1 automotive company that taught me the basic principles of lean and have worked very closely over the years with some great teachers.

I have never laid off an employee in over 20 years implementing lean tools in the workplace. I use those excess employees to perform more lean initiatives and through normal attrition (people leave or violate company policy). We just do not hire, but fill those positions with the lean team members.

My last plant that I took over made a profit of just $114K in 2012, and they were contemplating shutting it down. In my first full year as the plant manager and implementing lean principles, we made nearly $26 million in net profit. It saved the plant and several hundreds of good paying jobs. We are on track this year to surpass last years net profit. Don't underestimate the value of lean manufacturing when it is implemented properly!

By anon944787 — On Apr 09, 2014

What is throughput?

By anon332146 — On Apr 27, 2013

As a manager implementing lean in one area of a manufacturing plant, I have happy employees who are willing to go along with this change. The problem is I now have too many employees. My boss wants me to move the employees to a different area which is not implementing lean. Obviously, the employees do not want to go to this new area as they are happy where they are. The risk is over producing (waste), employee dissatisfaction if someone is moved and going back to the 'old ways', and my boss putting me under stress to move the employees. There is no risk that the employees will be made redundant. What are the lean protocols on this topic?

By anon326680 — On Mar 23, 2013

I'm working for a big telecom company in the UK, and lean ways of working are being implemented. I am finding the lean training and the ideas it produces very interesting, although it takes up probably over 30 percent of my time, so my productivity has dropped and my working hours have extended so I can complete my jobs. This is normally unpaid time of in lieu, so the hours the company owes me have greatly increased.

I work in the computing support section for this telecom company and it is very rare that I find lean ideas beneficial. The benefits in I.T to big corporations are from quickly adapting the new technologies produced by the production line company's such as HP, etc., etc. Some of the major banking/computing system failures recently seen in Europe, I believe have come about from applying these lean techniques to departments which support rather than produce.

Lean = Corporate utopia?

By anon321440 — On Feb 22, 2013

In the ideal lean environment, employees do not lose jobs, productivity potential is unleashed and quality improves. Unfortunately, in most US companies today, very little of that is true. Our automotive remanufacture is leaning out a product division and all that senior management is truly interested in is the number of heads that can be cut.

Speaking as one who knows the finances, if the executive bonuses were cut by 10 percent last year, the hourly workers' wage increase could have been doubled! I am beginning to think that OWS may not be completely wrong!

By anon279333 — On Jul 12, 2012

My husband's company has implemented the lean machining and it has become a horror for him. They let go of most of their employees and bought one machine to do most of their machining.

Now my husband is required to work 45-50 hours per week standing in a little box. His stress level has elevated to such an unhealthy level I worry daily about him. The shop foreman is constantly making sure the machine never stops spinning. But the other employees take constant smoke breaks, long bathroom breaks and only work an eight hour day at the most. Oh, they have also been told they are not allowed to speak to my husband so as not to distract him from his job.

The owners keep making more money year after year and my husband has received minimal raises and the cost of his health insurance has skyrocketed with high deductibles. I don't think this is how the Lean Handbook meant for the program to work.

By anon265490 — On May 02, 2012

I worked at a company that was leaned about eight years ago. No one lost their jobs. I think that people expect to see immediate results and that's not going to happen.

On top of that, I was saddled with combining two departments into one. Eight years later, as the company continues to rapidly expand, they are still continuing to make changes to keep up with the growth.

In order for it to succeed, however, all employees have to be on board and have a positive attitude. Your employers aren't trying to make more money off of you; they're trying to save your jobs (and theirs)!

By anon196277 — On Jul 14, 2011

I agree, if you are not using your human potential, it atrophies and becomes demotivating. However, it seems all workers are being forced to do more with less, which is tiring and promotes burnout. A happy medium is needed, and also some sort of work effort continuity among all workers.

By anon168978 — On Apr 19, 2011

Lean manufacturing sounded great to me at first. I had read quite a bit about it, have some-what of an in-depth idea of its details, and had a friend whose company had implemented it successfully. Therefore, when I had heard it was going to start at my company, I was optimistic.

Unfortunately, the upper management in my company has it in their heads that lean manufacturing consists of scooting several machines (cells) closer together, terminating the now “overage” of employees, and working the remainder to death. This in return is creating a reduction in productivity, leading to an increase in employee turnover.

Five years ago, it was a “good job”. Today, because of the lack of understanding and poor implementation of lean manufacturing, they can hardly get new applicants through the door – even in this economy. I guess old-fashioned word of mouth advertising still works.

By anon168249 — On Apr 16, 2011

Anyone who uses this practice will loose customers in the oilfield industry. Most systems or items will be needed quickly. In my business those companies that use this system never deliver on time with all kinds of excuses about parts availability. Bottom line, if it is not on the shelf ready for delivery i will have to find the product elsewhere. I have lost many jobs due to delivery issues from lean manufacturers.

By anon147010 — On Jan 28, 2011

Lean was so successful at the Gillette plants in Mass., when P&G bought it, the only way to squeeze more profits was to move the entire operation to Mexico.

By anon141118 — On Jan 09, 2011

Lean for me and for my company has really become about hope for improvements and hope for real and positive change. Hope for opening up new opportunities. And from my perspective, alignment of the company's improvement efforts has helped create this. Combining easier systems to track relevant data plus a higher flow rate, means you can see if the improvement is really better or not. And see where improvements need to be made. In this way the employees are in general enthusiastic about improvements.

We have been on the journey for four-plus years. I have seen safety improve- it wasn't all because of lean of course but some of it was. I have seen not a job elimination, but hiring avoidance -- meaning we could make more with less.

I have watched some employees' day to day lives become less stressful. Although with any change, there is going to be some disruptions to some individuals. In my opinion, the employees who have experienced the largest increase in stress or the largest disruption have been support employees. Not the value add employee on the lines. Their jobs have become better because parts are available and higher quality. The job and deliveries have become more predictable. Support crews have an easier time seeing problems in the process. The value-add employee has more support and support for more crucial processes.

I am sure there would be some people at my company who do not agree with me but they would be in the minority. In general, it has been a positive experience and created a more healthy company.

And just so we are clear, the executive management at my company decided and have never wavered that there will not be any lay-offs or jobs lost due to lean efforts. And they have stuck by that. And if a company is going to succeed at lean, they had better make this a rule from the beginning or they will struggle and not be able to have a successful transformation of culture.

By anon138955 — On Jan 03, 2011

Seems like a lot of rhetoric about a proven useful tool.

Lean is useful if implemented for a reason. Surely the recognition of becoming more efficient for any establishment is a pre-requisite and we all recognize this.

By anon132126 — On Dec 05, 2010

Lean means to wring more productivity out of already stressed workers. Really, this is the bottom line for companies adopting the lean trend, to work people to death while upper management sits back and enjoys the Christmas bonus they get for sticking it to the so called "little people".

By anon117465 — On Oct 10, 2010

Lean has cost about half our employees.A t the end of 2008 my company had a net profit of 5.5million. Lean was started in 2009 and that year was in the red. This year we will net about .4 million,and this is because of the salary cuts. Remember lean means "Less Employees Are Needed" More for less. Don't do it.

By kara — On Jul 20, 2010

Just because a company chooses to implement lean manufacturing does not mean that they are going to cut jobs or be less safe.

Many automated inspections can easily be incorporated into lean automation processes. Inspections can be done through simple poka-yokes (mistake proofing) or other simple and robust inspection methods. This allows people to be more efficient in running multiple cells because they are not performing time consuming inspections that can now be done by the equipment.

By anon90928 — On Jun 18, 2010

Lean manufacturing saves lives.

The best example is the case of EDO providing IED jammers in Iraq. Early on casualties were large and EDO contract performance was terrible. EDO then got acquired by ITT who implemented their Lean process to the EDO jammers. Results: No deaths to soldiers in vehicles protected by EDO/ITT jammers since.

Henry D., Carpinteria, CA

By anon85502 — On May 20, 2010

lean management is good at a training center because this management gives us placement jobs.

By anon85372 — On May 20, 2010

When studying Lean, one of the formulas given to me was 20:60:20. This is the 20 percent who are eager to adopt the system, the 60 percent who are prepared to see if it works, and the 20 percent who are vehemently against the methods because they see it as change or lost jobs.

Guess which group some of the posters above are in?

In my company we are implementing this successfully, yet we have not jeopardized anyone's job. We have, however, seen a significant increase in output, which has led to shorter turnaround to our customers, which in turn leads to more orders.

This secures people's jobs because we are the company who can give a faster lead time, against our competitors who have not adopted lean and are still struggling with inefficiency.

By anon83031 — On May 09, 2010

Lean manufacturing does not center on placing small stockpiles of inventory in strategic locations. Lean manufacturing strives to eliminate waste. Create one piece flow lines that can produce every product every day to meet customer demand by producing to take time (net available time divided by customer demand.

Producing only one piece every cycle is ideal. However this requires dedication to implement the lean tools and methodologies to achieve one piece flow by reducing waste, creating balanced standard work on a production line.

The true foundation of lean is 5S, creating a clean stable work environment by engaging employees to make improvements in their work areas. Kanban simply means signal. Kanban can be a card with information on it, a cart, a bin or any kind of signal indicating work is started.

The key with kanban in lean or Toyota Production System is to withdraw only what is required to complete a customer order. This reduces overproduction which is the worst form of the seven forms of waste.

Supermarkets of multiple kanbans strategically located a short distance away from the assembly line can be delivered by a water strider if the kanban is too large or cannot be placed at point of use. So the signal or kanban can contain one of the size that best fits the requirements of an operation.

If an upstream process is a bottleneck by having long set-up times the kanban size may be more then one.

Lean does not eliminate jobs. Lean eliminates waste in processes and in turn creates capacity to produce more of the same product in a shorter time. Lean frees up floor space and people so that new product lines can be introduced into a factory.

Once you have extra people you can train them in lean or use their skills for other continuous improvement efforts or setting up new production lines. My company has been practicing lean for the last six years and have not axed a single employee because of improvements we have made.

We have a lean promotion office that educates employees who come off the factory floor for 90 days to learn lean and make improvements. Then they go back to the shop floor use their new training to help make more improvements in their work areas.

By anon72914 — On Mar 24, 2010

The intent is not cutting jobs. Lean will create capacity gains that can be utilized to grow the company. Expand product lines, diversify and grow. Reduce cost through eliminating waste not employees. Don't axe jobs, people are your power.

By anon71109 — On Mar 17, 2010

If companies had their act together (proper management tools and processes) the excess labor would not be there in the first place.

Not recognizing waste for what it is (including excess people) and making busy work instead of right sizing operations is one of the reasons that many companies have failed.

Poor management and unions have combined to cost millions of workers their jobs. Remaining strong financially by staying lean and productive is the only way companies can protect and grow jobs in the long run.

By anon65923 — On Feb 16, 2010

Lean manufacturing is merely the sacrificing of Quality to increase one's bottom line. By employing fewer people and having those you do employ doing more than one job for the same wage and even inspect their own work! The excess profit from the elimination of said jobs more than covers the legal costs of the resulting loss of lives!

Three global companies immediately come to mind in Toyota, Honda and Synthes, a medical device manufacturer. The FDA even condones this practice?

It's all about the profit, period. Loss of lives is not a concern as we won't have jobs for them anyway!

By anon60812 — On Jan 16, 2010

lean just seems to me to be common sense at the work place. If there is a shortage of work then put your employees to cleaning and other stuff that might otherwise be done and shut down at other times during the year.

By anon19978 — On Oct 23, 2008

To answer the above questions:

In a truly Lean environment workers are not laid off. One of the types of waste is "waste of human capital", or not using your employees full potential. If employees are standing around after some improvement with nothing to do, you use them to clean the plant, come up with better/faster/smarter/safer ways to do what you're already doing, train them, or use them to help build new products and grow the business. This is done at both Toyota and Honda recently when production slowed down due to skyrocketing gas prices - they took two days off and had everyone clean the plant.

Other companies besides Toyota and Honda (and now GM, Ford and Chrysler who can't afford NOT to do it, albeit much less effectively) who use Lean manufacutring are Boeing, Lockheed Martin, Honeywell, Emerson and many others.

By anon4355 — On Oct 14, 2007

Lean manufacturing sounds like a great idea. I was wondering about larger companies and their loss of employees through this. How difficult has this production method be implemented with employees facing a lost of jobs. I am assuming that lean means more than stock and quality. So if a company took this strategy, is it foreseen that a company employing 500 employees down to 250. What are the numbers experienced by reduced employees of a success company which has this production in full swing?

I am aware of the, what are the downfalls?

Thank you

By anon4349 — On Oct 14, 2007

Will lean be successful without the supplier chain's support to produce on time delivery for each material? By empowering operators with greater knowledge on decision making, does it means less quality check in force when 4 sectional checks are required as a standard procedure by customer?? Till today, how many brand name supported this idea of lean manufacturing?

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