9.3 Core Objectives and Principles of Lean Manufacturing
To fully understand and effectively implement lean methodologies, it is crucial to grasp the major objectives and core principles that underpin the lean philosophy.
7 – Wastes
Despite ongoing debates and arguments surrounding the precise definition and description of lean, it is clear that the ultimate objective of lean is the avoidance of muda, or wasteful activity, in all business operations. Muda comprises seven deadly wastes, and in the lean world, waste is defined as any activity or condition that consumes resources but creates no value for customers. These seven deadly wastes include:
- Defects: Products that fail to meet customer requirements, rendering the effort to create them wasted and necessitating additional waste management processes.
- Overproduction: Producing or acquiring items before they are actually required, leading to excess inventory that must be stored, managed, and protected, often masking underlying production problems.
- Transportation: Moving products without adding value, incurring costs, and risking damage, loss, or delays.
- Waiting: Idle time spent by workers or capital tied up in goods and services not yet delivered to customers, often requiring additional processes to manage.
- Inventory: Raw materials, work-in-progress, or finished goods representing capital outlay that has not yet generated income, with any non-value-adding inventory considered waste.
- Motion: Unnecessary movements by workers or equipment that can lead to damage, wear, and safety issues, as well as incurring fixed assets and expenses.
- Over-processing: Using more expensive or valuable resources than necessary or adding features that are unneeded by customers, potentially leading to waste, particularly in terms of overqualified personnel performing tasks below their competency level.
By identifying and eliminating these seven deadly wastes, lean methodologies aim to streamline operations, reduce costs, and enhance value creation for customers, ultimately driving business success and competitiveness.
Video: “The 7 Wastes of Lean for Frontline Kaizen – Lean Manufacturing Training” by Lean Smarts [6:05] is licensed under the Standard YouTube License.Transcript and closed captions available on YouTube.
The Five Core Principles of Lean
Lean methodologies enable organizations to achieve more with fewer resources. A lean organization utilizes less human effort, equipment, facility space, time, and capital while continually striving to meet customers’ exact needs. Lean is not merely a cost-cutting program; it is a philosophy centred on conserving valuable resources.
In their seminal book, Lean Thinking, James Womack and Daniel Jones identified five core principles that underpin the lean approach:
Define Value from the Customer’s Perspective
The first principle emphasizes that value must be defined and specified from the customer’s perspective. This requires a deep understanding of how each specific product or service meets the needs of specific customers at a specific price and time. Generic statements are insufficient; value must be defined in terms of tangible products or services.
Describe the Value Stream for Each Product or Service
The second principle involves describing the value stream for each product or service (or groups of similar products). The value stream encompasses all activities, both direct and indirect, performed to bring a finished product or service to the customer. This includes manufacturing activities, order processing, purchasing, and materials management. Mapping the value stream reveals waste, enabling managers to identify value-adding activities, non-value-adding but necessary activities, and non-value-adding activities that can be eliminated or reduced.
Create Flow in Each Value Stream
The third principle is embodied in the concept of flow. Once non-value-adding activities have been eliminated, the remaining activities should be arranged sequentially to enable smooth and continuous product or service flow. Flow challenges the traditional “batch-and-queue” model, where products are manufactured in large batches based on functional organization. Lean organizations strive to improve flow by reducing batch sizes, increasing flexibility, and lowering costs.
Video: “Lean Manufacturing One Piece Flow vs. Mass Production Paper Airplane Simulation (Lean Tip 005)” by Lean Smarts [7:46] is licensed under the Standard YouTube License.Transcript and closed captions available on YouTube.
Produce at the Pace (Pull) of Actual Customer Demand
The fourth principle is producing at the pace or pull of actual customer demand. Continuous flow production dramatically reduces lead times, enabling lean organizations to respond to actual customer demand rather than relying on demand forecasts. This allows for substantial reductions in finished goods and work-in-process inventories.
Strive for Continuous Improvement (Kaizen)
The fifth principle is continuous improvement, expressed in Japanese as “kaizen.” Lean organizations adopt the mindset that any business activity can be improved and regularly conduct kaizen events to enhance specific processes or operations. Even the leanest organizations, like Toyota, continuously strive for improvement, recognizing that pursuing perfection is an ongoing journey.
By adhering to these five core principles, organizations can effectively implement lean methodologies, eliminate waste, enhance value creation for customers, and drive continuous improvement, ultimately achieving operational excellence and sustainable competitive advantage.
“Just-In-Time and Lean Systems” from Introduction to Operations Management Copyright © by Hamid Faramarzi and Mary Drane is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.—Modifications: used section Lean Manufacturing and Control, used section The Five Core Principles of Lean, some paragraphs rewritten; added additional explanations; videos added.
