What Is Lean Manufacturing? Meaning, Tools, And Techniques

A business, big or small, always has scope to improve its efficiency and earn better profits. Especially for a manufacturing company, no unnecessary activities must cost time and money. Lean manufacturing is a process that can avoid such waste activities so that the business can ensure improved manufacturing.

What Is Lean Manufacturing?

Lean manufacturing is a business process that increases a business production by cutting or mitigating waste in various business operations, especially manufacturing operations.

The lean manufacturing process believes that a business can become successful by removing any business waste (any operation that doesn’t add value). This way, the company becomes hypothetically lean, manufacturing processes become effective, and the business becomes profitable.

Lean manufacturing is also known as lean production. Numerous tools, techniques, and principles deliver manufacturing improvements and add value to the business operations and, thereby, the customers.

Lean manufacturing ensures a business is without such inefficiencies and uses the funds saved by removing business waste to increase business productivity.

How does lean manufacturing work?

Lean manufacturing principles aim to boost efficiency and cut waste in manufacturing. It's about delivering more value to customers while using fewer resources. This involves pinpointing and removing various types of waste like defects, overproduction, waiting, unnecessary motion, excess inventory, overprocessing, and unused talent. Lean manufacturing promotes ongoing improvement and engages all staff in problem-solving. By applying lean principles, companies can slash lead times, enhance quality, boost productivity, and trim costs. 

Why is lean manufacturing important?

Lean manufacturing is crucial for staying competitive in today's fast-paced business world. It boosts efficiency and cuts waste, allowing companies to offer better products at lower costs. This can attract and keep customers.

Lean manufacturing goes beyond reducing waste. It helps businesses adjust to shorter product lifecycles and the increasing demand for customisation. Lean principles provide the agility needed for ongoing improvement and adaptation. It improves employee morale and engagement, too. When employees are empowered to participate in continuous improvement and take ownership of their work, they feel more valued and motivated.

In the long run, lean manufacturing helps companies succeed by creating value for customers, employees, and stakeholders.

Benefits Of Lean Manufacturing

Here’s how lean manufacturing can help your business attain better effectiveness:

• Waste Elimination:

Lean manufacturing removes counterproductive and wasted business activities that add no value.

• Improved Manufacturing:

Without waste activities, a business can improve its manufacturing process and product quality.

• Cost Reduction:

Lean manufacturing ensures that the business reduces its expenditure on activities that do not contribute to manufacturing and customer value.

• Time-Efficient:

Undertaking lean manufacturing allows business to be time-efficient by removing inefficient working practices.

• Rejects and Defects:

Through lean manufacturing, a business can cut down on rejected and defective products as the manufacturing process improves the overall quality of the products.

Advantages & Disadvantages of Lean Manufacturing (Table)

What are the 5 Principles?

Lean management principles are key to optimising manufacturing systems. Here’s how the five lean management principles work:

1. Create Customer Value: Lean manufacturing focuses on efficiently delivering what customers truly value. By understanding customer needs, you streamline products to include only essential features, eliminating unnecessary components.
2. Value Stream Mapping: In lean manufacturing, the value stream is the set of all the steps that add value to customers from start to finish. Managers use it to spot waste and find ways to improve the process and serve customers better.
3. Create Flow: Lean manufacturing aims for smooth processes. This involves identifying and fixing wastes or inefficiencies, like poorly planned layouts, that hinder operations. By addressing these barriers, you enhance the flow of value through the manufacturing system.
4. Pull System: This means only starting new work when customers want it. It stops waste like moving materials or making too much stock, supporting just-in-time production.
5. Continuous Improvement (Kaizen): Kaizen involves making small, ongoing changes to processes. It enables businesses to solve problems permanently, maximise customer value, and minimise waste over time.

Tools And Techniques Included In Lean Manufacturing

Lean manufacturing is an ideal business process to create an effective and successful business. Such a business can manage its finances by removing waste from business operations through the listed tools and techniques:

1. Cellular Manufacturing

Cellular manufacturing is a tool included in lean manufacturing that enhances the manufacturing process. The main goal behind cellular manufacturing is to manufacture a wide variety of similar products while ensuring negligible waste.

Cellular manufacturing includes cells with different machines to accomplish tasks. The product moves from one cell to another until manufacturing completes.

2. Just-In-Time Production

Just-in-Time production ensures the highest efficiency level by matching the manufacturing with demand. It means the business manufactures a product only after a customer places an order to ensure there is no overproduction. Thus, the company has no additional and unnecessary activities that may create waste.

3. Multi-Process Handling

This business process in lean manufacturing assigns operators multiple business processes in a product-flow-oriented layout. It requires the trading operators to handle numerous business processes at once such that the company doesn’t have to employ more operators for the work that could be done by the current operators, thus increasing efficiency.

4. Total Productive Maintenance

This procedure is a total overhaul of the productive aspects of the company. It adopts measures such as producing better quality products, producing small batches quickly, and sending non-defective goods to customers while reducing wastage of time and money.

5. Maintaining A 5S Organization

5S is one of the most vital aspects of lean manufacturing. The 5 Japanese words mean:

Seiri: Sort, Classify, Clearing
Seiton: Set in Order, Configure, Simplify, Straighten
Seiso: Shone, Sweep, Scrub, Check, Clean
Seiketsu: Standardize, Conformity, Stability
Shitsuke: Sustain, Self-Discipline, Custom, practice

Business Equipment Financing With IIFL Finance

Having understood the meaning of lean manufacturing, it’s clear that it involves investing in various equipment and machinery to improve manufacturing. Hence, it is vital that you ensure equipment finance for business through ideal business equipment financing.

IIFL Finance is India’s leading financial services company that provides comprehensive and customized business equipment financing products. The proprietary business loan offers instant funds up to Rs 30 lakh with a quick disbursal process. You can apply for the loan online or offline by visiting IIFL Finance nearest branch.

FAQs:

Q.1: What are the five principles of Lean Manufacturing?

Ans: The five principles of lean manufacturing are: Value, Creating Flow, Mapping the Value Stream, Establishing a Pull System, and Perfection.

Q.2: Can I buy equipment from IIFL Finance business loan for lean manufacturing?

Ans: Yes, you can buy any equipment from the secured loan amount and implement the process of lean manufacturing.

Q.3: What documents are required for securing business equipment financing?

• Previous 12 months bank statements
• Proof of business registration
• PAN Card and Aadhar Card copy of the Proprietor(s).
• Deed copy and company PAN Card copy in the case of partnerships

Q4. What are the 7 Wastes of lean manufacturing?

• Inventory: Inventory holds value on a company's balance sheet but isn't the same as value itself. Having more inventory won't make customers pay more for your product, nor will having less make them pay less if you can still meet their delivery needs. Though sometimes necessary to handle demand variations, you should minimise inventory as it's considered waste.
• Waiting Time: Waiting time occurs when employees wait for tasks to finish or for machines to complete cycles. This time isn't productive or adding value to the product—it's waste.
• Motion: Motion refers to unnecessary walking around during work, whether between production areas, fetching materials, or within work cells. It doesn't contribute value to the customer and is thus considered waste.
• Transportation: This time involves moving materials or products around your facilities, which is essential for larger operations but does not add value to the product itself, thus being classified as waste.
• Defects: These are scraps or flaws in manufacturing that don't add value to products. These are thus clearly a form of waste.
• Over-Processing: This includes unnecessary production steps or processes that don't add value and should be minimised or eliminated.
• Over-Production: This refers to producing more than needed or sooner than needed. It leads to excess inventory and other wastes like unnecessary transportation and over-processing.

Q5. What are the 5S of Kaizen?

Ans. The 5S of Kaizen is a workplace organisation method named after five Japanese words: Sort (Seiri), Set in Order (Seiton), Shine (Seiso), Standardize (Seiketsu), and Sustain (Shitsuke). This method aims to maintain a clean and organised manufacturing environment to eliminate waste, enhance safety, and boost productivity.