What Is Lean Manufacturing? Rip Out The Cost And Up The Value

What Is Lean Manufacturing?

Rip Out The Cost And Up The Value!

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What is lean manufacturing? A simple lean manufacturing definition is to say that lean is a term used to describe a number of inter-related methodologies that focus on the maximisation of value and the minimization of waste in the manufacturing processes.

Lean is a philosophy – or mindset - where the focus is on:

(1) VALUE - i.e. those aspects and attributes of the manufactured product that the customer IS prepared to pay for, and in lean terminology, these are seen as "value"

(2) WASTE - i.e. those aspects and attributes of the manufactured product that the customer is NOT prepared to pay for, and in lean terminology, these are seen as "waste"

In contrast to the "standard view" which sees the selling price of the product determined by cost plus profit, the "lean view" sees profit as a result of cost/waste cut out of the selling price.

# Standard View: Cost + Profit = Sales Price

# Lean View: Sales Price – Cost = Profit

Lean Manufacturing Principles

The Lean Enterprise Institute, Inc. describes itself as a "do tank" rather than a "think tank". Their whole focus is on: "how can I make a difference to my organisation?" and their organisation provides managers support through events, on line resources and community to become effective lean change agents:

The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easy to achieve:

Specify value from the standpoint of the end customer by product family.

Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.

Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.

As flow is introduced, let customers pull value from the next upstream activity.

As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

You can read more here: What is lean manufacturing - what are lean principles?

Lean Manufacturing Definition and Introduction

Lean Manufacturing Example - Toyota Plant Kentucky

Change Management and Lean Manufacturing - The People Side

The people-side of any form of organisational change is on the critical path to success:

The simple fact of life is that every point of intersection between a changed business process and a human being has the potential for resistance - and thus failure - and this is mitigated by the recognition and implementation of some form of appropriate change management.

I have written about this is the section on Six Sigma, you can find the full section here:

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