Lean manufacturing involves 13 core principles – many more than the ‘five principles’ that are often associated with this popular manufacturing system.
Here we look at the aims and optimal outcomes of lean operations through the lens of these 13 core principles – and give you insights into how digital tools like manufacturing inventory software can support your business’ use of these methods.
The aims of lean operations principles
The overarching aim of lean operating principles is to create an agile workplace where efficiencies are created and maintained through rapid recognition of failings – which gives businesses the ability to fix and improve issues at an early stage.
The lean concept originally came from manufacturing, but it has gained in popularity and is now used widely across different industries and sectors. It is a holistic business philosophy, but with clear – and often simple – steps for implementation and outcomes.
The original five principles of lean are:
- Define value
- Discover the value stream
- Create flow
- Use a pull system
- Seek to create perfection
These five principles follow the steps of the manufacturing process and enable the business to identify and implement improvements at each stage, with production only advancing once the improvements have been made.
The benefit of a lean system is that it creates an environment where improvements are constantly being sought and implemented. While there can be difficulties implementing a lean system – since some top-heavy processes may need to be dismantled – the benefits can be significant. When done well, the lean system should create better value for the customer, reduce costs and inefficiencies, eliminate defects and produce near-perfect goods.
The 13 core lean manufacturing principles
Here we go beyond the original five principles of lean and examine this philosophy in more depth, with 13 foundational principles to shape the way you approach the lean method.
1. Identify value streams with your customers in mind
The concept of the ‘value stream’ is particularly important in lean processes. Using this concept, you can map each step you use to add value for the customer – right through production to final delivery.
The results of this analysis are represented on a value stream map, which allows the steps to be visualised and means the entire process can be easily shown in reports and other visual mediums.
2. Eliminate waste with lean manufacturing
The elimination of waste is key to the lean philosophy. Waste in the lean context can be described as any activity or material that uses resources or takes up space but doesn’t add value, and can therefore be disposed of.
Waste can be either necessary – for example, creating business reports – or pure waste, like unusable goods being left on the floor, or having to wait to use a machine. Once a business has identified the type of waste being considered for removal, there is room to assess if the ‘necessary’ waste can be refined or improved upon. The pure waste can be disposed of through removal or improved workflow and systems.
3. Focus on quality
The lean philosophy aims to deliver – as much as possible – a perfect product. This is achieved using highly productive workflows and a minimum of waste. The ability to identify defects or flaws in the lean process is key to this.
Quality must be considered at every step, and any issues identified and resolved, to ensure the end result is as good as it can be. Some businesses will use process control charts to analyse quality and minimise variation for optimal output.
4. Focus on optimising value streams
Once your value streams are identified (see note 1, above), lean manufacturing demands a focus on these streams with the aim of optimising them. In lean, this is carried out using a value stream map, which is used to visualise business operations so that an entire value stream can be considered and optimised, rather than individual products or processes.
5. Create continuous flow using lean
Continuous flow ensures every step in the production process operates in a steady way so there are bottlenecks and hold-ups are avoided as goods progress through. One means of improving flow is a one piece flow system, which sees goods flow through the manufacturing process one by one, eliminating waste and the need for stock on hand.
This is most effective in operations that have specific steps to create a consistent product, such as food production and the manufacturing of goods. If one step in the continuous flow system is flawed, or the opportunity for an improvement is identified, the step is paused until that improvement is put in place.
6. Organise your lean workspaces
The organisation of the workplace is an important principle of lean methodology. This can achieved with the five ‘S’s, which are:
- Seiri / sort. This is the idea of sorting the workstation to eliminate anything that is not needed in the space. Tools and materials that are needed are kept, while those that are not needed are identified and removed from the workspace.
- Seiton / set in order: This step is about ordering the items that are required and ensuring they are placed in a way that allows for easy identification and access.
- Seiso / shine: This step is to ensure the ‘shine’ of the workplace, keeping it tidy, uncluttered and visually appealing to work in, with all rubbish removed.
- Seiketsu / standardise: This step is to ensure the standardisation of activities by ensuring a regular schedule of maintenance and cleaning for the workspace.
- Shitsuke / sustain: Finally, the sustain step is to ensure the 5S system is continued and maintained as it is designed to be.
7. Understand your takt time based on demand
Takt time is a lean manufacturing measurement to figure how much time is needed to create each product according to demand. Once this calculation is made, the business is able to design processes and systems that ensure a smooth workflow to meet this demand.
This concept is particularly pertinent for lean systems as they are designed to hold minimal stock and goods, and to deliver products near-perfectly in line with customer demands. But it can also be challenging if market conditions change unexpectedly and materials are under-supplied, or products are over- or under-produced.
8. Prevent errors with simple lean mechanisms
This principle is based on the lean concept of poka-yoke, or ‘mistake-proofing’ systems – so errors don’t cause ongoing problems. This can be seen, for example, in preventive safety measures such as switches that automatically cut the power supply when systems are overloaded, or appliances that turn off when doors are opened.
Another mechanism used is TPM (Total Productive Maintenance), which refers to the idea that everyone involved in the processes should be maintaining it, rather than a specialist maintenance team.
9. Make information readily available with lean tools
Lean manufacturing relies on the principle of all employees being respected for their ideas and contribution, and therefore being fully engaged with the outcomes.
Part of this means ensuring employees are well informed, with information made readily available to them through the likes of a kanban board. These boards allow a visual representation of information like where a task is at, who is responsible for it, what might be delaying it, and when it is due for completion. These days, the kanban board concept is often part of a digital system that all employees can access.
10. Minimise inventory with Just in Time
Traditionally, lean inventory management meant using a pull system. These days the Just In Time method is more commonly used, with the core idea still to be able to deliver value to customers. The Just In Time system originally referred to producing goods to exactly meet customer demand, but it has evolved to now refer more to the elimination of waste across all steps.
11. Invest in and trust your people to implement lean
Another key element of the lean philosophy is to understand what everybody does, respect feedback and engage directly with staff. The lean philosophy suggests taking the ‘Gemba Walk’ which is when senior leaders observe what happens on the factory floor, and how each part and each person is interconnected.
The Gemba Walk is also encouraged for its ability to open lines of communication between senior executives and staffers. This direct communication means training needs are more easily identified, staff are involved in changes to the business, and trust is built.
12. Monitor your progress with lean
Monitoring your progress at all times is a central principle of lean manufacturing. The idea of delivering a near-perfect product is built on the idea that each step in creating that product is scrutinised continuously, and improvements made as soon as they are required.
Some businesses work with tools like process charts, and draw on metrics such as cycle time, rate of defects and the like to assess which lean processes are working and which may not be useful.
13. Engage in continuous improvement using lean techniques
Continuous improvement is vital to the overall philosophy of a lean manufacturing system. This encapsulates the idea that lean is not a ‘project’ you do for a limited period, but something you do to continually improve your processes.
The Japanese term for this is kaizen, which encapsulates the idea of making minor changes over time to improve the end product. This means that when improvements can be identified, they are implemented before production continues.
How does inventory management software support lean principles?
Inventory management software designed for use in manufacturing can be extremely helpful in supporting lean principles. Technology and the lean philosophy are complementary, given the focus on efficiencies and the elimination of waste.
Manufacturers frequently turn to inventory software to implement and maintain lean systems. The software supports many elements of the lean philosophy, including:
- Ecommerce integrations and B2B purchasing systems that improve process flow and get rid of admin waste
- Support for working in the cloud, which enables transparency across systems and means all staff are working with accurate and up-to-date information and tools
- The ability to monitor improvements and analyse if they have delivered the required gains – and if not, to figure out better ways to manage the issue
- Tracking of inventory through batches and barcode scanning to support transparency around stock levels and enable a smoother process of ordering more or pulling back on some. There is also the ability for the business to be alerted when stocks are low, meaning the system supports a Just In Time production process
- Effective supply chain management through the ability to track supplier lead times and implementation of KPIs and auditing
Inventory management and Just In Time for lean manufacturing
One lean principle that software lends particular support to is the Just In Time process. The Just In Time system is designed to increase efficiencies and minimise waste through a correlation – as far as possible – between inventory held, time to produce the goods, and demand from the customer.
A Just In Time system is based on the ability to be able to make accurate forecasts to hold the right amount of inventory, ensuring it is shifted along the production line at the best possible time to meet customer demand. This can be a complex process to get right, particularly in the face of fluctuating demand or changing trends.
Having the right software is key to creating an effective Just In Time system. The software offers increased transparency, with a real-time view of stock in hand, understanding of when sales orders arrive, and tracking of the ability to fulfil orders from the inventory available.
Inventory software features like digital Bills of Materials are also valuable tools for those looking to implement a lean system. The Bill of Materials effectively creates the ‘recipe’ to deliver the customer’s requirements, so that when an order is received it can accurately calculate the materials required to meet that demand.
And as all the tools in a cloud-based inventory system are responsive to real-time data, they provide the information to support the creation and ongoing management of a lean system and give business owners the confidence to implement broader lean manufacturing techniques.
By using these tools companies including SMEs can find themselves saving across costs of material and labour, freeing up cashflow, dealing effectively with fluctuating demand, and becoming more competitive.