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The Advantages of Lean Manufacturing

Lean manufacturing is the processes, techniques, strategies and initiatives being implemented by companies around the world that aim to reduce unnecessary and unproductive tasks, activities and behaviors in the work environment.

Because the times have really gone hard, demanding and intense due to political and turbulent concerns affecting all nations, firms are currently facing challenges to be able to keep their profitability and efficiency.

Lean manufacturing not only reduces operational costs but also targets to boost, restore and significantly raise the competitiveness of a company.

There are seven identified ‘forms of waste’ within the work environment and systems that lean manufacturing principally aims to alleviate, if not totally eliminate. These are over production, over processing, transportation, motion, inventory, waiting and scrap and defects.

Several advantages of adopting lean manufacturing principles

The first advantage identified by experts from implementing lean manufacturing techniques and strategies is the reduction of manufacturing time.

When the manufacturing lead time is significantly lowered, it follows that the operational costs incurred from the use of energy, utilities and wages from laborers’ time will also be significantly reduced.

Thus, lean manufacturing helps companies retain, maintain and significantly increase their earnings, widen their margins and help them generate savings from lower costs.

Space is another area where lean manufacturing advantages are clearly and effectively exhibited. Working space, it is understood, is one of the primary and basic factors that keep operations of businesses going.

Labor and human resource experts estimate that adoption of good and effective lean manufacturing techniques and strategies will likely help companies reduce their physical floor space requirements by as much as 5% to 30%.

The figures involved could be small and miniscule for your eyes, but, actually, that will significantly contribute to much more efficiency and savings. That would be an advantage almost all businesses will surely look after.

The advantage in productivity

It is found that in general, companies implementing and adhering to lean manufacturing practices significantly boost and increase their manufacturing productivity by as much as 75% to 125%.

It is because time and efforts are principally targeted by lean manufacturing processes. Thus, elimination of wastes, practices, behaviors and unnecessary and disturbing objects in the work place will surely and practically help workers get on to their tasks with much smooth pacing and comfort.

You know how it is when workers work without any distractions and interruptions. Productivity is very much maximized. Thus, lean manufacturing becomes a necessity for companies to be able to achieve that goal.

The advantages in terms of waste to profit relationships

It follows that elimination and reduction of wastes will gradually and efficiently help boost and raise up earnings and profits in companies.

Thus, elimination of wastes and unproductive activities, objects, tasks and behaviors in the work place will surely help the company and its personnel focus on the requirements and demands of the customer.

The advantage of that, above all is that, when customer satisfaction is achieved, sales will surely rise. The best way to establish a good relationship with customers is to improve the products and services offered to them.

Lean manufacturing would be of great help to achieve a good customer or client relations.

Another advantage brought about by lean manufacturing techniques among various companies and firms adopting it worldwide is streamlined, rationalized or lean structuring of the organization.

You should know that elimination of excess and unnecessary job positions and tasks in a company is a sure way to help that firm reduce labor costs and eventually lead to generate savings.

Lean manufacturing without a doubt brings that advantage of leanness upon organizations and companies practicing and adopting it.

Advantage on culture improvement

Various companies around the world are practicing and implementing different cultures. It is usually a cause of problems, conflicts and issues around and within the organization.

In lean manufacturing, the cultures are standardized, thus, unfavorable practices and behaviors of both the employees and the management are reduced, if not eliminated.

The greatest advantage of lean manufacturing in terms of cultures adopted by companies is that lean manufacturing makes the differences between management and personnel reach to a verging point.

Lean manufacturing principles should really be implemented by companies. It is high time to reap its advantages.

The Andon Lean Manufacturing Tool

Andon is a “visual control” device that shows machine, line or process status. It is a very useful tool in lean manufacturing systems where the main goal is to reduce production waste in all levels.

Using andon boards can help the industry guide, monitor and ensure productivity. Andon boards also double as early warning devices because audible alarms or warning messages usually accompany them to communicate a problem.

With andon boards installed in lean manufacturing warehouses, workers can instantly see order status, priorities and many relevant productivity measurements even from more than 100 feet away. Critical areas in lean manufacturing where andon boards can be used are manufacturing, inventory management, storage, receiving, picking and shipping.

By using andon boards in a lean manufacturing system, there is evidently better coordination of orders, parts, priorities and flow thus an improvement of customer service.

In shipping for example, andon boards can display queuing information, priorities, pick-up and departure and wait times, truck directions and other specifics which ensure fast and correct deliveries. Inventory accuracy is assured by seeing to it that proper items are picked.

Because of andon boards, lean manufacturing systems do not rely on white boards, clip boards and word of mouth and even emails and intranet as a communication tool. There is little room for error, therefore, and a reduction of “work in progress” or lag time between cycles.

Most andon boards have the ablity to project a number of 4” characters. Requests normally refer to x  number of lines and y number of characters. You can run for example 5 lines of 30 characters each which implies 4” characters.

Andon boards can also be used to display smaller characters as needed. 2.1” high characters are usually used for smaller areas with 100 ft. or less of viewing distance. Some adaptive andon boards can display different character sizes at once. are available in single-sided and double-sided veer

Windows applications can be installed inside andon board displays and all these will operate on the boards just like they run on PCs. Excel can be used to display charts and graphs live. Explorer can display internet or intranet sites as well.

Other HMI applications like GE Cimplicity, Wonderware, Visual Plant, Iconics or other SCADA applications can also be run on andon boards just like they are run on a desktop computer.

Andon boards have enhanced lean manufacturing tremendously. However, andon displays have, for a long time, been a basic but very expensive addition to lean manufacturing systems.

New technologies had to be developed to further enhance these communication tools and reduce more waste. Before, the data that andon boards display are usually fixed and restricted to single word headings such as “target” or “actual”, and data is lost once the display changes.

Now, Gemba Solutions have developed a new model, the OEE Impact Andon Board which provides flexible and displays which the user can configure via a PC. This can also be viewed on LCD or plasma screen.

The OEE Impact Andon Board creates another dimension for lean manufacturing as its software lets you know how you fare against targets in real-time by calculating TAKT times. A production plan for machines and lines can also automatically account planned breaks.

A profile of progress can also be views within a specific period of time or within work shifts. The OEE Impact Andon Board also can provide a historical summary report showing shift, daily, weekly performance vis-à-vis TAKT times, targets, rejects and down-times. 

These new kinds of andon boards are very helpful in lean manufacturing as they let you know how well your production is going. In the event that results are less than what you want them to be, the OEE Impact Andon Board can also utilize a powerful software to find out where problem areas and bottlenecks are.

This helps lean manufacturers decide what to change in the process and later check on summary reports whether, in changing the process results have indeed improved. This shows that with the OEE Impact Andon Board, no data is ever lost.

Success in the Implementation of Lean Manufacturing Principles in Companies

Lean manufacturing is a holistic and innovative approach to making companies’ profits and earnings somehow upbeat and at par with contemporaries around the world.

Lean manufacturing, according to experts, was developed and initially implemented and launched in Japan, which is a country foremost known for interactive and inventive approaches to solving and dealing with problems.

Experts also note that lean manufacturing principles are very simple and practical. However, the success of lean manufacturing adoption and implementation depends and principally relies on the effective and religious implementation of the simple and easy to do strategic principles.

Lean manufacturing and companies

Companies around the world, in all aspects and in all industries, are now addressing lean manufacturing issues and concerns, one way or another. The fact that all companies need to reduce operation costs and expenses make up to the companies ever- enduring efforts and initiatives to adopt lean manufacturing principles.

There are numerous companies that fall and file for bankruptcy every now and then. The corporate world is alarmed because even the staunchest and most stable companies in the past decades are beginning to show signs and indications of deterioration and weakness nowadays.

It can be because the world economy is so challenged by the greatest problem that has bugged the economy of the world—rising and higher oil prices. Lea manufacturing is becoming very popular among all companies because of that.

Lean manufacturing principally aims to help companies by targeting or initiating ways, measures and practices that alleviate and reduce wasteful practices and behaviors in the work environment.

Lean manufacturing is also helping companies around the world to cope up with the real and emerging challenges in the real world when prices and costs are so volatile and influential to modern living and economies.

There are seven waste, wasteful practices and unproductive processes that lean manufacturing aims principally to erase or alleviate.

First, lean manufacturing aims to scrap over production among companies. Over production leads to lowering and declining prices of products and merchandise that would eventually lead to a company loss.

Second, lean manufacturing aims to reduce and cut over processing inside all companies. Over processing makes expenses higher by putting up additional costs and expenses for processing materials and labor costs. Time is also wasted by that.

Third, lean manufacturing maximizes transportation. You know that transportation is facilitated by automotive and cars. These in turn, burn up oil and petroleum that are currently priced at unreasonable levels.

Fourth, lean manufacturing makes motion productive. By eliminating wastes and setting aside big and space-consuming equipment in the work place, laborers are able to move freely, enabling them to eventually speed up production and do more outputs.

Fifth, lean manufacturing prevents piling up of inventories. In some industries, piled up inventories are positive, but in almost all, or the majority of manufacturing firms, inventories should be kept controlled because prices of the goods are affected by piled up inventories.

Lean manufacturing makes up operations streamlined and more efficient. Thus, for the sixth spot, lean manufacturing principles help make companies alleviate and prevent waiting time.

Lastly, because the environment is cleared from all obstacles and disturbance, lean manufacturing helps companies avoid the production of goods with scraps and defects.

Companies producing merchandise and outputs with scraps and defects not only suffer from losses from the production of such substandard products, they also lose customers because their credibility are destroyed and tainted.

Companies that successfully implement lean manufacturing principles

There are more and more companies around the world that successfully implement lean manufacturing techniques and principles in their daily operation.

It should be noted that companies that use lean manufacturing with success are characterized by one and a single unifying feature— all of them are profitable and strong.

Companies that use lean manufacturing with success are also notably very competitive amid intense and rising competition in the corporate world.

Defining Lean Manufacturing

Understanding what lean manufacturing is does not take rocket science, nor does it take a conference of ten experts to bear down to the basic concepts. Simply put, lean manufacturing is the achievement of the greatest efficiency and profitability for a company by eliminating the wasteful methods and activities that are commonly present in corporate regimes.

At first glance, some firms are intimated with the thought of adopting lean manufacturing because of its fancy sounding name. But, if truth be told, it’s actually easier than seems. What you just need to have is the dedication and the discipline to see things through and make change happen.

First up, let us identify what the top seven wastes companies identified as the reasons for the production delays, gargantuan costs and, eventually, bankruptcy filings and hostile takeovers.

1) overproduction
2) transportation
3) motion (processes that don’t need to be conducted)
4) inventory
5) processing
6) waiting time
7) defects

These are the key reasons why most firms often fail. For instance, with defects, instead of focusing on achieving the best quality output at the shortest period of time, some firms waste effort and energy into looking at and fixing equipment and method defects and problems. If the kinks had been addressed in the first place and the problem nipped at the bud, such an unnecessary activity would be eliminated.

Definitions of popular lean manufacturing terms

If a company wants to fully understand what lean manufacturing is, it should first familiarize itself with some of the prominent technical terms linked to it. Don’t let these words scare you off.

Cellular manufacturing

This involves the linking manual and machine operation to achieve the most efficient and cost-effective combination that would extract maximum value from a certain activity and method, while reducing wastes at the same time. Cellular manufacturing is usually U-shaped and flows in a single pattern.

Kanban System

This is a pull method that makes use of color-coded cards attached to parts to be able to ensure the smooth flow of the production process. A ‘pull method’ simply means the customer’s interest is foremost, instead of you as the manufacturer dictating what the consumer should have.

Value

This is what the customers is willing to pay for. It is the responsibility of the lean manufacturing strategy to deliver what the customer wants exactly.

Pull system

This involves the replacement only of goods that have been used up or depleted.

Takt time

This is identified by the customers’ rate of demand. The takt time is what sets the production pace and matches it with how badly consumers need the product delivered to them. It is often referred to as the heartbeat of lean manufacturing systems.

Implementing Lean Manufacturing Systems

Lean manufacturing is a very good and effective concept of managing a company. The philosophy of reducing wastes found in a manufacturing business or any type corporation is a sound idea. The most common wastes that needs attention are:

- Overproduction
- Waiting time
- Transportation
- Processing
- Inventory
- Motion
- Scrap

When these wastes are minimized, the quality of the products or services is improved, the production time and the cost of manufacturing the goods is reduced. With this in mind, many companies go through lean manufacturing training to get the most out of their systems.

The goal of lean manufacturing for any business is to have the production and demand be linked directly. The result is a more efficient way in delivering your goods to the customer because you produce the product at the time the customer wants it. But this is only achieved if there is a proper implementing lean manufacturing guideline.

However, despite the training and guidelines, some companies have trouble in implementing lean manufacturing systems. There are different reasons in the failure of implementing lean manufacturing principles in projects. One of them is the difficulty in grasping the true nature lean manufacturing.

The most accepted form of implementing lean manufacturing is the kaizen. Kaizen in Japanese means, “improvement.” In implementing lean manufacturing, kaizen can be done in large scale or small-scale projects. The most commonly used kaizen are the blitz events. These are short-term programs launched to instantly improve the production process.

Though kaizen is highly prized as a valuable tool in implementing lean manufacturing in a company, it is not enough. If an endless cycle of kaizen events is the only form of lean manufacturing tool used, the company may suffer. Why? Because blitz events can be expensive and may cost the organization more money in implementing it.

There are other implementing lean manufacturing tools that an organization can use to get the improvements they want. There is the Value Streaming and Process Mapping. These two can effectively eliminate waste and in implementing lean manufacturing, they can streamline work processes.

Although lean manufacturing may sound simple enough, there are companies that do not view it that way. They find implementing lean manufacturing obscure and cloudy. This means that they do not fully grasp the principles of lean manufacturing. The best solution is to hire a lean manufacturing consultant.

Once the consultant has made an assessment of the organization’s problem areas, he can then suggest the most appropriate projects that will achieve the goals of the company. While the implementing lean manufacturing systems are explained to the managers and lean masters, the process of enforcing these systems and plans fall on the latter’s shoulders.

For the company to fully appreciate the benefits of implementing lean manufacturing systems, they must be willing to wait. Change does not happen overnight and some resistance should be expected from the people directly affected by the implementing lean manufacturing systems.

Why is there resistance when lean manufacturing aims to improve the production quality of the organization? Simply put, some people hate change. They have been doing the same thing and have been used to going through the routine for years that it has almost become something familiar to them.

In light of this, companies should make it a point to clearly explain the changes in implementing lean manufacturing systems. If all things go smoothly for the first run, the implementing lean manufacturing system must be adopted as soon as possible to make sure that the workers do not forget the new process.

When implementing lean manufacturing systems involving the executive management, it is important to note that this group is the one that must have a full understanding of lean manufacturing principles. Their training must cover all disciplines of lean manufacturing including the planning and implementation tools.

Although lean manufacturing is one of the best choices for improving a company or organization, you must be certain if your business fits this philosophy. Not all the implementing lean manufacturing systems may be good for your business, like excessive use of the kaizen events.

In implementing lean manufacturing systems, most often the best way to employ its principles is by only taking the elements that fit your company. This way you also save money without losing valuable resources.

What Adopting Lean Manufacturing Can Do For You

Lean manufacturing espouses the philosophy that the seven major wastes in every production process and company should be significantly reduced or even eliminated in order to be able to compete more effectively and dramatically boost profitability.

Times are changing fast and the demands of the market for faster delivery periods, higher quality and lower costs are placing huge tolls on every firm. This is where lean manufacturing comes in. What it does is help your firm rise up to the competition by being ‘lean’, that is, by taking out all the unnecessary activities and methods that cause problems and delay.

Lean manufacturing has identified seven major ‘wastes’, as named by companies surveyed all over the world: overprocessing, transportation, waiting time, over production, motion, scrap and defects and inventory.

For example, a certain production level becomes a huge waste of time, effort and resources if it’s being done in ten levels, while it can be completed in just three.

Citing another case, productivity could have been raised if defects of a particular equipment or system had been addressed before processing began. A lot more could have been done you had not waited for it to bog down in the middle of everything and cause annoying delays.

Another one is where your company has overproduced and have no more space to stock the overruns. Where do you put the excesses? How do you manage to sell them? More likely than not, you will be forced to offload them at a price much lower than intended just so you could make room for new goods. And, this, as lean manufacturing says (and any businessperson would say) is major waste.

Studies show that firms adopting the lean manufacturing principles have seen that their productivity has gone up 75% to 125%.

This is because the energy and time usually spent on regular processes have been significantly lowered to allow for greater focus on quality and on what the customers truly need. With lean manufacturing, there is no ‘this will have to do’ attitude.

Everything is done at the right quality, at the right quantity, at the right time, all the time.

As with the workplace setting, lean manufacturing’s focus on eliminating unproductive activities and tasks will also help the firm and its employees give more attention to what their clients need. No job will be haphazardly done because enough time is afforded to each level to make sure things are running smoothly.

When customer satisfaction is achieved, it follows that revenue will rise. Your client is happy, your company is happy, everybody is happy.

Lean manufacturing also aids the organization by weeding out redundant positions, thereby cutting labor costs and eventually raking in savings. It helps firms focus just on what needs to be done and do away with unwanted stress, especially those that arise from having too many people on board. With lean manufacturing, less is definitely more.

One major change that your company will see once you have adopted lean manufacturing concepts is the raised discipline among your employees. Because the culture becomes standardized, annoying kinks and practices are done away with.

While several people criticize lean manufacturing, saying it’s a costly endeavor, you must be aware that the costs related to its preliminary stages will far be trumped by the advantages it will deliver for the company in the long run.

What Is Lean Manufacturing?

Today, in a highly consumerist society where people strive to acquire more possessions, it is ironic that in manufacturing consumer products, lean is in.

The concept of zero-waste does not only circulate among ecological zones, it seems. Lean manufacturing is a new buzzword in the industrial world which is rapidly gaining ubiquitous following. Lean manufacturing is a systematic approach to eliminate waste in the production process with the end goal of satisfying customers.

Waste is anything that a consumer refuses to pay for. The types of wastes in a manufacturing system include the following:

(a) overproduction or producing more, earlier or faster than required
(b) waiting for machines to process
(c) inventory or work in process because of large lot production or processes with long cycle time
(d) unnecessary processing
(e) transportation which hardly adds values to products
(f) excessive motion of workers, machines and transport due to inappropriate location of tools and parts
(g) making defective products and
(h) underutilizing people.

The focus of lean manufacturing is to minimize the consumption of resources that adds no value to a product. As such, it is a process-focused production system which minimizes costs, maximizes customer options and ensures high quality and fast delivery of products and services.

The concept of lean manufacturing originated in Japan where, after WWII, it was necessary for manufacturers to develop a new, low cost manufacturing process.

Unlike their western counterparts, Japanese manufacturers needed torebuild after the war and faced declining human, material and financial resources. The first leaders to create lean manufacturing systems were Eiji Toyoda, Taiichi Ohno and Shingeo Shingo of Toyota Motor Company.

In the 1990’s, the concept of lean manufacturing was popularized in the U.S. by a study conducted by the Massachusetts Institute of Technology on the movement of mass production toward the more streamlined Japanese production style as described in the book entitled The Machine That Changed the World (Womack, Jones & Ross).

This depicted essential elements which are used in lean manufacturing systems. The term lean was adopted because these methods used less human effort, capital investment, production space, materials and time in all operation stages.

All U.S. manufacturing businesses eventually applied lean manufacturing because of competition among U.S. and Japanese automakers over the last two decades.

Lean manufacturing systems recognize the fact that the value of a product is defined solely by the customer. Customers’ needs must be met at a specific time and price. The nitty-gritty of product operations is of no importance to customers.

This realization forces companies to comprehensively analyze business processes.

To apply lean manufacturing is to understand basic activities required to produce a particular product and to optimize the entire process from the point of view of the customer. This is important as it helps identify activities that clearly add value, those have no value-added and cannot be avoided and those that have no value-added and can be scrapped altogether.

Transition to a lean manufacturing system does not happen overnight. Lean manufacturing requires every level of organization to have a complete understanding of its basic principles and execution processes. Widespread orientations must be set to prepare and motivate people and to make them understand the need to switch to lean manufacturing.

After that, a mentality for continuous improvement is necessary to reach company goals. This means that the company aims for incremental improvement of products, and processes over time.

For this, employee involvement and an atmosphere of experimentation are essential. Decision-making and system development must be delegated. Willingness to take risks must be encouraged.

Improvements must be measured according to results vis-à-vis macro level targets not on number of activities undertaken. Because of the complicated nature of lean manufacturing systems, there is a need to execute pilot projects before spreading the culture across the organization.

The number of manufacturers attempting to become lean is increasing fast. Companies that have fully implemented lean manufacturing systems are rare. Although perfection is impossible, it is a goal that lean manufacturers strive for because it helps them be more vigilant of wasteful practices.

Lean Manufacturing

This might approach you as a big surprise, but the principles of lean manufacturing actually dates a whole lot back, specifically the era of Benjamin Franklin. This does not assume that lean manufacturing principles are ancient, but the time of Benjamin Frankling cannot be called recent can it?

It is stated that in lean manufacturing, you must not waste time. Why? Well, have you ever heard of the saying “Time is gold”? You probably never imagined that this saying could apply to real life; well it does, especially in lean manufacturing. If you lose five shillings worth of time, you lose five shillings worth of money.

So you might as well be throwing five shillings out over a cliff. It is only eventual that if you lose the sum of five shillings, you also lose the advantages and opportunities that come along with it.

So, hopefully, you learn a lesson which is, if you waste time, thus wasting money, then you can say bye bye to the other good things, or blessings, that come along with it.

It is also a must in lean manufacturing that you avoid involving yourself with unnecessary costs because doing so is believed, in terms of lean manufacturing, as a more profitable way, rather than increasing your sales. Increasing your sales do not conclude that the consumers will buy what it is thay you are selling.

But not purchasing or spending money on things that are not really necessary will definitely save you a big comfortable bag of money. Just take this saying for example, “A penny saved is two pence clear. A pin a day is a groat a year. Save and have.”

Having unnecessary inventory can give you quite a number of disadvantages. It not only adds up to the space of your sales, and it also adds to your responsibilities, but it also gets you busy over things that you do not really need to be responsible of.

You might refer to those unnecessary items as goods.

However, you have to give these so-called goods some care if you do not want them to give you some evils. They will probably be sold with a cheap price, which is very unfair because they cost a lot more than they price with which they are sold.

If your sales are cheap, then they are only apparent and not real, as you expected and have been hoping for. If you do engage yourself and your sales in certain bargains, you have to be careful and you also have to be choosy of the said bargains.

Why?

Some bargains, which at first deem to be straightening your business, may actually cause you more harm than good. Harm in the case that when it straightens your circumstances, it reduces a big amount of the cast that is available.

The concept of having trash built into certain jobs and then taken for granted afterwards was taken to notice byb some motion efficiency experts. One motion efficiency expert is Frank Gilbreth.

Frank Gilbreth used the masons to serve as an example about the practice of lean manufacturing. He saw how the masons help each other. A certain mason will bend over to pick up bricks from the floor and then another mason, the brick layer, lowers and then raises the whole of his upper body to obtain a five pound brick. They are not wasting time because time is money.

However, this came as quite an inefficiency as it as built into the job after long practice. So when the masons were introduced to a non-stooping scaffold, which does the job of delivering the bricks at waist level, permitted the masons to go on with their work, only for an approximation of three times as quickly, and also with lesser effort.

In lean manufacturing, you can make us of standardization and also of best practice development. When you involve improvement in your proposal, the policy of the management is the only one that can make a thorough and careful analysis of the new method.

If necessary, it will conduct a series of procedures to find out, accurately, if there is a relative merit of the newly suggested statement, and also of the old standard.

The Philosophy of Lean Manufacturing

In the field of management, there are various approaches that principally aim to accelerate and boost corporate firms’ revenues and operational efficiencies.

Progressive companies from around the world have been coming up every now and then different strategies for corporate improvement. Some of these schemes have been so effective that other firms have recognized and even adopted them.

One of these efficiency-focused philosophies is what is termed ‘lean manufacturing.’

What is lean manufacturing?

Lean manufacturing is a holistic and strategic approach that aims to enable businesses and companies to improve and boost competitiveness and profitability.

Lean manufacturing aims to introduce and set in desired improvements through identifying, and gradually, eliminating wasteful or unproductive behavior and practices among employees and management.

The scheme called lean manufacturing is a program or methodology that could prove to be fitting and appropriate for all types of businesses or organizations. Lean manufacturing would be effective whether adopted by companies in the manufacturing, service, trading or other sectors.

Lean manufacturing is focused at helping companies get the right things, to the right and appropriate places, at the perfect or right time and in the right amount or quantity while at the same time, reducing waste and promoting productivity and flexibility among workers.

Lean manufacturing and wastes

It does not take a successful manager to assert that businesses and companies carry unnecessary and unlikely burden of wastes.

Lean manufacturing as a philosophy focuses on reducing the seven wastes commonly identified among global firms. Lean manufacturing attempts to help companies eliminate these unnecessary wastes to improve output quality, to maximize production and the time needed for it and mostly, to significantly save on costs.

The seven wastes lean manufacturing aims to slash and eliminate in the workplace are the following:

1.      Over production
2.      Over processing
3.      Transportation
4.      Motion
5.      Inventory
6.      Waiting
7.      Scrap and defects

Over production, over processing and inventory

While some companies view over production in the positive way, most, especially those in the service and manufacturing sectors, take it as a manufacturing liability.

Over production will create a piling of inventory that would eventually create a problem in distribution because most warehouses have capacity limits.

What is worse is that over production and piling of inventories are the usual causes of price drops, which are deemed bad for the business by most firms.

The fundamental law of supply and demand will attest that if supplies are exceeding or too much, the demand tries to settle down or decline. Demands going down will mean prices rolling back or dropping as well.

Over processing is unnecessary because it takes so much productive time from employees and managers. There are many disadvantage of over processing and most of them seem pretty obvious to you. Over processing makes costs blow up.

Transportation, motion and waiting

Because time is an important element of productivity, lean manufacturing values it the most. Thus, lean manufacturing philosophy aims to boost efficiency.

Transportation is an essential element of manufacturing because through it commodities and merchandise are distributed to retailers, down to the consumers.

However, lean manufacturing mandates firms to maximize the use of transportation especially nowadays when oil prices are soaring.

Because energy prices are rising, and energy is what makes companies rolling, motion should be controlled. Lean manufacturing will have companies slash procrastination and unproductive hours among employees so as to increase and meet sufficient production targets.

If motion is made efficient, then waiting could be reduced if not eliminated. In lean manufacturing, waiting makes idle of people and it kills time that should have been used instead in productive measures and activities.

Scrap and defects

Lean manufacturing have it that if employees are efficient and if they are motivated, the quality of production would be greatly boosted. That means, the company will not have to spend costs on wages, energies and other capital just to produce defective items that would eventually rejected upon distribution.

While scraps and defects in production items are inevitable, companies adhering to lean manufacturing could always do something about it. Basic management principles have it that motivation is the most effective incentive to get workers doing the right and proper procedures in the work place.

All the seven wastes that are combated by lean manufacturing strategies are somehow interconnected with each other that eliminating one could lead to the elimination of the others.

Implementing Lean Manufacturing by Third Party Logistics Outsourcing

Lean Manufacturing

Lean manufacturing is one of the business philosophies of today that have been embraced by most corporations around the world. Though it was initially intended for the improvement of manufacturing systems and processes, it made its mark throughout the rest of the enterprise as well.

Lean manufacturing originated from the business policies of one of Japan’s top automobile maker Toyota. This is very obvious since several of the terms used in the lean manufacturing processes or systems are Japanese words like kaizen, kanban and andon.

Lean manufacturing has since been part of the business system and is regularly observed by most companies around the world.

Lately, lean manufacturing is being implemented by companies by hiring third party logistics. Lean manufacturing by third party logistics is possible by outsourcing.

Lean Manufacturing By Third Party Logistics

Outsourcing is currently the trend in most businesses today. In fact, General Motors of North America has been using outsourcing as part of its competitive advantage strategies. This company has plenty of experience when it comes to the analysis of an outsourcing company’s capabilities and solutions.

Lean manufacturing by third party logistics is being utilized by most of the companies today including General Motors. General Motors identified the Powertrain Warren plant where General Motors can implement lean manufacturing and they used third party logistics to do this.

It embraced lean manufacturing principles by third party logistics and used the plant to effectively manufacture engines. It also used lean manufacturing by third party logistics to resolve transportation issues.

Later general Motors decided to further use lean manufacturing by third party logistics for the entire group. Greater benefits are evident from the economies of scale. Clearly, the teachings of lean manufacturing are to add value and eliminate waste simplifying the manufacturing process.

Steps Done In Choosing Lean Manufacturing By Third Party Logistics

General Motors made its choice on what potential supplier or third party logistics to choose from a number of factors enumerated below:

1. The overall quality of the lean manufacturing by third party logistics.

2. The service of the lean manufacturing by third party logistics.

3. The available technology or innovation of the lean manufacturing by third party logistics.

4. The price of the lean manufacturing by third party logistics.
 
The Benefits From Lean Manufacturing By Third Party Logistics

In line with the principles of lean manufacturing, the outsourcing party must be able to do it all in the least costly and the most relaxed manner.

The strategy of General Motors to outsource its transportation function has been very effective and is rather working well. The third party logistics have a 99 percent record for on-time performance and has met its objective to gain significant savings for General Motors.

The lean manufacturing by third party logistics has been implemented rather well in the case of General Motors. The available visibility of the products and data information via the supply chain pipeline of General Motors has been a value that was unexpected.

Furthermore, the lean manufacturing by third party logistics strategy covered scanning of all the General Motor’s freight and updated the advance shipping notifications of General Motors.

To make sure that both parties will combine their efforts to continuously improve processes in line with the principles of lean manufacturing, the outsourcing arrangement will include a gain sharing component.

Lessons Available From The Outsourcing Journal

The lean manufacturing by third party logistics strategy is effective since outsourcing several of the company’s functions such as the transportation functions will allow a buyer to possibly leverage the strength of the supplier in the economies of scale in order to be able to achieve a number of objectives that include on-time performance and cost reduction.
 
From the view of the third-party logistics supplier, it will manage the transportation function. It may also decide on using subcontract arrangements for some portions of the route, or otherwise perform and deliver the transportation services along with the management decisive component.

Lean manufacturing by third party logistics have a gain sharing mechanism indicated in the outsourcing contract which is a highly effective option for an incentive as well as for continuous reduction of cost and the improvement of services.