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Lean is the process to maximize customer value by minimizing waste in manufacturing. Simply, lean refers to creation of more value for customers with limited resources. The Lean approach is based on increasing efficiency by removing wasteful steps that don't add value directly to the end product. It is not that there is quality depletion with lean manufacturing; it is finding better results by applying more efficient ways of doing the same tasks. Since Lean manufacturing focuses on customer value, it will evaluate the customer by how much they are willing to pay for this product or service. Customers need value, and they'll only pay if we satisfied their needs. They shouldn't pay for defective products, or for the additional cost of having more inventories. In simple words, they shouldn't pay for our waste.
When talking about waste in lean implementation, anything which doesn't add any value to the end product is called waste. We classify waste in to eight categories which is necessary to be monitored:
Overproduction: Producing excess product before knowing exact consumer demand. This is a big drawback as it can lock up significant working capital in finished goods by without selling goods and dumping to storage. It’s common in all types of manufacturing, but it can occur only in bottleneck situation at workplace. Overproduction may occur due to Just-in-case production, Long set-up times, Producing in line with forecast, unclear customer demand, Engineering changes, and poorly applied automation. The solution to overproduction in lean manufacturing is to establish efficient work flow for the benefit of the customer. Ensure that there are well-defined procedures in workstation for every process in your firm, if not; implement new processes to keep work flow in control.
Waiting: It occurs whenever job has to stop for some reason: The reason might be machine breakdown, next person in line is overwhelmed, waiting for approval or materials, or the operator had run out of something. All these happens because of the following causes Unbalanced workloads, Long set-up times, Unplanned downtime, Insufficient staffing, Poor process quality, Work absences, Producing in line with forecast and Poor communication. However, we have to wait for a bottleneck to be cleared. Lean implementation will address this by providing adequate staffing to handle the workload at the bottlenecks.
Inventory: It denotes both raw materials and finished goods. Excess inventory will lead us to lock in working capital, it might happen because of the following reasons Overproduction and buffers, Poor monitoring systems, Unreliable suppliers, Mismatched production speeds, Long set-up times and misunderstood customer needs. Lean implementation will monitor these by preparing lists, in-boxes, resource allocation, and project pipelines visible in our workplace.
Transportation: It is caused by moving things around. This is big problem in a manufacturing plant, because too much transportation tends to increase costs, waste time, increases the chance of product damage and deterioration, and can also result in poor communication. Transportation waste can be caused by Poorly-designed systems, misaligned process flow, Poor plant/office layout and Unnecessary or excessive steps in the process. Lean implementation will allows us to limit transportation waste by common-sense efforts such as simplifying processes, handling products less often, renovating physical layouts, and reducing the distances between steps as short as possible.
Over-processing: It refers to the multiple versions of doing the same work which cause additional time, cost and money. In other words, product which takes more process than it’s actually required because of its poor design. Some examples are Lack of standards, Excessive reports, Re-entering data and duplicated data, unwanted signatures, Overdesigned equipment’s, Poor communication, Misunderstanding of the customer's needs and Human error. Lean implementation examines and maps your organization to analyse the processes in order to fix them. Lean implementation empowers employees and eliminates unnecessary documentation, Standardize processes, sign-off processes and meetings.
Motion: It denotes to the excess moves, neither by employees or machines, that doesn’t add any value to the product, service or process. Typical this is caused by Lack of standards, Shared tools and machines, Poor workstation/shop layout, Poor process design and controls, Isolated and soloed operations and Workstation congestion. Lean implementation will give you solution by rearranging layouts to reduce the distance between workstations, and make it simple to reach things that are often used.
Defects: This refers to producing completely a defective product or sometimes few jobs require to be repaired again due to not meeting requirements and the customer's needs. Inspection is said as review and this is in the work flow because our internal customer won’t trust our finishing of product. This leads to more reworking of defects additionally requires time, resources, and money to fix. Some causes of defects are Poor design and undocumented design changes, Lack of standards, Poor quality controls, Poor repair, Weak or missing processes, Poor documentation, Misunderstanding customer needs and Uncontrolled inventory levels. It is Impossible to avoid any form of waste completely, but in certain cases defects can be controlled by the application of lean implementation like more stringent quality control at all levels, a complete understanding of job requirements and customer needs, standardized work plans, and simple job aids such as checklists.
Workforce: Employee’s skills, abilities, and knowledge are not effectively or properly utilized. The biggest blunder in this waste is not empowering or enabling the employees to get familiar with a process to improve the process. Companies can benefits only when they respect value of skills and encourage improvement ideas from all levels of the employees. This can typically be seen in Insufficient training, Wasteful admin tasks, Assigning staff to wrong tasks, Poor management, Poor communication and Lack of teamwork. These causes are more familiar to all but we don’t take that much interest on it. In fact the truth behind is organization's productivity completely relies on employee engagement. Lean implementation will stop micromanaging, empowering employees and increase training.