The 5 principles of lean manufacturing to enhance your production

Learn about lean manufacturing, its origins, and, more importantly, how you can apply the five principles of lean thinking to your business.

Lean manufacturing principles help companies eliminate waste and achieve higher levels of efficiency.
Published: 19.07.2022

The world went from craft production to mass production with the industrial revolution, which was great in many ways.

However, mass production wasn’t without problems.

The sole focus of mass production was to produce goods faster and lower the manufacturing cost per unit. As time went by, assembly lines developed a “move the metal” mentality, leading to defective products and higher attrition of assembly technicians. Addressing this issue is how the lean manufacturing principles came to be.

Putting the lean manufacturing principles into action

Implement your lean manufacturing principles with ease by using a live inventory management system for real-time overviews of inventory and operations.
Lean manufacturing principles help organizations to focus on customer value and work to improve processes continuously.

Where mass production went wrong

The moving assembly line pioneered by Henry Ford in 1913 accelerated this shift by increasing the efficiency of production processes.  

It didn’t stop there — a host of other innovations made Ford’s manufacturing system so successful that by 1926, it was producing nearly half of all the motor vehicles in the world. Over time these process improvements and methods were adopted by other industries. 

Companies that adopted this production process needed to have dedicated rework areas where the products could be disassembled and repaired. Manufacturing defects and a rapid churn rate among the workforce meant a waste of resources and ultimately higher prices for customers. 

This was the context that led to the development of lean principles. 

Lean manufacturing principles can help reduce costs and lead time while increasing quality.

The roots of lean manufacturing 

After understanding the flaws in mass production systems, coupled with their own insights on manufacturing practices, Taiichi Ohno, and Eiji Toyoda of Toyota created the Toyota Production System (TPS).  

Post World War 2, Japan was cash and resource-strapped. Toyota was forced to move away from prioritizing higher output and working with excess inventories, which was the norm in mass manufacturing. Instead, they built their manufacturing system to focus on just-in-time (JIT) production, continuous improvement, and waste elimination.  

For instance, their system allowed technicians to halt the entire assembly line in order to fix a defect as soon as they spotted one — this was unimaginable in earlier production systems. 

Empowering the technicians to fix mistakes early in the process led them to make fewer mistakes and reduced waste over time. 

The production systems that we now call lean manufacturing are a direct result of the Toyota Production System. These ideas were first described in the book The Machine That Changed the World by James P. Womack, Daniel Roos, and Daniel T. Jones. Later these were distilled into the five principles of lean manufacturing by Womack and Jones:  

  1. Value 
  2. Value streams 
  3. Flow 
  4. Pull 
  5. Perfection 
Lean manufacturing principles help organizations to focus on customer value and work to improve processes continuously.

The benefits of lean manufacturing    

With sales of over 10.5 million units in 2021, Toyota is currently the world’s largest automobile manufacturer.  

This is simply a testament to the fact that lean manufacturing principles have stood the test of time.  

From large corporations like Toyota to smaller family-owned businesses like Buck Knives, plenty of companies have implemented lean principles to grow and stay competitive. The Lean Enterprise Institute also publishes detailed case studies and results from various companies using lean principles. 

If you want to optimize your production systems, lean manufacturing is the way to go. 

Here are some of the benefits that you could reap by adopting the lean principles: 

  • React to changing needs and circumstances quicker  
  • Deliver better products with shorter lead times  
  • Lead a happier and more content workforce  
  • Increase your bottom line  
Automotive manufacturing process can help manufacturers focus on installing a variety of features, including air conditioning, GPS navigation, and entertainment systems along their production lines.

What are the 5 principles of lean manufacturing?

Now that we know about the benefits of lean, here are the core principles and how you can apply them to your workflows.  

1. Value 

In order to optimize your manufacturing processes, you first need to understand how you deliver value to your customers.  

The durability of your products or quick turnaround times may be the value your business delivers to customers and clients. This is why understanding and defining your business’s value is the first lean principle. Defining your value and, in doing so, knowing your competitive advantage, allows you to invest time and resources on the right activities.  

For instance, if your edge comes from fast deliveries, knowing that narrows your focus to improving that aspect of your business — increasing the value for your customers.  

You can identify the value that you deliver through different ways, ranging from having one-on-one interviews with your customers to using sophisticated cloud-based manufacturing software that can analyze your sales data and everything in between.  

2. Value stream 

Once you have understood what your customers value, you are in a good place to identify and map the value stream.  

A value stream consists of all the actions in your business that go into taking raw materials to a finished product. You would start tracing your processes from creating the orders for raw materials, all the way to delivering and maintaining the product. The idea here is to understand the factors and processes that contribute to making your product valuable to the customers. 

Let’s use the earlier example of fast deliveries. You can break down how orders move through your system, from the customer placing the order to successful delivery. At every step, ask yourself how a specific process can be improved to achieve the goal of faster delivery times. 

Mapping the value streams first provides a greater understanding of the manufacturing process. Often this leads you to discovering processes that do not add value and are unnecessary. Needless to say, these are wasteful. In lean thinking, the elimination of waste plays an important role.  

Mapping value streams allows you to identify and minimize waste. 

3. Flow 

With value identified, value streams mapped, and waste minimized — you are in a great place to think about the processes that do add value to your products.  

In this step, lean thinking calls for streamlining your processes — this can involve breaking down each process into smaller steps, reconfiguring your shop floor, eliminating bottlenecks, or increasing the efficiency of your manufacturing operations.  

With total shop floor control and end-to-end traceability built in, Katana can make value stream mapping and establishing flow in your journey of applying lean principles a breeze. 

4. Pull 

Building up and maintaining excess inventory leads to manufacturing overheads, such as:  

  • Storage costs  
  • Lost inventory  
  • Excessive spending on marketing of unsold products   
  • And more  

These are rightly considered wasteful in lean. Your business production should focus on creating just-in-time delivery of products and raw materials across processes. This allows you to create a pull-based system for your products. Instead of spending time and resources on moving inventory, your business can become nimble enough to cater to orders as and when they arrive from your customers.  

Establishing a pull-based system and moving away from a push-based one was one of the major shifts in thinking that came from the Toyota Production System and lean manufacturing principles. 

5. Perfection 

Although applying the first four principles can provide a great boost to your business, the pursuit of perfection is what will set you apart.  

It allows you to acknowledge that efficiency and providing higher value to customers is a continuous process and requires building a company culture open to learning. Often great results come from persistence and continuous refinement of the production process. You might have to go through the cycle of mapping value streams multiple times, and additionally, what customers value in your products could change over time.  

For instance, during times of high economic growth, customer preferences could shift towards buying your premium products with better finishing and packaging.  

At times like these, you need to go through the process of optimizing again. The essence of this principle is the willingness to go back to the drawing board and improve what is already working well. It is almost as if lean principles throw out “If it ain’t broke, don’t fix it” and propose “If it ain’t perfect, make it” instead.  

Lean manufacturing with Katana ERP

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Become a mean lean green manufacturing machine   

There you have it — with everything you’ve learned about lean principles, you are in a great place to start implementing them. As the saying goes, a journey of a thousand miles begins with a single step.  

The good news is that you’ve already taken that first step. 

With features like real-time master planning, production planning, and purchase order management, a manufacturing ERP system like Katana can simplify your processes and help you implement lean ideas in your business.  

Get a 14-day free trial and find out how thousands of manufacturers use Katana to optimize their business operations.  

Tejas Shah

Tejas Shah

Freelance copywriter

Tejas is an enthusiastic winter swimmer who loves to write. From living in a kibbutz in Israel to running a food truck in Estonia, he has had some exciting life experiences. He also happens to be finishing up his Master’s in Computer Science.

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