The 5 Steps of Lean Manufacturing

Lean manufacturing has contributed to the rise of many companies in their respective industries. A good example is Toyota, the second largest car manufacturer today, and a pioneer of lean manufacturing through the Toyota Production System (TPS).

Attempting to replicate Toyota’s successes in lean manufacturing is a tall order. Each company has unique internal and external dynamics. What worked for others may not work for you. However, lean manufacturing offers five key steps that can be a helpful guide in this process.

What are these key steps in lean manufacturing, why are they important, and how can they be implemented in different companies? We answer these and other questions below.

Why Do Companies Use Lean Manufacturing?

Many companies struggle with inefficiencies which limit growth and can even lead to bankruptcy. Inefficient operations mean a company has wasteful practices and offers less value to customers which ultimately hurts their profits.

Lean manufacturing is one of several initiatives manufacturers implement to reduce waste. Unlike initiatives like 5S, lean manufacturing has a broad scope and entire steps can be eliminated from a process if they don’t add value a customer will pay for.

Lean manufacturing takes into account the entire value stream of a product and not just individual processes. This makes it easy to identify and eliminate sources of the 7 wastes of lean manufacturing.

What are the 5 Steps to Implementing Lean?

Long-term implementation of lean manufacturing requires companies to follow five steps, also known as the principles of lean. They are:

  • Value
  • The Value Stream
  • Flow
  • Pull
  • Perfection

These five principles were originally defined in 1996 by James Womack and Daniel Jones. Lean doesn’t offer a precise method for applying these principles and application is influenced by factors such as industry, market conditions, company values, culture, and long-term goals.

However, each of these steps or principles has common action points for implementation in many companies.

Identifying Value

The first principle of lean manufacturing is identifying value but not from the company’s perspective. Value is defined as what the customer wants and is willing to pay for.

Some key points to note about value in lean manufacturing are:

  • Processes that add features but don’t add value are considered waste.
  • The best ideas have no value if the customer is not willing to pay for them.
  • Value is best delivered in its entirety. Value that can only be realized after customers take additional steps can make customers consider other options.

You don’t have to guess what customers are willing to pay for when implementing lean manufacturing. There are many ways of establishing what customers value today including:

  • Direct feedback from past users of your products, e.g., reviews.
  • Conducting surveys
  • Forming focus groups
  • Social media research
  • Forums and blogs, etc.

Customers don’t always know that there is a product or feature they need. They may simply articulate their problems or desired experiences. It’s the company’s job to figure out how to create a product that solves the problem or allows them to have that desired experience.

One action that can be taken after identifying value is to shorten the production cycle. This is achieved by focusing on processes that add value and eliminating the rest.

Mapping the Value Stream

This step involves looking at an existing process, analyzing how material and information flow from the start to the end, and designing how the flow should be in the future to achieve the same result with less waste.

In value stream mapping, all the steps in a process are shown including the time taken at each stage and material consumed. This makes it possible to identify where waste is generated so it can be eliminated resulting in a more efficient operation.

Specific actions that can be taken during value stream mapping are:

  • Identifying and eliminating sources of waste. Mapping the current process makes it easy to identify and separate steps that add value, steps that don’t add value but are necessary, and, steps that are wasteful and unnecessary. The last should be eliminated and necessary steps that don’t add value should be optimised. This could mean removing steps, refining processes, or changing physical layouts.
  • Taking Gemba walks: Going for a Gemba walk means going to the place where work is taking place, that is, the factory floor or individual workstations. Gemba walks make it easy to identify both necessary and wasteful processes. It also allows the lead team to interact with workers and get valuable information about processes.

Creating Flow

Creating flow means establishing a system where material moves through processes consistently and predictably. There should be no unplanned stoppages and restarts or unnecessary barriers to the movement of resources, finished goods, or information.

When there is an unplanned stoppage, there is a higher chance of creating waste. In a lean system with low inventory, an unplanned stoppage means delivery to a customer may not be on schedule.

To create flow, specific actions you can take include:

  • Identifying physical barriers to flow such as distance, long changeovers, frequent machine breakdowns, and machine operation restrictions.
  • Identifying intangible barriers to flow such as unpredictable delivery timelines, unpredictable quality that demands regular rework, and unnecessary approvals.
  • Remapping or changing the physical layout to ease movement.
  • Implementing total productive maintenance to improve machine reliability and reduce unplanned stoppages.
  • Using Poka-yoke and early quality testing to reduce manufacturing errors that require rework.

Establishing a Pull System

In a pull system, products are manufactured as they are ordered, requested, or bought. This contrasts with push systems where products are manufactured based on demand estimates. Push systems are not resource-efficient because accurately predicting demand is difficult and typically results in surplus production.

The pull system was at the heart of Just-in-Time manufacturing, the precursor to lean manufacturing. It reduces overproduction waste, excess inventory, and waiting times. Specific actions you can take to establish a pull system include:

  • Create an ordering process: The ordering process should enable customers to get products as quickly as possible e.g. directly from a warehouse.
  • Implement a suitable inventory control system: Inventory control systems such as Kanban are essential for ensuring that the right stock levels are maintained to facilitate quick delivery while minimizing inventory or work-in-progress levels.
  • Apply pull signals: Pull signals ensure that when a customer makes an order or if something is consumed at one stage of the manufacturing process, it is replenished in time to maintain flow.
  • Build good supplier relationships: Maintaining flow in a pull system with low inventory requires reliable suppliers and partners. Reliable suppliers will ensure that raw materials, spares, and other resources are replenished as required depending on demand.

Perfection/ Striving for Continuous Improvement

This final step of lean advocates for constantly aiming to improve the implementation of lean manufacturing. This means going back to the initial steps and identifying improvements that can be made to build on the initial implementation.

Continuous improvement was captured by the Kaizen philosophy in TPS.

Actions points you can take to implement continuous improvement include:

  • Taking small steps: Making large-scale changes to a company can cause many problems in the short term. The changes associated with lean operations should be gradually implemented to minimize negative effects and resistance.
  • Empower employees: Employees should be empowered through proper and continuous training to enable them to make good decisions and improve work techniques. This will improve morale and aid the implementation of lean practices.
  • Get customer feedback: Feedback from customers will inform the company about their current and future needs so they can further redefine value to keep up with the times.
  • Quality testing: Quality testing ensures that current products offer customers value but also informs the company where improvements can be made in the future. Quality testing should also evolve to meet future needs.

Conclusion

Unlike methodologies like Six Sigma, lean manufacturing does not offer specific steps that every company should follow during implementation. However, the guiding principles offer a roadmap that any company can apply.

Each of the five steps has action points that apply to many companies. These include getting information directly from customers to know what they want and implementing a signaling system that ensures stocks are replenished in time to maintain flow.

This five-step implementation of lean manufacturing needs to be repeated with the goal of slowly but gradually improving the system. A gradual implementation reduces the negative effects of switching to lean manufacturing, especially in the short term.

Additional Resources