Could Your Small Business Benefit From Lean Manufacturing ?


If you use key performing indicators to measure how your business is doing, seek input from your employees about ways to continually improve, or use ERP software you are, in fact, practicing “lean manufacturing.” The question is are there other lean principles you could be employing to further improve the performance of your business ?

Lean manufacturing was popularized by Toyota back in the 1990s. It attempts to cut waste out of the job process while improving quality and maximizing value to the customer.  Lean manufacturing is a philosophy comprised of 32 different ideas. Because all 32 ideas do not fit all companies, in my view, managers should pick and choose the ideas that work for their business and implement just those ideas.

For instance, at a CNC Machine Shop I’m currently working with in Silicon Valley we are in the process of implementing the “5S,” an approach for cleaning, organizing, and standardizing work areas much like the “CAN DO” program created by Henry Ford, from which the idea receives its inspiration. While the 5 S’s and creating a Tool Crib Attendant position to stage tools & materials “Just-In-Time” for machinists were good fits here, because this business produces many different parts in smaller quantities, many of the lean ideas applicable to manufacturers did not fit this job shop operation.

When looking at ways to be more “lean,” expect some resistance to change. At the previously mentioned machine shop, for example, the company almost talked themselves out of implementing the 5S’s until the Controller pointed out how many office supplies the old Production Manager had hoarded, in addition to the many problems they had to deal with after they terminated this manager because he buried RMAs in the cabinets of his cubical instead of placing them in a visible, designated area.

Many of the small businesses I work with can benefit from better inventory management, scheduling & preventive maintenance, and lean manufacturing offers several possible solutions. What follows is a summary of the 32 lean manufacturing ideas that helped transform Toyota into the largest automobile manufacturer in the world … Perhaps your business can benefit from some of these ideas.

For more information about implementing lean manufacturing principles in your business, please contact Jim Talerico today at 1-800-828-7585.

32 Lean Manufacturing Tools:

1.   The 5S System: is an effective approach for rooting out inefficiencies, improving work space organization, and implementing standard work-area practices throughout your organization.  The 5S’s gets it name from the Japanese words used as guiding principles for this approach: namely, “Seiri”(tidiness,) “Seiton,” (orderliness,) “Seiso,” (cleanliness,) “Seiketsu,”(standardization,) “Shitsuke,” (discipline.) By implementing the 5S’s, employees can improve work station organization and, furthermore, become more efficient as they will be able to find tools more quickly, work safer, and improve their productivity by standardizing procedures. Boeing feels that the 5S’s have simplified operations and improved organizational efficiencies, and Harley Davidson credits the 5S’s with both streamlining their manufacturing processes and improved safety — which is sometimes referred to as the “6th S.”

2.   Kaizen: which translates to “continuous improvement,” encourages employees at all levels of the organization to make suggestions for improving the business to upper management. Kaizen helps employees feel more engaged, invested, and connected to the business.  When Toyota implemented Kaizen at one of its plants located in the US, the automaker received more than 75,000 suggestions from its 7,000 employees about how to improve the manufacturing process. Toyota went on to implement 99% of those ideas.

3.   Hoshin Kanri: takes a big picture look at the organization to ensure alignment of its corporate goals with middle management and front-line managers’ day-to-day objectives. This practice helps to ensure that the organization is working as one to tackle problems and realize its corporate vision, and is implemented by upper management — who work closely with middle and front-line managers to ensure organizational focus on corporate goals and objectives.

4.   Value Stream Mapping (VSM): outlines the production process from start to finish. A flow chart is used to examine each step to find areas of waste or inefficiencies, so that steps can be taken to improve the process. Dalco Metals, Inc. used VSM to reconfigure its office space, which cut their order processing time in half and inspired them to implement lean principles in their manufacturing process.

5.   Kanban: is a popular lean manufacturing technique that uses cards to control the flow of materials through a process. These cards are often used to trigger adjustments in inventory. Kanban, which means “visual cards,” is used to minimize waste, maximize efficiencies, and can also be used to signal when to cut back or step up production.

6.   Andon: is a visual feedback system designed to report on the status of production on the shop floor and alert others when assistance may be needed. Andon uses a combination of lights and sounds to communicate status updates, problems and challenges. Both Toyota and Nissan use Andon in their plants to empower factory employees to provide real-time feedback about the production process.

7.   Gemba: encourages managers to connect with employees on a personal level and to seek out the real problems on the plant floor. The five – (5) guidelines governing this approach include:

a.   Having a specific purpose for taking a “Gemba walk;”

b.   Being familiar with the area on which you are focusing;

c.    Making sure you understand the overall process; and

d.   Knowing what questions to ask.

8.   Muda: is a core lean manufacturing principle and consists of seven- (7) different types of waste that organizations needs to eliminate from the work environment to maximize their bottom-line.   These seven- (7) forms of waste include:

a.   The overproduction of items manufactured before they are needed in the workplace;

b.   Either too many or too few inventory items, which wastes money that could be invested in other areas of the organization;

c.     Downtime resulting from waiting;

d.    Unnecessary motions of humans and machines;

e.   The Unnecessary transportation of parts or items during the process;

f.     Over processing beyond the customer’s requirements; and

g.    Rework resulting from quality issues.

9.   “SMART” Goals: are “specific,” “measurable,” “attainable,” “results-oriented,” and “time-specific.” Creating smart goals helps an organization measure its success at reaching its corporate objectives.

10.                      PDCA – Plan, Do, Check, Act: is a method for solving problems. During the planning phase, the problem is identified. Doing involves the act of solving the problem. Next, small scale changes are reviewed to see if the intended consequences have been reached and to contemplate further actions needed. The last step in the process are the final actions, if any, needed to solve the problem. The process can be repeated, as needed, to focus on continuous improvement.

11.                      Root Cause Analysis: is a problem-solving approach that attempts to find the underlying cause of a problem. Getting to the root of a problem ensures that a company avoids focusing on the symptoms of the problem.

12.                      Ishkawa (Cause & Effect Diagrams) is a “root cause analysis” technique for solving problems. Another name for this approach is “the 5 whys ?” By asking the question “why” up to 5 times, you ensure that you get to the root cause of an issue, so that corrective actions can be implemented to solve the problem. Ishkawa diagrams are illustrations that map out the answer to the 5 whys, and are sometimes called a “bone diagram,” because they can resemble a fish’s bones.

13.                      Mind Maps: illustrates in a visual format the connection of ideas associated with a certain task. Mind maps are used to analyze both “macroscopic” and “microscopic” considerations of a problem during a “brainstorming” session. Mind maps are often used to unlock the solution to difficult problems.

14.                      Poka-Yoke: translates loosely to “inadvertent error prevention.” Poka-Yoke is used to detect — and prevent — problems in the production process in “real time,” rather than after the process is completed.  Proponents of Poka-Yoke maintain that it saves time and money while minimizing unnecessary waste in the production process.

15.                      The Big Six- (6) Losses: helps an organization avoid the six- (6) most common reasons for productivity loses, which include:

(i)              Unplanned Steps – such as when a piece of equipment goes down during the production process;

(ii)            Planned Stops – such as for breaks, safety inspections, and planned maintenance;

(iii)         Small Stops – such as the time needed to unclog a machine, correct settings, or to clean up;

(iv)           Slow Cycles – which usually occur when a machine runs slower than designed, because it is old, worn out, or being controlled by a new operator;

(v)            Production Rejects – or defective parts produced during the routine course of production — usually due to operator error or incorrect settings; and

(vi)          Startup Rejects – defective parts produced as a machine turns on and starts up. Start-up rejects usually occur due to normal processes during equipment startups and process changeovers.

16.                      Standardized Work: consists of finding the best work practices for a process and implementing that approach across the organization. When implementing a standard process, the steps involved when the tasks are to be performed and why they must be performed are carefully communicated to all parties involved.

17.                      The Visual Factory: relies on visual communications to inform workers. Examples of visual communications include: electronic display boards, color-coded storage systems, signs, labels, and floor markings. Studies reveal that clear, simple, and direct communications improve organizational efficiencies.

18.                      Cellular Manufacturing: Is an approach that breaks down the production process into parts and creates “cells” consisting of machines, people, and processes that fit into the larger manufacturing process. The benefit of cellular manufacturing is that it can cut down on floor space, increase output, and improve productivity when compared to a large-scale assembly line operation. Cellular manufacturing also offers flexibility, as a company can adjust certain cells without affecting the entire manufacturing process.

19.                      Enterprise Resource Planning (ERP): is a comprehensive computer software solution that collects data throughout the production process to allow the entity to make better business decisions.

20.                      Key Performing Indicators (KPIs): are important measurements that speak to the efficiency of the process. These critical measurements provide quick feedback about whether you are meeting your goals and allows management to make timely changes.

21.                      Heijunka: is a scheduling approach that encourages a steady flow of small batch manufacturing instead of larger runs with more downtime between runs. The theory behind this approach is that focusing on smaller runs improves focus and, hence, efficiencies.

22.                      Level Loading: is a technique that balances the manufacturing process, so that goods are produced at a steady rate. This, in turn, ensures that other stages of the production process can happen at a steady rate — independent of short-term increases or decreases in demand. Level loading reduces stresses to the process caused by big changes in demand.

23.                      Continuous Flow: is a scheduling strategy that attempts to minimize interruptions in the process by anticipating shutdowns and planning around them. Minimizing downtime allows a company to maximize output, profits, and efficiencies.

24.                      Takt Time: encourages a manufacturer to develop a rate of production that reflects consumer demand. Takt time measures the rate at which items must be produced to meet consumer needs, rather than the time it takes to produce an item. Takt time ensures the proper allocation of resources and offers employees flexibility, so long as consumer demands are met.

25.                      Single Minute Exchange of Die (SMED): SMED reduces setup times or changeover times in a manufacturing process to less than 10 minutes. SMED speeds up setups by simplifying the process, eliminating wasteful steps, and developing standard procedures. Toyota used SMED to reduce changeovers from 3 days to 10 minutes in their transfer stamping process.  

26.                      Zero Quality Control (ZQC): is a method for eliminating all defects from a process due to operator error or unfavorable conditions.  ZQC aims to control a process’ performance, so that it is impossible to produce defects.

27.                      Jidoka:  is another approach for minimizing inefficiencies, slowdowns, breakdowns, etc. by empowering employees and establishing machine controls to stop the process and fix the problem without management approval.

28.                      Bottleneck Analysis: looks at areas where the process backs up and then institutes changes, improvements, and methods to improve the slow down or “bottleneck.” Bottleneck analysis improves efficiencies and productivity by locating obstacles in the process and giving employees the tools to remove these obstacles.

29.                      A-B-C Inventory: groups inventory into three – (3) classes of inventory using Pareto’s Law, also known as the 80:20 rule. “A items” represents the top 20% of inventory and moves the fastest; B items consist of inventory that moves moderately; and C items are the slowest moving items.  By separating inventory in this manner, a company can better focus on managing the more important inventory items.

30.                      Just-In-Time (JIT): instead of inventorying items that can be pulled for future use, customer demand drives JIT inventory purchasing requirements.  Inventory purchases are timed for when they are needed in the production process and arrive on the floor “just in time.”

31.                      Total Production Maintenance (TPM): promotes proactive, preventive maintenance. By saving on maintenance costs and reducing downtime both productivity and output are improved.  The seven – (7) techniques for implementing TPM include: (i) Autonomous Maintenance, which includes operators keeping tabs on their equipment and work areas; (ii) Process / Machine Improvement, which uses data provided by operators to improve preventative maintenance; (iii) Preventative MaintenanceTasks & Duties, which are documented to help ensure better maintain equipment; (iv) Early Maintenance Investments to prolong the life of equipment; (v) Process Quality Management, which ensures worker / management buy-in by assigning maintenance roles to both groups; (vi) Education & Training to improve machine operation, maintenance & safety; and (vii) actions to Sustain Success.

32.                      Overall Equipment Effectiveness (OEE): OEE provides a method for understanding the efficiency of each step in the manufacturing process. Using this method, a machine’s — or process’– downtime, performance, and quality is measured as a percentage from 0 to 100. Knowing these percentages, allows management to look elsewhere in the production cycle for possible improvements.