Lean manufacturing, lean enterprise, or lean production, often simply, "lean", is a

production practice that considers the expenditure of resources for any goal other than the
creation of value for the end customer to be wasteful, and thus a target for elimination.
Working from the perspective of the customer who consumes a product or service,
"value" is defined as any action or process that a customer would be willing to pay for.
Essentially, lean is centered on preserving value with less work. Lean manufacturing is a
management philosophy derived mostly from the Toyota roduction !ystem "T!#
"hence the term Toyotism is also prevalent# and identified as "lean" only in the $%%&s.
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T! is renowned for its focus on reduction of the original Toyota seven wastes to
improve overall customer value, but there are varying perspectives on how this is best
achieved. The steady growth of Toyota, from a small company to the world*s largest
automaker,
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has focused attention on how it has achieved this success.
Contents
$ ,verview
o $.$ ,rigins
) - brief history of waste reduction thinking
o ).$ re.)&th century
o ).) )&th century
o ).+ /ord gets the ball rolling
o ).0 Toyota develops T!
+ Types of waste
0 Lean implementation develops from T!
o 0.$ -n example program
o 0.) Lean leadership
o 0.+ 1ifferences from T!
2 Lean services
3 Lean goals and strategy
4 !teps to achieve lean systems
o 4.$ 1esign a simple manufacturing system
o 4.) There is always room for improvement
o 4.+ 5ontinuously improve
o 4.0 6easure
7 8mplementation pitfalls
% !ee also
$& 9eferences
$$ /urther reading
$) External links
Overview
Lean principles are derived from the :apanese manufacturing industry. The term was first
coined by :ohn ;rafcik in his $%77 article, "Triumph of the Lean roduction !ystem,"
based on his master*s thesis at the 68T !loan !chool of 6anagement.
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;rafcik had been
a <uality engineer in the Toyota.=6 >?668 @oint venture in 5alifornia before coming
to 68T for 6A- studies. ;rafcik*s research was continued by the 8nternational 6otor
Behicle rogram "86B# at 68T, which produced the international best.seller book co.
authored by :im Womack, 1aniel :ones, and 1aniel 9oos called The Machine That
Changed the World.
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- complete historical account of the 86B and how the term
"lean" was coined is given by Colweg ")&&4#.
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/or many, lean is the set of "tools" that assist in the identification and steady elimination
of waste "muda#. -s waste is eliminated <uality improves while production time and cost
are reduced. - non exhaustive list of such tools would includeD !6E1, Balue !tream
6apping, /ive !, Kanban "pull systems#, poka-yoke "error.proofing#, Total roductive
6aintenance, elimination of time batching, mixed model processing, 9ank ,rder
5lustering, single point scheduling, redesigning working cells, multi.process handling
and control charts "for checking mura#.
There is a second approach to lean 6anufacturing, which is promoted by Toyota, called
The Toyota Way, in which the focus is upon improving the "flow" or smoothness of
work, thereby steadily eliminating mura ""unevenness"# through the system and not upon
*waste reduction* per se. Techni<ues to improve flow include production leveling, "pull"
production "by means of kanban# and the Heijunka bo. This is a fundamentally different
approach from most improvement methodologies, which may partially account for its
lack of popularity.
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The difference between these two approaches is not the goal itself, but rather the prime
approach to achieving it. The implementation of smooth flow exposes <uality problems
that already existed, and thus waste reduction naturally happens as a conse<uence. The
advantage claimed for this approach is that it naturally takes a system.wide perspective,
whereas a waste focus sometimes wrongly assumes this perspective.
Aoth lean and T! can be seen as a loosely connected set of potentially competing
principles whose goal is cost reduction by the elimination of waste.
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These principles
includeD ull processing, erfect first.time <uality, Waste minimiEation, 5ontinuous
improvement, /lexibility, Auilding and maintaining a long term relationship with
suppliers, -utonomation, Load leveling and roduction flow and Bisual control. The
disconnected nature of some of these principles perhaps springs from the fact that the
T! has grown pragmatically since $%07 as it responded to the problems it saw within its
own production facilities. Thus what one sees today is the result of a *need* driven
learning to improve where each step has built on previous ideas and not something based
upon a theoretical framework.
Toyota*s view is that the main method of lean is not the tools, but the reduction of three
types of wasteD muda ""non.value.adding work"#, muri ""overburden"#, and mura
""unevenness"#, to expose problems systematically and to use the tools where the ideal
cannot be achieved. /rom this perspective, the tools are workarounds adapted to different
situations, which explains any apparent incoherence of the principles above.
Origins
-lso known as the flexible mass production, the T! has two pillar conceptsD :ust.in.time
":8T# or "flow", and "autonomation" "smart automation#.
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-dherents of the Toyota
approach would say that the smooth flowing delivery of value achieves all the other
improvements as side.effects. 8f production flows perfectly "meaning it is both "pull" and
with no interruptions# then there is no inventoryF if customer valued features are the only
ones produced, then product design is simplified and effort is only expended on features
the customer values. The other of the two T! pillars is the very human aspect of
autonomation, whereby automation is achieved with a human touch.
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8n this instance,
the "human touch" means to automate so that the machinesGsystems are designed to aid
humans in focusing on what the humans do best.
Lean implementation is therefore focused on getting the right things to the right place at
the right time in the right <uantity to achieve perfect work flow, while minimiEing waste
and being flexible and able to change. These concepts of flexibility and change are
principally re<uired to allow production leveling "Cei@unka#, using tools like !6E1, but
have their analogues in other processes such as research and development "9H1#. The
flexibility and ability to change are within bounds and not open.ended, and therefore
often not expensive capability re<uirements. 6ore importantly, all of these concepts have
to be understood, appreciated, and embraced by the actual employees who build the
products and therefore own the processes that deliver the value. The cultural and
managerial aspects of lean are possibly more important than the actual tools or
methodologies of production itself. There are many examples of lean tool implementation
without sustained benefit, and these are often blamed on weak understanding of lean
throughout the whole organiEation.
Lean aims to make the work simple enough to understand, do and manage. To achieve
these three goals at once there is a belief held by some that Toyota*s mentoring process,
"loosely called !enpai and Kohai, which is :apanese for senior and @unior#, is one of the
best ways to foster lean thinking up and down the organiEational structure. This is the
process undertaken by Toyota as it helps its suppliers improve their own production. The
closest e<uivalent to Toyota*s mentoring process is the concept of ""ean !ensei," which
encourages companies, organiEations, and teams to seek outside, third.party experts, who
can provide unbiased advice and coaching, "see Womack et al., "ean Thinking, $%%7#.
8n $%%%, !pear and Aowen
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identified four rules which characteriEe the "Toyota 1>-"D
9ule $D -ll work shall be highly specified as to content, se<uence, timing, and outcome.
9ule )D Every customer.supplier connection must be direct, and there must be an
unambiguous yes or no way to send re<uests and receive responses.
9ule +D The pathway for every product and service must be simple and direct.
9ule 0D -ny improvement must be made in accordance with the scientific method, under
the guidance of a teacher, at the lowest possible level in the organiEation.
There have been recent attempts to link lean to service management, perhaps one of the
most recent and spectacular of which was London Ceathrow -irport*s Terminal 2. This
particular case provides a graphic example of how care should be taken in translating
successful practices from one context "production# to another "services#, expecting the
same results. 8n this case the public perception is more of a spectacular failure, than a
spectacular success, resulting in potentially an unfair tainting of the lean manufacturing
philosophies.
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A brief history of waste reduction thinking
The avoidance of waste has a long history. 8n fact many of the concepts now seen as key
to lean have been discovered and rediscovered over the years by others in their search to
reduce waste. Lean manufacturing builds on their experiences, including learning from
their mistakes.
Pre-20th century
The printer Aen@amin /ranklin contributed greatly to waste reduction thinking
6ost of the basic goals of lean manufacturing are common sense, and documented
examples can be seen as early as Aen@amin /ranklin. #oor $ichard%s &lmanack says of
wasted time, "Ce that idly loses 2s. worth of time, loses 2s., and might as prudently throw
2s. into the river." Ce added that avoiding unnecessary costs could be more profitable
than increasing salesD "- penny saved is two pence clear. - pin a.day is a groat a.year.
!ave and have."
-gain /ranklin*s The Way to Wealth says the following about carrying unnecessary
inventory. "Iou call them goodsF but, if you do not take care, they will prove evils to
some of you. Iou expect they will be sold cheap, and, perhaps, they may 'be bought( for
less than they costF but, if you have no occasion for them, they must be dear to you.
9emember what oor 9ichard says, *Auy what thou hast no need of, and ere long thou
shalt sell thy necessaries.* 8n another place he says, *6any have been ruined by buying
good penny worths*." Cenry /ord cited /ranklin as a ma@or influence on his own business
practices, which included :ust.in.time manufacturing.
The concept of waste being built into @obs and then taken for granted was noticed by
motion efficiency expert /rank =ilbreth, who saw that masons bent over to pick up bricks
from the ground. The bricklayer was therefore lowering and raising his entire upper body
to pick up a ).+ kg "2 lb.# brick, and this inefficiency had been built into the @ob through
long practice. 8ntroduction of a non.stooping scaffold, which delivered the bricks at waist
level, allowed masons to work about three times as <uickly, and with less effort.
20th century
/rederick Winslow Taylor, the father of scientific management, introduced what are now
called standardiEation and best practice deployment. 8n his #rinciples o' !cienti'ic
Management, "$%$$#, Taylor saidD "-nd whenever a workman proposes an improvement,
it should be the policy of the management to make a careful analysis of the new method,
and if necessary conduct a series of experiments to determine accurately the relative
merit of the new suggestion and of the old standard. -nd whenever the new method is
found to be markedly superior to the old, it should be adopted as the standard for the
whole establishment."
Taylor also warned explicitly against cutting piece rates "or, by implication, cutting
wages or discharging workers# when efficiency improvements reduce the need for raw
laborD "...after a workman has had the price per piece of the work he is doing lowered two
or three times as a result of his having worked harder and increased his output, he is
likely entirely to lose sight of his employer*s side of the case and become imbued with a
grim determination to have no more cuts if soldiering 'marking time, @ust doing what he
is told( can prevent it."
/rank Aunker =ilbreth, !r. established the fundamentals for predetermined motion time
system, used in systems like 6ethods.time measurement or similar.
!higeo !hingo, the best.known exponent of single minute exchange of die and error.
proofing or poka.yoke, cites #rinciples o' !cienti'ic Management as his inspiration.
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-merican industrialists recogniEed the threat of cheap offshore labor to -merican
workers during the $%$&s, and explicitly stated the goal of what is now called lean
manufacturing as a countermeasure. Cenry Towne, past resident of the -merican
!ociety of 6echanical Engineers, wrote in the /oreword to /rederick Winslow Taylor*s
!hop Management "$%$$#, "We are @ustly proud of the high wage rates which prevail
throughout our country, and @ealous of any interference with them by the products of the
cheaper labor of other countries. To maintain this condition, to strengthen our control of
home markets, and, above all, to broaden our opportunities in foreign markets where we
must compete with the products of other industrial nations, we should welcome and
encourage every influence tending to increase the efficiency of our productive
processes."
ord gets the ball rolling
Cenry /ord continued this focus on waste while developing his mass assembly
manufacturing system. 5harles Auxton =oing wrote in $%$2D
/ord*s success has startled the country, almost the world, financially, industrially,
mechanically. 8t exhibits in higher degree than most persons would have thought
possible the seemingly contradictory re<uirements of true efficiency, which areD
constant increase of <uality, great increase of pay to the workers, repeated
reduction in cost to the consumer. -nd with these appears, as at once cause and
effect, an absolutely incredible enlargement of output reaching something like one
hundredfold in less than ten years, and an enormous profit to the manufacturer.
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/ord, in My "i'e and Work "$%))#,
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provided a single.paragraph description that
encompasses the entire concept of wasteD
8 believe that the average farmer puts to a really useful purpose only about 2J of
the energy he expends.... >ot only is everything done by hand, but seldom is a
thought given to a logical arrangement. - farmer doing his chores will walk up
and down a rickety ladder a doEen times. Ce will carry water for years instead of
putting in a few lengths of pipe. Cis whole idea, when there is extra work to do, is
to hire extra men. Ce thinks of putting money into improvements as an expense....
8t is waste motionK waste effortK that makes farm prices high and profits low.
oor arrangement of the workplaceKa ma@or focus of the modern kaiEenKand doing a
@ob inefficiently out of habitKare ma@or forms of waste even in modern workplaces.
/ord also pointed out how easy it was to overlook material waste. - former employee,
Carry Aennett, wroteD
,ne day when 6r. /ord and 8 were together he spotted some rust in the slag that
ballasted the right of way of the 1. T. H 8 'railroad(. This slag had been dumped
there from our own furnaces. *Iou know,* 6r. /ord said to me, *there*s iron in that
slag. Iou make the crane crews who put it out there sort it over, and take it back
to the plant.*
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8n other words, /ord saw the rust and realiEed that the steel plant was not recovering all
of the iron.
/ord*s early success, however, was not sustainable. -s :ames . Womack and 1aniel
:ones pointed out in "Lean Thinking", what /ord accomplished represented the "special
case" rather than a robust lean solution.
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The ma@or challenge that /ord faced was that
his methods were built for a steady.state environment, rather than for the dynamic
conditions firms increasingly face today.
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-lthough his rigid, top.down controls made it
possible to hold variation in work activities down to very low levels, his approach did not
respond well to uncertain, dynamic business conditionsF they responded particularly
badly to the need for new product innovation. This was made clear by /ord*s precipitous
decline when the company was forced to finally introduce a follow.on to the 6odel T
"see Lean 1ynamics#.
1esign for 6anufacture "1/6# also is a /ord concept. /ord said in My "i'e and Work
"the same reference describes @ust in time manufacturing very explicitly#D
...entirely useless parts 'may be(Ka shoe, a dress, a house, a piece of machinery,
a railroad, a steamship, an airplane. -s we cut out useless parts and simplify
necessary ones, we also cut down the cost of making. ... Aut also it is to be
remembered that all the parts are designed so that they can be most easily made.
This standardiEation of parts was central to /ord*s concept of mass production, and the
manufacturing "tolerances", or upper and lower dimensional limits that ensured
interchangeability of parts became widely applied across manufacturing. 1ecades later,
the renowned :apanese <uality guru, =enichi Taguchi, demonstrated that this "goal post"
method of measuring was inade<uate. Ce showed that "loss" in capabilities did not begin
only after exceeding these tolerances, but increased as described by the Taguchi Loss
/unction at any condition exceeding the nominal condition. This became an important
part of W. Edwards 1eming*s <uality movement of the $%7&s, later helping to develop
improved understanding of key areas of focus such as cycle time variation in improving
manufacturing <uality and efficiencies in aerospace and other industries.
While /ord is renowned for his production line it is often not recogniEed how much effort
he put into removing the fitters* work to make the production line possible. ?ntil /ord, a
car*s components always had to be fitted or reshaped by a skilled engineer at the point of
use, so that they would connect properly. Ay enforcing very strict specification and
<uality criteria on component manufacture, he eliminated this work almost entirely,
reducing manufacturing effort by between 3&.%&J.
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Cowever, /ord*s mass production
system failed to incorporate the notion of "pull production" and thus often suffered from
over.production.
!oyota develops !P"
Toyota*s development of ideas that later became lean may have started at the turn of the
)&th century with !akichi Toyoda, in a textile factory with looms that stopped themselves
when a thread broke. This became the seed of autonomation and (idoka. Toyota*s @ourney
with :8T may have started back in $%+0 when it moved from textiles to produce its first
car. ;iichiro Toyoda, founder of Toyota 6otor 5orporation, directed the engine casting
work and discovered many problems in their manufacture. Ce decided he must stop the
repairing of poor <uality by intense study of each stage of the process. 8n $%+3, when
Toyota won its first truck contract with the :apanese government, his processes hit new
problems and he developed the ";aiEen" improvement teams.
Levels of demand in the ost War economy of :apan were low and the focus of mass
production on lowest cost per item via economies of scale therefore had little application.
Caving visited and seen supermarkets in the ?!-, Taiichi ,hno recognised the
scheduling of work should not be driven by sales or production targets but by actual
sales. =iven the financial situation during this period, over.production had to be avoided
and thus the notion of ull "build to order rather than target driven ush# came to
underpin production scheduling.
8t was with Taiichi ,hno at Toyota that these themes came together. Ce built on the
already existing internal schools of thought and spread their breadth and use into what
has now become the Toyota roduction !ystem "T!#. 8t is principally from the T!, but
now including many other sources, that lean production is developing. >orman Aodek
wrote the following in his foreword to a reprint of /ord*s Today and Tomorrow)
8 was first introduced to the concepts of @ust.in.time ":8T# and the Toyota
production system in $%7&. !ubse<uently 8 had the opportunity to witness its
actual application at Toyota on one of our numerous :apanese study missions.
There 8 met 6r. Taiichi ,hno, the system*s creator. When bombarded with
<uestions from our group on what inspired his thinking, he @ust laughed and said
he learned it all from Cenry /ord*s book." The scale, rigor and continuous
learning aspects of T! have made it a core concept of lean.
!ypes of waste
-lthough the elimination of waste may seem like a simple and clear sub@ect it is
noticeable that waste is often very conservatively identified. This then hugely reduces the
potential of such an aim. The elimination of waste is the goal of lean, and Toyota defined
three broad types of wasteD muda, muri and muraF it should be noted that for many lean
implementations this list shrinks to the first waste type only with reduced corresponding
benefits. To illustrate the state of this thinking !higeo !hingo observed that only the last
turn of a bolt tightens itKthe rest is @ust movement. This ever finer clarification of waste
is key to establishing distinctions between value.adding activity, waste and non.value.
adding work.
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>on.value adding work is waste that must be done under the present
work conditions. ,ne key is to measure, or estimate, the siEe of these wastes, to
demonstrate the effect of the changes achieved and therefore the movement toward the
goal.
The "flow" "or smoothness# based approach aims to achieve :8T, by removing the
variation caused by work scheduling and thereby provide a driver, rationale or target and
priorities for implementation, using a variety of techni<ues. The effort to achieve :8T
exposes many <uality problems that are hidden by buffer stocksF by forcing smooth flow
of only value.adding steps, these problems become visible and must be dealt with
explicitly.
Muri is all the unreasonable work that management imposes on workers and machines
because of poor organiEation, such as carrying heavy weights, moving things around,
dangerous tasks, even working significantly faster than usual. 8t is pushing a person or a
machine beyond its natural limits. This may simply be asking a greater level of
performance from a process than it can handle without taking shortcuts and informally
modifying decision criteria. ?nreasonable work is almost always a cause of multiple
variations.
To link these three concepts is simple in T! and thus lean. /irstly, muri focuses on the
preparation and planning of the process, or what work can be avoided proactively by
design. >ext, mura then focuses on how the work design is implemented and the
elimination of fluctuation at the scheduling or operations level, such as <uality and
volume. Muda is then discovered after the process is in place and is dealt with reactively.
8t is seen through variation in output. 8t is the role of management to examine the muda,
in the processes and eliminate the deeper causes by considering the connections to the
muri and mura of the system. The muda and mura inconsistencies must be fed back to the
muri, or planning, stage for the next pro@ect.
- typical example of the interplay of these wastes is the corporate behaviour of "making
the numbers" as the end of a reporting period approaches. 1emand is raised to *make
plan,* increasing "mura#, when the "numbers" are low, which causes production to try to
s<ueeEe extra capacity from the process, which causes routines and standards to be
modified or stretched. This stretch and improvisation leads to muri.style waste, which
leads to downtime, mistakes and back flows, and waiting, thus the muda of waiting,
correction and movement.
The original seven muda areD
Transport "moving products that are not actually re<uired to perform the
processing#
8nventory "all components, work in process and finished product not being
processed#
6otion "people or e<uipment moving or walking more than is re<uired to perform
the processing#
Waiting "waiting for the next production step, interruptions of production during
shift change#
,verproduction "production ahead of demand#
,ver rocessing "resulting from poor tool or product design creating activity#
1efects "the effort involved in inspecting for and fixing defects#
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Later an eighth waste was defined by Womack et al. ")&&+#F it was described as
manufacturing goods or services that do not meet customer demand or specifications.
6any others have added the "waste of unused human talent" to the original seven wastes.
/or example, six sigma includes the waste of !kills, referred to as "under.utiliEing
capabilities and delegating tasks with inade<uate training". ,ther additional wastes added
were for example "space". These wastes were not originally a part of the seven deadly
wastes defined by Taiichi ,hno in T!, but were found to be useful additions in practice.
8n $%%% =eoffrey 6ika in his book, ";aiEen Event 8mplementation 6anual" added three
more forms of waste that are now universally acceptedF The waste associated with
working to the wrong metrics or no metrics, the waste associated with not utiliEing a
complete worker by not allowing them to contribute ideas and suggestions and be part of
articipative 6anagement, and lastly the waste attributable to improper use of computersF
not having the proper software, training on use and time spent surfing, playing games or
@ust wasting time./or a complete listing of the "old" and "new" wastes see Aicheno and
Colweg ")&&%#
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!ome of these definitions may seem rather idealistic, but this tough definition is seen as
important and they drove the success of T!. The clear identification of non.value.
adding work, as distinct from wasted work, is critical to identifying the assumptions
behind the current work process and to challenging them in due course.
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Areakthroughs
in !6E1 and other process changing techni<ues rely upon clear identification of where
untapped opportunities may lie if the processing assumptions are challenged.
Lean implementation develops from !P"
The discipline re<uired to implement lean and the disciplines it seems to re<uire are so
often counter.cultural that they have made successful implementation of lean a ma@or
challenge. !ome
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would say that it was a ma@or challenge in its manufacturing
*heartland* as well.
Lean is about more than @ust cutting costs in the factory.
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,ne crucial insight is that
most costs are assigned when a product is designed, "see =enichi Taguchi#.
An e#ample program
8n summary, an example of a lean implementation program could beD