Impact of Lean Principles On Your Business
Let’s look at the importance of Lean principles, and how Lean can impact your business. Before we begin let’s review a definition of Lean.
Lean or Lean Manufacturing is a method of systematically eliminating waste in an operation, typically a production or manufacturing system. The waste can be through overburden or unevenness in work loads. The concepts come from these Japanese words meaning waste.
- Muda – means waste or any activity that consumes resources, but does not add value – this can be in design, distribution, manufacturing, customer services, and related processes
- Muri – means waste created through overburden
- Mura – means waste created from an unevenness of work loads
Let’s also review that it was during the post-WWII period of reconstruction in Japan that the idea of Lean was developed by TaiichiOhno – a Toyota executive. The ideas of Lean were further developed in 1996 with the publishing of Lean Thinking from authors Jones and Womack.
Impact on Business
When you use Lean Manufacturing thinking you try to do more with less. You also attempt to reduce or eliminate the waste that comes with your business processes. You reduce or eliminate what adds no value to the customer.
This means you can positively add to your bottom line. So the impact of Lean principles can help you with your business results.
As Lean reduces waste it also increases efficiency. This can relate to a production line with an impact on various parts of a business.
Your business could be impacted by:
- Adjustments needed due to converting to the new thinking of Lean
- Changes to your supply chain
You must plan for these changes and challenges to get a greater benefit from Lean. Some of the ways you could see an impact on your business is in efficiency, inventory, and quality.
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Quality can change when you implement Lean methods. This is because with Lean processes you deal with problems effectively at the source. You do root cause analysis and rely on input from people who do the work.
When you improve quality you have:
- a satisfied customer with more repeat business
- fewer claims and service calls
Instead of spending time on these issues of poor quality, you spend time developing a product with high quality and no defects. Imagine you work on a production line that makes plastic toys. Instead of reworking or removing scrap you determine what causes scrap and spend time on fixing and further improving the process.
More about the Business Impact
Waste should be at a minimum with Lean processes. Again with our example of a line that makes plastic toys, with a Lean process, you remove the sources of the waste and recycle any low-quality products. When you cut down on waste you decrease your business costs. This makes your products more competitive. It also increases profitability.
Inventory changes can happen with Lean processes and can changes including reduced waiting time on the assembly line. Lean processes typically work with an improved production line and improved forecasting for material needs. This can include just in time techniques. This means you work closely with your supply chains to keep inventory at an optimal level. You have the material you need at every stage of making the product. You provide products as a customer places an order.
This impacts your business with:
- raw material suppliers
- sales numbers
Efficiency improves with Lean processes. This means you look at process flow. With a production line one group waits for reduced time for work from the group before them in the production line. Everyone works together to see where there are longer wait times. Everyone works together to remove bottlenecks. This saves you money and helps improve your bottom line.
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