Lean manufacturing

What is lean manufacturing?

Characteristics of lean manufacturing

Lean manufacturing was developed by Toyota 
  • to optimize production - by eliminating waste.
  • building quality into manufacturing processes + recognizing the importance of cost reduction.

four defining characteristics:

Waste awareness
to banish seven types of waste: 
  • overproduction, 
  • unnecessary motion, 
  • repairs, 
  • overprocessing, 
  • waiting (for parts or for a machine to finish its cycle), 
  • excess inventory, and 
  • inessential transportation. 
frontline employees - Responsible for 
  • spotting waste and 
  • figuring out ways to prevent it lies with . 
  • Spread the solution quickly within the organization 

Continuous quality assurance. 
NOT - inspecting work after it is completed and then performing any necessary rework, 
DO - build in quality assurance at every step in the process. 
In some cases, frontline workers have the authority to stop a production line if they see it putting out substandard products. 

  • supported by standard-ized work instructions that prevent differences in execution and 
  • rigorous maintenance procedures that minimize breakdowns and other hiccups in machine performance.
Just in time (JIT)
aims to 

  • supply each process with
    • right quantity
    • right item
    • right time
  • normally associated with external suppliers, but can extends to internal functions. 
  • Central idea: continuous flow
    • elimination of stagnation in and between process steps --> 
      • minimize in-process inventory, 
      • avoid waste in transportation and motion, and 
      • improve feedback on defective output. 
  • Flexibility (reducing set-up times to the minimum)
    • to promote effective capacity utilization
    • cross-training employees to enable them to switch between assignments
  • minimum inventory
    • using tracking mechanisms to keep tabs on stock levels, 
  • avoiding bottlenecks 
    • to minimize work in progress (WIP), and timing deliveries to demand

Level production

Level production is the end state achieved by a lean manufacturing system. 

  • Peaks and troughs in volume are minimized to ensure optimum capacity utilization
  • process is designed to enable the fastest possible throughput
  • (internal perspective) tasks are balanced between work stations and process steps 
    • so that utilization is maximized and 
    • overall cycle time kept to a minimum. 

3 examples applying Lean Manufacturing in financial services

  • check processing, 
  • loan processing, and 
  • call centers


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