What Is Lean Manufacturing?

The underlying principle behind lean manufacturing is rather simple; to continuously eliminate as much waste as possible in the manufacturing process. Reducing waste plays a significant role in maximizing profits and minimizing expenses allowing companies to become more competitive. 

The lean approach focuses on capitalizing on a company’s resources to get rid of or minimize losses in effectiveness and efficiencies that would otherwise lead to stunted production. These wastes include everything from project management tools for manufacturers to employee skillset. 

In lean manufacturing, waste refers to all the activities that use up resources without driving value to the end consumer. That said, only a small percentage of activities in the entire work process provide value to the customer is the industry is chock-full of waste. 

From unused materials to idle workers, all of which can’t be repurposed or recycled and reduce productivity, this emphasis on consistently minimizing waste is the foundation of lean manufacturing or production. No matter what industry you’re in, Prodsmart has customizable solutions to help simplify production management and tracking. 

What is Lean Manufacturing?

The term lean was first used in manufacturing by John Krafcik in an article published in the late ’80s based on his master’s in management thesis at MIT. He was a quality engineer in California at General Motors and Toyota joint venture before enrolling for his masters degree. 

Lean manufacturing or production refers to a methodology or collection of best practices designed to eliminate waste in the manufacturing process without compromising production. The goal is to remove all those unnecessary activities that don’t contribute to the customer’s perception of value. 

While the concept of lean production rose to fame thanks to Toyota Production System, it can be traced back to the Poor Richard’s Almanack by Benjamin Franklin. In it, he states that eliminating unnecessary expenses in the line of production could have a much more significant impact on profit than improving sales. 

How to Practice Lean Manufacturing

As mentioned above, lean manufacturing is made up of a variety of tools and techniques designed to identify and reduce waste and increase efficiency. Production processes with uneven and overburdened workloads are the primary sources of waste. 

By eliminating waste, businesses can reduce the cost of production while simultaneously improving the quality and time of production. However, it’s worth noting that not all wasteful activities or processes can’t be removed entirely because sometimes they’re a necessary evil. 

Some of the tools used in lean production include:

  • value stream mapping,
  • workflow visualization with Kanban boards, 
  • production flow analysis, 
  • multi-process handling etc. 

The Toyota Way is an alternative approach to lean manufacturing, and its main focus is on streamlining workflow to eliminate unevenness. Both methods have the same end goal; eliminating waste. 

The main focus of the former approach is to eliminate waste while the Toyota Way is to improve workflow, but in so doing, it also removes waste. 

Related: How to Take Control of Your Inventory Once and For All

Principles of Lean

After Krafcki first coined the term in 1988, David Jones and James Womack went on to define the core principles of lean manufacturing: 

  • Value: while producers are responsible for creating the product value, the customer is ultimately the one who defines it. Simply put, businesses need to get into their customers’ heads and understand the value of their services and products from the customer’s point of view.
  • Value stream: this refers to mapping the flow of information and material in the entire product lifecycle. The goal is to identify and eliminate stages where waste is created. 
  • Flow: effectiveness and efficiency are the two underlying concepts behind this principle, i.e., to prevent interruptions in production from providing a consistent product flow through the value chain.
  • Pull system: establish a pull system in stages of production where there’s a continuous flow, i.e., demand initiates and drives production. 
  • Continuous improvement: continuously strive to improve the production process so that lead time and stages of production are effectively reduced. 

Types of Waste in Lean Manufacturing

warehouse trucks lean manufacturing

One of the main hindrances to building efficient and robust work processes are wasteful activities or Muda. After careful observation, one of Toyota Production System founders, Taiichi Ohno identified seven types of waste in lean manufacturing

  • Wasteful transportation: moving resources excessively if it doesn’t increase product value, can lower product quality, take up valuable space, time, and machinery, not to mention the cost. 
  • Excessive inventory: overstocking may be a standard business practice but doesn’t add value and only increases depreciation and storage fees. 
  • Waiting: whenever there’s an interruption in the production process, which wastes valuable time. 
  • Overproduction: when production exceeds customer’s demand, it triggers the types of wastes. 
  • Defects: defective products can be turned into scrap or reworked, which wastes valuable resources. 
  • Overprocessing: this refers to wasting valuable resources on features customers aren’t willing to pay for. 
  • Motion: The wasteful movement of personnel and assets can cause injuries and increase production time.

Related: Tips for Creating the Ultimate Bill of Materials

Goals and Strategy of Lean Manufacturing

Eliminating or minimizing waste is vital to lean manufacturing, albeit there is a controversy on whom the end consumer is. For some, lean manufacturing is a methodology whose primary goal is to maximize profits, while for others, it works solely for the benefit of the end consumer. 

Lean manufacturing revolves around optimizing activities and processes with the primary goal of eliminating waste. While these may seem like easy steps, they play a significant role in cutting production costs while allowing a company to maximize the quality and, subsequently, the value of products. 

In lean, the focus is on improving efficiency throughout a product’s lifecycle without compromising on quality. It emphasizes making continuous improvements, i.e., taking small steps to affect sustainable changes instead of sudden drastic changes that will disrupt the current workplace systems.

Doing so ensures that the personnel working with these materials, machinery, and processes will implement the changes moving forward. 

Goal #1: Improve Quality

For companies to become competitive and get an edge over their competitors, they have to continuously evolve with their end customer’s dynamic needs and wants. Therefore, each of the company’s processes and activities should be developed to meet their exact requirements and expectations. 

One way of doing this is through total quality management—abbreviated to TQM. It refers to a company-wide effort to drive success by doing everything necessary to improve customer satisfaction. 

The key to thriving in any market is never to become complacent. On that note, TQM’s primary focus is on providing an environment for continuously improving quality. 

Goal #2: Reduce Time

Lean manufacturing also focuses on reducing the time it takes workers to complete each stage of the production process, i.e., collecting material, packing, shipping, etc. One way of doing this is by evaluating employee movement on the factory floor. 

Some of the crucial questions here are: 

  • What’s the average distance covered by an employee for each shift?
  • Do employees regularly double back when servicing orders?

This can be done by reorganizing how orders are presented, rearranging the inventory to have fast-moving items as close as possible to the shipping area, etc., it effectively reduces the time it takes workers to fulfill an order, adds value by driving efficiencies and helps cut costs because after all, time is money. 

Goal #3: Eliminate waste

Eliminating waste is an integral element of lean manufacturing and has grown to become a widespread business practice for cutting costs and optimizing limited resources. Doing so provides companies with the opportunity to identify significant areas that need to be improved to boost performance. 

That said, not all activities and processes in an organization add value to the end consumer; in fact, only a small percentage of the entire production process adds value. Furthermore, some activities deemed wasteful can be eliminated from the production process and are a necessity. 

One example of such an activity is product testing—customers don’t want to pay for it, but without it, there’s a high chance of compromising quality. 

Goal #4: Reduce costs

One way for companies to save money is by reducing wasteful or unnecessary activities that take up valuable resources, labor, and time. What’s more, according to a study by LERC—Lean Enterprise Research Center, nearly 60% of activities in the manufacturing process are wasteful and don’t add value from the customer’s perspective. 

Fortunately, lean manufacturing provides a unique opportunity to identify and improve upon these wasteful activities. The wide array of techniques in Lean allows companies to improve the quality of the product while simultaneously lowering the costs of production. 

Moreover, as we mentioned above, overproduction is a primary type of waste and incurs in considerable costs in terms of storage and warehousing fees. By helping to identify the unnecessary movement of resources, lean manufacturing also helps cut down costs for the extra machinery, space, and time. 


Lean methodologies provides businesses of all types, not just the ones in manufacturing, a unique opportunity to identify and eliminate waste from their production processes. When companies focus on continuously improving quality, they’ll be able to improve customer relations and maximize profits. 

From assessment of your production process to real-time reports and analysis, Prodsmart has every service you need to improve your company’s operations. Contact us today to find out more about how we can help to make your manufacturing process more efficient and successful today.