PRINCIPLES OF LEAN

MANUFACTURING

Purdue Manufacturing Extension Partnership

(800) 877-5182
www.mep.purdue.edu
What Is Lean?

LE101 Principles of Lean Manufacturing, V1

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Defining Lean Manufacturing

■ Lean manufacturing is a systematic approach to

identifying and eliminating waste (non-value-added
activities) through continuous improvement by
flowing the product at the pull of the customer in
pursuit of perfection.
- MEP Lean Network

LE101 Principles of Lean Manufacturing, V1

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Term: Value-Added
Value-added:
■ Any activity that increases
the market form or function
of the product or service.
❑ These are things the
customer is willing to pay
for.
Example: These two
parts are put together
to form an assembly.
4
At Buzz, which
of these were
there more of?
Non-value-added:
■ Any activity that does not
add market form or function
or is not necessary.
❑ These activities should be
eliminated, simplified,
reduced, or integrated.
Example: The top
component sits in the
plant for 4 days before
it is used.
Source: http://www.soliddna.com/SEHelp/ST6/EN/assemble_parts/plprt1a.htm
LE101 Principles of Lean Manufacturing, V1
Copyright 2018 Purdue University
Traditional Production Environment
Material

Assemble Assemble Assemble

springs diodes LEDs
Receive
materials
Ship
Store product product

Repair
defect
Kitting product
(organize Test product
raw materials)
Ship

? Which of these activities are valued added?

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Traditional Production Environment
Material

Assemble Assemble Assemble

springs diodes LEDs
Receive
materials
Ship
Store product product

Repair
defect
Kitting
product
(organize Test product
raw materials)
Ship

Value-Added Time: Minutes

ORDER Time in Plant: Weeks CASH

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Traditional Elements of Work

■ If we categorized the work that takes place in a traditional

manufacturing plant, we might see something like this:

Non-valued-
added activities Value-added
(those that do not activities
add value to the (those the
product) customer is willing
to pay for)

LE101 Principles of Lean Manufacturing, V1

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 Traditional Lead Time

■ Lead time is the total time needed to manufacture an item,

from order to customer’s receipt of the finished goods.

Lead time in a traditional manufacturing environment:

Material Assembly #1 Assembly #2 Packaging

production
Waiting Transport Staging Inspection Transport

Total lead time

= non-valued-added time = valued-added time

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Lean Elements of Work

■ The goal of lean is to optimize value-added activities by

minimizing non-valued-added activities:

Optimize value-
added activities

Minimize non-
valued-added
activities

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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 Lean Lead Time

Lead time in a lean manufacturing environment:

Material
Assembly #1 Assembly #2 Packaging
production
Transport Staging Inspection Transport

Total lead time

= non-valued-added time = valued-added time

? Is it possible to eliminate all non-valued-added activities?

LE101 Principles of Lean Manufacturing, V1

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Reduced Lead Time

■ Lean can lead to reduced lead time.

“One of the most noteworthy accomplishments

in keeping the price of Ford products low is the
gradual shortening of the production cycle. The
longer an article is in the process of
manufacture and the more it is moved about,
the greater is its ultimate cost.” — Henry Ford, 1926

LE101 Principles of Lean Manufacturing, V1

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Why Lean? Countries that are currently
competitive in manufacturing
include China, Germany, Japan,
and South Korea.

■ The marketplace is changing!

❑ The marketplace is now global.
❑ We can no longer assume that the world
wants our products.
❑ To remain competitive, companies must:
■ Grow
■ Innovate Adopting lean can help
■ Become more productive companies remain
competitive!

Source: https://www2.deloitte.com/global/en/pages/manufacturing/articles/global-manufacturing-competitiveness-index.html

LE101 Principles of Lean Manufacturing, V1

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Key Points

• Non-value-added activities are waste.

• Waste in manufacturing uses up time and
resources.
• The goal of lean is to eliminate wastes.
• Lean is a powerful system for reducing
costs, improving quality, and reducing
lead time.

LE101 Principles of Lean Manufacturing, V1

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The Eight Wastes

LE101 Principles of Lean Manufacturing, V1

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Wastes in Manufacturing

■ Eight wastes commonly exist in manufacturing:

D Defects
O Overproduction
W Waiting
Notice N Non-utilized talent
“DOWNTIME”! T Transportation
I Inventory The goal of lean
is to eliminate
M Motion these wastes.
E Excess processing

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Defects
What is it? What happens as a result?
Defects are when the product • Parts have to be reworked,
produced or service provided repaired, replaced, or
doesn’t match specifications scrapped.
or what the customer wants. • Information has to be
corrected.

■ Some causes of defects:

❑ Product not designed well.
❑ Employees not trained well or not provided work instructions.
❑ Equipment or tools not maintained.
❑ Poor or nonexistent quality control.
❑ Customer needs not understood.

LE101 Principles of Lean Manufacturing, V1

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Overproduction
What is it?
Overproduction is
• Producing more parts than can
be sold or have been already
requested by the customer.
• Making more than is required
by the next process (or earlier
or faster than).
What happens as a
result?
• The organization has capital tied
up in stock, raw materials, and
work in process (WIP).
• These items need to be stored
or moved around, tracked, etc.

■ Some causes of overproduction:

❑ Process setup takes a long time.
❑ Scheduling is not level (we are not exactly sure
when we will need items).
❑ Workload is unbalanced; some processes are faster than others.

LE101 Principles of Lean Manufacturing, V1

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Waiting Waste
What is it? What happens as a result?
Waiting for parts, People or machines are idle.
instructions, approval,
information, setup, etc.

■ Some causes of waiting:

❑ Production rates are mismatched.
❑ Equipment breakdowns, including upstream or
downstream.
❑ Process setup takes a long time.
❑ Quality problems exist upstream.

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Non-Utilized Talent
What is it? What happens as a result?
Non-utilized talent is the waste • Problem solving is slow or
nonexistent.
of not using people’s
knowledge, skills, or abilities. • Needed improvements aren’t
made.
• Employees have poor morale.

■ Some causes of non-utilized talent:

❑ Company culture doesn’t value employees.
❑ Low or no investment in training.
❑ The company has a low-pay, high-turnover strategy.

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Transportation Waste
What is it? What happens as a result?
Transportation waste is moving • You have to pay for material
parts and materials from one handling (people, equipment, etc.).
location to another.
• Damage or losses can occur in
transport.

■ Some causes of transportation waste:

❑ Overproduction.
❑ Plant layout is poor.
❑ Large batch sizes/high quantities of work in progress.

LE101 Principles of Lean Manufacturing, V1

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Inventory Waste
What is it? What happens as a result?
Inventory waste includes raw • Capital is tied up in inventory.
materials, work in progress
• Inventory needs to be stored or
(WIP), or finished goods on moved around, tracked, etc.
hand.

■ Some causes of excess inventory:

❑ A buffer is needed against inefficiencies and
unexpected problems.
❑ Batch size is large.
❑ Scheduling is not level/workload is unbalanced.
❑ Shipments by suppliers are unreliable.

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Motion Waste
What is it? What happens as a result?
Motion waste is any movement • Employees are doing things other
of people or machines that does than producing, such as lifting,
moving, searching, etc.
not add value to the product or
• In people, injuries that can lead to
service.
absenteeism; in equipment,
additional wear or premature
breakdowns.

■ Some causes of motion waste:

❑ The workplace or work areas are poorly laid out.
❑ The workplace is not organized.
❑ Work methods involve lifting, turning, or rearranging
the product being worked on.

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Excess Processing
What is it?
Excess processing is
efforts that add no value to
the product or service from
the customers’ viewpoint.
What happens as a result?
• Staff time is wasted. (What
else could they be doing?)
• Equipment and materials
are used unnecessarily.

■ Some causes of excess processing:

❑ True customer requirements not clearly defined.
❑ Over-processing to accommodate downtime.
❑ Lack of communication.
❑ Product changes without process changes.

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Review: Eight Wastes

■ Eight wastes commonly exist in manufacturing:

D Defects
O Overproduction
W Waiting
Notice N Non-utilized talent
“DOWNTIME”! T Transportation
I Inventory The goal of lean
is to eliminate
M Motion these wastes.
E Excess processing

LE101 Principles of Lean Manufacturing, V1

Copyright 2018 Purdue University
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Review: Lean Techniques

■ We eliminate waste and achieve lean manufacturing

by implementing the lean techniques:

Continuous Improvement
Pull/Kanban Cellular Manufacturing TPM

Quality at Source POUS Quick Changeover

Standardized Work Batch Reduction Teams

Value
Stream
5S System Visual Controls Plant Layout Mapping

LE101 Principles of Lean Manufacturing, V1

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Review: Traditional vs. Lean
Traditional
• Complex
• Forecast driven
• Excessive inventory
• Speed up value-added work
• Batch production
• Long lead time
• Quality inspected-in
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Lean
• Simple and visual
• Demand driven
• Inventory as needed
• Reduce non-value-added
• Small lot size
• Minimal lead time
• Quality built-in
LE101 Principles of Lean Manufacturing, V1
Copyright 2018 Purdue University
Review: Benefits of Lean

• Lead time** • Productivity**

DECREASE

• Work in • Customer satisfaction

INCREASE
process/Inventory** • Capacity
• Space** • Responsiveness
• Defects** • Quality**
• Cost • Profit!
• Waste!

Those items marked with ** are areas where you can expect significant gains.

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