For many progressive manufacturing companies, the concept of "Lean" has evolved from its original definition as a strategy for efficient manufacturing and has now become an objective worth pursuing across every aspect of the business. Why? Because the goals of Lean are not limited solely to production. Eliminating waste, increasing efficiency and productivity, and striving for continuous improvement are now acknowledged as proven tactics in the competitive battle to improve operational performance, product quality, customer relationships and the financial bottom line.

The fact is that manufacturers can begin to adopt a Lean philosophy and expand the beneficial effects of Lean across virtually every business process in the enterprise. In doing so, over time, a company can shift its focus to become more customer-centric, optimize its supply chain management, and successfully align all of its business processes to advance corporate goals.

From a "big picture" point of view, here are five key steps an organization needs to take to begin implement Lean thinking, principles and practices. These include:

• Specify – Since the most dominant underlying principle of Lean is the creation of value for the customer, the first step calls for breaking down and analyzing the entire value chain to calculate the perceived customer value delivered by each process area.
• Map – Once the value chain is broken down, the various steps are valued and mapped in their respective places according to value delivered. Those areas that do not contribute to customer value are considered as wasteful and either minimized or eliminated. The remaining elements form the foundation for developing a true customer-focused value chain.
• Flow – The purpose of this step is to create a smooth and efficient process flow between the value-added steps identified in order to transform the chain into a value stream for the company. The increase in flow will ultimately improve lead times and eliminate "bull whip" effects, creating maximum efficiency and productivity.
• Pull – Pull and flow are two of the most important elements of Lean Manufacturing and its implementation. Once the true value stream is established, products can be manufactured in alignment with actual customer demand and not by assumptions or arbitrary forecasts.
• Perfect – The final and very important step is bringing the principle of continuous improvement to the Lean Manufacturing initiative. We have all seen how complacency and stagnation can plague an organization - whether it is a championship sports team, a small to midsize business, or a Fortune 500 company. It is essential that an organization not allow the initial taste of Lean success to get in the way of their continual pursuit of perfection. Ongoing process improvement is absolutely key to sustaining a competitive edge.

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Eliminate waste. Increase workflow efficiency. Strive for continuous improvement. These are just a few of the phrases manufacturers have come across regarding Lean Manufacturing and its benefits. Lean has become a proven method for improving operational performance, product quality, customer relationships and the financial bottom line.

In this paper, we will take a closer look at Lean Manufacturing — how it began and why, its underlying principles and practices, where it has been and, most importantly, how today's manufacturers can undertake lean initiatives to drive significant improvements in virtually every aspect of their operational and business performance.

A Brief History of Lean

The basic principles of Lean Manufacturing dates back 50 years to a complete re-thinking of processes at Toyota. This led to that company's development of the Just-In-Time (JIT) philosophy and the Toyota Production Systems (TPS) — all steps taken to enable Toyota to compete in both domestic and foreign markets with limited resources and capacity. The company's overwhelming success in the ensuing decades became a case study and model for manufacturers all over the world, and still sets the standard today.

In past years, repetitive manufacturers have experienced the most success with Lean practices because remapping the value stream was straightforward, the implementation process was often limited to the factory and customer demand was somewhat more predictable. As time went on, however, competitive pressures on all manufacturers continued to grow and magnify weaknesses in the organization. Today, shorter product life cycles, increases in customer expectations and foreign competition are forcing companies to further reduce costs and improve supply chain flexibility and agility.

Since the introduction of Lean Manufacturing half a century ago, numerous companies have been exposed to the Lean philosophy and impressed by its success stories. Unfortunately, many businesses sought quick answers by implementing piecemeal approaches, not fully realizing or understanding the methodology and commitment of resources required for success.

Other companies have been able to leverage Lean principles to realize substantial positive results. As a result, the concept of Lean has enjoyed steady growth and is again being discussed in executive meetings and IT departments. Much of this renewed interest is due to the changes that have occurred in both the application of Lean and competition in the marketplace.

Defining Lean Principles

To better understand the changes in the application of Lean and competition in the marketplace, we need to revisit the basic fundamentals of Lean and its critical success factors.

For a business to be called "Lean," management needs to adopt a philosophical strategy that is relentless in its efforts to create value for the customer through the elimination and prevention of waste, such as excess inventory, needless motion and other time and resource-consuming activities. Essentially, Lean aims to create a value stream comprised only of processes that add perceived customer value.

As more value is created with fewer resources, lean operations can increasingly focus on allowing customer demand to "pull" products and services through production and the supply chain, rather than "push" products out to customers based on plant capacity, forecast assumptions or other factors. However, unless there is stability and optimal flow, the Lean value stream cannot meet the demand that is pulled through the system without using a considerable buffer inventory.

Flow, which is created through communication and synchronization, will minimize delays within the system and allow for collaboration. This customer-focused value stream ultimately improves productivity, decreases waste, creates flexibility and responsiveness and increases customer satisfaction, while reducing inventory and adding to the bottom line.

5 Steps Toward Implementing Lean

From a 'big picture' point of view, there are five key steps an organization needs to take to begin implement Lean thinking, principles and practices. These include:

• Specify – Since the most dominant underlying principle of Lean is the creation of value for the customer, the first step calls for breaking down and analyzing the entire value chain to calculate the perceived customer value delivered by each process area.
• Map – Once the value chain is broken down, the various steps are valued and mapped in their respective places according to value delivered. Those areas that do not contribute to customer value are considered as wasteful and either minimized or eliminated. The remaining elements form the foundation for developing a true customer-focused value chain.
• Flow – The purpose of this step is to create a smooth and efficient process flow between the value-added steps identified in order to transform the chain into a value stream for the company. The increase in flow will ultimately improve lead times and eliminate "bull whip" effects, creating maximum efficiency and productivity.
• Pull – Pull and flow are two of the most important elements of Lean Manufacturing and its implementation. Once the true value stream is established, products can be manufactured in alignment with actual customer demand and not by assumptions or arbitrary forecasts.
• Perfect – The final and very important step is bringing the principle of continuous improvement to the Lean Manufacturing initiative. We have all seen how complacency and stagnation can plague an organization – whether it is a championship sports team, a small to midsize business, or a Fortune 500 company. It is essential that an organization not allow the initial taste of Lean success to get in the way of their continual pursuit of perfection. Ongoing process improvement is absolutely key to sustaining a competitive edge.

Eliminating the 7 Areas of Waste

Preventing or at least minimizing waste is another key principle of Lean Manufacturing. Seven areas of waste that can plague a manufacturing enterprise include:

• Overproduction – Inaccurate demand forecasting and faulty communication are a few reasons why manufacturers tend to produce more than their customers need or want. Simply put, a business that persists in producing more products than the market demands is simply wasting time, money, energy and labor resources.
• Excess Inventory – A direct result of overproduction and long cycle times is excess inventory, whether in raw materials, work-in-process or finished goods. This type of waste can be especially burdensome when it begins to take up space, requires maintenance/ record keeping, and freezes up a good portion of liquid assets.
• Transportation and Logistics – When creating shorter cycle times, a good place to start is the transportation segments of the value stream. Any time you have materials, parts or finished goods in transit, there is potential for enormous waste because the parts and goods are sitting in a container creating no value.
• Excess Motion – Similar to transportation, motion creates waste when materials, products, equipment and people are used inefficiently. Excessive movement should be automated where applicable or eliminated altogether so that product cycle times may be reduced.
• Design/Engineering – Products should only carry the value that is perceived, needed or appreciated by the customer. If customers cannot see the value in a particular product feature or understand its purpose, then there is no reason to include it in the first place. This kind of waste is often present in product development areas, such as design and engineering.
• Excessive Waiting – A byproduct of poor process design, waiting time creates lags in the system and interrupts efficient flow, which not only affects that particular phase of the operation, but also the ones that come before and after as well. This "bullwhip" effect is a common occurrence that creates many capital and risk issues.
• Errors – As is commonly known, the expense and effort involved in repairing damage or defects, and handling scrap, is typically more than the cost and labor required to prevent them. Taking preventive measures and focusing on creating an error-free production process will lead to higher productivity and a smoother experience for everyone involved, including the customer.

10 Technical Elements of Lean Manufacturing

In its Lean initiative, Toyota instituted five s-words — Seiri, seiton, seiso, seiketsu and shisuke — which can be roughly translated as: Sort, Simplify, Shine, Standardize and Sustain. The purpose of these directives is to create a clean and organized work environment that is consistently productive. Here are nine additional ways in which Lean principles are put into action:

• Visual Control – An important aspect of Lean, visual controls promote the importance of