Lean manufacturing

Lean manufacturing is an American invented method of manufacturing goods aimed primarily at improving efficiency within the production system as well as response times from suppliers and customers. Its earliest applications can be traced back to German manufacturing principles, first implemented during the Industrial Revolution in agricultural production and small factories. However, the term "Lean" was not used to describe these and other manufacturing efficiency methods and philosophies until the 1980s.

Before WWII, Dr. William Edwards Deming began to formalize the first true "Lean" philosophy for modern manufacturing while working for the US Bureau of Statistics. Later, Deming invented the first "Lean" manufacturing method and management philosphy, known as Total Quality Management, which continues to be used as the foundational teachings of Lean today. From there, the Just-in-time manufacturing (JIT manufacturing) process grew, first in Japan and then around the world. Just-in-time manufacturing tries to match production to demand by only supplying goods that have been ordered and focuses on efficiency, productivity (with a commitment to continuous improvement), and reduction of "wastes" for the producer and supplier of goods. Lean manufacturing adopts the just-in-time approach and additionally focuses on reducing cycle, flow, and throughput times by further eliminating activities that do not add any value for the customer. Lean manufacturing also involves people who work outside of the manufacturing process, such as in marketing and customer service.

Lean manufacturing (also known as agile manufacturing) is particularly related to the operational model implemented in the post-war 1950s and 1960s by the Japanese automobile company Toyota called the Toyota Production System (TPS), known in the United States as "The Toyota Way". Toyota's system was erected on the two pillars of just-in-time inventory management and automated quality control.

The seven "wastes" (muda in Japanese), first formulated by Toyota engineer Shigeo Shingo, are:

The term Lean was coined in 1988 by American businessman John Krafcik in his article "Triumph of the Lean Production System," and defined in 1996 by American researchers Jim Womack and Dan Jones to consist of five key principles: "Precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection."

Companies employ the strategy to increase efficiency. By receiving goods only as they need them for the production process, it reduces inventory costs and wastage, and increases productivity and profit. The downside is that it requires producers to forecast demand accurately as the benefits can be nullified by minor delays in the supply chain. It may also impact negatively on workers due to added stress and inflexible conditions. A successful operation depends on a company having regular outputs, high-quality processes, and reliable suppliers.

Frederick Taylor documented many observations relating to manufacturing efficiencies and Henry Ford applied Taylor's and early German manufacturing principles at the Ford manufacturing plant in the early 1900s. However, these methods were limited to physical and organizational efficiencies and not the management philosophies and statistical methods Lean also requires. Toyota's Shigeo Shingo and Taiichi Ohno were first introduced to Lean's formalized manufacturing efficiency methods and philosophies after WWII by the father of "Lean Manufacturing", Dr. William Edwards Deming. Deming's Total Quality Management (TQM) lectures in Japan were widely celebrated and rapidly incorporated into Japanese manufacturing during the Reconstruction period.

In 1988 manufacturing effeciencies and philosophies were dubbed Lean by John Krafcik, and then were defined in The Machine that Changed the World and further detailed by James Womack and Daniel Jones in Lean Thinking (1996).