What is lean manufacturing?

By | July 13, 2016

The following post is excerpted from the manuscript of my book about Lean Media. I will respond to comments, corrections, and other feedback at the bottom of the page.

I was introduced to lean business theories while attending MIT. One of my Supply Chain Management instructors, Charles Fine, mentioned lean manufacturing in a discussion of different approaches to producing textiles, electronics, and other factory-made goods.

I learned that lean manufacturing was an established idea in heavy industry, emerging from the study of successful Japanese companies in the 1970s and 1980s. At the time, there was widespread angst over unexpected gains by Japanese auto and electronics manufacturers, and a desire among businesses in the West to understand why. It wasn’t just the cozy relationships enjoyed by Japanese industrial conglomerates, or favorable trade conditions. At certain Japanese companies, there was a whole different mindset which emphasized eliminating waste, and not only on the factory floor. Cutting waste extended to suppliers’ facilities, and even to corporate offices.

Eliminating waste was the core lean concept. It had arisen in Japan owing to the country’s limited access to natural resources, as well as a corporate culture that prized harmony and consensus over wasteful internal conflict and rivalry.

Lean manufacturing and the Toyota Production System

The poster child for lean manufacturing was the Toyota Production System. The company’s website gives the following definition:

A production system which is steeped in the philosophy of “the complete elimination of all waste” imbuing all aspects of production in pursuit of the most efficient methods.

The Toyota Production System extended the idea of eliminating waste into key principles that could guide operations. There is jidoka (“automation with a human touch”) and genchi genbutsu, an approach to identifying and overcoming obstacles by observing problems first-hand, whether on the factory floor or on the road. Toyota also pioneered just-in-time manufacturing, which emphasizes making only what is needed in the amount required. Toyota’s kanban process served as a production control system for managing JIT and making full use of its workforce. In sum, lean manufacturing allowed Toyota and other producers to operate more efficiently by limiting inventory, increasing collaboration, streamlining assembly line operations, and reducing costs.

Our supply chain management class discussed the benefits of just-in-time production for parts procurement. Until the late 1900s, factories often maintained warehouses of components and other parts needed for production. The rationale for keeping such a large supply related to economies of scale and a desire to avoid expensive assembly line disruptions. However, there was a huge cost associated with purchasing and warehousing this inventory. In lean terms, it was incredibly wasteful.

Companies that follow the just-in-time philosophy do not have to deal with massive inventories of parts. Indeed, companies following a just-in-time approach procure components in smaller quantities, and only when they are needed—sometimes with just a few days or weeks’ notice. This requires a flexible and dependable supply chain that can quickly turn around an order. It takes a lot of coordination to make it work, but it can result in significant savings and manufacturing efficiencies.

For a media person like me, lean manufacturing was interesting. But I did not see much of a connection to what was going on in my field. With the possible exceptions of print publishing and DVD manufacturing, what media companies needed to consider an obscure supply-chain management theory from Japan? I had my own way of evaluating media ventures, and a lesson from heavy industry was about as relevant to my world as flying a rocket to the moon.

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