Vitor Ferreira, a lean manufacturing expert with decades of experience at Michelin and Bridgestone, puts it bluntly in our recent podcast: If you hold 250,000 tyres in a warehouse but only 30,000 move, you hold 220,000 units of waste.
You pay to store them. You pay to insure them. You pay people to count them.
To eliminate waste and optimise production, you must understand the core lean concept driving the system. Lean management demands more than boards and tape. It demands flow.
Whether you run a manufacturing plant or manage a complex lean project, understanding the five principles of the lean approach helps you succeed with fewer resources. Here is how you can apply these principles of lean today.
Value defines everything
The first lean principle asks a simple question: What does the customer value?
Value for the customer signifies only what the end customer pays to receive. Anything else represents waste.
When you adopt this lean concept, you see your factory differently. You stop looking at individual departments and start analysing the value stream. Work exists to move material through a manufacturing process to the customer. Waste includes anything sitting inside that stream that stops the flow. Creating value for the customer means removing those blockages.
The hidden cost of “just in case”
Many manufacturing industry leaders fall into a trap. They fear running out of parts or facing machine breakdown. So, they build buffers. They use a “just in case” strategy, which creates overproduction.
Overproduction is the most dangerous type of waste because it hides all other problems. If you maintain a large buffer, you fail to see the defect rate until it’s too late. You fail to see the root cause of a problem because you hold plenty of stock.
To minimise waste and increase efficiency, look at the data. According to research on supply chain costs, inventory carrying costs often comprise 20 to 30 percent of your total inventory value.
If you hold $1 million in excess inventory “just in case”, you bleed up to $300,000 a year. That cash could improve quality or upgrade your automotive assembly systems. Waste reduction here funds growth elsewhere.
Flow exposes the truth
Lean aims to create continuous flow. When flow runs poorly, bottlenecks appear. When flow runs smoothly, problems become visible immediately.
Lean practices like 5S and Kanban serve visibility, not just organisation. 5S equals productivity, not housekeeping. It ensures that wasteful activities like searching for tools do not interrupt the workflow.
Creating value requires you to remove the rocks from the river. You cannot do that if the river floods with inventory.
This applies across various industries. Whether in lean construction or process manufacturing, flow remains king.
The just-in-time reality
Just-in-time remains a famous lean production term. It means producing the right quantity at the right time to meet customer demand.
But you cannot apply just-in-time blindly. Lean strategy requires context. If your supply chain proves unstable, you might need a safety stock.
However, the goal remains the same. You want a pull system. You want customer demand to trigger production.
When you push products based on a forecast, you create work in process that might never sell. When you pull based on demand, you align your resources with reality. This lean approach reduces lead time and frees up cash.
Continuous improvement and lean culture
Continuous improvement, or Kaizen, acts as the engine of lean. Perfection remains impossible but the pursuit of it drives the business forward. This practice of continuous improvement relies on the PDCA (Plan-Do-Check-Act) cycle.
Lean culture requires respect for people. Your operators know where the waste lives. They see the unnecessary movement. They know which work processes frustrate them. While the manufacturing sector produces a staggering amount of physical scrap, a lot of waste also takes the form of non-utilised talent.
If you fail to engage your team in problem-solving, you waste their potential. Lean initiatives fail when they come from the top down. They succeed when the front line owns the improvement process.
How Lean Six Sigma work with digital tools
Some people ask if digital technology will replace lean and Six Sigma. The answer is no. Digital tools amplify lean concepts.
Value stream mapping used to happen on paper. Now, real-time data shows the production line status instantly. You can identify bottlenecks faster. You can see root cause patterns that a human eye might miss.
To see how we combine lean thinking with digital solutions, read our article on whether digital will replace lean.
Implementing lean project management
You do not need to be Toyota to use the Toyota Production System (TPS). You just need to start using lean principles.
Since the publication of The Machine That Changed the World, companies have tried to copy many lean tools and techniques. But copying tools without culture fails.
Here is a simple introduction to lean implementation:
- Identify value: Look at your products and services from the customer’s eyes.
- Map the stream: Use value stream mapping to find the waste.
- Create flow: Eliminate the buffers that hide problems.
- Establish pull: Stop overproduction.
Seek perfection: Make continuous improvement a daily habit.
Maximising value to the customer
Whether you analyse business processes, lean construction, or automotive assembly, the concept of lean remains the same.
Reduce waste. Add value to the product. Respect people.
Organisational success comes from best practices that reinforce the principles of the lean production system.
If you are ready to build a production system that supports these lean methods, we can help. Jendamark provides the world class automotive assembly systems you need to drive operational excellence. Let’s build a lean enterprise together.
