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The Lean Manufacturing Handbook

This Lean Manufacturing web tutorial is adapted from Continental Design & Engineering's Lean Manufacturing Handbook. Digital copies of the complete workbook are available for download for your staff to assist in building your own "Lean Team." See below to read the Lean Manufacturing Handbook online, or simply complete the short form below to download your own digital (PDF) version. You will receive an email with a download link.

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The Lean Manufacturing Handbook
by Tom Epply
Assisted by Judy Nagengast
Second Edition

The Purpose of this Handbook

This booklet was written to give a simple explanation of Lean Manufacturing for anyone to understand. It is meant for engineers, purchasing agents, company clerks, newspaper reporters, schoolteachers, or anyone else who wants to find out about Lean.

It is by no means a complete text on Lean, but does include an addendum that will point the way to further Lean knowledge for anyone who is interested. Resources for Lean training and support are included in the booklet and where appropriate, Continental's Lean services are outlined.

Lean is a large area of expertise, and no booklet could possibly cover it all, but it is my hope that you will gain an understanding of Lean principals and be motivated to find out even more about this quiet revolution that is transforming worldwide manufacturing.

What is Lean Manufacturing?

Lean Manufacturing is a manufacturing system and philosophy that was originally developed by Toyota and is now used by many manufacturers throughout the world. At Toyota the system is referred to as the Toyota Production System. Other manufacturers have adapted the system to meet their own needs and assigned a proprietary name to it, such as Delphi Automotive's Delphi Manufacturing System. Therefore the term Lean Manufacturing is a more generic term and refers to the general principals and further developments of Lean.

The term Lean is very apt because in Lean Manufacturing the emphasis is to cut out the "fat" or waste in the manufacturing process. Waste is defined as anything that does not add value to the customer. It could also be defined as anything the customer is unwilling to pay for.

For example, if you order a shirt to be custom made, it may take 6 weeks. However the actual time the tailors or seamstresses are working on the shirt is only 5 hours. The rest of the time is taken up by such things as material ordering, waiting between processes and inefficient shipping practices. This extra time does not add value to you, the customer. As Lean Manufacturing principals are applied to the shirt-making process, one would see a reduction in delivery time from 6 to 5 to 4 weeks and even less. The ideal shirt-making operation would be streamlined to give you, the customer, what you want, when you want it at the lowest possible cost within the least amount of time.

Though they may not call it Lean, the "Eyeglasses in About an Hour" companies have applied many Lean principles to their operation. What used to take weeks is now done in about an hour, adding value to the customer. It is no surprise that these operations have opened up all over the country. What was once thought of as impossible speed of delivery is now commonplace. Applying Lean Manufacturing principles gives manufacturers these types of results on a routine basis.

Why do you say "add value to the customer" vs. "add value to the product"?

These are two distinctly different things. For example, a custom made shirt may be made more valuable by adding extra stitching, using top of the line fabric and adding a monogram. All these things add value to the product in terms of quality and the longevity of the product. However, if the customer just wants a basic shirt that fits well and that will last about two years, then these things do not add value to him. He will not be willing to pay a premium to have a more valuable product and the added extras are actually a form of waste.

Another example of this would be UPS Ground vs. Fed Ex overnight. In Indiana one can ship UPS Ground to Michigan and it will arrive the next day over 90% of the time for a cost of about $3 or $4. Fed Ex offers an upgraded product of next day delivery to Michigan 100% of the time. You can even select a 10:30 am delivery time. The price of this service is closer to $10, over twice the cost of the UPS Ground.

Obviously the Fed Ex product has more value. However, in many instances the customer does not require a 100% guarantee and is only willing to pay for a 90% probability of next day delivery. So, unless the customer puts a value on a 100% delivery guarantee, he will be unwilling to pay the extra cost.

Is speed of delivery the main benefit of Lean?

Improved speed of delivery is only one of the benefits of Lean. Lean deals with the reduction or elimination of many types of waste with lowest cost and customer defined quality as driving forces. In Lean technology, identifying and eliminating waste is so important that it even has its own terminology. In Lean, waste is called MUDA, which comes from the Japanese term for waste.

Lean identifies seven types of waste:

1. Over-Production - Obviously a product that cannot be sold or has to be dumped at a reduced price is wasteful. Also producing product before the customer needs it requires the part to be stored and ties up money in inventory.

2. Inventory - Excess Inventory ties up a great deal of cash, which is wasteful. Stockpiling inventory between processes is wasteful.

3. Conveyance - Unnecessarily moving a part during the production process is wasteful. It can also cause damage to the part, which creates wasteful rework.

4. Correction - Having to re-work parts because of manufacturing errors is a large source of waste. Additionally, sorting and inspecting parts is wasteful and can be eliminated by error proofing (designing your processes so that the product can only be produced one way, which is the correct way, every time).

5. Motion - Unnecessary or awkward operator motions put undue stress on the body and cause waste. Improvement in this area should result in reduced injury and workman's compensation claims.

6. Processing - Unclear customer requirements cause the manufacturer to add unnecessary processes, which add cost to the product.

7. Waiting - The operator being idle between operations is wasteful. It is acceptable for the machine to wait on the operator, but it is unacceptable for the operator to wait on the machine.

By eliminating waste you can do more with less:

Less capital equipment
Less floor space
Less operator effort
Less direct labor
Less indirect labor
Less inventory
Less lead time

To see and eliminate waste in the work environment requires a major shift in one's understanding as to what waste is. The old school definition of waste is usually described as scrap and rework. To truly implement a Lean Manufacturing System, you must first change your definition of waste to anything that does not add value to the customer. Once you have changed your mindset, you will see opportunity after opportunity for eliminating waste.

How does Lean Manufacturing differ from traditional manufacturing?

Traditional manufacturing is often called mass production or batch-and-queue (waiting in line) production. In traditional manufacturing, similar processes are grouped together (paint, welding, fabrication, etc.) and a large batch of parts is processed and then held in a queue waiting for the next process. In this system a batch of parts is put through Process A and set aside. They are then moved to the next area where Process B is done to the batch. The parts then wait in a pile for the next process. After a while they are shifted to another area where Process C is completed on the batch. This batch-and-queue process is continued until the part is completed and shipped.

    Lean Manufacturing Handbook Menu
  1. The Lean Manufacturing Handbook
  2. What does "Just-In-Time" mean?
  3. How was Lean Manufacturing Developed?
  4. How do I implement Lean Manufacturing?
  5. Do we need outside help to get Lean Manufacturing?
  6. Tell me more about the Lean Implementation Workshop you offer
  7. About the Author - Tom Epply

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