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Posted by Brian Thomas - 06 June, 2019

Lean Manufacturing Principles That Save Money

It’s no secret that every business out there, regardless of the industry, wants to cut down on unnecessary expenses wherever they can. After all, it’s everyone’s goal to make more money than they spend at the end of the day. So then why do companies spend extra money through inefficient manufacturing practices?

Even with the best of intentions, many companies dump capital into surprisingly wasteful pitfalls, from transportation, to inventory excess, to even just poor workflow. One solution? The philosophy of lean manufacturing. Lean manufacturing, when implemented correctly in your workplace, can help you cut down on excess spending and improve your overall revenue.

What Is Lean Manufacturing?

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Simply put, lean manufacturing is just the applied philosophy of continuous improvement, with the goal of increasing system-wide efficiency. The emphasis in lean manufacturing is placed on overall efficiency and maximizing the productivity of the entire system, rather than just particular sections. If one aspect of a production line is more efficient than another, for example, that doesn’t help the whole system become more efficient. Productivity and efficiency in lean manufacturing is based on the weakest link in the chain; if something’s causing a slow-down in your manufacturing, that’s where the focus should be.

The result, in theory and often in practice, is a more streamlined work environment that reduces the amount of non-value added activity. This means that people spend less time fixing problems that come up in the manufacturing process and more time on manufacturing itself. Eventually, this leads to greater output and reduced spending on resource-draining issues.

What Problems Does Lean Manufacturing Prevent?

Lean manufacturing is designed to focus on the weakest links in your manufacturing process and cut down on wasteful issues in those areas. While it might seem obvious to reduce waste in your manufacturing processes, the problem comes from certain types of resource drains and waste sources being overlooked. These are often considered common parts of the manufacturing process, but could actually be cutting into your overall productivity significantly.

Production waste: You’d be surprised to learn just how much of your product isn’t actually reaching your end customer. Product can be lost at many points during manufacturing, and all of them cut into your profits. Defective products, transportation loss, and more all can be considered wasted product under the philosophy of lean manufacturing.
Inventory issues: Has your inventory been overflowing with unsold product before? Did you accidentally make too much of your primary product, and then had to find a way to store or get rid of it? Unsold inventory takes up storage space and resources that could be better directed elsewhere.
Workflow woes: If you’ve got an unbalanced manufacturing process, it likely results in bottlenecking at some point along the way. It may also cause a wait time or slower turn-around for overall production, meaning your customers are likely going to be less satisfied in the long run.
Talent troubles: Lean manufacturing takes more into account than just your mechanized production methods. Proper utilization of talent is a must with lean manufacturing; otherwise, you’re wasting potential that could be used to improve your manufacturing process.

Why Not Focus On Manufacturing Strengths?

When it comes to lean manufacturing, many people are skeptical about its ability to improve manufacturing processes and save money. This is because it emphasizes balancing the workplace and focusing on the weaker aspects of your company’s workflow, rather than the strengths. Lean manufacturing is based on pulling the problem spots up to the standard of the rest of your manufacturing, instead of pushing ahead the strengths in a way that would simply increase the gap between your company’s strengths and weaknesses.

While it’s easy to think that zeroing in on your existing strengths will help improve your revenue, it ignores the parts of your business that are actually costing you money. Focusing on your strengths can help you earn more money, it’s true; however, you’ll be losing money in all the areas you’re choosing to overlook. Ignoring your company’s weak points in manufacturing means you’ll continue to lose money in spite of your gains, and your system will still be inefficient in ways that could be easily resolved.

The Bottom Line For Your Bottom Line

At the end of the day, lean manufacturing can help you streamline your production and workflow in ways that can save you shocking amounts on your normal business expenses. Lean manufacturing helps you slim down operational expenses to maximize profits, while also cutting down on frustrating workflow issues like inventory, product loss, and bottlenecking. Making use of this particular philosophy in your manufacturing processes can even improve customer satisfaction by reducing wait and turnaround times when properly implemented.

When looking to improve upon your existing manufacturing practices, the philosophy of lean manufacturing might be one way you and your company can save money and change your workflow for the better.

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Topics: Finance, manufacturing

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