How Manufacturing Companies Benefit from a Lean Transformation

Written by Ted Stiles & David Portney | Jun 29, 2022 9:26:07 PM

Lean Manufacturing can be confusing to understand, and further obscured by a high rate of variability in how Lean is applied and deployed. However, there are a few things to keep in mind when considering whether or not it’s right for your company.

First, true Lean organizations primarily focus on process, not outcomes. The general belief is if an organization deeply focuses on creating customer value and then relentlessly improves the processes that delivers that value, the results will come (financial, growth, etc.).

Additionally, these organizations understand that pursuing operational performance using Lean is a never-ending endeavor. It takes constant focus, effort and most importantly, leadership support. The best Lean organizations in the world understand this is not something they do in addition to running their business, this is how they run the business.

The seven forms of waste: inventory, motion, overprocess, overproduction, rework, transportation and waiting.

When companies focus on people and process, they can expect these results:

Maximized productivity

Shorter lead times
More inventory turns
Less rework
Better workflows and processes allow organizations to absorb more demand without increasing headcount
Identifying, addressing and eliminating mistakes early in the cycle prevent additional inventory and higher labor costs down the line

A continuously improving organization

Constant focus on improvement drives regular changes in performance
Leaders hold frequent training sessions and kaizen events to enhance their workers’ skills and knowledge
Always looking for new opportunities to deliver more value to customers; and always evaluating the process and product creates possibilities that weren’t previously there

Higher rates of employee engagement and satisfaction

Lower rates of turnover
Increased accountability on the floor
Lean leaders encourage employees to make problems visible and use those opportunities to improve
Developing people creates upward career mobility and bench strength
Higher levels of trust and respect

Improved financials

Lower levels of raw materials and finished goods inventory kept on hand
A better and faster process allows manufacturers to build on demand instead of relying on sales forecasts
Improved margins

Higher rates of growth and customer loyalty

Higher quality product
Outperform the competition on service, quality and value
Leading Lean companies traditionally win share based on elements other than price, as competitors might be more affordable but provide lesser value

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