6 Ways Lean Manufacturing Can Improve Business Performance
Lean manufacturing is a relatively new term in the industry that focuses on improved business performance to help reduce costs and minimize waste. The global market has a lot of competition, and businesses need to constantly advance and find new ways to be the leaders of the manufacturing industry.
The philosophy is to improve overall business performance by limiting the amount of non-valuable resources being thrown in the trash. In any manufacturing plant, there will be a fair amount of excess waste that gets produced daily, as well as duplication of unnecessary procedures, but here is how lean manufacturing can change that.
Automation of Redundant Processes
Lean manufacturing is essentially cutting down on everything, from the cost of machinery to what happens to the by-products of the manufacturing process, and even the need for additional staff. This in no way means that employees become redundant; rather, it frees them up to do other, more important things. Automating any process is an ideal business practice and should be one of the top priorities in any manufacturing firm.
Certain manual processes can be automated with the use of technology. It streamlines the entire procedure and often improves quality. With the right software and proper machinery, the most basic tasks that humans perform can be automated with lean manufacturing principles and robotics in mind.
Reduced Cost of Inventory
One of the main principles of lean manufacturing is that manufacturing plants shouldn’t create more inventory than is needed to fulfill a customer’s order. Over time, too much stock becomes a liability instead of an asset. If the stock isn’t sold soon after production, it could lose its value, or technology could change. In this case, the inventory stock becomes useless and costs more to keep in storage the longer it remains there.
With the right lean manufacturing processes in place, any business can learn how to reduce waste and focus on the customer needs at hand. Produce just enough for each order, and long-term inventory costs will start to reduce almost immediately.
Increase Profit Margins
By reducing waste and improving inventory, businesses’ profit margins can be maximized. There is more productivity in the manufacturing plant, and with a focus on producing just the right amount of stock, quality can be improved. All of these principles increase profit margins because costs become significantly reduced. Money doesn’t have to be written off at the end of the financial year for stock that was wasted because there will be no components that go unused.
Another way to maximize profit margins with lean manufacturing is to find ways to use every last piece of product to the ultimate point. For example, a plastic producing company will have a fair number of left-over pieces or even dud parts that cannot be sold to the public. Lean manufacturing means taking this waste and putting it back into the manufacturing process until there is nothing left. Using every last piece or resource that can be used means fewer financial costs over extended periods.
Better Employee Utilization
With lean manufacturing, employees can be put to better use in departments that need it the most. Because employees are freed up as a resource, they can be used to check the quality and manage the lean manufacturing system. If a business utilizes special machines and software, there is less chance of errors in processing that humans are likely to make. Lean manufacturing also utilizes processes that work faster than the average person without the chance of burnout from working too long. This can increase employee sustainability for more important responsibilities.
Employees can also specialize in lean manufacturing to improve the business performance from more angles than one. An employee can even be upskilled and taught how to create unique solutions by earning a masters in lean manufacturing online with Kettering University, while they still work full-time. This is just one example of utilizing employees more conductively, but lean manufacturing can improve overall staff satisfaction with better communication and management procedures put in place.
Focus on Innovation
The core principle of lean manufacturing is that processes are constantly being improved with ways to save costs, improve employee performance and increase product output. It must be constantly evolving with the times and technology and actively looking for areas that need innovation. It’s a great way to get employees and managers thinking about best business practices and how to improve performance with every step of the manufacturing process.
It focuses on creativity and designing new ways to solve various problems as they arise. By just identifying areas of the manufacturing process that can be managed better, lean manufacturing aims to optimize every strategy of a business. It’s called process optimization and is a long-term exercise that works to continually improve performance with innovative ideas.
Changing Customer Base
A major function of lean manufacturing is that environmentally-friendly means of manufacturing are used wherever possible. Reducing less waste doesn’t just mean using scrap pieces of metal or pieces that cannot be used a second time. Producing less waste also relates to the environment around us, and our carbon footprint. A manufacturer will produce a large amount of carbon dioxide every year keeping the factory running, but there are ways to conserve energy and cut down on carbon emissions that lean manufacturing explores.
By being more eco-friendly, a business will attract more customers that are also concerned for the environment. If a business can prove they have no waste and are doing everything to keep the air unpolluted, they can increase revenue streams with other like-minded businesses and private customers. Being green is part of a massive global movement to try to get everybody to take better care of the earth, and is a big part of manufacturing today.
Lean manufacturing is not only for limiting redundant production steps and improving business performance; it can be a way to empower employees to be more innovative, save thousands of dollars on various manufacturing costs, save time, and allow for products to be made with better quality tools and resources.