Posted on by tomasz

5 Lean Tips for Saving Money in Your Manufacturing Business

Be it small scale or large scale, manufacturing can certainly be an extremely profitable business, especially if you have a factory busy with meeting a steady stream of orders in making paper, packaging, steel, automotive, microchips, chocolate, or just about any food grade products. The list is long and quite inspiring, but there is one caveat; out of the many manufacturing businesses that come into existence every year, only a handful even make it past their breakeven point.

Although the reasons why that happens are too many and too variable to be summarized in a few sentences, it all comes down to one final point – inability to earn a profit which justifies the effort and expenses. It is not a coincidence that modern lean manufacturing in its structured form was brought into existence by Toyota back in the day to solve this problem, among many others.

Lean has roots that far predate the 1940s of course, because cutting unnecessary steps to improve productivity and profitability is an ancient concept that has only been refined over the centuries.

However, lean manufacturing in its current form has truly been refined to the point where it is a methodical scientific process now. Without further delay, let us now discuss a few tips for adopting lean manufacturing in your own business, so that it can help produce more, while consuming less.

Choosing the Right Method

There are multiple different principles of lean manufacturing and management. While some of the most popular ones actually are considered to be different from lean, they are, at their core, still using similar concepts to lean. Whether you call them variations or competitive ideologies, here are some of the most popular ones:

  • Six Sigma
  • Agile manufacturing
  • Kaizen
  • Kanban
  • Heijunka
  • Jidoka

It should be noted though, that the Six Sigma principles are by far the most applicable and beneficial when it comes to manufacturing and profitability. Therefore, the first tip would be to go with Six Sigma, unless you find any of the other methods to be more pertinent to your business of course.

Understand the 5 Basic Principles of Lean to Put them into Practice

Now, irrespective of which lean method you choose to go with, rest assured that the following will be the core concepts or principles that will remain relevant always:

  • The Definition of Value, as is relevant to the target customers
  • Identification of the value stream; any manufacturing step that doesn’t contribute to the definition of value above must be eliminated
  • Flow Improvement, with the objective of removing unaddressed blockades and interruptions of any kind from the remaining streamlined steps
  • Pull establishment is a lean term for producing only what is needed and wanted by the customer and nothing more
  • Perfect what remains so that quality of the products is continuously improved over time, but within the parameters of the customer demand only

In theory, these should be enough to help anybody with a business mind to start making their manufacturing businesses more profitable, but practically applying them takes time and more intricate knowledge than just a few bullet points!

Complete an Online Course in Lean Manufacturing

Whether you are a high-level manager or the business owner, there is practically no better or more complete way to learn about the various methods of lean, than to complete a course on the subject.

Remember how we mentioned that lean manufacturing has been turned into a method-oriented science now? That is precisely what the Master of Science Lean Manufacturing program offered at institutions like Kettering University is based on. Check out the official link to their website here on https://online.kettering.edu/programs/masters/lean-manufacturing-masters-online to see what the course – which has been designed in partnership with General Motors – can do for you and your business in terms of boosting productivity and profitability.

By the time you are done with the specially formulated Six Sigma training, the following should be achievable:

  • Elimination of wasteful steps and removal of obstacles from the path of the productive ones
  • Reduction of workforce if necessary, but boosting productivity all the same
  • Improved quality of products
  • Improved deliverability and delivery times
  • Improved management all around
  • Reduced impact on resources and better profitability per product

Adopt Lean Strategy in Setting Goals

We often hear about setting realistic goals, but what is the definition of a realistic goal exactly? We know it’s variable, but how do we find out about the right variable in our specific situation? The few points next should help to shed more light on doing exactly that:

  • After you have applied the methods of lean, you should already have a clear idea of what you need to achieve
  • Resist the urge to set unrealistic goals that don’t perfectly align with your lean strategy
  • Goals that are achievable and in line with the lean manufacturing estimations make the workforce feel less pressurized

Stick with a Productive, Streamlined Team of Workers

As it is extremely important to eliminate all unnecessary steps from the manufacturing itself, you will be avoiding a number of setbacks by sticking with an appropriately sized workforce for long periods of time. The advantages are as follows:

  • They know how lean works in your company, so they will be more productive than new employees in most cases
  • Training new employees and giving them the time to reach the levels that you need them to reach is wasteful, unless necessary
  • Experienced team members have the automatic coordination between them that can take years to achieve with a new team

Now that we have briefly covered the basics, it makes sense to remind the reader that lean in its full effect is a scientific and highly practical process. It goes beyond theory and even the tips we discussed here. It’s best to either complete a course on lean methods yourself, or hire someone who has the necessary knowledge in lean to see the results you truly can get from categorically applying the principles in the right places.