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The Complete Lean Manufacturing Guide

Learn how manufacturers are using new Industry 4.0 technologies to augment traditional lean manufacturing practices.

Chapter One: What is Lean Manufacturing?

Lean Manufacturing Defined

Lean manufacturing is a systematic framework for eliminating waste from a manufacturing system, or value stream, without sacrificing productivity. The value stream comprises all of the activity and information streams that exist between the raw material supplier and the possession of the customer. Lean is about empowering people at all levels of an organization to identify and eliminate waste in order to continuously increase the value delivered to customers.

A lean mentality and culture adds value and reduces activities that decrease value. Put simply, lean manufacturing aims to create more value for customers while reducing waste.

The 8 Wastes of Lean

In lean, “value” is defined as any action or process that a customer would be willing to pay for. Meanwhile, “waste” is defined as anything that doesn’t add value to a product, or cost without benefit. Lean practitioners commonly agree on 7 wastes, which are derived from the Just in Time mentality to reduce costs and increase value:

Overproduction: producing more, sooner, or faster than is required by the next process or customer
Waiting: operators standing idle while machines cycle, equipment fails, parts delay, etc.
Transport (or conveyance): movement of parts and products beyond the absolute minimum necessary.
Overprocessing: unnecessary or incorrect processing.
Inventory: keeping more than the minimum stock of raw materials, parts, work in process (WIP), and finished goods necessary.
Motion: movements made by operators or machines beyond what is necessary.
Defects: time and effort spent correcting and inspecting rework and scrap.
The 8 wastes of lean manufacturing: transport, inventory, motion, waiting, overproduction, over-processing, defects, and unutilized talent.

Some lean practitioners include an 8th type of waste: unutilized talent. While the first 7 wastes are directly related to manufacturing processes, the waste of unutilized talent is specific to manufacturing management. Remember that lean is focused on humans; without humans, there is no lean culture.

The Lean Manufacturing Cycle

The Lean Enterprise Institute lays out a 5-step cycle for implementing lean:
The Lean Enterprise Institute established a 5-step cycle for implementing lean.
  1. Specify value from the standpoint of the end customer by product family.
  2. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
  3. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  4. As flow is introduced, let customers pull value from the next upstream activity.
  5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Thinking With Lean Philosophy

To accomplish this goal, organizations implement lean thinking both in their management and production philosophies. According to the Lean Enterprise Institute, “lean thinking changes the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets, and departments to customers.”

Lean manufacturing is a continuously evolving effort that requires understanding and participation from all levels of an organization. Just as important to achieving a lean operation as the technical implementation is lean thinking. There are a variety of strategies for reducing waste in a production process, but it is also important to understand and internalize the underlying philosophies in order to sustain a lean operation and continue to strive toward a perfect, zero-waste operation.

Chapter Two: History of Lean

Early Lean Concepts

The core principles of lean manufacturing can be traced to as early as Benjamin Franklin, who documented examples of waste reduction in his experiments in the mid-1700s. He foreshadowed the lean principle of avoiding costs in the famous adage now known as “a penny saved is a penny earned” in Poor Richard’s Almanac: “A penny saved is two pence clear. A pin a-day is a groat a-year. Save and have.”

Franklin also warned against carrying unnecessary inventory, writing in The Way to Wealth: “You call them goods; but, if you do not take care, they will prove evils to some of you. You expect they will be sold cheap, and, perhaps, they may [be bought] for less than they cost; but, if you have no occasion for them, they must be dear to you.”

In 1911, Frederick Winslow Taylor introduced what would become known as standardization and best practice deployment. Taylor wrote in The Principles of Scientific Management:

“And whenever a workman proposes an improvement, it should be the policy of the management to make a careful analysis of the new method, and if necessary conduct a series of experiments to determine accurately the relative merit of the new suggestion and of the old standard. And whenever the new method is found to be markedly superior to the old, it should be adopted as the standard for the whole establishment.”

Soon after, Henry Ford developed his mass assembly manufacturing system, which recognized and eschewed material and motion waste, to great success.

In his autobiography My Life and Work, Ford summarized lean manufacturing in one sentence: “We will not put into our establishment anything that is useless.”

Training Within Industry

In 1940, the United States Department of War created Training Within Industry, a service designed to provide job training in war-related industries that were impacted by the shortage of skilled personnel due to military conscription. Training Within Industry consisted of four core programs:

• Job Instruction (JI), which teaches a method to instruct an operator on how to perform a process correctly, safely and conscientiously
• Job Relations (JR), which teaches the foundations of building positive employee relationships, increasing cooperation and motivation, and effectively resolving conflict
• Job Methods (JM), which teaches employees to evaluate their work and suggest improvements
• Program Development (PD), which teaches those in charge of training to assist line supervisors in problem-solving

By the end of World War II in 1945, over 1.6 million workers in over 16,500 plants had received a certification in Training Within Industry.

Toyota Production System

Heavily influenced by Training Within Industry, which spread to Japan after the end of World War II, the Toyota Production System (TPS) was developed in Japan between 1948 and 1975 by Taiichi Ohno and Eiji Toyoda, industrial engineers at Toyota. The Toyota Production System has been widely lauded as the system that made Toyota as successful as it is today.

TPS is grounded on two main conceptual pillars: just-in-time–the principle of producing only what is needed, only when it is needed, and only in the amount that is needed–and jidoka, the concept of “automation with a human touch.” The main objective of TPS is to eliminate waste (“muda”) by designing out overburden (“muri”) and inconsistency (“mura”).

TPS is grounded by 6 principles, known as The Toyota Way:

• Continuous improvement
• Respect for people
• Long-term philosophy
• The right process will produce the right results
• Add value to the organization by developing your people and partners
• Continuously solving root problems drives organizational learning

Evolution of Lean

While lean manufacturing has been influenced and evolved over the decades, it is based largely on the Toyota Production System (TPS). The term “lean” was first coined by John Krafcik in 1988 in his article, “Triumph of the Lean Production System,” based on his experience as a quality engineer at the Toyota-GM NUMMI venture in California. TPS soon became widely known due to the publication of the book by James P. Womack, Arthur Roos, and Daniel Jones, based on Krafcik’s research, titled The Machine That Changed the World.

Chapter Three: Lean Manufacturing Principles

The following principles underlie the techniques of lean implementations:

Just in Time production

Just-in-time (JIT) production refers to a system of production that makes and delivers what is needed, just when it is needed, and just in the amount needed. Just-in-time is comprised of three elements: takt time, continuous flow, and pull system.

Takt time refers to how often a part or product should be produced to meet customer requirements based on the rate of sales. Takt time is calculated by dividing the available working time per shift by the rate of customer demand per shift. Producing to takt time means that a manufacturing system is able to respond quickly to problems, eliminate causes of unplanned downtime, and reduce changeover time.
Takt time refers to how often a part or product should be produced to meet customer requirements based on the rate of sales.

Continuous flow means producing and moving one item at a time (or a small, consistent batch) to match takt time. Each item is passed immediately from one process step to the next, without any wasted time (or any other waste) in between.

Continuous flow was developed through the Ford System and includes concepts such as using consistently interchangeable parts so that cycle times can be consistent; the assembly line itself; arranging machines so that parts could flow smoothly between tasks; and ensuring that the rate of parts fabrication matched the consumption rate of parts in final assembly.

Pull system refers to arranging all the processes in the production sequence in a single, smooth flow based on the rate of sales. Basically, sales demand drive production, because it “pulls” items from the manufacturing process


Jidoka translates to “automation with a human touch,” or “autonomation.” It refers to providing machines and operators the ability to detect when an abnormal situation has occurred and immediately stop work to institute countermeasures. Adopting Jidoka enables work to be more efficient because operators are freed to do work that creates value rather than keep watch at machines to prevent defects.

The concept of jidoka was developed when Sakicho Toyoda, founder of the Toyota Group, invented an automatic loom that would stop automatically when a thread broke, quickly eject near-empty shuttles, and insert a new one at just the right moment. This invention enabled operators to do more value-creating work rather than monitor the looms. The concept of designing machinery that would stop automatically when problems arose and call attention to issues eventually became a crucial part of every process at Toyota.

Heijunka (level production)

Heijunka refers to leveling the type and quantity of production over a fixed period of time. This enables production to efficiently meet customer demands while avoiding batching. Heijunka also minimizes inventories, capital costs, manpower, and production lead time throughout the value stream.

An example of heijunka is alternating between producing small batches of product A and product B rather than producing all of product A in the morning and all of product B in the afternoon.

Standardized Work

Standardized work is the principle of establishing precise procedures to make correct products in the safest, easiest, and most effective way based on current technologies. Standardized work requires three elements: takt time, work sequence, and standard inventory (or in-process stock).

Standardized work results in benefits such as the documentation of current processes for all shifts, reductions in variability, easier training for new operators, and reductions in injuries and strain. Having standardized work for procedures also provides a basis for continuous improvement, as improvement can only be truly measured from consistent processes.


Kaizen, which translates to “changing something for the better,” is the concept of continuous improvement. With kaizen, manufacturers continuously improve standardized processes, equipment, and other daily production procedures. We’ll cover kaizen in-depth in the next chapter of this guide.

Chapter Four: An Overview of Kaizen

The concept of continuous improvement is core to lean manufacturing. It is one of the foundational principles of TPS.

Continuous improvement is also known as “kaizen,” which translates to “changing something for the better” in Japanese. Lean manufacturers use kaizen to help eliminate waste. With kaizen, manufacturers continuously improve standardized processes, equipment, and other daily production procedures. Kaizen is famously exemplified in TPS, where employees are required to stop the line if an abnormality arises and, along with their supervisors, suggest an improvement.

Kaizen is guided by several principles, the foremost of which is that good processes create good results:

Improvements are based on small changes

Rather than wait for a major change to be implemented to begin improving, change should be approached in small, incremental steps. This increases the speed to improvement and reduces the pressures of implementing a major change. In addition, small changes are often less costly and therefore less risky.

To this end, a key to making incremental improvements is identifying and solving the root causes of issues. This allows employees to catch and contain small issues before they become larger and costlier to eliminate, and it prevents the same problems from reoccurring.

Improvements must be measurable, standardized, and repeatable

In kaizen, it’s important to “speak with data and manage with facts.” In order to evaluate improvements objectively, existing procedures must be standardized and documented. Measuring performance against existing benchmarks allows you to demonstrate ROI from your kaizen efforts and keep the company aligned around improvement. It also allows you to identify areas where your efforts are working–or not–so you can make strategic decisions about future improvements.

Empowering the Employees

Kaizen places emphasis on the value of employees at every level of an organization. Employees who are closest to the problem are the best-equipped to solve them. Further, engaging team members to identify problems and suggest improvements in their work areas encourages a sense of ownership over their work, which can improve overall motivation, morale, and productivity. Training and empowering employees to grow should be a part of your company’s continuous improvement.

Continuous Improvement Cycle and other implementations

According to John Shook, chairman and CEO of the Lean Enterprise Institute, the Continuous Improvement Cycle consists of three steps: seeing the workplace, identifying problems, and implementing solutions.
John Shook’s continuous improvement cycle consists of 3 steps: seeing the workplace, identifying problems, and implementing solutions.

Chapter Five: Lean Manufacturing Tools

The following are some of the most common techniques used in lean manufacturing:

Value Stream Mapping

Value stream mapping refers to the process of identifying and charting flows of information, processes, and physical goods across the entire supply chain from the raw material supplier to the possession of the customer. Basic planning tool for identifying wastes, designing solutions, and communicating lean concepts


Poka-yoke refers to “mistake-proofing” or “error-proofing” a process. The goal of poka-yoke is to prevent product defects from reaching customers by catching, correcting, and eliminating mistakes at the source. By integrating poka-yoke inline, mistakes are either prevented or caught shortly after they happen. This prevents defective products from making it to the end of the process. As a result, a higher quality of output naturally follows.


5S is a systematic framework for workspace organization based on the idea that a better work environment results in better operations, which in turn leads to better products. 5S provides five key steps for maintaining an efficient workspace in order to improve the quality of products: sort, set in order, shine, standardize, and sustain.

Total Predictive Maintenance (TPM)

Total Predictive Maintenance provides strategies for creating employee ownership and autonomous maintenance of production equipment. TPM strategies include designing products that can be easily produced on existing machines, designing machines for easier operations, changeover, and maintenance, training workers to operate and maintain machines, purchasing machines that maximize productive potential, and designing a preventive maintenance plan that spans the life of the machine.

Visual Management

Visual management involves making information about production processes and fundamental daily activities visually available in a coherent, timely, and regular manner. This makes it easier to determine production status and makes abnormalities, waste, and scrap obvious. Examples of visual management include kamishibai boards and kanban.

Kamishibai boards are used to audit kaizen in processes. Modern Kamishibai boards are simple and flexible visual controls to perform mini-audits within a manufacturing process. When used correctly, they are powerful tools to perform, manage and audit tasks of specific duties.

Kanban, which translates to “card” from Japanese, is a signaling device that gives authorization and instruction for the production or withdrawal of items in a pull system. Kanban visualizes the flow of materials and information in a system, most commonly using kanban cards.

Root Cause Analysis

Root cause analysis is a method of problem-solving aimed at getting to the root cause of the issue. Methodologies used in lean manufacturing include the fishbone diagram (also known as the Ishikawa Diagram) and the 5 Whys.

Gemba Walk

A gemba walk is defined as a tour of the shop floor. Gemba is a Japanese term defined as “the actual place”. The “gemba walk” bridges theory and practice by bringing leaders to the shop floor to observe processes as they happen. This result is the definition of “gemba walk”.


Andon is a system that notifies management of a quality or process problem. This is often accomplished using a light stack or other video or audio signal that alerts management of a defect, shortage, or other issues.


Kitting is the process of organizing components and parts needed for a process prior to delivering them to the point of use in order to save time on the production line. Kitting can help free up space, reduce inventory, and increase productivity, improving the efficiency of the assembly process.

Chapter Six: Lean Manufacturing in the Age of Industry 4.0

While lean methodologies have been tried and true for decades, the emergence of Industry 4.0 has given rise to new technologies that can augment traditional lean strategies.

Error-proofing and quality at the source with smart sensors and devices

As IIoT sensors, device integrations, and manufacturing software become more accessible, it is becoming easier than ever to error-proof manufacturing processes. Here are a few examples of using smart sensors and devices to ensure quality:

  • Use pick-to-light systems to light up the correct bin or part needed during a process step
  • Use break beams to detect whether the operator has reached into the correct bin, and prevent the process from advancing to the next step until the correct part is obtained
  • Use a digital scale to detect whether a product weighs as it should and halt the process if the weight does not meet the requirements
  • Integrate tools such as torque drivers and calipers to perform operations to exact specifications
  • Require products to pass machine vision inspections before allowing them to proceed down the line

Digitizing Standard Work

Gone are the days of printing tens of pages of work instructions every time you update a process. There are many options available for digital work instructions software that offer a much-improved experience for the operator. Digitizing work instructions allows manufacturers to incorporate multimedia and integrate with IoT tools and devices to make standard work more efficient and engaging for operators. Digitizing standard work also has the benefits of being highly customizable and allowing changes to automatically update across a plant, ensuring that work instructions are always up-to-date.

Data Collection

We’ve already established the importance of “speaking with data and managing with facts” in lean manufacturing. After all, measuring performance against existing benchmarks is the only sure way to demonstrate ROI from your lean efforts. One of the key benefits of the digital transformation of manufacturing is the ability to automatically collect data from machines, tools, operators, and processes. Integrating IoT (Internet of Things) tools and hardware with manufacturing software enables manufacturers to get an accurate view of production and quality metrics such as production rate, defect and scrap rate as well as defect causes, and process timing such as process and step cycle times.

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