Why we need Lean Manufacturing?

Why we need Lean Manufacturing?

-Stronger competitive environment
-Due to price erosion, all manufacturing industries face continuous pressure to reduce price and to remain competitiveness in the market
-Need to lower the operational costs in order to sustain the profit margin
-In an effort to become more profitable many companies are turning to lean manufacturing.

What is Lean Manufacturing?
•Lean is a manufacturing philosophy that recognizes WASTE as the primary driver of cycle time, and employs techniques to continually drive out the waste in processes
•Lean is reducing the time from customer order to manufacturing and delivering products by focuses on eliminating non value added activities in the production stream
•Lean production is not about eliminating people

Lean is about doing more with less resources:
–Less time
–Less inventory
–Less space
–Less money.
Lean is about speed and getting it right the first time.

What is waste?
•VALUE: Any activity that changes the shape of a product to meet customer needs
•WASTE: Activities that consume time, resources and space, but does not change the form of the product OR “Anything that adds Cost to the product without adding Value”
According to Fujio Cho, Toyota, Waste - “anything other than the minimum amount of equipment, materials, parts, space, and worker’s time, which are absolutely essential to add value to the product.”
•How to determine a non-value added activity? A good test is “would my customer be willing to pay for this activity?”

Tony Lim 10-Aug-2007 Malaysia