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5 Ways Lean Manufacturing Improves Profits

By: Grant King, IndustrySearch writer
15 September, 2016

If you know anything about lean manufacturing you’ve probably heard good and bad.

And there is the odd horror story of lean manufacturing making formerly fat companies decidedly skinny. But a system that's worked so spectacularly well for Toyota in creating what could be considered the world's most successful automotive company has to have some pluses. And it does. Here are a few reasons why lean manufacturing can work for you.  

Made to demand

Lean manufacturing is all about manufacturing products 'just in time.' Not six months before they're needed, not because all the parts were in stock, and not because you were paying staff to work so they may as well make something. With lean manufacturing you make to demand; to the pull of your customer needs.

Less transport waste

With lean manufacturing you only transport components and finished products directly according to customer demand. Effectively you only transport sold goods. No large shipments of unsold inventory flying about the place only to sit and wait for something to happen.

Less inventory waste

Again, you only make to demand and you only stock to demand. Which means less stock sitting unused on your warehouse floor eating up space and profits. In a perfectly streamlined lean manufacturing process, stock is only fed into your system as it's about to be fed out the other end. It's a delicate balancing act and takes precision planning and management, but when it works, it saves plenty.

Less overproduction waste

It goes without saying that if you make to demand, there won't be any overproduction and in a perfect lean set up that's the case. But even if you overlap demand by a small percentage, you're not making mountains of stock that sit and wait for a buyer while they erode your bottom line.

Les motion waste

Time-in-motion is one of the biggest time wasters in manufacturing; or rather the lack of it. Lean manufacturing drastically cuts the time your workers spend flitting about between components, inventory and production lines. Think about it: normally stock arrives in and someone stacks it somewhere, often far away from the line. Someone then makes another trip each time that stock is needed wasting valuable time. In a lean process, the stock comes in and goes straight to the line. Every time a worker has to make an unnecessary trip across your factory floor, it costs you money.   

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