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Lean organisations: the path to continuous efficiency improvement

Resources:
Energy, Materials, Water, Waste, Carbon
Sector:
All sectors
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Resource savings: Raw material:
Less wasted raw materials, fewer defects of components and products
Total cost savings:
Cost savings are made via improved productivity and throughput times, reduced inventory and fewer material losses
Size of company:
Micro (less than 10), Small (less than 50), Medium (less than 250), Large (more than 250)
Advancement in applying resource efficiency measures:
Intermediate, Advanced
What is in it for you:
Comprehensively improve your business: maximise customer value and minimise waste of both materials and human resources while improving working conditions, employer involvement and product quality.
Descriptive information:

Global competition and fast changes in markets require companies to develop efficient processes and operations, and to streamline their whole value chain. The Lean methodology can be used to improve the efficiency of an organisation as a whole*.

Transformation to Lean operations requires commitment and long-term development work, but it pays off. By eliminating activities that do not add true value to the customer and by continuously improving processes and procedures, a Lean enterprise can get several steps ahead of their competitors. Adopting the Lean methodology helps firms respond faster to changing customer needs and market conditions.

Before the initiation of a Lean transformation, the company management needs to understand the principles of Lean and be committed to the change. A person or people should be named to implement the changes. These people should have or acquire knowledge about the Lean methodology and be ready to develop and learn.

Firstly, define what contributes to value-creation in the company. What does the customer value in your product or service? What is the value stream in your process, i.e. which steps exactly create the value of your product or service? After defining the value stream, you can start to recognise areas for improvement (actions or processes that do not contribute to creating value).

Secondly, engage the whole organisation in efforts to improve operations and produce customer value. Train employees about lean thinking, emphasise their role in quality assurance and involve them in continuous improvement efforts by being open to their ideas about the everyday working environment.

Lean methodology includes the following areas of improvement:

  • Eliminating waste in production (i.e. activities that do not contribute to value creation); Lean thinking recognises eight sources of waste: unnecessary transport or motion, inventory, waiting, overproduction, over-processing, defects, and unused skills
  • Supporting productive, high-quality work by ensuring a clean, well-organised working environment (implementing 5S)
  • Adopting a systematic approach to continuous improvement, e.g. Plan-Do-Check-Act or PDCA
  • Developing or improving enterprise resource planning (ERP) to support just-in-time activities; ensuring that components and goods are in the right place at the right time, and that production is based on orders from customers

Remember that Lean is not a rapid cost-reduction programme, but the way that the company operates. The full benefits can only be reached by implementing organisation-wide transformation towards more efficient, flexible processes which result in reduced costs. Eliminating wasteful processes also means eliminating material losses, which results in improvements in resource efficiency and fewer defects, avoiding wasted work and components.

Lean also improves working conditions, ergonomics, and employer involvement, thus resulting in increased staff satisfaction and contribution to the efficient running of the business.

* This brief description of the Lean methodology provides a picture of the potential benefits to communicate to the whole organisation. More information can be found in the Lean literature.

Sources

Hede, Teemu (2013), Applying Lean practices in woodworking industry, Master of Science Thesis (in Finnish), 50 pages, Tampere University of Technology, Finland

Association of Finnish Woodworking and Furniture Industries (2012), Factsheet about LEAN for woodworking industries (in Finnish)

 

 

 

 

 

Further Information

Lean principles, practices, and impacts: a study on small and medium-sized enterprises (SMEs), https://link.springer.com/article/10.1007/s10479-012-1177-3

Lean manufacturing best practices in SMEs, http://www.iieom.org/ieom2011/pdfs/IEOM134.pdf

Lean Enterprise Institute. What is Lean? https://www.lean.org/WhatsLean/

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