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Lean Concept To Reduce Production Loss

In What You Need To Know About Small Business on April 18, 2017 at 8:14 am

Japan goods and services are treated as one of the most high-quality on the world market. But where did they get such a desire to improve the quality of their goods? Is it about mentality or something else?

It’s no secret that Japanese are unique and special in approaches to management. Have you heard something about lean production? No? Then this article is just for you! Looking ahead, we note that lean manufacturing (or lean production) can dramatically reduce production loss, thereby increasing the competitiveness of your business.

The Essence of Lean Production

Lean production is an approach to managing an organization based on improving the quality of products while reducing costs. It sounds like something impossible, but practice shows that this can be achieved by sticking to certain rules.

The concept of lean manufacturing was developed by Taiichi Ohno, an engineer and entrepreneur of Toyota, and Shigeo Shingo, his colleague. After some time, it was adapted for American companies and was called Lean Production. The concept implies involving all employees in the optimization process and full focus on the consumer.

The main task of lean manufacturing is the continuous elimination of losses as this is the only way to reduce the cost of the product and improve its quality. Toyota’s production system has a special term “muda,” which means all possible losses, wastes, debris, and costs.

According to the concept of lean production, it is necessary to systematically eliminate processes that are not valuable to the consumer and just lead to the increase in the price of the product. The good news is that any company has huge opportunities to improve any field!


Types of Losses

According to Taiichi Ono and American management researchers, there are ten types of losses than any company can reduce to the minimum. They are as follows:

1. Overproduction.
2. Idle production (when an unfinished product is waiting for processing for too long).
3. Unnecessary transportation. Any transportation increases the risk of damage.
4. Unnecessary processing stages.
5. Extra stock. Stocks in warehouses freeze profits.
6. Unnecessary movements (waste of time).
7. Issuing of defective products on the market (in addition to financial loss, it also affects the image of the company).
8. The unrealized creative potential of employees.
9. Overload of workers or equipment.
10. Uneven execution of a specific operation.

These are the losses to minimize or completely exclude without any additional investments. It’s possible, and it will improve the quality and reduce the price of the goods.

The next question is what actions do not increase the value for the consumer while increasing the price of the good?

These may be registration of documents, ordering of components, packaging and storage, order processing, sale and promotion of goods. As you see, there’s a great gap to reduce the cost of products. Eliminate all processes that do not bring value!


The principles of Lean Manufacturing are simple but require great organizational abilities.

1. Find out what creates the value of the product for the end user. Eliminate all actions and processes that are unimportant for the consumer.
2. Identify the most necessary processes in the production of products and remove unnecessary ones, avoiding any losses.
3. Ensure a continuous production process.
4. Do only what the consumers need.
5. Reduce unnecessary actions and strive for perfection.

Instruments for Lean Manufacturing

There are a lot of tools for lean manufacturing, including:

• Kaizen production.
• Just in time.
• 5s workplace organization.
• Kanban.
• Andon.

These tools are used in various fields of activity, namely medicine, education, banking, logistics, trade, etc.

Although the concept of Lean Manufacturing is relatively young, it’s worth your attention. Study it along with the newest tools for production, and you’ll get some reasonable ideas on improving your production process.

I wish you best of luck in your business endeavors!

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