Modern manufacturing value streams are looking more like software development value streams – because increasingly, they are. Manufacturers are hiring more and more software engineers as their product lines evolve to incorporate more software.

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Lean manufacturing principles help organizations drastically reduce time to market, increase innovation, and add more value for customers.
Lean manufacturing principles help organizations drastically reduce time to market, increase innovation, and add more value for customers.

This is why manufacturers are turning to proven practices from Lean / Agile software development to achieve sustainability, agility, and growth in a volatile market. These Lean manufacturing principles are helping organizations drastically reduce time to market, increase innovation, and add more value for their customers.

Lean Manufacturing Today

When Lean manufacturing began in the 1950s, it was designed to optimize the logistics, production lines, and use of raw materials in manufacturing value streams. Lean manufacturing principles were focused on eliminating waste, cutting costs, and improving overall efficiency on the shop floor.

Today, Lean manufacturing refers more to the optimization of knowledge workers, using Lean principles to work smarter, innovate faster, and deliver more value to customers. By providing a structure to keep teams focused on efficiency and flow, these Lean manufacturing principles are not only making teams more productive, they’re also making manufacturing companies more attractive places to work for talented engineers.

The Principles of Lean Manufacturing

Eliminate Waste

In Lean thinking, waste refers to any activity, product, or service that does not add value to the customer. In Lean manufacturing, most of the waste comes from inefficiency; it’s the excessive time, energy, labor, and money spent developing products that don’t meet market demands. All of this process waste results in a more expensive and lower quality product for the customer.

Eliminating waste across the value stream, instead of at isolated points, helps manufacturers create processes that require less human effort, less space, less capital, and less time to deliver products and services that cost less and have fewer defects. In fact, industry trends show that companies adopting Lean manufacturing principles are developing products by up to six months faster and staying 35% closer to products’ target costs than their competitors.

Deliver Fast by Managing Flow

Manufacturers have notoriously long design and production cycles, which equate to huge cost of delay and a crippling lack of agility. Some of this is due to the complexity of products or the liability involved, especially for auto or aerospace manufacturers. Some of it is due to a lack of organizational focus; many manufacturers produce hundreds of products, making it difficult to analyze performance or leverage feedback from customers to make meaningful improvements.

A key Lean manufacturing principle is that in order to deliver value quickly, companies must focus on managing the flow of ideas, products, services, and improvement efforts across their value streams.

In an industry where cost of delay can be measured in millions per day, improving flow can make a drastic impact on the bottom line.

A tangible and effective way to deliver faster is to implement WIP, or work-in-process, limits. WIP limits are fixed constraints that enable teams to stay focused on their top priorities. Instead of spreading their attention, energy, and time across hundreds of things at once, WIP limits encourage teams to focus on a handful of products at once and deliver them as quickly as possible.

This means that your talented employees can dive deeper and add more value to the tasks at hand, which can improve job satisfaction and boost employee retention rates. This is especially important in an industry with a seasoned workforce and steep competition from the tech industry for top talent.

Practice Iterative Development

Iterative development is a hallmark of Lean software development and another key Lean manufacturing principle. Lean development is based on this concept: Build a simple solution, put it in front of customers, and enhance incrementally based on customer feedback.

Testing concepts before making greater investments in raw materials and equipment can save manufacturers millions and allow them to provide more value to customers, who no longer have to incur the cost of a lengthy and costly development cycle.

Historically, iterative development has been difficult for manufacturers to do at scale, but Industry 4.0 trends like the Internet of Things, additive manufacturing, digital twins, and digital factories are enabling companies to iterate at a lower cost and higher frequency.

Build Quality In

Building quality and reliability into the design and manufacturing process is the accepted norm (or at least, goal) for manufacturers. For many companies, quality equals safety, which means things have to work correctly the first time. Generally, the approach to ensuring quality is to test defects out – to run rigorous tests to ensure that quality meets a certain pre-defined standard.

Lean thinking reverse-engineers this by encouraging organizations to build quality into the manufacturing process, providing unlimited opportunities to learn and value to the customer. In recent decades, many Lean development teams have found success by applying the following Lean development tools to build quality into their work. In Lean development, quality is everyone’s job, not just QA’s.

Here are some examples of this Lean manufacturing principle at practice:

  • Pair programming: Avoiding quality issues by combining the skills and experience of two developers instead of one
  • Test-driven development: Writing criteria for a product/feature/part before creating it to ensure it meets business requirements
  • Incremental development and constant feedback
  • Minimize wait states: Reducing context switching, knowledge gaps, and lack of focus
  • Automation: Automate any tedious, manual process or any process prone to human error

Respect for People

A seasoned workforce and competition for top talent from tech companies is forcing manufacturers to change their talent management philosophies to nurture a culture of innovation.

Top engineering candidates are seeking work experience that is as stimulating, engaging, challenging, and enriching as the tech-enabled world they live in. They know they can get a high salary, good benefits, and startup-y perks anywhere – what they really crave is to do meaningful work in a forward-thinking organization that is making a difference in the world.

Embracing the Lean concept of respect for people, as many tech companies have, could be key to fulfilling this lofty vision. In this case, respect for people means that organizations do everything they can to create value for both prospective and existing employees. This means finding ways to attract and retain new talent by adding value to their experience. It also means supporting existing employees through cultural adjustment.

For engineers who have spent their careers in traditional manufacturing cultures, embracing a culture of innovation may require a new set of social skills, including open collaboration, a free-flowing exchange of ideas, and an overall increase in empathy and flexibility. Practicing respect for people will mean creating an environment where employees of all generations and backgrounds can find room to learn, adapt, and grow in their careers. Of all the Lean manufacturing principles, respect for people might be most challenging to sustainably implement because of the cultural shift required.