Lean Management, also known as the Toyota Management, is an ideology emphasizing the value of waste reduction and also standardization of parts. It is a relatively simple concept but it has proven to show significant impact both production capacity and also production speed. It has five key principles which elaborate on this method further.

Five Principles

1. Value: Identify and define the value of the product you’re trying to manufacture. Create a certain value to what the customer is willing to pay.
2. Value Stream: Create a stream through the company with emphasis on value generating departments. This way it gets easier to identify which systems to improve upon and which systems to appraise.
3. Flow: Development of a workflow for each product will make the production run smoother and also helps in identification of problems. This also helps during the product development phase to identify hindrances for the future production run.
4. Pull: “Pull” in this context means the action to take up any production job. Creating an effective pull mechanism ensures that only necessary products with sufficient demand are taken up and this optimizes the resources of the company.
5. Perfection: This is the most important step. Even though a lean management framework optimizes and increases the efficiency of the company, it’s not perfect. This step helps in identification of known issues and solving them. This step is used to make the production more dynamic in nature.

Advantages of Lean Management

1. Improves efficiency of the company
2. Reduces waste
3. Deployment of a better pull system
4. Identification issues becomes easier

Criticisms of Lean Management

Even though there are known benefits of lean management, it’s not free from criticism. Because of its scope and also its broad nature, Lean Management is considered more as an ideology than a standard procedure. And also because of lack of any consideration of the workforce, it is not considered to be a labor friendly methodology. Better ideologies such as Kanban, 5S and Six Sigma have emerged in the later part of 20th century and have taken the principles of Lean Management and made them better with today’s standards.

Covid-19 and Manufacturing Industry

To understand the importance of lean management during the pandemic we first need to analyze the situation in the current world. Due to Covid-19 thousands of employees have lost their jobs and factories around the world are shut down. But this pandemic has put another challenge in front of the manufacturing industry too and that is increasing the production of essential goods. Food Processing industry has seen significant growth and the medical equipment such as ventilators and face shields have shown a rise in demand.

Demand forecasts were revised around the world in almost every sector when the pandemic hit us in February. Consumer goods have seen a drop in demand and clinical devices such as blood pressure and heart rate monitors have seen a surge in demand. This has reset the priorities of firms around the world and Lean Management rose to the occasion to help companies cope up with erratic demands.

Lean Management during Pandemic

In Lean management more time is spent during the product development phase than actual production because if the production team can optimize the run for one batch, then it’s just a matter of volume equation. This means that the team has to reorganize and go back to the drawing board and make decisions over and over again about issues that were thought to be easy. Because of the restrictions around the world it’s not exactly easy for a firm to obtain raw material and new equipment as easily as before, let alone development for new developing projects. So existing materials and tools have to be repurposed. This is exactly where lean management is useful. It helps in identification of all the values and creates a value stream so the management already has an idea about the systems which will help the manufacturing during these troubled times. These new but technically existing tools can now be repurposed.

Due to advanced prototyping techniques and manufacturing methods such as additive manufacturing and virtual analysis of the product even before it is actually obtained in a physical form, wastage of both raw materials and also human resources is reduced. Manufacturing of rudimentary components with these techniques and raw assembly of them helps in further understanding of the final product the team is hoping for. Manufacturing giant General Electric calls this method “Moonshining” as a nod to the Prohibition era in the US. This helps in further reduction of the product development phase and more importantly reduces the already piling up stress in the workforce.

Back to Normalcy

As restrictions are being eased and the workforce is returning to the industries, people are bracing themselves for a return to normalcy. Which, for the manufacturing industry, means a sudden surge in demand again and attempts have to be made to reach the levels of efficiency of the past. Lean Manufacturing helps in reduction of waste all around the factory from human resources to material optimization. Digital technologies of today have paved a path to better optimization of factories to increase both quality and quantity of production. A virtual and digital twin, as Siemens defines it, “is a virtual representation of a physical product or process, used to understand and predict the physical counterpart’s performance characteristics.” By considering various data analytics and also with the help of new computational capabilities available today, digital twins help in analysis of the product under various scenarios previously not imagined and not thought of. These procedures help in improving the quality of the product, reduce the need for physical prototypes in a few instances and, in contrast to previous technologies, reduces the product development time significantly.

Relationships and Problem-Solving

Lean Management and in turn Lean Thinking relies mainly on two things. Relationships and problem-solving habits. A company can optimize its production line and keep producing at maximum efficiency but no company knows the future and no company can be ready for a crisis like Covid-19. But due to lean thinking and digital technologies, even small manufacturers can find solutions to new problems. Because of the nature of humans, the first response to a crisis like this is either to ignore it and try to move on after this ends or to overreact, panic and cause a managerial disaster. Lean thinking helps to clear the clutter up and identify one problem at a time and helps us to solve them quickly. Since identification of value streams is in the nature of lean manufacturing, this helps in making each team’s responsibilities clear and to the point and reduces load off of the workforce. A constantly evolving workflow increases productivity during the development phase and due to availability of information including data analytics of the firm and also external market analysis, development time is reduced significantly. An important and fascinating case study of lean management is the 1997 Aisin Seiki factory fire accident. In this accident a key factory which supplies components, proportioning valves used in automobile brakes to be specific, to Toyota burned to ashes. Due to this incident critics thought that there would be a significant drop in Toyota’s production because of its lean nature and maintenance of low inventory. But to everyone’s surprise Toyota showed little to no drop in production because of its long-term supply chain relations. Because of Aisin’s Just-In-Time production commitment the production rose to normal within 2–3 days. A study published in MIT Sloan Management Review found that this was possible because of the Japanese model of long term collaborative partnerships between approximately 150 firms. The study also found that there was no central command in this operation but just an “obeya” which is a term which loosely translates to a war room.

Conclusion

Covid-19 has shown that a crisis big enough can bring a company of any scale to its knees. This crisis has proven the importance of lean manufacturing ideologies and has shown how it can be useful especially in situations where supply chain relations are in shambles. In spite of the obvious advantages with lean management and lean thinking, firms and institutions still use obsolete systems such as spreadsheets and whiteboards to solve problems. Because of their rigid nature they tend to be in an endless routine of revising deadlines and restructuring teams instead of actual product development. This crisis has given a chance for companies to adapt to situations. The dynamic nature of lean thinking has increased transparency and reduced the need for briefings for every meeting. It is important to understand that digital manufacturing is not a stand-alone project but goes hand in hand with lean thinking. Covid-19 has shown the importance of supply chain relations, innovation and also crisis management. This is the time to rethink development strategies, learn lessons and grow out of the crisis and build on these ideologies.