LEAN is a production method aimed primarily at reducing times within the production system as well as response times from suppliers and to customers.
It is derived from Toyota’s 1930 operating model “The Toyota Way” (Toyota Production System, TPS). The term “Lean” was coined in 1988 by John Krafcik and defined in 1996 by James Womack and Daniel Jones to consist of five key principles: “Precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection.”
Companies employ this strategy to increase efficiency. By receiving goods only as they need them for the production process, it reduces inventory costs and wastage and increases productivity and profit. The downside is that it requires producers to forecast demand accurately as the benefits can be nullified by minor delays in the supply chain. It may also impact negatively on workers due to added stress and inflexible conditions. A successful operation depends on a company having regular outputs, high-quality processes, and reliable suppliers.
History of Lean
LEAN Definition: Fredrick Taylor and Henry Ford documented their observations relating to these topics, and Shigeo Shingo and Taiichi Ohno applied their enhanced thoughts on the subject at Toyota in the 1930s. The resulting methods were researched from the mid-20th century and dubbed “Lean” by John Krafcik in 1988, and then were defined in The Machine that Changed the World and further detailed by James Womack and Daniel Jones in Lean Thinking (1996).
Evolution in Japan
The exact reasons for adoption of JIT in Japan are unclear, but it has been suggested it started with a requirement to solve the lack of standardization. Plenert offers four reasons, paraphrased here. During Japan’s post–World War II rebuilding of industry:
1. Japan’s lack of cash made it difficult for industry to finance the big-batch, large inventory production methods common elsewhere
2. Japan lacked space to build big factories loaded with inventory.
3. The Japanese islands lack natural resources with which to build products.
4. Japan had high unemployment, which meant that labor efficiency methods were not an obvious pathway to industrial success.
Wikipedia. Accuracy and Precision. https://en.wikipedia.org/wiki/Lean_manufacturing