What is Lean Manufacturing?
Lean manufacturing is a continuous way of producing what the customer wants, when they want it, at a price they are prepared to pay and using the least amount of resources.
The core idea behind lean is minimizing waste, therefore creating more value for customers with fewer resources.
A company can reduce costs and keep prices low without adversely affecting profits or quality by controlling the amount of waste generated during production. Estimates suggest that on an average 95 per cent of manufacturing activities fall either under non-value adding time or non-value adding cost. Lean manufacturing tries to minimize this waste and benefit consumers in the form of lower prices. Toyota, the world’s largest car manufacturer, was the first company to successfully adopt this model. The company’s steady growth from a small company to the world’s largest automaker has made the Japanese carmaker an acknowledged benchmark in lean manufacturing. Thus, the lean manufacturing process is sometimes also referred to as the Toyota Production System.
Key Features of Lean production are as follows:
• Lean Manufacturing
• Flexible Manufacturing
• Just In Time
• Lean Supply Chain
• Virtual Integration
• IT Solutions
• Total Quality Management
Companies Going Lean in India
Indian manufacturing companies have been increasingly restructuring operations and implementing world-class practices. The companies range from Bharat Forge, Bajaj and Tata in the auto sector to Larsen & Toubro, and Godrej & Boyce in the specialist engineering space as well as Ballarpur Industries in paper, and others in the pharmaceutical and textile sectors. These practices help companies become globally competitive, especially in sectors such as auto and auto components.
By adopting lean manufacturing practices, Indian companies have been able to significantly cut down costs. For example, Sundaram-Clayton Limited, one of the country’s largest auto component manufacturers, has been able to reduce 2.5–5 per cent of costs and product prices by going lean. Through the adoption of lean manufacturing practices, the company significantly boosted employee productivity and was ranked by Lean Enterprise in the US as one of the leanest companies in the world.
The world’s largest forging factory is based in the industrial city of Pune, Maharashtra. The state-of-the-art factory belongs to Bharat Forge, which is rapidly placing India on the world map for manufacturing. It has embraced a strategy that includes heavy investment in technology, a scientifically skilled workforce, and aggressive overseas acquisitions. Also, the company recalibrated its business strategy and put an emphasis on streamlining operations to create a leaner and more cost efficient enterprise.
Thus the Indian manufacturing sector is striving for operational excellence. Companies are restructuring operations and adopting world class practices in their bid to expand profits and become competitive globally.
The implementation of lean manufacturing practices in the automotive sector has helped cut costs and improve employee productivity. Consequently auto companies were able to offer reduced prices to enhance competitiveness.