In order for a company to gain and maintain a competitive advantage, it needs to be customer-oriented. This is why many businesses today are turning to applying Lean thinking to their business processes. The lean journey of businesses starts with defining value, that is, defining what customers are willing to pay for. In Lean thinking, anything that the customer does not value is defined as “waste” or “non-value adding”. The journey then continues with efforts to reduce or eliminate waste. What is Value in Lean Manufacturing? Lean manufacturing is a concept that has gained great popularity in a wide variety of sectors with the positive effects it creates on the overall performance of companies. It helps organizations reduce costs, improve processes and increase quality. But what really makes Lean effective is its focus on value. According to Lean, value should always be evaluated from the customer’s perspective. If the customer doesn’t see a product or service as worth paying for, then it doesn’t matter. However, value is not only about the price the customer is willing to pay. The product must also fulfill the customer’s need. Hence, in order for a product or service to be valuable, it must both fulfill the customer’s need and be worth paying for. What is Waste in Lean Thinking? Waste in lean manufacturing refers to any activity that consumes resources but provides no benefit to the end customer, i.e. does not add value. Any wasteful activity harms customer satisfaction and reduces the profitability of businesses. Therefore, it is necessary to identify non-value added activities and improve processes to eliminate them. Once businesses understand value and waste, they can map their business processes and focus on identifying value-added activities and wasteful activities. By increasing high value-added activities and eliminating waste, it becomes possible to meet customer expectations. How Can You Identify Value-Added Activities in Lean Manufacturing? Value-added activities contribute to the transition of a product from raw to finished form in the shortest time and at the lowest cost. For an activity to be considered value-added, it must meet three criteria: It contributes to the completion of the product. It is an activity for which the customer is willing to pay. For an activity to be value added, it must be done right the first time. In other words, the activity does not require rework due to any defects. Neither the customer nor the business needs to spend extra effort to make the activity better. Non-value-added activities negatively impact productivity by delaying the delivery time of products. They require rework, make customers unwilling to pay for the product/service and as a result burden the business. How Can You Identify Waste Activities in Lean Manufacturing? Eliminating waste improves performance and efficiency, resulting in satisfied customers. There are seven types of waste in the lean methodology. These wastes need to be eliminated or reduced. These wastes are as follows: Transportation: The unnecessary movement of equipment or materials from one place to another. Inventory: Excess inventory due to non-delivery, waiting, overproduction, etc. Movement: Unnecessary extra movement of employees. Waiting: disruption of work due to equipment failure, lack of materials or preparation of documents. Overproduction: Production in excess of demand. Over-processing: spending more time than necessary on any task. Defects: Defective products are returned and reworked or remanufactured. To eliminate waste to the maximum extent, it is necessary to audit your business processes and find the factors that cause waste. Lean Tools to Identify Value and Waste There are many Lean techniques that businesses can use to improve business processes and reduce waste. These techniques help to identify value-added activities and identify waste. Commonly used lean tools are as follows: Value Stream Mapping VSM visualizes the steps in the production process of a product or service and analyzes the value creation capacity of these steps. Through this mapping, businesses can clearly see the steps that create value and those that do not and identify the source of waste. 5 Whys The 5 Whys technique is a common technique used to identify and solve problems. With this technique, businesses can identify the factors that cause waste and seize opportunities for improvement. Gemba Walks “Gemba” means “real place” in Japanese and refers to the place where business processes actually take place. In this technique, senior management goes to the place where the work is done and observes the processes. From there, they can communicate with field workers to get a clear picture of where value is created. 5S Methodology Another important tool is the 5S Methodology. This methodology offers a five-step process to ensure that the workplace is organized and efficient: Through the five steps of 5S, businesses can get rid of unnecessary materials and processes and create a more effective working environment. Lean Manufacturing Software
