How to apply lean production principles
When it comes to the manufacturing industry, some of the best lessons can be learned from long-term industry leaders. These businesses developed and implemented lean production principles that almost any facility can apply to streamline operations. Applying these lean process improvement methods will deliver significant results for your business.
At OE Partners, we help manufacturing facilities introduce these tried and trusted methods so they can reduce waste, take control of costs and improve financial outcomes. As lean manufacturing consultants, we understand the unique challenges of the industry and this helps us to deliver specialised services.
If you have a feeling your facility is wasting time and money, take a look applying lean production principles, what industry greats have to teach us and how a lean approach can benefit your facility.
Table of Contents
Why general cost-cutting doesn’t work for manufacturing facilities
What is lean manufacturing and what does Toyota have to do with it?
Understanding what’s really being wasted at your manufacturing facility
How to implement lean production at your manufacturing facility
Lean process: Reducing costs through continuous improvement
The 3 keys to lean production success in your business
Simplifying and streamlining: How lean production consulting can help
Why choose OE Partners for lean manufacturing consulting?
Transform your manufacturing facility with lean production principles
Why general cost-cutting doesn’t work for manufacturing facilities
“A penny saved is a penny earned” is a phrase every manufacturing business owner knows. The problem is saving that penny often feels elusive.
In manufacturing, many decision-makers equate saving with drastic cost-cutting measures like salary reductions, layoffs or downsizing, but this is often the wrong approach.
Firstly, reducing labor costs in the short term can benefit cash flow, however cutting your team (especially experienced people that you've trained to complete the job competently) can damage productivity over the long term. Losing skilled individuals not only impacts current operations but may also increase costs over the long term by requiring additional training and onboarding for replacements. This can make it harder to deliver quality products or services efficiently. There are times when labour cuts are unavoidable, but it's usually the last step to take, not the first.
Secondly, the root causes of high costs are often more complex than a large number on the “wages & salaries” line on the P&L. High costs are frequently embedded in inefficient processes, wasted resources, or systemic bottlenecks that require deeper analysis and targeted improvements to address effectively.
In Australia, where manufacturing is a challenging but opportunity-filled sector, lean manufacturing consulting companies can help you transform how your business operates without resorting to drastic cost-cutting. At OE Partners, to help our clients achieve their goals, we apply principles of ‘lean’ thinking and introduce lean process improvements, many of which originate from the Toyota Production System's philosophies and practices.
What is lean manufacturing and what does Toyota have to do with it?
Lean manufacturing is a production methodology that aims to minimise waste and maximise value-added activities in the production process.
Rooted in the trusted Toyota Production System (TPS), lean manufacturing is a holistic approach that involves the entire organisation—from the shop floor to top management—in the pursuit of operational excellence. By focusing on eliminating waste, reducing variability and improving flow, lean manufacturing helps businesses to continually improve, which in turn leads to improved cash flow and profits.
At its core, lean manufacturing is about enhancing productivity and reducing expenses without sacrificing standards. This data-driven approach leverages visual management and various tools to identify inefficiencies and streamline processes.
Lean manufacturing consulting companies help facilities by thoroughly understanding your current state, analysing what key initiatives will unlock productivity and mapping out what the future state potential looks like. They can take an outsider's perspective and introduce lean process improvements that can make a difference to business outcomes very quickly.
Understanding what’s really being wasted at your manufacturing facility
A core part of the Toyota Production System is a relentless commitment to eliminating waste. The Toyota Production System identifies eight key forms of waste:
- Transport: Unnecessary movement of materials.
- Inventory: Excess raw materials or unfinished goods.
- Motion: Inefficient movement of employees.
- Waiting: Delays due to production interruptions or bottlenecks.
- Over-production: Creating more than current demand requires.
- Over-processing: Using overly complex or costly methods.
- Defects: Resources wasted on defective products.
- Space: Inefficient use of expensive operational space.
How to implement lean production at your manufacturing facility
There is a clear process to implement lean manufacturing. An experienced consultant will ensure this happens faster and the business will suffer from fewer trial and error loops. We assist clients through the following steps:
- Define value: The first step is to identify the activities that add value to the production process and reduce or eliminate those that do not.
- Map the value stream: Your facility needs to visualise the flow of materials and information through the production process to identify and eliminate waste.
- Create a future state: The next step is to design an ambitious, lean and efficient future state for the production process.
- Implement the future state: Use lean tools and methodologies to bring the future state to life.
- Pursue perfection: Continuously improve the production process by applying lean principles and tools.
The challenge with implementing these principles generally revolves around 3 factors…
- People and culture: Positively engaging the team to overcome fear, inertia or poor habits
- Project execution: Investing in the right change or making sure the change is executed well
- Sustaining the change: Ensuring effective lean leadership and active management practices are in place
By working with an experienced lean manufacturing practitioner or consultant, manufacturing businesses can accelerate their improvement efforts and achieve greater results.
Experienced lean consultants bring a fresh, unbiased perspective, enabling them to identify inefficiencies and waste that internal teams might overlook. They typically have experience working with a wide variety of businesses, processes, and solutions, which provides them with a broad understanding of best practices across industries. Additionally, many consultants have firsthand experience in world-class manufacturing facilities, equipping them with proven strategies and approaches that can be tailored to your operations.
This expertise gives businesses access to knowledge and innovative solutions that may not exist internally, helping them implement ideas and methodologies that might not have been considered otherwise.
Lean process: Reducing costs through continuous improvement
At OE Partners, as one of Australia’s best lean manufacturing consulting companies, we champion an intelligent and effective approach to cost reduction and practical use of lean methodologies.
Lean production principles helped transform Toyota into an industry giant. Applying them can help any manufacturing facility to identify and address systemic inefficiencies that drain profitability.
There are three keys to lean process improvement success:
- Understanding what your customers really care about
- Active leadership participation
- Data and facts driven approach
The 3 keys to lean production success in your business
If you want to learn from the greats and implement a tried and tested system at your facility, it’s important to have buy-in across all levels of the business.
How can you get buy-in from across the organisation?
Well firstly let’s understand why you don’t have buy in at the moment. Most people come to work wanting to do a good job, there will be the occasional bad apple that needs to be dealt with, but the vast majority of your team want to contribute to the success of the organisation they work for. The trouble is in most organisations it's only too common for different people and departments to have many different ideas about what needs to be done to improve performance.
For example…
Sales want the business to reduce prices so that we’re more competitive in the market.
Finance thinks that our costs are too high and we need to cut spending across the board to improve profitability.
Design is convinced that a new integrated business IT system will revolutionize the efficiency of the business
Etc. etc.
In business focus is critical, so lets talk about how to get alignment with your team and success with lean production.
Key No. 1 - Understand what your customers really care about
A clear and compelling way to align your efforts internally is to understand what your customers want. Everyone has an opinion and a lot of people assume they know what their customers want but don’t have the objective facts and data to back it up.
Conducting interviews, running surveys, hosting workshops for the express purpose of better understanding your customer’s business and how you can better serve them, is a great way to figure out what is most important for your customers. At OE Partners we run these Voice of the Customer Studies for our clients and they are generally really eye opening.
CASE STUDY:
An industrial products manufacturer supplying the construction industry was convinced that reducing prices was the key to unlocking growth. After we conducted a Voice of The Customer exercise on their behalf we discovered that in fact lead time and reliability of delivery was by far the most important thing for their customers. If their customers (the construction company) received components late and the building handover was delayed it had huge financial implications. The construction company needed fast and reliable delivery and in fact were prepared to pay more for that. Price, whilst always important, wasn’t the main issue.
Once we know (not just think) what our customers want from us then decisions about strategic lean process improvements become easier.
For the industrial products manufacturer described above the discussion about strategic changes went something like this…
“We want to invest in a new business IT system”
“Will this new system reduce our delivery lead time and improve our delivery reliability?”
“If yes, then we should pursue it. If no, then perhaps other changes should be prioritised”
Once everyone understands that changes are being made to improve what our customers actually care (i.e. lead time) the end goal becomes much clearer. The business will be better able to work together to implement the right new lean process improvements.
Key No. 2 - Active Leadership Participation
Leadership is critical to successfully implementing lean manufacturing. Active leadership and leading by example is fundamental for success with Lean. Leaders who commit to understanding lean principles and who empower their employees to take ownership of the production process will achieve more. Active leaders play a vital role in challenging the status quo and driving change throughout the organisation.
Key responsibilities of leaders in lean production include:
- Communicating the vision and goals: Clearly articulate the organisation’s lean vision and objectives to all employees.
- Empowering employees: Encourage employees to take ownership of the production process and contribute to continuous improvement efforts.
- Providing training and development: Offer opportunities for employees to learn about lean principles and tools.
- Encouraging a culture of continuous improvement: Foster an environment where continuous improvement is valued and pursued.
- Driving change: Lead by example and motivate the organisation to embrace lean methodologies, and commit to resources when needed
Effective leadership ensures lean principles are integrated into the organisation’s culture, leading to sustained improvements and operational excellence.
Want to know if you’re an effective Lean Leader? Download the checklist and find out!
Download our ebook: Lean Leaders Checklist
Key No. 3 Data and facts driven approach
A critical element of lean production success is ensuring the team makes decisions based on data and facts rather than assumptions or opinions. We want to build discipline to take an objective analytical approach and track measurable outcomes. This will not only allow the businesses to identify inefficiencies and prioritize improvements, tracking progress with numbers will help the team to stay motivated with the implementing changes. Imagine playing a game of football without a score? It's the same in business.
To ensure your data-driven approach is actually successful, we need to look at the right numbers. Tools like value stream mapping, root cause analysis, and visual management boards can help pinpoint bottlenecks, highlight waste, and ensure continuous improvement efforts are focused on areas with the highest impact. We want to develop a set of numbers that show our progress with attacking these priority areas. Otherwise the numbers that are reported are simply wall paper and the activity a waste of time.
For example, measuring downtime, lead times, or defect rates provides insights into current performance and helps set realistic targets. At OE Partners, we guide businesses to implement simple yet effective tracking systems that ensure teams make informed decisions based on facts. This approach not only builds credibility for lean initiatives but also fosters alignment, accountability, and long-term success.
Simplifying and streamlining: How lean production consulting help
Once waste is identified, lean production calls for more streamlined processes. By simplifying workflows and reducing cycle times, manufacturers can better utilise resources, increase productivity and deliver products faster—ultimately boosting profitability.
A lean consultant can help play a crucial role in this process by providing expertise and tailored services to meet the specific needs of manufacturing businesses.
Lean consultants help drive faster organisational transformation and improving operational efficiency through tailored consulting support.
Why choose OE Partners for lean manufacturing consulting?
All OE Partners’ consultants have decades of industry expertise from world class organisations. We bring spent years applying this experience, working with businesses seeking transformative change. Our team applies proven lean production principles but tailors them to your organisation's unique challenges, helping you uncover inefficiencies and implement lasting improvements through customised lean programs.
Whether you’re looking to fine-tune operations through lean management manufacturing or seeking a complete operational overhaul, we’re here to guide you every step of the way.
Transform your manufacturing facility with lean production principles
The ideas may not be brand new but effective Lean implementation remains elusive for many Australian businesses. When bedded down well and effectively embraced by your team, lean production principles will dramatically reduce costs, boost efficiency and unlock your business’ true potential.
Get in touch with our team: we support clients in Melbourne, Sydney, Brisbane and other cities.
Start a conversation with OE Partners today to explore how lean production consulting can deliver measurable results for your manufacturing facility.
About Damien Lacey
Damien provides expert guidance to clients in areas including strategy development, lean production principles, process improvement, organisational transformation, business process redesign and the integration of continuous improvement practices.
A qualified mechanical engineer fluent in Japanese, Damien brings a wealth of experience from his tenure with Toyota, including a three-year assignment in Japan, where he honed his expertise in lean methodologies and learned from the greats.
With a demonstrated history of delivering impactful, measurable outcomes, Damien excels in engaging with stakeholders at all organisational levels. His collaborative approach has proven effective across a diverse range of businesses, from small and medium-sized enterprises to large-scale corporations.
Connect with Damien on LinkedIn.
