Why Lean has been so popular in the manufacturing sector

In the wake of the global economic downturn, companies have shown increased interest in waste reduction programs such as Lean, Six Sigma and Kaizen. With widespread market uncertainty, rising energy costs and diversifying supply networks, the need to eliminate inefficiencies and operational excess has become an imperative.

In regards to manufacturing, this concept has already taken hold, perhaps contributing to the industry's tremendous recovery from the recession. On Wednesday, consulting firm KPMG reported a considerable uptick in confidence among manufacturing executives – both in the U.S. and abroad. More specifically, 94 percent of U.S. respondents claimed they expect conditions to either improve or remain level over the next year – the second-highest figure since KPMG began documenting industry sentiment in October 2009.

“A positive economic mood has clearly taken hold among the nation's manufacturing- and service-sector leaders,” said Lynne Doughtie, vice chair of advisory at KPMG. “U.S. manufacturing executives are more upbeat than their global counterparts, while overall optimism for increased business activity among U.S. service providers is second only to Brazil.”

But what exactly is behind this improvement? An uptick in consumer demand – driven by higher employment – certainly helps. But many factories are also adopting process improvement strategies that help reduce operational costs and drive bottom line performance.

“In recent years, businesses of all types have begun to implement Lean processes,” productivity specialist Laura Stack reported on her blog. “Today, eight forms of waste have been defined and targeted: seven from the original business transaction processing system (TPS), and one added by American experts as the concept became more obvious to (and accepted by) mainstream business.”

Stack identified these eight categories as defects, overproduction, waiting, non-utilized staff talent, transportation, inventory, motion and excess processing, all of which can be remembered under the convenient acronym DOWNTIME.

Manufacturers were one of the early adopters of Lean because many factory processes are already automated, so it's easier to identify inefficiencies and strike them where they stand.

However, Stack notes, regardless of industry, companies need to find a balanced strategy that strives for “faster processes, lower costs, higher quality, happier workers and, most importantly, happier customers.” These efforts are instrumental in reducing waste and boosting the bottom line.