Lean manufacturing is a production strategy based on the manufacturing techniques of the Toyota Production System. The manufacturing strategy requires workers to engage in small incremental improvements to eliminate waste, increase quality and improve efficiency in the production process. The lean manufacturing strategy focuses on the needs of the customer in terms of quality and delivery time.

Lower Inventory Costs

Companies that use lean manufacturing reduce the quantities of raw materials, work in process and finished goods, which causes a reduction in inventory costs. In addition to the reduction in costs to purchase raw materials, companies spend less to warehouse the stock and fewer employees to receive and handle the materials. Companies that do not use lean manufacturing purchase materials in anticipation of customer orders, which may result in waste and increased inventory costs.

Increased Productivity and Flexibility

In a lean business, employees move parts through the manufacturing process a single piece at a time instead of in batches. The single-piece flow increases productivity and improves the flexibility in production processes. Companies using lean manufacturing processes reduce the amount of time required to manufacture a product, which increases the ability to respond to customer orders.

Elimination of Waste

The lean manufacturing method seeks to eliminate waste in all forms, such as movements, excess inventory and wait times. Production lines are structured to minimize the number of movements between processes, and a single-piece flow reduces the wait time between steps in manufacturing. The lean methodology reduces bottlenecks in the production line, which can increase the wait time for workers further down the line.

Quality Improvement

Lean manufacturing eliminates waste by improving the quality of products and reducing the number of defects. Single-piece flow allows workers to identify quality defects before a large quantity of products are manufactured. Assembly workers are empowered to stop production and take corrective action if they discover a quality defect during the manufacturing process. The lean manufacturing method lays out the production process in work cells, which completes all operations in the manufacture of a product in one area. The work cell arrangement encourages employees to monitor the quality of the product as it moves between operations.

Employee Morale

Lean manufacturing methods, when implemented successfully, empower employees to participate in quality improvements, which can improve worker morale, according to the University of California-Berkeley. Low employee morale can result in low productivity, high employee turnover and increased absenteeism. Decreases in productivity and high employee turnover can reduce the profitability of a manufacturing business.