The term "lean manufacturing" is often abbreviated as simply "lean." This type of operation strives to create a comprehensive strategy to identify and reduce or eliminate waste of all kinds. This includes eliminating all non-value-added time and activity.
Non-value-added time or activity in a production or manufacturing process is any time spent on a step in that process that adds nothing to the finished product. This is in opposition to value-added activity, which adds some value that a customer will pay for with the finished product.
Non-value-added activities include, but are not limited to: Overproduction, when more product is made than necessary so there is a need for boxing, transporting and hauling product with no increase in the value; excess transportation, which adds costs of transporting a product to different facilities without increasing it's worth to the customer; and waiting, where machines or people are required to sit idle waiting for pieces or orders.
A product's value is ultimately determined by the customer. The customer determines what he will pay for, so his opinions are integrated into lean decisions. One of the hypothetical questions lean plant employees ask themselves is: "If a customer saw us taking this step, would they say to stop, or continue?"
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