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How can Lean waste reduction help your company reduce costs?

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If you are in the automotive manufacturing industry, you know how competitive and challenging it can be to produce high-quality vehicles at low costs. One way to achieve this goal is to adopt the Lean philosophy of waste reduction, which aims to eliminate any activity or process that does not add value to the customer or the product. In this article, you will learn how Lean waste reduction can help your company reduce costs and improve efficiency, quality, and customer satisfaction.

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SHAHANA BEEGAM S

Software Engineer - Data & Analytics | Retail Banking Wealth Management- Digital | Techno-Functional Consultant -…

1 What is Lean waste reduction?

Lean waste reduction is based on the concept of muda, which is a Japanese word for waste. Muda refers to any form of inefficiency, defect, excess, or variation that consumes resources without creating value. Lean waste reduction identifies and eliminates eight types of muda: overproduction, waiting, transportation, inventory, motion, over-processing, defects, and skills. By reducing muda, you can save time, money, materials, energy, and space, and increase productivity, quality, and customer loyalty.

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2 How to implement Lean waste reduction?

To implement Lean waste reduction, you need to follow a systematic approach that involves four steps: plan, do, check, and act. The plan step involves identifying the sources of waste, setting objectives and targets, and designing solutions. The do step involves executing the solutions and collecting data. The check step involves analyzing the data and measuring the results. The act step involves standardizing the improvements, resolving any issues, and planning for further actions.

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Yago Bezerra de Souza

PMO no Hospital Dona Helena com expertise em Lean Six Sigma e Gerenciamento de Projetos
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The value stream map is a tool that can be used for a large or small process to identify and avoid waste. Identify non value processes and apply kaizens or projects

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3 What are the benefits of Lean waste reduction?

Lean waste reduction can bring numerous advantages to your company, such as lowering costs, increasing quality, speeding up delivery, and promoting innovation. By eliminating waste, you can reduce the resources and expenses needed to produce and deliver your products. This can improve your profitability and competitiveness, as well as the reliability and performance of your products. Moreover, by eliminating delays and excess inventory, you can shorten the lead time and cycle time of your production and delivery processes. This can increase your responsiveness and flexibility, while freeing up more time and talent for creative and value-adding activities. Ultimately, this can foster a culture of continuous improvement and innovation.

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4 What are the challenges of Lean waste reduction?

Lean waste reduction is not a one-time project, but a long-term commitment that requires constant monitoring and adjustment. You may face resistance to change from employees or stakeholders, lack of alignment between processes or systems and Lean principles, or complexity and variability of products or processes. To overcome these challenges, it is important to communicate the benefits and expectations clearly, involve stakeholders in the improvement process, provide training and support, align strategy, structure, culture, and technology with Lean vision and values, and simplify and standardize operations while adapting the Lean techniques to your specific context and needs.

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SHAHANA BEEGAM S

Software Engineer - Data & Analytics | Retail Banking Wealth Management- Digital | Techno-Functional Consultant - Business Intelligence | Fintech Data Lead | CBAP Certified | Ex-IBMer
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The time and effort required for lean waste reduction/removal are high, making people initially reluctant to choose it. Moreover, it often challenges traditional practices, some of which are deemed unacceptable. To overcome this, greater efforts are needed to convince people of the positive results. Care must be taken not to overly complicate processes.

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5 How to measure Lean waste reduction?

To evaluate the effectiveness and impact of your Lean waste reduction efforts, you should track key performance indicators (KPIs) that reflect your objectives and targets. Cost reduction, for instance, measures the amount of money saved by eliminating waste. You can calculate it by subtracting the total cost after improvement from the total cost before improvement. Quality improvement, on the other hand, measures the percentage of products that meet or exceed the quality standards. This can be calculated by dividing the number of defect-free products by the total number of products produced. Additionally, delivery improvement is measured by the percentage of products that are delivered on time and in full. This can be calculated by dividing the number of products that meet the delivery requirements by the total number of products ordered. Lastly, innovation improvement is determined by the number of new or improved products or processes developed or implemented. This can be calculated by counting the number of ideas that are generated, tested, and adopted.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Automotive Manufacturing

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How can Lean waste reduction help your company reduce costs?

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1 What is Lean waste reduction?

2 How to implement Lean waste reduction?

3 What are the benefits of Lean waste reduction?

4 What are the challenges of Lean waste reduction?

5 How to measure Lean waste reduction?

6 Here’s what else to consider

Automotive Manufacturing

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