to Sanchez and Perez (2001), one of the
primary goals of lean manufacturing is to eliminate any step, process, and materials that do
not add value to the final product or service. Storage of inventory, as
an example, does not add value to the product and should be eliminated whenever
possible. Inventory levels could be reduced
by reducing the time the machines spend standing due to breakdowns and
malfunction through preventative and predictive maintenance. Other techniques
for reducing inventory could be a simultaneous reduction in manufacturing lot
sizes and set-up times and the use of common
parts to manufacture different products.
Another source of zero-value activities is the transport of parts within the company. This activity does not add value to the product,
but increases lead times. In lean manufacturing,
the machines are laid out in flexible work cells to eliminate the frequency of
movements among machines (Webster, 2008).
According Keyes, Nahn and Lauver (2009) the reduction of non-value adding
activities improves operational efficiency which in turn can provide increased
opportunity for profitability and enhanced position among the competition. The
authors conducted a case study aimed at measuring the effect of lean
implementation at a low-volume high variety manufacturer. Performance measures
in different categories such as financial (gross profit), operational and
materials management were identified and
measured three months before and three months after the implementation of lean
manufacturing. As expected the organization’s
financial measures, i.e., gross profit improved after implementation of lean.
The financial improvement was recognized due to the reduction in the cost of goods sold. The cost of goods sold had
reduced due to the reduction of
manufacturing costs. Before lean implementation, the cost of goods as a
percentage of sales averaged 86% and following the implementation of lean manufacturing the cost of goods sold as a percentage of sales reduced to
76%. Sanchez and Perez (2001) stated that A study of Italian manufacturing
companies showed that lean manufacturing companies used more teams in problem-solving, that workers performed a
higher variety of tasks, and that the proportion of implemented employees’
suggestions was higher than in non-lean manufacturing companies. In another
case study of lean implementation using VSM has
mentioned by Singh et al. (2010) as an Indian manufacturing industry
witnessed 92.58% reduction in lead time, 2.17% reduction in processing time,
97.1% reduction in work-in-progress and 26.08 % reduction in manpower requirement. According to Singh et al. (2010) the goal of lean manufacturing is
to reduce inhuman waste effort,
inventory, time to market and manufacturing space to become highly responsive to customer demand at the same time
producing quality products in the most efficient and economical manner. In
the same context, Worley and Doolen (2006) argued that lean manufacturing is often associated with benefits such as
reduced inventory, reduced manufacture times, increased quality, increased
flexibility, and increased customer satisfaction. Lean implementation results
in improved output and quality levels and
achieves this using fewer resources, such as raw materials and employee effort. 


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