Lean manufacturing is a management philosophy that is focused on continuous elimination of waste in business processes through small or incremental improvements. Created by Toyota, it has since been adopted by many companies and across a number of industries. According to lean methodology, there are seven key sources of waste to focus on:

1. Labor
2. Overproduction
3. Space
4. Defects
5. Unnecessary human motion
6. Inventory
7. Transportation

Both manufacturing and distribution operations have benefited from applying lean manufacturing principles to their operations. Here are four main benefits of making the switch to lean:

1. A lean approach will improve quality. Using lean manufacturing principles, companies can quickly identify defects, use rapid problem solving techniques to identify the root cause of the problem, and then develop solutions to reduce or eliminate the possibility of a similar mistake in the future. This type of “mistake-proofing” will strengthen existing production processes, which improves the quality of the final product — whether that is a manufactured item or a group of items being prepared for shipment.

Lean also generally reduces the number of touches required to complete a process by eliminating unnecessary motion, labor, and handling. By reducing the amount of human intervention in a given process, you can reduce the possibility of human error. The key is to automate as much as possible, while also continuously monitoring for quality in a way that does not erode efficiency. In a warehouse environment, this might mean using automated material handling equipment to consolidate goods for shipment, while barcode scanning to verify that the shipment is accurate.

2. Lean can reduce your inventory. Inventory is expensive to purchase and hold, and can use up valuable space in a factory or warehouse. Over-purchasing inventory ties up cash, can quickly depreciate if the market for the finished product declines, and requires labor to store, organize, and retrieve. In lean manufacturing, companies only produce what is needed by the next operation based on actual demand. This is a pull-based model that relies on accurate demand signals to dictate production volume and inventory purchases. In automotive manufacturing, this just-in-time production method helped greatly streamline inventory flows, while putting additional pressure on parts suppliers to be incredibly responsive to shifts in demand.

This continuous flow model ensures that customers get the right quantity of the right goods exactly when they need it. This also reduces the need for excess inventory. That frees up space and capital, reduces the possibility of damage or obsolescence, and requires less handling and labor.

3. Lean manufacturing approaches can improve efficiency. By reducing wasted motion, continuously improving processes to eliminate unnecessary steps, and standardizing workflows so that each employee knows how to accurately complete a process, the lean approach can greatly improve efficiency. This makes it possible to complete work using fewer resources and in less time. These resources (whether they be employees or equipment) and then be redirected to other value-added activities that will increase the capacity of your facility.

4. Lean makes it easier to manage your operations. Another important aspect of lean manufacturing is the concept of visual management. In short, that means your facility should be organized so that managers can visually scan the work area and easily spot any problems or anomalies. That visibility can also include technology — using the right technology, you can evaluate the flow of goods and be alerted to any orders that might be in danger of falling behind schedule.

With best practices and work processes fully standardized and documented, it’s also easier to see when staff members are deviating from norm. This may indicate that conditions have changed and processes need to be adjusted to meet them.

Using lean manufacturing approaches, your operation can be less reactive and better conditioned to deliver the perfect order each time, to every customer.