Lean manufacturing

Lean manufacturing is a management system built on three principles: produce only what is needed, when it is needed; correct abnormalities as soon as they occur; and empower workers to improve the process themselves.

At its core, Lean eliminates activities that do not add value for the customer. Where just-in-time manufacturing (JIT) focuses on inventory strategy — receiving goods only as needed to reduce costs and waste — Lean goes further by reducing cycle time, flow time, and throughput time across the entire system, including marketing and customer service. According to one study: "While Just-In-Time manufacturing focuses on efficiency of inventory strategy to eliminate waste and enhance productivity, Lean manufacturing uses efficiency in its system setups to reduce cycle, flow, and throughput times being the added values to customers."

Companies employ the strategy to increase efficiency. By receiving goods only as they need them for the production process, it reduces inventory costs and wastage, and increases productivity and profit. The downside is that it requires producers to forecast demand accurately, as the benefits can be nullified by minor delays in the supply chain. It may also impact negatively on workers due to added stress and inflexible conditions. A successful operation depends on a company having regular outputs, high-quality processes, and reliable suppliers.