Lean Manufacturing - Advantages and Disadvantages?

Lean production is the name given to a group of highly efficient manufacturing techniques developed to combine the flexibility and quality of craftsmanship with the low costs of mass production.

With lean production, components are delivered to each team's work station just-in-time, and every worker is encouraged to stop production when a fault is discovered. Lean production promotes a continuous two way exchange between workers, designers and managers. It encourages workers to learn, find faults and assume a more active role on the production line.

In the classic assembly-line process, where stoppages are expensive and need to be avoided at all costs; the workers on the assembly line learn nothing and the faults persist.

Advantages of lean production:

1. When a lean-production system is first introduced, stoppages generally increase while problems are ironed out. Gradually, however, there are fewer stoppages and fewer problems. In the end, a mature lean-production line stops much less frequently than a mature mass-production assembly line.
2. Gaining feedback from both the production-line workers and the component suppliers is a long and awkward process. With lean production, designers work hand-in-hand with production workers and suppliers. 

Applying Lean Production for a Positive Impact – an example:

At Littelfuse, a firm based in Illinois that makes fuses and other equipment to protect the electrical circuits in cars, mobile phones to larger machines in its customers' factories; it uses sophisticated equipment, skilled workers and produces good quality products on three major production lines.

However, at their 10,000 square foot assembly area (an old warehouse), the firm has ‘gained’ space by drastically cutting back its need to store raw materials, unused scrap, unfinished goods and other sorts of wasteful material. They have been using lean manufacturing for many years now. This is because the firm’s production site receives its raw materials (resins and high-grade zinc) — ‘just-in-time’ to pull them through its production line.

My question is – how lean does a process need to become before changing into a liability for the company? The whole idea behind surplus stock is that the firm has additional raw materials/finished goods to fall back on in case of emergency. But if they are living ‘hand to mouth’, what does the contingency plan of such a firm state?

Sources:

• Cusumano, M., “Manufacturing innovation: lessons from the Japanese auto industry”, Sloan Management Review, Vol. 30, 1988
• Lean production, October 2009, The Economist - http://www.economist.com/node/14299730
• Lean and Unseen, American Manufacturing, The Economist - http://www.economist.com/node/7119428
• http://www.foxnews.com/us/2011/04/29/japans-lean-manufacturing-takes-root/