Lean management is a long-term approach to management that focuses on continuous improvement and efficiency through small, incremental changes. It seeks to eliminate any waste of time, effort, or money.
This Lean management, also known as Lean Manufacturing, affects every level of the company’s hierarchy, intending to make it more flexible and better able to address customer requirements faster.
Lean management continues to be famous among all kinds of businesses as it is designed to define value from the end customer’s perspective, eliminate waste within the business, and continuously improve all work processes, purposes, and people. In addition, it encourages shared responsibility and leadership while ensuring that each employee is an equal contributor.
What is meant by LEAN?
- Standardised Work
- KPIs- Key Performance Indicators
- Visual Management
History of Lean Management.
In 1975 Toyota Production System (TPS) was a small automobile manufacturer, and the company’s owner was assigned the responsibility of identifying areas for improvement across all processes and figuring out ways to eliminate waste and reduce the cost of manufacturing production by his employees. The employees worked on certain principles, and the concept of lean management or manufacturing originated. The methodologies and operational processes Toyota Production System used were adhered to by other companies when they achieved success on a global level.
Pillars of Lean Management.
There are two pillars of Lean Management, and they are Continuous Improvement and Respect for people. When used correctly, these guiding pillars help in more thoughtful decision-making and guide companies toward becoming more innovative and productive systems.
Continuous improvement, or Kaizen, is a methodology created to figure out opportunities for streamlining work and reducing waste. This encourages boosting the speed and quality of value delivery. The operation was formalised by the popularity of Lean in manufacturing and business, and now in the present time, thousands of companies around the world practice this method to identify savings opportunities. Outstanding results can be obtained by combining these ideologies.
Some of the wastes in knowledge work are,
- Wait times between the steps in a process
- Context switching
- Excessive planning
The most effective way to reduce waste in any organisation is by working to improve constantly. Eliminating these types of waste through continuous improvement allows organisations to work more efficiently, reducing wasted time and effort while improving the speed of value delivery.
The Continuous Improvement Cycle.
The continuous improvement cycle is a flexible process that outlines the basic steps in the process of constant improvement:
When encountering a new opportunity, teams use this method to identify a hypothesis, plan a solution, implement the changes, and measure the results. The final step of this improvement cycle, the review, is critical to the continuous improvement process because businesses cannot continuously improve without a way to measure and reflect upon the impact of their decisions.
Among all Lean methodologies, continuous improvement is a primary focus, in addition to high customer service standards and the reduction of waste in the form of cost, time, and defects.
Respect for people.
The second pillar of Lean management is respecting the people and organisations that practice Lean Management. Execute this methodology by respecting people, including customers, employees, and the team at every part of the value stream
Respect for customers.
This methodology mainly focuses on paying attention to the customers’ voices instead of relying on educated guesses about the problem. Organisations that practice Lean Management respect their customers by limiting waste that the customer would not be willing to pay. More specifically, not wasting the customer’s time on a product, service, or feature that doesn’t serve the customer’s requirements. Lean organisations always try to get customers’ points of view on improving their products, features, and services to meet their needs more finely.
Respect for employees.
Employees of Lean organisations are bestowed with the autonomy, mastery, and purpose to perform at a high level for the betterment of the business. Lean leaders mentor their employees perfectly, guiding them to stay focused on delivering customer value, which in turn would help the business. For example, mentoring marketers to manage spending capital on leads that only benefit the process or the company or else guiding salespeople to invest in specific, targeted leads instead of aimlessly chasing any information.
As respecting employees targets the waste that Lean aims to eliminate, it enables those organisations to produce products of higher quality, at a lower cost, in a more sustainable way. In addition, it also succours Lean organisations by removing the layers of overhead between the customer and the employees who are directly producing the product.
Respect in teams.
In Lean Management, “Teams” are not defined as a group of employees that operate for personal goals to advance in their careers. Instead, lean teams work to optimise the system by visualising and distributing work to deliver value to the customer in the fastest, most sustainable way.
According to Lean Management, that one team member who does the work of a few other teammates sets a detrimental, non-viable standard for the whole team and gets in the way of meeting objectives that benefit the customer. Lean management methodologies limit Work in Process (WIP) at the team and individual levels to discourage this way. Team members should respect each other by collaborating and distributing work evenly across themselves. The team manages work as a system rather than as a group of individuals while prioritising the delivery of value.
5 Principles of Lean Management.
“A way to do more and more with less and less-less human effort, less equipment, less time, and less space while coming closer and closer to providing customers exactly what they want,” says Womack and Jones defining Lean.
Lean Management has proven to be successful in managing productivity and efficiency while eliminating waste in most demanding industries like software development, manufacturing, construction, healthcare, high technology, education services, and many more.
The following five principles of Lean Management are implemented to patently understand Lean methodologies.
1. Identify Value.
This principle strives to do what every company aims by providing their customers with a product or service after identifying the value from the customer’s perspective/Standpoint. Simply the company needs to add value defined by its customers’ needs.
Identifying the value that needs to deliver is the primary principle here, and afterwards, the company can proceed to the next step.
2.Value Stream Mapping.
In Lean, value is defined through the eyes of the customer. Therefore, anything that adds value to the customer, anything a customer is willing to pay, is known to be the value in Lean Management.
A value stream is the way value flows through an organisation or any kind of business. It is a set of actions an organisation takes to deliver value to a customer in the form of a product or service.
Value Stream Mapping.
Value stream mapping in Lean Management involves defining and visualising the steps in getting a product or service from ideation to delivering value to the end consumer.
Value stream mapping helps organisations optimise the flow of value while creating a more efficient, predictable, and agile system.
3. Creating a continuous workflow.
After mastering the value stream mapping, each team’s workflow should remain smooth. This principle is to ensure that the steps which create value fall out in a perfect sequence for the product to reach the customer steadily as possible, along with having fine quality.
Breaking down the work into smaller batches and visualising its workflow would easily detect and help to avoid bottlenecks and interruptions when producing a product or to offer a service.
4. Establishing a pull system.
Once the flow is initiated, customers pull value from the next level of activity. In lean methodology, creating and establishing a pull system is needed to have a stable workflow that can deliver work tasks much faster with less effort.
To optimise resources’ capacity, “the work” is pulled only when there’s a demand. For example, a young lady goes to a coffee shop and orders a hot chocolate. Then only the barista makes the hot chocolate that the young lady ordered. He has not prepared any hot chocolates because there wasn’t any demand, and they might have been completely wasted.
5. Pursuing perfection.
Lean leaders seek to steer their organisation toward a perfect value stream by engaging in a series of continuous improvements to pursue perfection. Lean management isn’t about a grand gesture or revolutionary change. It’s about making small, incremental changes at every level of the organisation for continuous improvement and efficiency while eliminating waste.
This principle is to make sure that the other four principles take place continuously and consistently.
“5S” complement the general principles, and Lean Management can be viewed through it. Here are the 5S and its translations
- Seiri à Organization
- Seiton à Order
- Seiso à Cleanliness
- Seiketsu à Standardization
- Shitsuke à Discipline
8 Wastes of Lean management.
Taiichi Ohno was one of the founding fathers of Lean manufacturing, and he identified three major areas that have a negative impact on the work process.
- Muda – Waste
- Mura – Unevenness
- Muri – Overburden
There are 8 categories of waste which are given by the acronym DOWNTIME.
When the product is not fit for usage, defects arise, adding additional costs to the process and further it unable to deliver any value to the customer. This also causes the production team to either rework or scrap the product.
Following are a few countermeasures for defects.
- Figuring out and focusing on the most repetitive defect
- Designing a process that can detect anomalies in the system
- Redesigning the operations without flaws.
- Using standardised assignments to ensure a compatible defect free manufacturing process
It is the other process that doesn’t add any value to the customer, and it is often one of the most challenging ways to detect and eliminate. Usually reflects on doing work with no additional value required by the customer. But, in turn, it increases the cost of the end product.
The followings are the countermeasures for avoiding over-processing
- Comparing customer needs to manufacturing specifications
- Simplifying the manufacturing process
- Processing re-evaluation
- Developing value stream mapping
There are two types of waste in waiting,
- Idle workers
- Idle equipment
Waiting time is the result of unevenness in the production stations, and it may cause excess inventory and overproduction. Waiting for higher-level administration to review files, waiting for the computer to load a program, and waiting for needed materials to arrive are some examples of waiting.
The followings are the countermeasures for waiting
- Improving continuous flow or single-piece flow
- Using standardised work instructions to even the workload
- Training employees to be skilful in various fields
4. Non-Utilized talent.
This is an extremely important form of waste that is hardly recognised because it is often ignored or underemphasised. Unused human potential often results from management policies and styles that damage the employees’ contribution. Insufficient training, lost motivation, lost creation, and lack of teamwork can cause skills to be unutilised.
The followings are the countermeasures for avoiding non-utilized skills
- Proper training plan
- Hiring a competent workforce
- Giving the employees skill-based jobs
Wastes in transportation are the unnecessary movement of raw materials, work in progress, or finished goods. Poor office layout, excessive steps in the process, misaligned process flow, and a poorly designed system can cause transportation waste. Making the raw materials required for production easily accessible inside the factory is a way to reduce this type of waste.
The followings are the countermeasures for avoiding transportation waste
- Continuous flow
- Managing work-in-process (WIP) items.
A product, raw material, WIP, or finished goods quantities that go beyond supporting immediate need. These excessive inventories are often the result of the company holding Just-in-case stocks. Then they overstock themselves to meet the unexpected demand or to avoid protection delays. However, these excessive inventories do not meet the customer’s needs most of the time. In return, they increase the storage cost and the deposition cost.
Poor monitoring systems, misunderstanding customer needs, long set-up times as well as unreliable suppliers are some other reasons that may cause inventory waste in an organisation.
The followings are the countermeasures for avoiding inventory waste
- Following the Just-In-Time philosophy
- One-piece flow
- Using a “Takt Time”
- Practising kanban
Motion waste is the unnecessary movement of people that does not add value. This includes the movement of employees or machinery, which is complicated and unnecessary. Motion waste can be caused by poor shop floor layout, remote operations, or workstation congestion.
The followings are the countermeasures for avoiding motion waste
- Having a 5S working management system
- Developing value stream mapping
- One-piece flow
- Proper planning of the workload
8. Excess Production.
Manufacturing a product or an element of the product before the demand of the customers is known as overproduction. Mostly this type of waste happens when there is an idle worker, resources, or time. This is known to be the ‘Just In Case’ way of working and is NOT a part of Lean management for the following reasons.
- Prevents smooth workflow
- Demand for higher storage costs
- Ignore defects inside the WIP (Work in Progress)
- Require more capital expenditure to fund the production process
- Require excessive lead time.
Additionally, over-produced products or quantities of products produced may not meet the customer’s requirements.
The followings are a few countermeasures for overproduction.
- Using a “Takt Time”, which is the required product assembly duration that is needed to match the demand.
- Reducing setup times to manufacture in small batches
- Using a pull system or ‘Kanban’ system to control the amount of WIP.
Benefits of Lean Management.
Though pointing out all the benefits of Lean management is challenging, here are some significant reasons to integrate lean management into a business.
1.Enhancement of the Quality Control.
In most conditions, Quality control is directly related to productivity, and it is challenging to improve one of them without influencing the other. In Lean Management, enhancing the quality of the product, service, or feature is one of the top priorities in the organisation. It applies to the whole hierarchy, and each level’s employees need to participate in this process.
Once improving the quality is carried out, the companies will inevitably start reducing wastes that add no value.
2.Reduction of Waste.
Lean thinking encourages defining waste as anything that your customer wouldn’t like to pay for. So it’s essential to get rid of them, and businesses of any size struggle with outrageous wastes of all kinds.
Lean management guides the organisation to reduce waste more effectively and sustainably, enhancing productivity.
3.Improvement in the efficiency.
Undoubtedly, improved efficiency is one of the most noticeable efficacies of lean management. When measuring progress and success in Lean organisations, improvement in efficiency is visible in various stages of the process. Therefore, measuring efficiency is crucial for the long-term success of an organisation. Moreover, In-depth analysis of the work processes and their evaluation are proven to be profound for its upcoming performance.
4.Boost the Morale.
Lean Management encourages an effective interaction between employees of each level in the organisation’s hierarchy, leading to a trustworthy and respectful professional relationship that helps the organisation grow. This eventually enables those lean organisations to enjoy higher employee satisfaction rates. In addition, it improves employee morale on an individual level and across the entire team.
H2- Improvement of Stakeholder Visibility
Lean Management strengthens communication and allows the stakeholders to have a crystal-clear visualisation and viewpoint of a particular project.
5.Reduction of Costs.
By performing key practices only when demand dictates, organisations eliminate waste and save time and energy while reducing overhead costs like inventory storage, labour, and machine runtime. Furthermore, it also attempts to minimise the strain on necessary types of equipment.
6.Promising Future Possibilities.
Lean Management is one of the most popular methods that businesses are using in today’s world. More organisations will try to adopt Lean Management and its principles when more exposure to this methodology and awareness of its benefits occurs.
Organisations that are already practicing Lean Management will be leading in that specific field shortly.
- Management of Complex processes
- More systematic Business Processes
- Enhancing the Management of switching Priorities
- Reduction of Lead Time
- Predictable Delivery of Customer Value
- Attaining new methodologies and techniques
are some other benefits of Lean management.
As a philosophical approach, Lean methodologies possess broad applicability to processes within businesses of all scales because of their ability to assist in achieving their business goals in a more flourishing and sustainable way.
From shortening the vision to value cycle time to improving speed and increasing overall quality throughout the production process to improving the aspects that impact delivery, Lean management enables organisations to add value to customers by guiding them to optimise across the entire value stream
Understanding what Lean Management is through its 5 principles and 2 pillars enables Lean organisations to focus on building quality into the system by developing and optimising standard processes, allowing the team to move faster and with more productivity while eliminating waste.