The Lean Management System is a popular business process methodology that started in the manufacturing sector but quickly spread to healthcare, software development, construction, and a host of other fields. While its use is widespread, many of the business leaders we talk to still have questions about its origins, structure, and benefits. This post answers the ones we hear most often.
What is the Lean Management System?
The basic idea of Lean Management is that improvement should be continuous and practiced by every person at every level of the organization. To achieve this improvement, Lean leaders apply the scientific method of experimentation to understand work processes and systems to undercover potential improvements. Improvements are aligned with the strategic goals that support the financial plan.
Also central to Lean is the concept of respect for people. This applies both to the voice of the customer and to those who do the work. Lean embraces the idea that the people who are closest to the work are the experts in improving it. Respect for people demands creating a work environment that promotes safety for workers and customers. It also requires a process-focused rather than a blame-based culture.
The third critical concept of a Lean Management System is eliminating waste in each of its forms. Lean thinking encourages people to learn the difference between work that adds value for the customer and work that does not. Eliminating waste frees resources to focus on value-adding activity that is meaningful to customers.
How Was the Lean Management System Developed?
The Lean system is generally the result of the Toyota Production System that was created by Taiichi Ohno, Shigeo Shingo, and others. It started with an effort to reduce dye change time on the stamping press. This allowed for a reduction of in-progress inventory and evolved into just-in-time inventory management. With less inventory in play, Toyota could reduce warehouse space, use fewer forklifts, and create an interruption-free flow of materials.
In order to achieve these goals, Shingo didn’t tell the workers what to do. Instead, he asked them to think about innovative ways to speed the process by eliminating unnecessary tasks. As a result, it was the workers who operated the press and changed the dye that solved the problems and implemented improvement.
What are the Principals of Lean?
Today, most leaders who practice Lean Management agree that it rests on five crucial principles.
1. Identify Value
In Lean, the customer always defines value based on their needs and what they are willing to pay for in a product or service. An effective business strategy requires identifying a problem that you can solve for the customer. Customer stories are an essential ingredient in defining value. Anything that serves that end is value, any activity or process that doesn’t is waste.
2. Value Stream Mapping
Value stream mapping is the process of visualizing the workflow of your operations and resources. It includes all activities by people involved in producing the end result for the customer. Visualizing the flow of value is an excellent way to identify parts of the process that add work and resources but no value.
3. Continuous Flow
The ideal Lean operation has no bottlenecks or interruptions to the flow of value. It is common for interruptions in flow to occur when work moves from one function to another, so leaders focus on these handoffs, deploying cross-functional teams to smooth the workflow.
The Lean method for achieving unimpeded flow is called a pull system. Work is only pulled into a process when there is a demand for it. This allows for optimal use of resources and helps eliminate the wastes of inventory, overproduction, transportation, and motion.
5. Continuous Improvement
Lean does not rely on massive transformation change. Instead, it embraces small, incremental improvements made daily by the people who do the work. No process is ever perfect or entirely free of waste, so improvement is always possible and encouraged.
What are Lean Strategy Maps?
Strategy mapping is a tool developed by the pioneers of the Balanced Scorecard, Robert S. Kaplan and David P. Norton. Strategy maps are a strategy deployment tool that helps leaders describe and communicate the strategic plan. They also serve as the basis for the creation of financial and non-financial metrics that can be used to track strategy execution and performance. Finally, they also serve a risk mitigation function.
Strategy maps are most valuable when they are part of a systematic management process like Lean. In that environment, organization and individual goals and objectives align with a defined mission and desired business outcomes.
Strategy maps approach the goals from four perspectives, financial, customer, internal, and growth. The financial and customer perspectives address the question of “What do we want to accomplish,” while the internal and growth views represent how it will be accomplished.
What are the Benefits of the Lean Management System?
Lean is such a popular business strategy because it has benefits for organizations of all types.
Lean is ideal for managing process complexity. Because value stream mapping allows you to understand each part of the system of resources, activities, and processes that creates the final product or service, you can identify opportunities for simplification.
The result is more efficient business processes that involve less waste and increase the productivity of workers. Another benefit is reduced lead times that genuinely allow for just-in-time production of products or work in progress.
Lean also has built-in strategy deployment elements that allow for better management of changing priorities and goals. In addition, increased visibility at the team level improves worker engagement and morale.
Obviously, we can’t answer every question about Lean in this one post, but hopefully, the ones we covered give you some insight into the approach. Of course, if you have questions that we didn’t address, feel free to reach out or leave your thoughts in the comments. Our team is happy to help and ready to explore how our solutions might support your implementation of your own Lean Management System.