James Womack and Dan Jones are the founders of the Lean Enterprise Institute and the Lean Enterprise Academy (UK), respectively. Their book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation, is considered by some to be the bible of Lean Manufacturing. It was initially published in 1996 based on their in-depth study of Toyota’s fabled Toyota Production System (TPS).

Womack and Jones realized that every business output results from a process. Process thinking in operations management requires leaders and workers to view the organization as a set of related processes that work together for a common goal rather than a group of departments supporting a specific function.

These ideas are widely used by organizations in every sector to better design, track, and optimize business operations. Companies have not done away with functional departments. Instead, they view the work departments do differently. Departments don't exist on their terms. Each receives inputs from other functions and provides outputs that other departments must consume to complete their work.

In short, each function or person contributes to one or more business processes. So, instead of managing departments, process thinking means managing entire operations. A process might move through a series of teams or functions, each with its requirements, but the purpose of each one is to create value for the customer, which is what matters.

The 5 Principles of Lean Thinking

"Lean Thinking" lays out the five lean principles: value, value streams, flow, pull, and perfection. Here's some insight into what Womack and Jones meant by each.

Value

The Lean continuous improvement approach begins with a detailed understanding of what value customers assign to products and services. Customer perception of value determines what they will pay for the product or service. Establishing value allows organizations to create a top-down target price. Next, the cost to produce the products and services is determined. Finally, the organization gets to work on eliminating waste to deliver the value the customer wants for the most profit.

Remember that what customers value isn't necessarily what your team expects. For this reason, it is essential not to guess but rather to research by talking to customers and analyzing their real-world behavior.

"Why is it so hard to start at the right place to correctly define value? Partly because most producers want to make what they are already making and partly because many customers only know how to ask for some variant of what they are already getting."

- Lean Thinking: Womack and Jones

The Value Stream

The value stream is the totality of the product's entire life cycle, from the raw materials to the customer's use and eventual disposal of the product. In order to eliminate waste, the ultimate goal of Lean, there must be an accurate and complete understanding of the value stream. First, processes are examined to determine what value is added. Next, steps, materials, features, and movements that do not add value are eliminated. According to Womack and Jones, value stream mapping will almost always reveal three types of waste.

• Many steps will be found to create value unambiguously.
• Many other steps will be found to create no value but to be unavoidable with current technologies and production assets.
• Many additional steps will be found to create no value and be immediately avoidable.
  
  

Flow

Understanding flow is an essential element of improving performance. If the value stream stops moving forward, waste is the inevitable by-product. The Lean manufacturing principle of flow means creating a value chain with no interruption in the production process and a state where each activity is entirely in step with every other.

"Converting a classic batch-and-queue production system to continuous flow with effective pull by the customer will double labor productivity all the way through the system (for direct, managerial, and technical workers, from raw materials to delivered product) while cutting production throughput times by 90 percent and reducing inventories in the system by 90 percent as well."

- Lean Thinking: Womack and Jones

Pull

The Lean principle of pull helps support flow by ensuring that nothing is made ahead of time, building up work-in-process inventory, and stopping the synchronized flow. Rather than using the traditional American manufacturing approach of pushing work through based on a forecast and schedule, the pull approach dictates that nothing is made until the customer orders it. As a result, the method requires great flexibility and short design to deliver cycle times. It also requires an efficient way of communicating what is needed for each step in the value chain.

"Pull in simplest terms means that no one upstream should produce a good or service until the customer downstream asks for it."

- Lean Thinking: Womack and Jones

Perfection

Lean practitioners strive to achieve perfection. The march toward the perfect process operations happens step by step as continuous improvements address the root causes of quality problems and production waste. The relentless pursuit of perfection drives process thinkers to dig deeper, measure more, and change more often than their competitors.

Lean Process Definition

With these principles in mind, it becomes clear that a Lean process must have:

• A standard operation that sets the baseline for continuous improvement. (Standard work)
• Defined performance indicators that are consistently measured. (KPIs)
• Visualized indications of flow and pull.
• A built-in problem-solving process.

The Benefits of Process Thinking in Operations Management

Here are a few of the top reasons why organizations are moving away from traditional, function-based thinking to a process-based approach that leverages Lean principles:

Process Thinking is Holistic

Traditional, function-based thinking often leads to a siloed approach to work, where each department focuses on its own tasks and goals without considering the overall flow of work or the needs of other departments. This can lead to a number of problems, including:

• Poor communication and collaboration: When departments don't communicate effectively, it can lead to misunderstandings, delays, and errors.

• Waste and duplication of effort: Departments may perform the same tasks multiple times, or they may create unnecessary paperwork or data.

• A lack of customer focus: Departments may focus on their own metrics, such as productivity or output, without considering the impact on the customer experience.

Process thinking, on the other hand, encourages managers to view the organization as a system of interconnected processes. This means that managers are responsible for understanding the entire process, from start to finish, and for identifying and eliminating bottlenecks and waste. As a result, process thinking can lead to:

• Improved communication and collaboration: When departments understand how their work fits into the overall process, they are more likely to communicate effectively and collaborate with each other.

• Reduced waste and duplication of effort: By mapping out the entire process, managers can identify and eliminate unnecessary steps and duplication of effort.
  
  
• A stronger focus on the customer: When managers understand the entire customer journey, they can identify and implement improvements that will make the customer experience more efficient and enjoyable.
  
  

Process Thinking Helps Solve Difficult Challenges

Complex challenges are often difficult to solve because they are difficult to understand. Process thinking provides a framework for breaking down complex problems into smaller, more manageable parts. This makes it easier to identify the root cause of a problem and to develop effective solutions.

For example, an organization may be experiencing a problem with customer satisfaction. By mapping out the entire customer journey, the organization can identify specific steps in the process where customers are experiencing problems. This information can then be used to develop targeted solutions, such as improving customer service training or redesigning the ordering process.

Process Thinking Improves Quality

Process thinking can help organizations achieve consistent, predictable results by identifying and eliminating sources of variation in the process. Variation can occur for a number of reasons, such as:

• Inconsistent work instructions: If workers are not following the same instructions, it can lead to different results.
  
  
• Lack of training: If workers are not properly trained, they may make mistakes.
  
  
• Equipment problems: If equipment is not properly maintained, it can break down and cause delays or errors.
  
  

Every organization should strive for a consistent, predictable result that matches customer requirements. This means supporting processes that always work the same way every time they happen. Variation is the opposite of quality and the enemy of perfection.

We highly recommend that you pick up a copy of Lean Thinking, which goes into greater depth about each of these Lean manufacturing principles. It also offers insightful and unexpected examples across almost every industry. These ideas form the foundation of the Lean approach transforming countless corporations, giving them a leg up on the competition and a clear path to profitability and delighted customers.