Lean process management is one of the most widespread methods of bringing structure to an organization's continuous improvement efforts. The underlying concept of Lean is that the best way to inch closer to perfection is by empowering the people who operate each process to improve it, based on fundamental principles. In addition, high-quality outcomes are achieved by embracing simplicity and eliminating waste.
Origins of the Lean Methodology
Although the modern concept of Lean process improvement is closely associated with the Toyota Production System, its roots go much further back. At the turn of the 18th century, Eli Whitney pioneered the idea of interchangeable components in products, which made repairing and configuring them much more manageable and expanded product lifespans. Another breakthrough arrived more than 100 years later when Henry Ford organized the flow of raw materials through to the cars he sold customers.
After World War II, the introduction of the Toyota Production System changed the focus from machinery to process operations as a whole. Toyota's goal was to improve quality while reducing production costs and the time it takes to convert customer orders into cash.
Toyota's success led other manufacturing organizations in the West to replicate and modify the approach. The term "Lean manufacturing" was introduced in 1991, and many of its principles were defined in "The Machine That Changed the World" by James P. Womack, Daniel T. Jones, and Daniel Roos of MIT and in their follow-up "Lean Thinking" (1996).
While Lean was born from manufacturing, today, the principles support continuous improvement in almost every industry, including healthcare, construction, education, banking, and software development.
The Five Principles of Lean Process Management
Lean process management rests on five core principles:
Customer Value: While most organizations strive to provide value to customers, Lean organizations let this concept guide decision-making at every level. Lean leaders know that each customer decides what is valuable to them and for what they are willing to pay. Waste reduction is so critical to Lean management because waste, by definition, consumes resources but does not provide customer value.
The Value Stream: Maximizing customer value requires understanding how an organization transforms raw materials or information into products and evaluating each step, the resources, and the time involved. Value stream mapping helps organizations identify waste and opportunities for improvement in a way that helps prevent sub-optimization of just part of the value stream.
Flow: As Henry Ford demonstrated, the key to efficient production is an uninterrupted flow of work-in-progress. Bottlenecks or variations interrupt the flow and introduce the opportunity for errors that impact product quality.
Pull: One way to ensure a smooth flow is to limit the amount of work in progress. The Lean concept of pull means that nothing is produced or purchased until the next step in the flow is ready to use it — meaning they pull it. Pull is the key to just-in-time manufacturing, but it applies equally well to information work.
Perfection: The final Lean principle is that of pursuing perfection. Although it is impossible to achieve, Lean leaders are always looking for even small opportunities for improvement to get closer to the elusive goal. "Good enough" is never good enough.
The Eight Wastes of Lean
Through value stream mapping, Lean organizations look to reduce waste in every form. It is important to note that waste elimination isn't simply about cost-cutting; it is about simplicity and efficiency. In addition, reducing waste improves customer value. To make waste easier to spot, it is categorized into eight different types.
Transport: The waste of transportation is the unnecessary movement of materials or equipment.
Inventory: Storing materials or products before they are needed by the external or internal customer results in the waste of inventory.
Motion: The waste of motion is the unnecessary movement of people, walking, reaching, etc.
Waiting: When operations are unable to continue because materials, information, or people are not available, flow is blocked by the waste of waiting.
Over-Processing: The waste of over-processing occurs when features, materials, or effort are added to products that don't add value to the customer.
Over Production: Producing more of a product or work-in-progress that exceeds customer demand is overproduction — building too much or too early.
Defects: Defects are perhaps the most apparent and costly form of waste. Lean organizations achieve quality through process improvement and error-proofing rather than inspection alone.
Human Potential: If defects are the easiest type of waste to spot, the waste of human potential may be the most difficult. It occurs when the talents, skills, and ingenuity of people go untapped.
Lean Tools and Techniques
While there are too many Lean management tools and techniques to list here, there are some that are widespread across all industries.
Standard Work: Standard work is the foundation of improvement. It represents the documented current best practice for each process or activity. It is developed by the people doing the work and is accessible in the place where work is done (not hidden in some binder or computer system). Standard work is critical because, without consistent process operations, it is impossible to determine whether an improvement has been successful.
PDSA (Plan, Do, Study, Adjust): PDSA is an iterative improvement cycle that supports decision-making and action. The planning step involves identifying the problem, uncovering the root cause, and choosing a potential solution for experimentation. Then, the experiment is conducted in the next phase (Do). During the Study phase, the experiment's results are compared with baseline key performance indicators to determine if there was a positive change. If so, the standard work can be updated (Adjust), and a cadence for future monitoring is started.
Kanban: Kanban is a technique for visualizing flow. also originating in manufacturing. Work-in-progress is represented by cards that move from one state to the next. The structure of the Kanban board varies based on the organization and products, but it can be as simple as Plan, Doing, Done.
Gemba Walks: Because every team member is involved in improvement in a Lean organization, showing respect for employees is crucial to success. One method for demonstrating respect is the Gemba walk. During a Gemba walk, leaders go to the workspace to ask questions, observe, and note opportunities for improvement, getting input from the people who are doing the work. Leaders don't need to have all the answers. They don't make on-the-fly changes during a Gemba walk; instead, they reflect and potentially kick off a PDSA cycle to address opportunities for positive change.
Lean Process Management Software
You don't have to use Lean process management software to benefit from the approach, but it can be enormously helpful. Lean software supports continuous improvement with the following:
Digital boards: Online kanban boards make it possible for people to interact with them from wherever they happen to be. In addition, they make it easy for leaders to manage multiple boards and ensure that the history of each improvement is retained long after it is complete.
Opportunity capture: Once you empower employees to suggest opportunities for improvement, you will likely get more than you can implement at any one time. Lean software provides a repository for each idea to be evaluated and potentially added to the queue. With an online solution, employees can submit improvement ideas from wherever they are on the desktop or mobile device of their choice.
Alerts and notifications: Lean software speeds the pace of improvement by providing users with alerts and email notifications when projects need their attention or when new opportunities for improvement are submitted.
Impact measurement: The best way to maintain employee enthusiasm and executive support for Lean management is to quantify the impact of continuous improvement. Lean software helps capture the results of your efforts in terms of objective measurements such as cost savings, customer satisfaction, cycle time, and revenue. It also captures more subjective improvements, such as safety and employee engagement.
Organizations that implement Lean process management enjoy a structured and sustainable approach to improvement. They benefit from all employees' collective knowledge, ideas, and creativity, and they produce quality products and services for which customers will happily pay. Lean isn't easy, but the benefits far outpace the effort.