The Lean methodology is an evolution of the Toyota Production System that the Japanese automaker implemented following World War II to improve the efficiency and flexibility of its manufacturing. Two important books, The Machine That Changed the World (1990) by James P. Womack, Daniel Roos, and Daniel T. Jone and Lean Thinking (1996) by James P. Womack and Daniel T. Jones, outlined the structure and principles for the Lean method.
Although the Lean management system started in manufacturing, today it is widely used for process improvement across the globe in every sector, including logistics and distribution, services, retail, healthcare, construction, maintenance, software development, and even higher education. There is also a lean approach to product development.
What is the Lean Methodology?
Two guiding concepts are the heart of the Lean methodology. An organization can not practice Lean without embracing them both.
1. Respect for People
Lean thinkers recognize that the best ideas often come from people directly responsible for producing the product or providing the services. So they turn top-down management on its head and give those closest to the product or the customer an equal voice.
One essential Lean practice involves managers going to the "Gemba" or the place where the work gets done to see workspace conditions and process activities first hand, allowing frontline workers to share insights and answer questions. This process often results in opportunities to improve.
Another way that Lean organizations demonstrate respect for people is by giving them the tools and training they need to be successful. Lean leaders take the time to ensure that everyone understands the techniques that the organization will use to implement, manage, and report on improvement work. In addition, they invest in training, software, and other necessary resources to achieve operational excellence.
2. Continuous Improvement
Lean leaders believe that processes can constantly be improved and that improvement is a daily activity that is the responsibility of everyone in the organization. The structure is applied with an improvement cycle such as PDSA (Plan, Do, Study, Act) or DMAIC (Define, Measure, Analyze, Improve, Control.) Often continuous improvement software is used to organize, measure, and report on Lean activities.
Five Core Principles of Lean
Womack and Jones laid out five core principles for the Lean methodology, giving leaders a framework under which to operate.
Lean starts by understanding what value the customer ascribes to the offered product or services. The customer, not the producer, defines all value. The price is based on the customer's willingness to pay, which determines the maximum allowable cost to produce the product. The organization then focuses on eliminating waste to deliver what the customer wants with the highest possible margins.
2. The Value Stream
The value stream represents the sum of the product's entire life-cycle from research and development through to the customer's use of the product. A deep understanding of the value stream is necessary to achieve maximum value and eliminate waste. Every process is examined to see what value it adds. Processes, features, and materials that don't add value are removed. Value stream mapping is a frequently used technique in Lean organizations.
The value stream should flow seamlessly without interruption or delay. The Lean method seeks to have every process entirely in sync with every other. A smooth process flow is one of the conditions necessary for just-in-time production.
What makes flow possible is the idea of pull. In Lean, pull means ensuring that nothing is made before it is needed. Instead of creating work based on a forecast and schedule, in a Lean organization, nothing is made until the internal or external customer orders it. This makes shorter delivery cycle times possible and increases flexibility. Of course, it requires a solid way of communicating what is needed in each step of the value chain. The Lean technique of Kanban, using visual cues to communicate process flow, is widely used.
In line with the guiding concept of continuous improvement, Lean practitioners exercise a relentless pursuit of perfection. They dig deeper into the root causes of quality problems and waste, apply more rigorous measurements, and make incremental changes more effectively than their less successful competitors.
Perhaps the Lean methodology is most often associated with the goal of eliminating waste. The Lean framework lays out eight distinct types of waste that should be identified, minimized, or eliminated. Everything that does not add value that the customer would be willing to pay for is considered a waste.
The waste of motion occurs when movements of people, materials, or machines are more complicated or occur more frequently than necessary.
Inventory of products or materials that is not immediately needed to fulfill customer needs is targeted for elimination. Too much stock creates waste in terms of storage, management, and loss of value over time.
The waste of waiting occurs when processes become out of sync and flow is interrupted. People and equipment are idle as they wait for work-in-progress to catch up. Waiting is a costly inefficiency.
Perhaps the easiest type of waste to understand, quality errors are a blatant waste of materials, time, and human effort.
Overproduction is an insidious waste because it contributes to many of the other wastes, including inventory, motion, and transportation. The antidote is to produce only what is needed when it is required.
Lean leaders consider transportation a waste when materials are moved from one place to another in a way that does not add value for the customer.
Over-processing means putting more work, features, or cost into the product than the customer values. Lean leaders look to produce what is necessary and no more.
8. Human Potential
The waste of human potential occurs when a person’s skills, capabilities, and ideas are underutilized. It is perhaps the most challenging waste to recognize but arguably the most damaging.
Benefits of the Lean Methodology
Lean organizations benefit from the approach in several important ways. While there is no "right" or "wrong" way to improve operations, Lean has several compelling advantages.
Lean helps organizations manage more improvement projects and complete them faster by providing a framework for improvement projects. Lean provides a common language for operations improvement and makes it easier for cross-functional teams to work together. Several Lean tools, including PDSA and Kanban boards, are often used to organize and visualize improvement work. Lean software supports all Lean initiatives.
One of the most potent aspects of Lean is the idea that the people who operate processes are the ones who should be empowered and expected to improve them. When employees can contribute opportunities for improvement and participate in the improvement cycle, they become emotionally invested in the outcome, and engagement increases.
Lean organizations strive to learn from every improvement project so that the team gains tribal knowledge over time. Lean software is helpful in this quest because it becomes the repository of that knowledge. Team members can search for similar projects that have been completed in the past and take away ideas of what to do and mistakes to avoid.
Before an improvement is attempted within the Lean method, the baseline is documented. This allows the team to understand exactly how much waste was eliminated and place a value on the improvement. Measuring the impact of Lean secures further investment in improvement work, increases team morale, and highlights the difference between actual improvement and change without effects.
Lean Software Capabilities
Implementing Lean is no small task, especially if it is new for your organization. However, selecting a Lean software platform is an excellent way to bolster your efforts, unite the team, and build on each success. The most crucial features of Lean software are designed to support four critical functions:
Capturing Opportunities for Improvement
Because improvement in Lean is a bottom-up affair, all employees are potential sources of ideas for positive change. Cloud-based Lean software allows people to submit opportunities from wherever they happen to be any time of the day. In addition, employees can search the database to see if the improvement has already been proposed to avoid duplication.
Capturing ideas is an excellent first step, but it is only the beginning. Improvement management software includes notifications so that when an opportunity is entered, the right leaders are notified about it and can decide whether to take action. As the project commences, active alerts help ensure that tasks are completed and that someone is aware of progress stalls.
We mentioned the importance of measurement in the Lean method. Software is ideal for capturing the baseline process results, comparing them to the post-change results, and assigning finical or other impact measurements to the improvement.
To support the idea of continual learning, Lean software becomes the home for notes, documents, control charts, fishbone diagrams, and other artifacts of improvement. Whether successful or not, every completed project makes the organization more innovative. The best solutions also make it easy to broadcast success so that engaged employees are recognized and acknowledged for their efforts.
These are the fundamentals of the Lean methodology. Volumes have been written about the approach, so if you are ready to go beyond these basics, you have many resources at your disposal.