Lean Management is a method of managing and organising work to improve the performance of a company.
In this article, you will find all the answers to your questions about Lean Management:
- The definition of Lean Management;
- The origins of Lean Management;
- The 5 core principles of Lean Management;
- The different tools of Lean Management;
- The advantages of Lean Management.
Inspired by Toyota’s production system, Lean Management is a management and work organisation method aimed at improving a company’s performance and, more specifically, the quality and profitability of its output.
Lean Management optimises processes by reducing time spent on non-value-added tasks (unnecessary operations or transport, waiting, overproduction, etc.), causes of poor quality and complications. This method is supported by an important managerial dimension to ensure employees work in the best conditions. Ultimately, there are two main objectives: Complete customer satisfaction and the success of each employee.
Formalised by American researchers at the Massachusetts Institute of Technology (MIT), Lean Management is an English expression with a significant key word. “Lean”, in effect, means “no frills”. This echoes the idea of reducing something to the essential, of removing the unnecessary, which forms the basis of this method.
In the late 1940s, when Toyota laid the foundations for Lean Manufacturing, the goal was to reduce processes that did not add value to the end product.
In doing so, the leaders managed to achieve significant improvements in terms of productivity, efficiency, cycle time and profitability.
Through this significant impact, Lean thinking has spread to many industries and has evolved into the 5 core principles of Lean Management as outlined by the Lean Management Institute.
The term “Lean” was coined by John Krafcik (CEO of Google’s self-driving car project, Waymo, from 2015 to 2021) in his 1988 article “Triumph of the Lean Production System”.
In order to implement Lean Management effectively within the company, it is necessary to follow the 5 core principles of this method.
1. Identify value
What does every business strive to do? Offer a product or service that a customer is willing to pay for. To do so, it must add value to its offering as defined by its customers’ needs.
The value of your offering therefore lies in your company’s ability to solve the customer’s problem and, more specifically, in the part of the solution that the customer is actively willing to pay for. Any other activity or process that does not add value to the end product is considered waste.
This is why you should first identify the value you want to bring to your offering and then define it very clearly. This first step will help you move on to the second one more easily.
2. Map the value chain
This is where you literally need to map the workflow of your business. This should include all actions and people involved in delivering the end product to the customer. In doing so, you will be able to identify the steps in the process that do not add any value.
Applying this principle will show you where value is being generated and to what extent the different steps in the process do or do not add value.
Once you have mapped out your value chain, it will be much easier for you to see which processes belong to which teams and who is responsible for monitoring, evaluating and improving each process. This overview will allow you to identify and eliminate steps that do not add value.
3. Create a continuous workflow
Once you have got a handle on your value chain, you will need to ensure that each team’s workflow remains smooth. This may take some time.
Developing a product or service often involves interdepartmental teamwork. Bottlenecks and interruptions can occur at any time. However, by breaking down tasks into smaller chunks and visualising the workflow, you can easily detect and remove obstacles to the process.
4. Create a traction system
A stable workflow enables your teams to complete their tasks much faster and with less effort. However, in order to ensure this stability, care will need to be taken to create a traction system within the framework of the Lean methodology.
In such a system, work is only produced when there is demand. Thus, the capacity of resources is optimised: they are only mobilised when there is a real and concrete need.
Take the metaphor of a restaurant. You go in and you place your order. The restaurateur takes your order and starts preparing your meal. He does not cook a large quantity of dishes in advance, as there is no real demand and these potentially superfluous dishes may become wasted resources.
5. Continuous improvement
Once you have completed all the above steps, you have built your Lean Management system. However, be sure to pay attention to this last and arguably most important step.
Remember that your system is not isolated and static. Problems can arise with any of the previous steps. This is why you will need to ensure that employees at all levels are involved in the continuous improvement of the process.
There are several techniques for encouraging continuous improvement. For example, each team can hold a daily meeting to discuss what has been done, what remains to be done and any obstacles – an easy way to optimise the process every day.
The growing popularity of Lean principles is due to the fact that they focus on improving all aspects of a work process and involve all levels of a company’s hierarchy.
Lean tools are often described as learning and experimentation solutions. Staff adopt them and collaborate in a process of continuous improvement.
There are a multitude of tools available, but here are a few examples:
- The 5S method (clear, tidy, clean, order and be rigorous) to optimise the working environment and reduce wasted time;
- The Six Sigma method to improve the quality and efficiency of processes;
- Visual management to share information and solve problems;
- The Kaizen method to continuously improve processes;
- The SMED method to reduce the series change time;
- The Kanban method to optimise inventory management;
- The Value Stream Mapping (VSM) method to analyse processes and identify obstacles.
Although it originated in the automotive industry, Lean Management is now widely adopted, regardless of sector or company size. The concept has also been adapted, as in the case of Lean Purchasing, which focuses on operational excellence in procurement departments.
There are significant benefits for managers in implementing Lean Management methods:
- Concentration: By applying the Lean methodology, you can reduce waste. As a result, your staff will focus on the activities that really add value.
- Improved productivity and efficiency: Employees who focus on creating value will be more productive and efficient because they are not distracted by unclear tasks.
- A smarter process: By establishing a traction system, you can provide work only if there is a real demand
- Better use of resources: By basing your production on actual demand, you can use only the resources you need, thus avoiding waste.
As a result, your company and your staff will become much more flexible and able to respond to consumer demands a lot more quickly. The principles of Lean Management will enable you to create a stable production system, which will improve the overall performance of your company.