What is lean management? Definition, principles and techniques

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In need of a management model that cuts back on waste, trims the fat, and improves performance and profitability? Let lean management show you how...

Decades after it first originated, lean management has been steadily growing across the business world, and it’s easy to see why. Used across just about every industry and sector imaginable, its long-term approach can benefit company performance in a range of different ways.

Unfamiliar with the term or just looking for a quick refresher? We’ll delve into lean’s definition, sum up the key principles behind it, and explore how it can benefit organisations below.

What is lean management?

Lean management’s roots lie in the production lines of Toyota in the 1940s. Seeking to improve its products, keep costs down and reduce processes that failed to add value to the product, its leaders made significant improvements to the company’s efficiency, cycle time and productivity.

The unnamed process eventually earned the “lean” moniker in 1988 thanks to John Krafcik’s article The Triumph of the Lean Production System, while books by the likes of Dr James Womack, Daniel Jones and Daniel Roos helped to popularise the approach in the Western world.

In short, lean emphasises shorter lead times, higher product quality and lower costs, utilising three pillars to achieve this:

– Delivering value from your customers’ perspective

– Eliminating anything that does not provide value

– Continuously improving your processes

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What are the five principles of lean management?

Implementing lean management means following the core principles of the method:

Identify value

Your company’s product or service is the solution to your customers’ problems. More specifically, it’s the part of the solution that they’re willing to pay for. Per their customers’ needs, this gives the product/service value.

But anything that doesn’t add value has got to go. Thus, the first step concerns identifying the value you want to bring to your offering and defining this value as clearly as possible.

Map the value stream

Here, you’ll map the workflow of the organisation, including the actions, people and processes that are involved in creating value when delivering to the customer. By seeing which processes belong to which teams, along with who is responsible for monitoring, evaluating and improving each process, identifying the steps that don’t create value becomes much more straightforward.

Create continuous workflow

With your value stream mapped out, ensuring that this flow then remains continuous and free of interruptions is imperative. As you can imagine, it’s not quite so quick a fix, requiring collaboration amongst team departments to carry out.

Since bottlenecks and interruptions can take place without warning, breaking down tasks into smaller parts and then visualising can help you to better detect anything that stands in the way of the process.

Create a pull system

For optimal success, you need traction. In a pull system, work is only produced when there is a real need for it. That means your resource capacity and products or services are only delivered as and when they’re required by customers.

Consider your local coffee shop. They don’t pour out a selection of different coffees in the hopes that the same number of customers will come in and buy them. Doing so is a sure way of creating waste. The barista only starts creating orders when customers walk in and request their drinks.


Group of people working together

Continuous improvement

This is probably the most important step. Putting lean in place isn’t a one-time event.

Just like your customers’ needs will change, so too will your system. Even the most perfectly managed process isn’t free from challenges. Instilling a sense of continuous improvement across your team helps to ensure longer-term success in your lean system.

Examples of lean management

There are several specific business and production processes based on the lean management concept, including:

– 5S: A lean method designed to optimise workspaces, 5S consists of five steps that begin with S: Sort, Set in Order, Shine, Standardise and Sustain.

– Kanban: Used as a means of designing, managing and improving flow systems for knowledge work such as software development, Kanban places special attention on visualisation in order to control a project’s work in progress.

– Kaizen: A lean concept that aims to continuously improve all functions of a business, from top to bottom.

– Six Sigma: An approach that uses a series of management techniques intended to improve business processes and reduce the likelihood of errors and defects.

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Why lean management is important

The array of benefits that lean management creates for businesses has helped make it a popular choice for many managers of late. When it’s implemented correctly, here’s what you can expect lean to provide across your business…

Greater team focus

By decreasing the amount of wasteful processes and activities, employees are better able to focus on tasks that only produce value for customers.

Increased efficiency and productivity

With the elimination of unnecessary tasks, managers and teams contribute to smoother workflows that are uninterrupted by the need to complete superfluous duties that stand in the way of achieving such workflows.

More employee engagement

Since it makes everyone on the team aware of an organisation’s larger strategy, lean management’s continuous improvement helps to engage employees at all levels. And not only are engaged employees more productive, they’re also more committed to professional development – which in turn helps to reduce employee turnover.

Optimal use of resources

By limiting production to real demand, an organisation makes greater and more intelligent use of the resources at their disposal.

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