Lean management is a concept that most people in the business world have heard evermore in the past few years. Its growing popularity is evident in how widespread it has become across the industries. Companies have taken it up because it impacts the companies’ holistic performance and serves to be a universal management tool.
The Lean methodology can be applied to organizing and managing product development, operations, suppliers, and other facets of any business, because of its universality. It relies on 3 of its basic tenets:
- Maximize quality and customer value
- Minimizing waste
- Continuous improvement
The 5 Lean Principles
Five lean management principles can be applied to any business to maximize workplace productivity.
Value-centric work is what draws customers to your business; it is what makes a consumer pay for your products and/or services. Therefore, value creation is of paramount importance. If a customer does not feel that your products/services don’t solve a customer’s problem or ease some tension, they will not be willing to spend any money on your products.
The end value is, therefore, the most important because it concerns the customer. Therefore, the first step is to identify this value. Anything which does not contribute to the end value is unnecessary and distracting. This makes you clear on the objective from the very start.
Map Value Streams
This is the step where you design a workflow for the whole organization. By designing the whole structure, you can figure out the purpose of each moving part. Thus, this can lead to identifying any parts that don’t contribute to the end value, which means that these parts don’t contribute any value to the customer.
Mapping your value stream condenses your organization plan and its workflow. The process can be easily visualized. It simply helps you optimize the process through which a customer receives value.
Once you’ve made a map of your value stream, you can identify superfluous parts of the process which don’t contribute to the final value and becomes an opportunity for waste reduction.
It gives you a macrocosmic view of your organization and lets you identify the more responsible teams. It also helps you figure out the correct workflow process steps which can make the greatest impact. Finally, it helps you visualize how your value flows and from where to where.
After creating the value stream map, you need to convert it into a non-stop workflow, eliminating any sort of wastage. If a workflow stops at any given step, there will be a wastage of resources, the most common wastage being that of time.
Therefore, the workflow needs to be tightly packed. This can be done by dissecting the workflow, looking at each part to identify potential stoppages and barriers, and then modifying your plan accordingly to address them up-front.
Create a pull system
One of the greatest risks for companies is that of forecasting demands since the market is contingent and subject to risks itself. Therefore, if a company manufactures its products in excess and the demand does not meet their manufactured goods, it leads to wastage of resources and labour.
Therefore, you need to create a pull system. A pull system is a system where the manufacturing depends on actual demand rather than on predictions. This minimizes waste. However, there is a catch to it. It requires a quick, short cycle to be efficient and productive; otherwise, there will be a lot of latency in the process, which can lead to customer dissatisfaction.
However, this step will now be easy if you’ve already adopted lean thinking, created mapped value streams and continuous workflows.
Maintain Continuous Improvement
The previous four steps help you integrate lean principles into your workplace. With the help of the previous four steps, your workplace transitions from being traditional to a Lean workplace. The last principle and step are centred on the sustenance of this workflow.
This step requires you to embrace the fact that your workplace is not stationary or static, that it’s an ongoing process, not an end product.
These steps are often seen as cyclical, where continuous improvement leads you back to the first step, which is identifying value.
Benefits of Lean Management
Although the benefits of lean management become clearer as and when an organization transitions from the traditional system to this system, there are some of its hidden benefits that we take for granted.
Firstly, it breaks the complex process of workflow down into smaller pieces and helps you identify every problem in each part of the process. The breakdown of the complexity of this process helps you with a better understanding of your organization. This breakdown also helps you understand how to manage your team and which teams need more guidance than the others.
By eliminating all possible wastages, you create a Lean workflow, which helps in improving performance and profitability, by leading to a better and more condensed business process. This creates a quicker workflow and makes you less prone to market risks than other forms of traditional structure.
Moreover, lean management focuses on the customer’s viewpoint and is, in a sense, built around it. This makes up for better customer satisfaction, with better responsiveness to their demands and concerns.
Since Lean management emphasizes maximizing profits, it drastically reduces the cost of production while maintaining the same, if not a better, quality of products. This leads to a lot of savings, which directly translates into profit for a company.
This added capital can be used for further implementation of the lean structure in your company. You can use it to buy better technologies, which condense the structure, even more, making your production process faster.
One of the major issues any business can face is unproductivity. Unproductivity can cause the business a hefty amount, and lean management is an effective solution to this problem. Companies have been adopting Lean management now more than ever because of its numerous benefits. Lean management systems are one of the most, if not the most, management systems and structures available. They are also cost-effective, which makes them a great choice for all companies of all scales.