A guide to lean management
Managing a team or company can be challenging, if not downright overwhelming at times. With so many moving pieces, it’s hard to know where to focus efforts to meet the needs of your customers, get the most out of your employees, and grow your business.
One approach that has helped countless organizations become more efficient and productive is lean management — a system that prioritizes value for customers while also focusing on continuous improvement for team members and the organization as a whole.
If you’re looking to change the way you run your company or more effectively manage your teams and projects, read on to learn how to master and implement lean management strategies.
This article will cover:
- What lean management is
- The history of lean management
- The five principles of lean management
- Tools for implementing lean management
- Benefits of lean management
- How to get started with lean management
What is lean management?
Lean management is an organizational management strategy that combines two goals — continually improving efficiency and providing high value to customers. It’s a long-term approach designed to reduce waste and create a streamlined workflow through small, incremental process changes.
While the main purpose of lean management is to maximize value, it also emphasizes the success and continual growth of employees. It accomplishes all of these goals by focusing on the three main pillars of lean management:
- Providing value to the customer
- Reducing waste
- Improving continuously
Lean management also encourages shared responsibility across the organization. All team members are respected and encouraged to contribute ideas, and everyone is expected to continually improve and contribute to shared goals.
When correctly implemented, lean management can lead to increased efficiency, productivity, and customer and employee satisfaction.
A brief history of lean management
The story of modern lean management began in the Japanese manufacturing sector. In the 1940s, automaker Toyota wanted to reduce waste by slimming down its business processes. Its leaders developed a unique business model called the Toyota Way — and later known as lean management or lean manufacturing.
The model was highly successful, and it began to spread from Japan. The first person to dub the methodology “lean” was John Krafcik in 1988. Krafcik had worked at Toyota early in his career and later went on to be the CEO of Google’s self-driving car project. But lean management as we know it today was more fully developed in 1996 by James Womack and Daniel Jones in their book about Toyota, The Machine That Changed the World, now a management classic.
Since then, lean management has become a successful and leading approach to business in countries and industries around the world. It has also evolved over time as new generations have adapted the strategy to help run more efficient startups and software companies.
The five principles of lean management
True lean management is based on five core principles — establishing value, mapping the value stream, creating a continuous workflow, creating pull, and improving continuously. Let’s take a deeper look at each principle.
1. Establish value
To be a successful business, you must provide value to the customer. Value is defined as something the customer is willing to pay for, and true value convinces them to buy your product. The first step to lean management, then, is to identify precisely what kind of value you are providing and where it is coming from.
2. Value stream mapping
Next, create a visual map of the workflow of your company. Value stream mapping helps you identify exactly where value is being created — and where it’s not. Visualizing your business process helps you see what’s working, what needs improvement, and what can be considered waste.
3. Create a continuous workflow
Once you’ve pinpointed value in your workflow, you can cut the fat by eliminating any business processes that don’t help to provide that value. You might find that cross-functional teamwork poses a challenge by creating bottlenecks — a common roadblock for lean management. You can correct this by accurately mapping your workflow, identifying issues, and re-engineering problematic processes. The key to a continuous workflow is avoiding bottlenecks and creating a waste-free, seamless workflow for all employees.
4. Create pull
Another vital way to avoid waste is to create product only when there is demand. Organizing your workflow so that work only happens when triggered by demand is known as “creating pull.” This keeps you from doing work that doesn’t provide value and helps minimize overhead. It also ensures that whenever there is demand, you have plenty of resources available to rise up and meet it.
5. Continuous improvement
The previous four steps build the lean management system, but the final step may be the most important principle of all. Lean management is not finished once the system is built — it’s just getting started. You and your employees must constantly optimize and improve as problems arise and are solved. Each time an inefficiency is noted, employees should have the responsibility and be empowered to tweak the system to make it more efficient. This means all employees are contributing to the continuous improvement of the business.
The tools for implementing lean management
A variety of tools and strategies based on the principles of lean management have developed over the years, each offering a slightly different take on lean. Here are a few you might consider using to improve your organization’s overall performance.
Six sigma is a strategy for optimizing business processes based on the five-step DMAIC methodology — define, measure, analyze, improve, and control. The steps are not necessarily sequential, and six sigma encourages revisiting earlier steps in the cycle to identify what needs to be optimized and implement changes on an ongoing basis.
5S is a method of organizing a workspace for efficiency. The components of 5S include:
- Sort. Identify what is and is not needed in the workspace.
- Straighten. Arrange and store things so they are easily accessible and ensure everyone knows where things belong.
- Shine. Clean equipment and workspaces regularly.
- Standardize. Revisit the first three Ss on a regular basis and make adjustments as needed.
- Sustain. Ensure all employees know and keep the rules to sustain the new order over time.
While the main purpose of lean management is to maximize value, it also emphasizes the success and continual growth of employees.
Kanban is a project management approach that uses a communal Kanban board to visually track a repetitive process through stages — for example, a planning stage, a development stage, and a delivery stage. Kanban is helpful for identifying bottlenecks and keeping team members in sync, and while it’s widely used for software development, it can be applied in any setting that relies on a repeatable process.
Value stream mapping
Value stream mapping involves visualizing the flow of delivering a product or service to a customer in order to identify areas for improvement. The map must show how and where value for the customer is created — and where it isn’t. It can also be helpful to create a current state map and a future state map to inform your strategy for eliminating inefficiencies.
The word “Kaizen” in Japanese means “continuous improvement.” In management literature, Kaizen refers to processes that include all employees in the continuous, gradual improvement of operations. Like other lean management tools, it has its roots in the Toyota Production System, where all employees in manufacturing lines were famously expected to halt production when any defect or abnormality was discovered and immediately implement a process improvement to resolve the issue.
These are just a few of the lean management tools available. Many more are used across industries, and new tools are regularly evolving to meet the demands of a fast-changing, networked global economy.
The benefits of lean management
Lean management offers significant, tangible benefits for virtually any organization. Let’s explore some of the most important.
By eliminating waste from your workflow, you create space to focus on what matters most. The tasks that produce the most value can receive all of your attention, resulting in better products and services, more satisfied customers, and more fulfilled employees.
Better resource management
Using a pull system ensures that you’re using the minimum amount of resources required to generate value. When you eliminate excess resource consumption, you get greater visibility into what resources you have, more flexibility in how you use them, and ultimately higher profitability.
Productivity and efficiency
When tasks are more focused and workflows are seamless, your workplace naturally becomes more efficient and productive. You create more value with less input — the most basic formula that exists for business success and growth.
By mapping your workflow and responding only to demand, you’re working smarter instead of harder. Taking a bird’s-eye view of your entire process and adopting a consistent philosophy of improvement enables you to be strategic, creative, and efficient in every part of your business.
Getting started with lean management
Lean management equips you with smarter business processes and increases efficiency. When you’re ready to get started, begin by identifying your value — that is, what a customer is willing to pay for — and how you’re creating it.
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