Lean methodology – the basics
Lean methodology is a widely used management tool for delivering value and optimizing workflows. Lean is an approach to process design focused on eliminating time wasted on activities that don’t add value for customers.
It is important for business leaders to understand the principles of Lean management, while also looking at Functional Accountability and Process Accountability in their organizations. Refer to the CoLAB Blog for more on these topics.
What is a Lean business?
Simply stated, a Lean business is a business that maximizes value while minimizing waste. A Lean business model focuses on improving processes across the value stream to eliminate waste and deliver optimized value to the customer.
The Lean methodology derived from the Toyota Production System, established around 70 years ago.
Therefore, there is no surprise that Lean management is now widespread across industries. Thanks to its core values and positive impact on the overall performance of many companies worldwide, the Lean concept appears to be a universal management tool.
Can I apply Lean methodology in my business?
One can apply the Lean methodology in any business or production process, from manufacturing to marketing and software development.
The basics of Lean methodology
The Lean methodology relies on 3 remarkably simple ideas:
- Deliver value from your customer’s perspective
- Eliminate waste (things that don’t bring value to the end product)
- Continuous improvement
The Lean methodology is about continuously improving work processes, purposes, and people.
Instead of holding total control of work processes and keeping the spotlight, Lean management encourages shared responsibility and shared leadership.
Hence, the two main pillars of the Lean methodology are:
- Respect for people
- Continuous improvements
This means, a good idea or initiative can be born at any level of the hierarchy, and Lean trusts the people who are doing the job to say how it should be done.
The 5 basic principles of the Lean methodology
1. Identify Value
The main goal of every company is to offer a product or service that a customer is ready to pay for. Therefore, a company needs to add value defined by its customers’ needs.
The value lies in the problem you are trying to solve for the customer. More specifically, in the part of the solution that your customer is actively willing to pay. Any other activity or process that doesn’t bring value to the end product is considered waste.
Consequently, you first need to identify the value you want to deliver before you proceed to the next step.
2. Value Stream Mapping
This is where you map the workflow of your company. Include all actions and people involved in delivering the end product to the customer. In doing this, you will be able to identify what parts of the process bring no value.
Once you have the value stream mapped, it will be much easier for you to see which processes are owned by what teams and who is responsible for measuring, evaluating, and improving that process. This big picture will enable you to identify the steps that don’t bring value and eliminate them.
3. Create Continuous Workflow
After you mastered the value stream, you need to make sure that each team’s workflow remains smooth. It may take a while.
Developing a product/service almost always include cross-functional teamwork. Bottlenecks and interruptions may appear at any time. However, by breaking up work into smaller batches and visualizing the workflow, you can easily detect and remove process roadblocks.
4. Create a Pull System
Having a stable workflow guarantees that your teams can deliver tasks faster with less effort. However, in order to secure a stable workflow, apply the Lean concept of creating a pull system.
In such a system, the work is pulled only if there is a demand for it. This lets you optimize resources’ capacity and deliver products/services only if there is an actual need.
For example, you go to a restaurant and order a pizza. The baker pulls your order and starts making your pizza. He doesn’t prepare tons of pizzas in advance because there isn’t actual demand, as these pizzas can turn into a waste of resources.
5. Continuous Improvement
Undoubtedly, the last step in building a Lean management system in your company, is the most important one.
Remember, no process in the system is isolated and static. Problems may occur at any of the previous steps. Subsequently, you need to make sure that employees on every level are involved in continuously improving the process.
There are different techniques to encourage continuous improvement. For example, every team may have a daily stand-up meeting to discuss what has been done, what needs to be done, and possible obstacles—an easy way to process improvements daily.
Benefits of the Lean methodology
The growing popularity of Lean management principles comes from the fact that they focus on improving every aspect of a work process and involve all levels of a company’s hierarchy.
A few benefits include:
- Focus. By applying the Lean methodology, you will be able to reduce waste activities. Therefore, your workforce will be focused on activities that bring value.
- Improving productivity & efficiency. When employees are focused on delivering value, they will be more productive and efficient because they won’t be distracted by unclear tasks.
- Smarter process (pull system). By establishing a pull system, you will be able to deliver work only if there is actual demand. This leads to the next benefit.
- Better use of resources. When your production is based on actual demand, you will be able to use only as many resources as needed.
As a result, your teams will be much more flexible and able to respond to customers’ requirements much faster.
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In Summary
The Lean methodology is a guide for building a stable organization that improves constantly and helps to identify actual problems and remove them.
- The main purpose of Lean management is creating value to the customer by optimizing resources.
- Lean management principles aim to create a stable workflow based on actual customer’s demand.
- Continuous improvement is a major part of Lean methodology, ensuring that every employee is involved in the process of improving.
CoLAB can help you implement Lean methodology
Forming part of our Functional Accountability and Process Accountability offerings, CoLAB has a #bestpractical approach to assist leadership teams to implement Lean methodology principles in their organizations.
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