Lean thinking is a mindset that has been adopted by organizations across the globe to improve efficiency, enhance productivity and deliver value for customers. The approach supports the concept of continuous improvement, working systematically to reduce waste and optimize resources and develop a steady workflow based on customer real demands.
The Lean thinking relies on 3 important ideas:
Deliver value from customer’s perspective.
Focus on continuous improvement.
Lean and Agile both share some similarities in terms of their principles and values, such as their focus on quality and technical excellence, importance of continuous learning and improvement, and encourage working in a self-organizing way instead of micro-managing by superiors. However, unlike Agile which has its roots in software and IT industries, Lean was born out of manufacturing practices.
Lean originated with the Toyota Production System (TPS) in the 1950s which completely revolutionized the manufacturing industry. Back then it was more widely known as “Lean Manufacturing”. It was created to effectively organize manufacturing and logistics at Toyota by eliminating waste called “muda” (7 wastes). Since then, many variations of Lean methodology and tool were developed such as Total Quality Management (TQM), Six Sigma, Just-in-Time and many others.
In order for us to understand Lean in its entirety we would first need to understand the Five Lean Principles:
Figure 1: The Five Lean Principles
1. Identify Value
The first step in lean management is to define and understand what value is in the perception of the customer. It is at the end of the day what any customer would be willing to pay for. Often companies deliver value by solving a particular problem for the customer. To identify value, techniques such as interviews, surveys, empirical research and data analytics are extremely useful.
2. Map Value Stream
The second principle is to map the value stream or the workflow of the company. The value stream map should consist of all activities that contribute or involve in delivering value to the customer. Activities that have no value to the customer are considered as waste. But it is also crucial to understand that waste can be divided into two types: The non-value add & unnecessary (considered as “waste” and should be eliminated) and non-value add but necessary (should be reduced if possible). The Value Stream Map provides you with an overview of where value comes from and what actions “Wastes” can be eliminated reducing cost and time, and delivering what the customer truly values.
3. Create Flow
After we have developed the Value Stream, we need to ensure that work can flow/run smoothly to avoid delays. To achieve that, you will need to be mindful of bottlenecks and interruptions that can appear throughout the process at any time.
4. Establish Pull
With Lean, work is “pulled” only if there is a demand for it. This way, we can optimize resources and only deliver products or services when there is an actual need. For manufacturers, this can significantly reduce inventory which many considered as a waste in any production system.
5. Continuous Improvement
Continuous improvement is essential to Lean thinking. The importance of continuous improvement doesn’t only apply to the products/services, it also involved the people and processes. The team or organization can use various techniques to reflect and review ways to improve every aspect of the work process.
The 5 Lean principles provide a holistic and fundamental view of how an organization can adopt Lean Thinking to improve efficiency, productivity and bring real value to customers. However, there are still many other Lean tools, practices and methodologies that we have yet to cover in this introductory article.
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