What does lean management mean?
Lean management, or “Lean,” is a systematic way to run a business that supports continuous improvement. It is a continuous process of improving goods, services, or procedures, which leads to minor improvements over time. This thinking comes from the Japanese manufacturing industry and is based on getting the most value from something while wasting as little as possible.
Lean management is a way to use fewer resources to make things better for customers. That way of thinking and running a business makes everyone want to work together to find better ways to do things. This means that workers at every level can make suggestions and help the business run better.
Lean management is not a set of strategies or ways to save money like traditional management. Instead, it is a way of running a company. Traditional methods tend to focus on giving orders from the top down. On the other hand, lean management gets everyone involved in fixing problems and aims to improve the flow of value to the customer.
Similar Words: lean business, lean output, lean thinking
How to Run a Lean Business
A few basic ideas form the basis of lean management. These ideas are meant to boost quality and speed.
Some lean management concepts are finding value, mapping the value stream, making flow, setting up pull, and striving for perfection. These ideals are based on continuous improvement and reducing waste, which means getting rid of things that don’t add value and making things better.
Figuring Out Value
The first concept, “identifying value,” is about finding out what a customer wants from a product or service. For example, a software business might find that the most important thing to its customers is that it is easy to use and reliable. By focusing development efforts on these areas, the company ensures that resources aren’t spent on features that don’t add to the perceived value.
Making a map of the value stream
When you map the value stream, you look at all the steps that need to be taken to deliver a product or service, from the idea stage to the finished product. In real life, a maker might map out the production process to find activities that don’t add value, like moving materials around pointlessly or causing delays in the production line. The company can cut wait times and costs by a significant amount by streamlining these processes.
Setting up Flow
Creating flow means ensuring the work goes smoothly and without any breaks. Using this idea as a guide, a hospital could change how its emergency room is set up so patients can move quickly from triage to treatment, cutting down on wait times and providing better care.
Setting up pull
Setting up pull means that production is based on what customers want instead of what is expected to be needed. For example, a clothing store might use just-in-time inventory to quickly keep up with changing fashion trends while reducing the amount of extra stock it has.
Looking for Perfect
Seeking perfection means constantly trying to get better. An IT services business could make it a rule that teams meet at the end of each project to discuss what they learned and how they could improve things. This would create a culture of always getting better.
The Five Simple Steps of Lean
The 5S framework is an integral part of lean management because it shows how to organize your workspace in a planned way. Some of the words in it are sort (seiri), set in order (seiton), shine (seiso), standardize (seiketsu), and sustain (shitsuke). Using visual cues and keeping things to get more consistent operating results are two ways 5S helps reduce waste and boost productivity. If a restaurant kitchen used 5S, the tools would be sorted and put in order, the work areas would be shined and cleaned, recipes and processes would be standardized, and these habits would be kept up over time, making the kitchen safer and more productive.
Six Sigma and Lean
Lean Six Sigma takes the focus off of fixing problems and mixes it with the ideas of lean management. A telecommunications business could use Lean Six Sigma to improve customer service and simultaneously cut down on billing mistakes. This would make customers happier and lower the company’s costs.
The Different Kinds of Waste (Muda) in Lean Management
Finding and removing the trash, or muda in lean, is vital to increasing quality and efficiency. Knowing the different kinds of waste helps businesses determine where to improve.
These are the seven wastes:
If a product doesn’t meet quality standards, it must be fixed, which costs money and time. For example, a software company could find bugs that make customers unhappy and must be fixed quickly.
- When you make too much or too early, you’re overproducing. When a bakery makes more bread than it sells, it has things that aren’t sold.
- Waiting: the time when resources aren’t being used well. In a clinic, one clear example is people who have to wait too long for their visits.
- Non-utilized ability means that team members’ skills are not being used well. A skilled worker who is given boring, repetitive jobs wastes their skills.
- Moving things or information around pointlessly is called transportation. A distribution center might find that moving things around in its plan cuts down on the distance that goods travel, saving money.
- Inventory: extra materials and goods. Stores usually keep a close eye on their stock to avoid having too much of it, which can tie up cash.
- Motion: People move around without needing to. A worker on an assembly line might take extra steps because they don’t have the right tools.
- Extra processing means doing more work than is needed. Companies that make long papers that no one reads waste their time and money.
Some models also see the eighth waste as untapped human potential or skills, which means that workers’ skills and ideas are not being used to their full potential.
How to Understand Muda, Mura, and Muri
- Muda: These wastes use up resources without making them better.
- Mura: Workloads and methods that aren’t consistent. When an assembly line works in bursts, material builds up, and there is downtime.
- Muri: putting too much stress on people or things. Mistakes and breakdowns happen when workers are overworked or tools are always running at full capacity.
Tools and Methods for Lean Management
Many tools and methods can be used to put lean management principles into practice successfully.
Making a Value Stream Map
In lean management, value stream mapping (VSM) is a crucial tool for understanding how materials and information move from the source of a product or service to the customer. For example, a maker could use VSM to find production process bottlenecks and steps that don’t add value and should be cut out or made better.
Kaizen is the idea.
Kaizen, also known as “continuous improvement,” tells all workers to suggest and make small changes regularly. Businesses can build an atmosphere of constant growth and long-term success by doing this. In a hospital, this could mean that nurses and doctors work together to speed up the process of admitting new patients, cutting down on wait times and improving patient care.
A Kanban
Kanban is a visual management tool that helps you keep track of supplies and work. Digital Kanban boards are used in software development to keep track of tasks from “to do” to “done.” This keeps the process smooth and keeps team members from being overworked.
Cycle of PDCA
The Plan-Do-Check-Act (PDCA) cycle is a four-step way to keep processes under control and improve them all the time. A marketing team could use the PDCA cycle to improve a campaign strategy, plan the campaign, run the campaign, and then look at the results. Based on what they learned, they could make the next version better.
Using these tools and methods makes it easier to find places where things aren’t working as well as they could. It also creates a place where continuous improvement is encouraged and built into the company’s culture.
Different Types of Lean Management
Lean goes beyond standard manufacturing and applies its ideas to many different fields, each changing the method to fit its needs and problems.
Making things
The industry uses lean ideas to improve production lines, lower inventory costs, and reduce waste. For instance, a car company might use just-in-time production to cut down on inventory and lead times, saving them a lot of money and making production processes more responsive.
Cloud computing and SaaS
Lean principles help companies speed up delivery to market, improve product quality, and simplify development processes in the fast-paced world of software as a service (SaaS) and technology. Lean methodologies could help a tech company improve its software development lifecycle. This would reduce the time it takes from idea to launch while ensuring the product meets customers’ wants well.
Medical Care
Healthcare organizations use lean to improve patient care and the speed of their operations. Lean management could help hospitals improve patient outcomes and staff happiness by streamlining the flow of patients, cutting down on wait times, and getting rid of steps that aren’t needed in the care process.
Retail stores use lean inventory management to give better customer service and run their stores more efficiently. For example, a store could use lean tools to match the amount of goods they have with what customers want better. This would cut down on overstock and stockouts.
Real-Life Examples
Companies like Toyota have become associated with lean because they constantly improve their processes to make them as efficient as possible. In the same way, tech giants like Spotify have adopted lean principles to improve how they develop new products, create them, and deliver them. This helps them stay competitive and listen to what their customers say.
Pros of Lean Management
Lean management dramatically improves the operational success of businesses and the satisfaction of all stakeholders in many areas.
To Help Businesses
Businesses are much more efficient and spend less when this happens. Companies often see faster turnaround times and more flexibility when cutting waste and improving processes. This lets them adjust quickly to changes in the market. This flexibility gives businesses a competitive edge and allows them to take advantage of new possibilities quickly.
As for the employees, Lean makes the workplace dynamic and values their feedback. This method that involves everyone makes people happier with their jobs and gives them a sense of ownership and responsibility. When employees help solve problems and improve processes, they learn more about their jobs and care more about the company’s success.
For Customers: Customers benefit from better goods and services. When you focus on creating value with lean, you get more customized solutions, better dependability, and faster delivery times. Customers are more likely to stay loyal and happy because they get exactly what they need when needed.
Documented Impact: Specific cases show how Lean changed things. For instance, Toyota’s production is said to have grown by a factor of ten thanks to its Toyota Production System. In healthcare, several hospitals in the US used Lean to rethink their chemotherapy process, which cut wait times for patients by a significant amount. After following Lean principles, a well-known tech company said that the time it took to make software had been cut by 30%. This meant that products came out faster and customers were happier.
The best ways to put something into action
If you want to change things, lean management is more than just cutting costs. It creates a setting where things are always improving and waste is eliminated. This method not only makes things run more smoothly, but it also gets workers involved, which makes them an essential part of solving problems and making things better. These changes significantly impact customer satisfaction because they make it easier for them to get better goods and services.
For Lean to take hold in a business, the following must be true:
Cultural Shift: Businesses must create a way of doing things where change is always possible in every part of the business.
Employee Involvement: Getting employees at all levels involved makes sure that everyone works together to reach common goals and uses different points of view to find better answers.
Support from leaders: The group needs clear and ongoing support from its leaders to keep moving forward and make it through the transformation.
