Getting Started With Lean Management Basics To Improve Business Performance

When a business suffers from ineffective processes and wastage of resources such as cost, it is high time to count on lean management. Learn how.

Lean management has been around for many decades. Today, it is a vital tool for improving operations that are directly connected to customer satisfaction and company performance across industries. 

If you are in the field of operations, find out what lean management means, along with its approach principles, tools, and origin, by clicking on the links below. 

Table of Content

1. What is Lean Management?
2. A Company’s Approach to Lean Management
3. Roots of Lean Management
4. Principles of Lean Management
5. Tools for Lean Management

What is Lean Management?

Lean management is a methodology to improve work processes continuously. By doing so, such processes become efficient and consequently, provide the best customer satisfaction. In a way, any task that does not contribute to customer satisfaction or to the revenue should be removed.  

A Company’s Approach to Lean Management 

Lean management remains an effective practice to offer value to customers. It aims to optimise the resources by developing workflows that are heavily based on the demands of the customers. And, optimisation happens continuously by revisiting previous methods that are wasteful and removing them.  

Lean management reduces the time taken to complete tasks, especially in the manufacturing process stages, that do not add any value to the final outcome. 

Lean expert, John Shook, mentions that lean management is “a fully holistic, social, and technical system. That means embracing everyone, every human being that’s in it, from the board, the CEO, the owner, all the way down to the bottom.”

It would also be important to consider that lean management is not a set of template-like practices. An organisation has to analyse the current situation and then start planning to exercise lean management. 

On a broader level, lean management is more of a leadership-driven conceptual process than purely technical. 

When it comes to the methodology, the main area of focus for an organisation is in reducing costs, which needs to be looked from differing perspectives. For instance, replacing workers with less expensive workers will not be the solution if they are not providing their maximum output. Perhaps it is the training and motivation they need to perform tasks better, and only the company’s management should look into it. 

Roots of Lean Management

Before the term was introduced, lean manufacturing as a process improvement method was introduced by American industrialist, Henry Ford. It was primarily in the manufacturing industry where lean was applicable back then. 

Between 1930s to late 40s, Toyota from Japan applied it in its workflow, which is now popularly known as Toyota Production System (TPS). 

TPS was used for the elimination of all waste in processes to increase efficiency. It was developed basis two philosophies. 

One was “jidoka” (in English – automation with a human touch) and the other, JIT (Just-in-time), which is also a common technique in inventory management. And it was this Toyota’s approach that created five principles of lean thinking that is known today. 

Apart from Toyota and Ford, lean management also takes its roots in Frederick Winslow Taylor’s Scientific Management Principles, specifically, the first principle that standardises tools based on technological benchmarks. 

But as a term, ‘lean’ first prefaced in an MIT Sloan Management Review article, “Triumph of the Lean Production System” written by John Krafcik in 1988. 

Over time, there have been many modifications to the concept, but the principles that the next section follows remain more or less the same. 

Principles of Lean Management

The five principles of lean management are below. 

Identifying Value

Value identification can only start by determining the problems, currently plaguing the work processes and creating challenges for the customer. The goal should be that the product fulfils the customer’s demands. In this logic, any activity that does not cater to their requirements must be removed and activities that add any value to the customer should be added.

Value Stream Mapping 

It is essential to map what all are responsible for developing and delivering the product. Mapping is essential as it provides a clear visualisation of who are tasked with what and what elements are providing value. 

This principle applies to various other disciplines as well. Supply chain management, logistics management, administration, etc., are some examples. 

Creating Workflow

Here, the goal is to ensure the processes are going on as planned. They should be monitored and if any challenge arises, it should be fixed in real-time. 

It is also important to recognise that challenges will arise as there are different departments working towards one common goal. 

Generally, organisations choose to break down work into smaller batches. With that, the f challenges become easier to understand. 

Creating a Pull System

This means that work should be done only when there is a need for it. Instead of performing tasks in advance, the pull system ensures more efficiency.

Continuous Improvement to Reach Perfection

All work processes should be revisited and improved continuously. Challenges do not end after identifying and fixing them at times. There can be newer challenges that can arise in different situations. 

Related: Quality Circle

Tools in Lean Management

Lean management can be approached through various tools. Some of the common ones are mentioned here. 

Six Sigma 

Six Sigma uses evidence through statistical analysis to ensure the business processes are optimised. It also looks into making the best final product. 

Learn more about What is Six Sigma?

Also, check out the top Six Sigma courses online. 

Kanban

It is one of the most used during production. It aims to balance demands with the capacity available and improves processes continuously. 

Parting Thoughts

So there you go, these are the basics of lean management. You can clearly argue that with lean management all work processes can be improved and a business can reduce costs and deliver customers what they actually demand. 

If you are inspired to learn lean management as a beginner, you can check out some operations courses to get started.