By: Emily Finlay
From a business perspective, improvement is one of the most important goals you should pursue. Whether you’re improving teamwork, costs, timing, or results, these efforts will help your organization gain more clients as it grows.
Lean management capitalizes on this concept by deliberately incorporating it into the various processes you use to accomplish your work. Through small positive changes, it seeks to increase the value you can offer to your customers. No matter how good your team is, lean management finds ways to make it better.
In this article, we’ll introduce you to the concept of lean management, how you can use it in your organization, and what benefits it provides. Using this understanding, you can then achieve better results for yourself and your customers.
What is lean management?
Lean management is an approach to business that seeks to make improvements while shedding waste. By refining your processes, resources, products, and services, you can then focus on creating greater value for your customers.
This philosophy is based on manufacturing processes, specifically those used by the Toyota Production System that was created in the late 1940s. To streamline procedures and reduce waste that didn’t offer any value to their customers, they focused on continuous improvement. They quickly found that this new approach increased their efficiency, productivity, production times, and costs.
The term lean management was then coined in 1988 by John Krafcik, who had spent years working in and studying manufacturing plants. Over the decades, this concept became increasingly popular in a variety of industries. Today, lean management remains a common business philosophy around the world.
What is the lean management definition?
Lean management is defined by its goals. These include:
- Understanding value from the end customer’s point of view
- Removing all waste from your business processes
- Continuing to improve your costs, team, and results
This philosophy seeks to reach these goals by following a set of principles. The principles are:
- Identify value
- Create a value stream map
- Develop a continuous workflow
- Create a pull system
- Enable continuous improvement
Following these guidelines enables you to develop an organization designed to minimize waste and prioritize value. In the next section, we’ll dive deeper into these principles to understand better how they can apply to your business.
How do I use lean management?
Using lean management starts by following the steps below, but it thrives when you include two important pillars: continuous improvement and respect for people. As we mentioned above, this method seeks to improve your business processes, but it does so by also focusing on the people involved.
As you move through these steps, it’s important to share both the responsibility and leadership of these efforts among your team. You should always be open to feedback and ideas from everyone involved. Your team will be the main driving force behind your lean efforts, so make sure they are seen, heard, and appreciated.
1. Identify value
You’re in business to create value for other people. Whether you do that through the products you create or the services you provide, this value is what drives customers to pay you for your work. To create this value, however, you first need to know why customers need it. Understanding this core need allows you to find the best way to meet it for ultimate customer satisfaction.
Start by working with your team to define the value you’re seeking to offer. By the end of this step, you should understand what leads people to pay for the solution you offer and how you can prioritize this value throughout your organization. Anything that doesn’t contribute to this differentiator is waste that needs to be removed.
2. Create a value stream map
Now that you know the value you need to focus on, it’s time to examine the processes you currently use to serve your customers. This starts with value stream mapping. Using a tool such as MindManager, create a visual representation of your organization’s workflow. This map should include every person and process involved in your operations from start to finish.
Once you have your processes mapped out, examine them for any steps, resources, or roles that don’t add value to your results. Take note of who is involved in which efforts and how they contribute to the big picture. Your value stream map should also show who is responsible for understanding and improving each part of your operations.
3. Develop a continuous workflow
Armed with your value stream, you can start refining each of the essential processes within your organization. This starts with streamlining the workflows used by your teams. Some of the questions to ask as you accomplish this include:
- Can you simplify the processes you use? This might mean consolidating steps or eliminating them altogether. You shouldn’t lose any time or energy to needlessly complicated procedures at any point of your production.
- Are there any bottlenecks? Ask your employees how well their workflows operate in all circumstances. Just because an issue only happens occasionally doesn’t mean it’s a problem you can ignore.
- Can you facilitate strong team collaboration? When you have different teams or departments that need to work together, are they able to do so efficiently? Look for ways you can bridge any gaps you find with existing or new policies or resources.
As you perfect your workflows, be sure to look at them on a larger scale and in smaller batches. If you want your processes and value to improve, you have to address all of the problems that exist.
4. Create a pull system
A pull system guarantees that your team only completes work that is needed at that time. Rather than creating a large amount of unordered product just in case a sizable order comes in, for example, you should only produce (pull) the number you need then.
A pull system ensures that your team’s efforts aren’t wasted if something changes. It also directs energy to the tasks important at the moment. More importantly, it prevents new problems and waste. You won’t get stuck with inventory that may sit for an undetermined amount of time, something that is especially important for items like food. Implementing a pull system also keeps you from spending money that doesn’t need to be spent.
Instead, you develop systems that allow you to work faster and more efficiently to meet immediate needs. No matter the demand volume or timing, your team can use these processes to deliver.
5. Continuous improvement
Even the most perfect system changes with time. Maintaining continuous improvements ensures that you retain the value you achieved with consistency in every circumstance. With a lean management system, your team will always find the ideal processes to use for greater results.
The benefits of lean management
While improvement is an obvious benefit of applying the lean management concept, there are numerous ways it can help your team and business. The more you focus your processes on producing value, the more flexible and efficient your company will be.
1. Cost savings
The most immediate savings will come from your initial evaluation and waste removal. Eliminating steps that waste time directs your employees’ efforts to work that produces better results. You will pay for less idle time, along with potentially reducing the number of people you employ.
That said, it’s essential to remember the pillar of respect for people. Lean management isn’t an excuse to save money by overworking your staff. Instead, look for healthy ways to eliminate waste and unnecessary costs.
Many processes include steps that are there because no one thought to examine their purpose. When you eliminate these actions, you help your team accomplish every task more easily. Every step will have a purpose, naturally leading to getting more done in less time. Plus, the more productive your team becomes, the more you can grow. You will be able to meet every customer need quickly, solidifying your reputation as an industry best.
3. Employee engagement
No one can be deeply involved in every area of the work you do, so it’s important to rely on the people around you. As you move forward with continuous improvement, your team will be the ones who drive these changes in their departments and tasks. Along with sharing responsibility, lean management encourages investment and engagement from everyone involved. Your team will always be looking for ways to increase the value they create, developing a close and committed organization that offers the best experiences.
Though many people don’t think about their organization’s purpose on a daily basis, it should be the force behind everything they accomplish. Lean management aligns your team to your mission, ensuring that every action is completed with value in mind. Putting this end goal at the forefront of each role reminds people what they’re working toward and why it matters. By ensuring that every task and step is designed with purpose, you can give your employees a great reason to show up and give their best every day.