Introduction to Lean
Many companies we see today have been around for quite some time. Five and ten or more years ago, when the companies were founded, they implemented a project management system. It worked for them then, and generally, still works now. So they keep working the same way for years, and decades, without change simply because that’s the way they do things. And because they are following the “don’t fix it, if it ain’t broken” principle.
The problem with this approach is that the business world today is not only different from what it was a decade ago, but it’s constantly evolving and changing. The continual advancements in technology are transforming the market. And with it, the way we do business. Competition is getting fiercer by the minute. In order to remain competitive, companies have to look for ways to improve speed of delivery and quality of work, and at the same time, reduce waste.
Many companies attempt to achieve better results and work more efficiently. They are choosing to implement a methodology that has proven to be very successful at increasing the organization’s productivity and reducing waste – Lean. Thirty and more years ago Lean was only a manufacturing technique. In recent years it has proven to be useful and applicable approach to project management in almost any industry.
What is Lean Management?
Lean management is an approach to running a company that helps businesses achieve their goals in a healthier, smarter and more sustainable way. At its core, it is a business methodology. It supports adding customer-defined value to products and/or services and reducing waste. It relies on two main pillars: continuous improvement and respect for people.
Lean management uses tools and methods for eliminating factors that waste time, effort and money. This is done first, by analyzing the business process. Then, making adjustments to certain steps or eliminating them if they don’t create value. That ensures the process is delivering value to customers through every step, and is cost-effective from start to end.
The main purpose of Lean management is creating value to the customer by optimizing resources. It is the ongoing effort to optimize the value stream. And improve products/services and processes, improve speed, quality and organizational health by making incremental improvements and eliminating waste.
Companies that wish to be Lean need to understand its principles and use them as guides for building a stable organization that constantly evolves. And at the same time actively works on identifying actual problems and removing them.
Brief History of Lean
The Lean methodology is not a new concept. Its application to modern business is constantly evolving and proving its timeless value. Before Lean was adapted as a project management approach, it was known as a manufacturing technique.
The Lean technique originates with the Toyota Production System (TPS) as an approach to manufacturing that refined the concept of Just-in-Time (JIT). In the 1950s, the Toyota engineer Taiichi Ohno set the foundation of TPS by combining JIT with Jidoka, Kaizen and pull production. The goal was to additionally increase production speed and improve quality. And most importantly, to eliminate waste.
Few decades later, in the 1980s, Western manufacturers struggled to keep up with the more efficient Japanese companies. They had two options: change the way they work or shut down. Those who decided to survive the crises began adopting the practices of the Japanese companies and emulating TPS. They were calling it World Class Manufacturing, Stockless Production, and Continuous Flow Manufacturing.
But Lean manufacturing, as a management philosophy, was first introduced in an articles titled “Triumph of the Lean Production System”, written by John Krafcik in 1988. Later, in 1990, three scholars, Womack, Jones and Roos, released a couple of books “The Machine that Changed the World” and “Lean Thinking”, which played a huge role in spreading the concepts and explaining the principles of Lean manufacturing in the West.
Principles of Lean Management
The Lean methodology relies on five Lean principles. They each build on each other, then begin start the circle again to create a continuous loop of improvement. The 5 main Lean thinking principles are: value, value stream, flow, pull, and perfection.
#1 Identify Value
What’s the goal of every business? To offer a product or services that customers want and are willing to pay for. To do this, a company need to learn what customers need (or want). This customers’ need is the ‘secret ingredient’ the company needs to add to their product/service to make it valuable.
The value of a product or service you are offering lies in the ability of that product to solve a problem for the customer. More precisely, in the part of product that solves the customers’ pain points. Anything else, that doesn’t bring value to the end product is considered waste.
Identifying what the customers consider valuable is the first step.
#2 Map the Value Stream
After company determine the unique value, they need to map and evaluate the process that leads towards delivering that value. Mapping the workflow has to include every step and all the people involved. That way, they can understand the whole process and see how value moves through the organization. And more importantly, in what proportion different parts of the process do or do not create value.
Having a clear map of your value stream will make it a much easier to see which teams are responsible for which tasks, who is responsible for measuring, evaluating and improving the process. Additionally, it help detect where value gets stuck, or which steps don’t bring value at all, so you can improve or eliminate them.