What is Lean Thinking?
Lean Thinking is a business methodology based on the history of Japanese manufacturing techniques which have been applied worldwide within many types of industries. It is ultimately a mindset – a way of viewing the world – that aims to handle work in a Lean manner. Lean puts focus on providing high levels of customer value by continuously improving business processes.
The Lean Thinking concept is more than just using tools or changing a few steps in a business process. It’s about changing the lens by which you perceive your business operations.
Origins of Lean
Lean takes its roots from the car manufacturing industry, particularly from the Toyota Production System. The Japanese company was able to create a sustainable ecosystem for work, where they are able to minimize their costs, ensure efficiency in their processes, and sell their products at a competitive price. In fact, when Toyota entered the U.S. market, they were able to sell their cars at a much lower price than U.S. manufacturers.
This is because they were able to find a way to speed up the manufacturing process without sacrificing quality. As Lean thinkers, they were also able to identify wasteful activities in their process and address them. All these were made possible because they came together as an organization with a new set of beliefs and attitudes towards work – one that puts focus on providing value to the customer.
This is what Lean Thinking is about.
The two pillars of Lean provide the necessary foundations to develop Lean Thinking. These are Continuous Improvement and Respect for People. When people frame their mindset on continuous improvement and respect, they are able to formulate and execute better business decisions and strategies that result in more productive systems for the organization.
Continuous improvement is the active pursuit of identifying opportunities and executing initiatives that change work for the better. Working to constantly improve enables teams to spot non-value adding activities in their business operations. This allows them to increase team productivity and deliver value faster to their end-customers.
Respect for People
When everyone in an organization operates on a system of respect, they would ensure that their efforts are aimed towards the best interest of the recipient of their work. Teams who show respect for their customers would not exert effort on activities that do not satisfy the customer’s need. Instead of relying on their own assumptions, Lean teams take the time to engage with their customers to gather feedback on how their products and services can be improved. This ensures that whatever work the team takes on is valuable to their customers. But in order for respect to emanate outside the organization, it must be embedded within the organization’s DNA. This means that employees from all levels within the company operate on a system of respect.
In a Lean organization, you will see how leaders trust and give autonomy to their people to get the job done. This level of confidence entrusted to employees then become the fuel for them to carry out the same respect and attitude towards their work, and therefore towards the company’s customers. Employees within a Lean organization show respect to their colleagues through collaboration, making sure that work is managed by and distributed through the entire team. This allows them to leverage on everyone’s skill and capacity and, at the same time, aim for faster delivery of high-quality value to the customer.
5 Principles of Lean Thinking
James P. Womack and Daniel T. Jones, founders of the Lean Enterprise Institute (LEI), laid out the five key principles to any lean implementation. These are Value, Value Stream, Flow, Pull, and Perfection. Let us explore each one of them and see how, when combined, these principles provide the building blocks for teams to pursue continuous improvement.
Organizations must aim to understand what value means for their customers. Only then will they be able to create products and services that satisfy their customers’ needs. Without a clear understanding of what customers want and require, organizations miss the mark. This not only means not being able to give customers what they want. It also means that they have spent their time, effort, and resources into working on something that does not give out value.
Value isn’t the first principle of Lean Thinking for nothing. It is in the proper identification of customer value that organizations are able to design their processes to efficiently deliver that value. This prevents rework and ultimately, waste.
In order to get to the bottom of customer needs, organizations must listen to them – engaging with their customers, understanding their thinking process, getting to the bottom of their pain points. These will allow organizations to surface the requirements and expectations of customers.
2. Value Stream
After identifying what value means for customers, organizations must then define how to meet that value. What this means is identifying all the processes and steps that transform raw materials or ideas to working products that customers will use. This is also what value stream means as a Lean thinking principle.
Value Stream Mapping is a lean technique used to identify the process by which products and services are created and delivered. The goal of value stream mapping is to surface any steps in the process that do not add any value to the final product and then working towards eliminating those wastes.
After eliminating the wastes initially identified in the value stream, it is now time for work to flow through it. Establishing a smooth flow means that work is not impeded or blocked. As LEI prescribes, “Make the value-creating steps occur in tight sequence so that the product or service will flow smoothly toward the customer.”
Establishing a fluid flow of work is not as easy as it sounds. This may mean introducing changes in the organization that some may be resistant at first. For example, we are so used to performing only within our functional jurisdiction. Developers do the code and QA analysts do the tests. But this siloed thinking only creates barriers towards better collaboration within a team. It develops wastes in the form of increased waiting times, unnecessary hand-offs, and technical debt. In order for work to smoothly flow, cross-functional thinking must be introduced. Even the physical environment by which teams work in should be so that there is no hindrance towards collaboration.
With waste eliminated and work flowing smoothly, time to market is significantly decreased. This then creates the desirable setting for customers to pull products when they need to. Businesses no longer need to build products only to store them as inventory; waiting to be pushed on to the customer.
When organizations go through a Lean transformation, they realize that it is not just some project. The identification of value, refinement of the value stream, the establishment of a smooth flow, and the constant effort to ensure to only produce when needed and in what amount, are part of a continuous improvement initiative that the entire organization must come together to support. This means that Lean Thinking must be embedded in the company’s culture.
The pursuit for the perfect product and process is never-ending. Therefore, the organization needs to have a system in place that encourages everyone in the organization to swarm towards improving their processes incrementally. This is where process improvement models like Kaizen come into play. Kaizen is a business philosophy to instill a culture of continuous improvement within the organization.