5 Basic Principles of Lean Management

Source: Isixsigma

The Focus of Lean Management

• Defining value from the standpoint of the end customer
• Eliminating all waste in the business processes
• Continuously improving all work processes, purposes and people

Lean management promotes shared leadership and responsibility; Continuous improvement ensures that every employee contributes to the improvement process.

The management methodology is a guide to building a successful, stable, progressive organization and identifying and solving practical issues.

5 Basic Principles of Lean Management

Lean management methodology consists of 5 guiding principles:

• Identify value
• Value stream mapping
• Create a continuous workflow
• Establish a pull system
• Facilitate continuous improvement

Source: Businessmap

Identifying value is the first step in lean management, and it means identifying the issues that the customers need to solve to make the product a solution. Specifically, the product must be the part of the solution that customers are willing to pay for.

Any process or activity that does not create value to the final product—that is, it does not create usefulness, importance, or value—is considered waste and should be eliminated.

Value stream mapping is the process of mapping a company's workflow, including all actions and people who contribute to the process of creating the final product and delivering it to the consumers. Value stream mapping helps managers visualize which processes are led by which teams and identify who is responsible for measuring, evaluating, and improving processes. Such visualization helps managers determine which parts of the system will not create value to the workflow.

Creating a continuous workflow means ensuring that each team's workflow runs smoothly and preventing any disruptions or bottlenecks that may arise in cross-functional teamwork. Kanban is a lean management technique that uses visual cues to trigger actions and is used to enable easy communication between teams so they can address what needs to be done and when it needs to be done by the team. Breaking the whole workflow into a collection of smaller parts and visualizing the workflow in this regard helps eliminate process interruptions and roadblocks feasibly.

Establishing a pull system ensures that continuous workflow remains stable and that teams deliver tasks faster and with less effort. The pull system is a special lean technique that reduces waste in any production process. It ensures that new work is started only when there is demand, providing the advantage of minimizing overhead and optimizing storage costs.

These four principles build a lean management system. However, the last principle - continuous improvement - is the most important step in the lean management method.

Facilitating continuous improvement refers to the various techniques used to determine what an organization has done, what needs to be done, any obstacles that may arise, and how all members of the organization can improve their work processes.

Lean management systems are neither isolated nor static, and thus any of the 4 steps may go wrong. Make sure that all employees contribute to the continuous improvement of work processes and protect the organization when issues arise.

Lean management principles can be used as a general management tool to improve the overall performance of a business.

Some examples of specific business and production processes based on lean management:

• Lean Manufacturing
• Lean Software Development
• Lean Six Sigma
• Lean Startup
• Value-based healthcare

Source: Ibalondon

The Benefits of Lean Management

Lean management benefits organizations by focusing on improving every part of the workflow at every level of the company. To be more specific, managers benefit from the following advantages:

• A smarter business process - a pull system ensures that work is executed only when there is a real demand or requirement.
• Improved resource utilization - The pull system also ensures that the organization uses resources only when they are needed, as it operates based on real customer requirements.
• Improved focus - Lean management reduces the number of wasteful activities, thus allowing employees to increase their focus on value-producing tasks.
• Increased productivity and efficiency - To control costs and become efficient, as unnecessary activities are de-emphasized.

All of these key benefits create a more agile company that can meet customer requirements in an improved and faster manner. In a conclusion, the lean management system creates a strong production system with a higher chance of improving the overall performance of the company.