Lean Thinking: The Foundation Of Lean Practice
Lean thinking is a business philosophy that is focused on dramatically maximizing value for customers and eliminating waste for more growth and better results in any organization. Although it is most well-known in the manufacturing and engineering sectors, the concept can be applied to any business. Most companies across various industries apply lean thinking principles to improve their operations and financial performance.
It’s not just a concept, but a mindset that handles work in a lean way, putting priority on delivering value to the customer by continuously improving business processes. Workers and managers can improve the quality and efficiency of their work through continuous experimentation, whether it involves physical or knowledge-based work, to achieve better results in less time and with reduced costs.
Moreover, a company that implements lean practices is more flexible and responsive to its ever-changing environment than other organizations due to the continuous and structured learning facilitated by lean principles and implementation.
Origins of Lean Thinking
Toyota, a Japanese-owned automaker, developed a sustainable working environment for productive labor, and this is where the lean concepts originated. Because of this, Toyota was able to maintain low expenses, guarantee efficient processes, and eventually offer top-notch vehicles at affordable prices.
Generally, when companies increase their production volume, the quality of their products decline. However, with lean thinking, this is not the case, and organizations can identify wasteful practices in their processes, resolve them, and ultimately improve the quality while reducing time wastage. Toyota applied the lean mindset and developed a new philosophy that focused on hard work, putting the needs of customers first, and included that value into every product and service they offered.
Foundational Practice of Lean Thinking
A lean approach involves using fewer resources and minimizing waste to create needed value. Begin with the work, the people performing the job, and the activities that both directly and indirectly create value for the consumer. These are the foundational practices that guide lean thinking:
Eliminate Waste
The primary objective of lean thinking is to completely eliminate waste rather than simply reduce it. Effective identification of unwanted material can help you be aware of common types of waste. In knowledge work, the philosophy focuses on the actions of the individuals performing the work and the physical processes on the floor. In lean methodology, any activity the customer wouldn't want to pay for is considered waste.
Create Knowledge
The Create Knowledge principle in Lean thinking is straightforward: to scale, we must integrate learning and teaching into our businesses, allowing more people to offer more value in more ways. To achieve this, we need to design spaces that facilitate learning, which will help our organization deliver faster with more value.
Build Quality In
Establishing a system built for growth necessitates ensuring your system is as error-proof as possible. Lean organizations do this by standardizing and automating repetitive, prone to human-error, or tedious tasks to free up their employees' time and skills to focus on innovation, growth, and continuous improvement. The approach to ensuring quality may vary across industries, but the fundamental idea remains consistent: Construct a strong foundation for growth by creating a reliable and robust system.
The building quality approach may vary depending on your specific industry, but the fundamental idea remains consistent: Create a system that is built for growth by building a strong base.
Deliver Value Quickly
The central concept of Lean thinking is that focus produces better quality work. When our surroundings don't support our ability to focus, we become slower in our work than when we have fewer tasks. The Lean approach promotes the practice of teams visualizing, managing, and consistently improving their workflow. To provide value to customers at a consistently efficient speed, you must have control over the work process and can effectively manage its flow.
Respect People
Teams that follow lean principles quickly respond to other workers, paying close attention to what they have to say, acknowledging their viewpoints, and not ignoring them, even if their perspectives differ. According to this approach, employees function most effectively when they are empowered to make decisions at the level where the work is being done.
Optimize The Whole Team
A lean organization optimizes the entire value stream, not just specific functions or teams. High-level business processes often involve multiple systems and teams to optimize the entire process rather than just one team's work.
Adapt and Respond to Risks
Enterprise resilience is an organization's overall capacity to quickly adapt to and address any kind of threats, and this covers both short-term risks (such as supply chain interruptions, cyberattacks, and natural disasters) and long-term risks (like adjusting to a new environment and set of circumstances).
Defer Commitment
Businesses often face unnecessary pressure to plan, make decisions, and finish work well before the market's requirement for that particular product. This lack of flexibility influences their ability to consistently deliver value to customers.
The Lean Defer Commitment Principle encourages organizations to delay making decisions until the last moment to make choices based on the most current, relevant, and comprehensive information available. If we plan and complete a product too early, how can we be sure that it will remain valuable to customers when we launch it? By completing work before fully understanding market demands, we run the risk of investing time, money, and effort into something that's undesirable, forcing us to either release it or accept it as wasted effort.
What is the Primary Goal of Lean Thinking?
The main objective of this approach is to improve the business, prioritize mutual respect, and focus on delivering value to customers, and when these goals are achieved, it shows that lean thinking is fully operational.
In a lean organization, employees respect their colleagues and superiors by working collaboratively to ensure quality and maintain clear communication. This means that each member's skills, weaknesses, capacity, and output are managed equally so that the workload is shared among everyone and they don't feel overwhelmed.
Benefits of Lean Thinking
The Lean thinking philosophy provides numerous benefits to organizations; some of them are:
Cost Saving and Added Value
According to the Lean Enterprise Resource Centre, around 60% of organizations have processes that contribute very little value to the overall operations. It means that a large number of businesses unknowingly allocate funds and resources for activities that are not beneficial or necessary.
By getting rid of these wasteful activities, businesses can reduce costs and improve value by focusing their efforts on more productive and valuable activities.
Strategic Advantage
Lean thinking helps organizations manufacture high-quality products for their customers without substantial price increases. Implementing this helps businesses eliminate unnecessary costs and improve profitability while creating top-notch product/service quality, and it also provides these enterprises a competitive advantage.
Improve Business Reputation
When a business implements lean principles, it creates trust among customers because it focuses on delivering the best quality products and services to its clients, which makes customers value its purchases. A business's great reputation will help with its establishment and growth if it develops a reputation for providing high-quality goods and services.
Increase Employee Morale
According to the LEAN concept, managers should act as mentors or leaders more than as a boss to maximize team productivity. This creates a more pleasant work environment and allows individuals to develop and thrive in their professions. Taking good care of your employees and increasing their engagement and morale will also significantly increase production.
Make Your Business Eco-Friendly
Lean thinking also helps organizations in implementing sustainable practices to increase productivity while minimizing waste, which automatically improves the quality of manufacturing processes and has a beneficial impact on the environment. Moreover, positioning your organization as environmentally friendly can give you a competitive advantage in outperforming competitors.
What Are the Stages of Lean Thinking?
The success of Lean initiatives relies on how well these five principles are implemented: Value, Value Stream, Flow, Pull, and Perfection. Let us explore each one and see how, when combined, these principles give businesses the foundation they need for continuous improvement.
Identify Value
To begin the Lean process, you must understand the importance of meeting the needs and desires of your target market, and customer satisfaction should be your utmost importance.
The first step is understanding what the customer wants and why they want it to identify the value they seek. Once you know this, you can start delivering that benefit to them and effectively eliminate unnecessary waste.
Value Stream Mapping
All the processes that contribute to the organization's goals and add value are carefully examined and documented in this stage.
Once mapped, the unproductive elements within these processes are identified and eliminated, and only the processes that benefit the end user are retained. Surprisingly, in most cases, this amounts to only 10% of the total processes.
Establishing a Flow
When the flow is disrupted, wastage becomes inevitable, and that’s why establishing a continuous value chain is crucial.
At this stage, efforts are made to minimize wastage, enabling the smooth flow of value to the end-user. As a result, the overall production process should start to improve. However, not all activities that generate waste can be completely eliminated, and do not waste time trying to do so.
Create a Pull
Since value is now flowing through the value chain, customers should be able to get value whenever and wherever they need it. This saves both time and resources by balancing production and consumption.
Perfection
To achieve perfection, go back to the initial phase and repeat the process. Implementing lean adjustments should not be a one-time effort if you want to fully benefit from the production line or other business processes. As a process goes through cycles of waste elimination, additional sub-processes that contribute to waste may erupt, and to optimize the entire process, consistently identify and eliminate them.
Conclusion
Lean is a collaborative approach involving many employees across your organization. It supports you in creating and designing efficient business processes that can produce customer-demanded products. Lean Thinking promotes a shift in an organization's mindset, allowing it to focus on continuous improvement and respect people. This approach drives transformation within an organization and benefits both the company and its customers.
In a corporate environment, this approach offers the adaptability required to consistently deliver value, and applying these principles can guide your organization toward a stronger and more sustainable future.
