What are Lean Management Principles?

Lean management enabled Intel to reduce its minimum product launch time from fourteen weeks to just ten days. It also helped Intel’s operations stay profitable when energy prices skyrocketed.

Similarly, it has helped several large corporations (such as the Kimberly-Clark Corporation and Nike) achieve remarkable tenfold increases in workplace productivity.

What Is Lean Management?

Lean management is a game-changing approach to optimizing business operations. It was introduced in Japan by Toyota more than ninety years ago, but it has been successfully applied to many businesses all over the world, particularly those in the information technology, supply chain, logistics, and manufacturing sectors.

Lean management revolves around cutting waste while magnifying value–you can think of it as tidying your workspace to enhance productivity. It is all about identifying customer needs and aligning resources to fulfill them while eliminating any processes or practices that do not contribute to fulfilling the customer’s need or desire.

When managers and employees know how to learn about Lean manufacturing, workplaces undergo a journey to excellence where processes are refined, actions are purposeful, and outcomes are driven by value.

The Five Key Lean Management Principles

Lean management principles laid the foundation for several specialized business management techniques, such as the 5S system. The 5S system example is tailored to manage the physical environment of workers by focusing on decluttering the workplace to make it safer and easier to work in.

The five key principles that back this management technique and others include:

1. Identify Value

In Lean, identifying value means pinpointing what your customers truly care about. In other words, it means determining the core benefit they are paying you for.

For example, let’s say there’s a bakery that sells a variety of pastries and cakes. The value for customers might not be just about the taste, but also about the freshness and aesthetic appeal of the cakes they order. In this case, the bakery's value lies not only in providing baked goods but also in delivering delightful experiences that make their products the centerpieces of special celebrations.

Businesses need to align their processes with these customer values, ensuring they invest time and resources where they matter most.

Amazon's ‘One-click’ ordering system is an interesting real-world example of value identification. The company recognized that customers value convenience and simplicity, so they streamlined the purchasing process to a single click and eliminated unnecessary steps.

2. Map the Value Stream

The second principle of the Lean approach involves outlining every step, every handoff, and every decision you need to make to bring value to the customer. By mapping this value stream, you can identify areas where delays, inefficiencies, or bottlenecks occur.

3. Create Flow

Think of a river flowing effortlessly–this is the kind of smoothness Lean management aims for in business processes. It aims to eliminate any obstacles and interruptions to ensure a continuous and rhythmic workflow.

For example, manufacturers can ensure a smooth workflow by keeping a backup plan ready in case of equipment breakdown and shortage of raw materials. Similarly, the 5S system focuses on organizing workspaces, optimizing layouts, and standardizing procedures, all of which minimize disruptions.

4. Establish Pull

Traditionally, businesses operate on a push system, where they produce based on demand forecasts. Lean encourages a pull system, where businesses should produce only when customers request a product. This reduces excess inventory, waste, and the risk of producing items that may not be wanted or needed.

The fashion retailer Zara is an excellent example of pull-based production. Its quick response to changing trends means it produces limited quantities of new designs. It restocks an item only if it runs out completely and the fashion trend is still popular. This minimizes unsold stock.

5. Strive for Perfection

The last principle of Lean management revolves around continuous improvement. Lean management fosters a culture of always seeking better ways to do things. It's not about a one-time fix–it's an ongoing journey of innovation, problem-solving, and fine-tuning business processes.

Toyota (the company that introduced Lean) practices this principle with its Kaizen policy and training. Employees are regularly encouraged to suggest small improvements in business processes. Over time, these small improvements lead to significant gains in efficiency and product quality.

With more than sixteen years of experience, Creative Safety Supply is a trusted partner for all of your safety and efficiency needs! Curious about the difference between traditional and Lean manufacturing? Check out our latest post!