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What Is Lean Management? Principles & Everything You Need to Know

What Is Lean Management

You may have heard of lean management a few times in business school or the workforce. Companies have been using lean management principles for a long time and continue to perfect the lean management methodology. However, you may not know precisely what it is if you have yet to study it directly or are in a company that uses lean management throughout its operations.

Altogether, lean management is simple when it comes to business management methodologies. Once you know the underlying principles, you’ll see how easy it can be to implement them in any business.

Here is what you need to know about the lean project management methodology and how to earn a Lean Six Sigma certification to boost your career.

What Is Lean Management?

Lean management is a business running method where stakeholders try to remove any task or process that does not create value. By removing this waste from the company’s operations, the company sees improved productivity, cost management, and quality control. In many cases, it can also mean higher job satisfaction for workers.

Companies adopt lean project management principles because it allows them to optimize the company for success. Less waste often leads to wider profit margins, which make a company more successful in good times and more resilient in hard times.

Also Read: What Is Lean Six Sigma? A Comprehensive Guide to Understanding the Methodology

The History of Lean Management

The idea of lean management as we know it today began with the Japanese manufacturing industry in the late 1940s, originating with the Toyota Production System (TPS). This system was designed to reduce processes that didn’t contribute to the product’s value, thus improving efficiency, productivity, and cost-effectiveness.

Toyota was initially a small automobile manufacturer that became a worldwide success. Over time, its business and operational processes caught on. Soon, other companies began to incorporate similar methodologies, hoping to experience the same levels of success that Toyota did.

The phrase “lean production” debuted in 1988. John Krafcik, the former CEO of Waymo, Google’s self-driving car project, used the term in his article “Triumph of the Lean Production System”.

Today, leading businesses worldwide use lean management, including Intel, John Deere, and Nike.

Lean Management Tools

Although there are many lean management tools to choose from, the following are the most popular:

The 5S Method

This Lean management method optimizes the working environment and reduces wasted time. It’s called the 5S method because of the Japanese translation:

  • Seiri (organization)
  • Seiton (order)
  • Seiso (cleanliness)
  • Seiketsu (standardization)
  • Shitsuke (discipline)

The Lean Six Sigma Method

LSS improves process quality and efficiency. Combining the Lean manufacturing methodology and Six Sigma creates a complete system that eliminates waste and reduces process variation, resulting in streamlined manufacturing and optimal product output.

The Value Stream Mapping (VSM) Method

Value Strem Mapping analyzes processes and identifies obstacles. VSM involves visualizing, analyzing, and improving every step of every product or service delivery process.

The Kanban Method

Kanban is used to optimize inventory management. It defines, manages, and improves services that deliver knowledge work.

The Kaizen Method

Kaizen is a strategy where employees proactively work together to achieve regular, incremental, and continuous improvements in their manufacturing process.

The Visual Factory Method

Visual Factory uses visual displays, indicators, and controls throughout the manufacturing plant to improve information communication.

The SMED Method

Short for single-minute exchange of die, SMED reduces the series changeover time, shrinking it down to less than ten minutes. SMED is especially good for manufacturing in small lots, inventory reduction, and improved customer responsiveness.

Lean Management Examples

Lean management has proven its worth, including these examples:

  • Healthcare. Healthcare is expensive and complicated, so more institutions are turning to lean management principles to improve cost-effectiveness, service quality, patient care, and healthcare workers’ satisfaction.
  • Software Development. Lean principles mesh well with software development methodologies such as continuous deployment. Software and app development requires frequent releases, rapid turnaround times, and removing unnecessary and wasteful tasks. These needs jibe with the lean management philosophy.
  • Startups. Getting a startup off the ground is a considerable challenge, fraught with risks and no guarantee of success. Therefore, the easier the road is, the greater the chance of success. Lean management’s five basic principles are a fantastic roadmap for any startup that wants to thrive and are especially effective in helping these embryonic organizations adjust to sudden changes.

Can Any Company Adopt a Lean Process Management Method?

While some management methodologies are designed for enterprise-level organizations, the lean management methodology can be adopted by any company. In many respects, it is the default way companies try to run. That is especially true for startups and small businesses that have little extra resources to waste.

The size of the company is not essential to this methodology. You can implement a lean management methodology across the entire company. And if everyone in the company works toward a lean management system, it still works.

The complexity of the company also doesn’t matter. Even the most complex multinational enterprises can benefit from adopting this system. It may even help resolve some of that complexity and help the company run more efficiently.

Lean Management Principles

Lean project management principles are simple, and there are only five. When adopting the methodology, address each one to get the best results. Here are the five principles of lean management.

Identify Value

Lean management always begins with identifying value. That just means finding the parts and processes in your business that create value. In this case, resting value means that a particular process takes the company closer to providing value to customers.

In retail, for example, this could be anything from ordering products to identifying which products customers want. However, keeping inventory that does not always sell in stock does not create value.

Before you can do anything to improve how the company works, you must know which parts add value and are worth keeping. Then, you can see where to remove different processes to make the business work more efficiently.

Value Stream Mapping

The next step is to identify the overall process that creates customer value. This usually means creating a step-by-step value stream map showing how the company creates value.

This is important because it shows how valuable parts of the business work together to deliver that value. In some cases, this may mean that steps in the process that you thought were not valuable provide some value rather than just to the customer.

Value mapping can also show where processes you thought added value might not be as valuable as you thought. By knowing the process of creating value, you can ensure that any changes made don’t stop the company from doing what it needs to do to keep customers happy.

Create a Continuous Workflow

When the value map is complete, the company can work on creating a continuous workflow. Workflows are always tricky to manage since things need to happen in a precise order to have positive results. Your goal at this point is to create a workflow where there are no pinch points in the process that slow things down.

Essentially, you are trying to make everything run smoothly from start to finish. Look for any areas in the process that create problems or take longer than they should. Finding processes that create time waste and making changes can make overall operations much smoother.

Create a Pull System

A pull system is designed to allocate work based on demand. This means that operations within the company only work on the services or products that are needed at the time and stop working when the demand for them drops.

Pull systems help optimize the use of resources and energy within the company. Companies can reduce waste and reduce production costs by focusing on where the demand is.

Continuous Improvement

Finally, lean management is a continuous system of improvement. Companies can continually improve optimization, so you should always look for new ways to improve performance.

This means creating a system to review performance regularly. Most companies have designated people to review performance metrics and look for new improvement methods. This is especially important when companies and industries go through significant changes.

Also Read: Six Sigma vs. Lean Six Sigma: Which Methodology Is Right for Your Business?

Common Challenges When Implementing Lean Project Management

Lean management is a relatively straightforward management process. However, it can face considerable challenges when being implemented.

One of the most daunting challenges in implementing lean project management is from other staff within the company. Changing how a company runs is challenging since it involves retraining, removing, or firing staff because their current roles are made redundant. As you improve productivity throughout the company, the workers must adapt to changes that may not be needed.

If you are trying to implement lean management but are not the CEO, you could face significant pushback from above. People are skeptical of changes to a system that seems to work, and managers won’t want to act unless they are sure those changes will improve things. When developing lean management for your company, you’ll need to find a way to show management that those changes can make a big difference.

Learn How to Apply Lean Management to Your Business

Businesses of all sizes apply lean management principles to create better value and eliminate waste. They are looking for certified professionals who can implement them at all levels of the organization. If you want to boost your career, whether you are a designated project manager or a team leader at any level, gaining certification from a comprehensive online Lean Six Sigma course will help you do so. This six-month post graduate program from Simplilearn, in collaboration with the University of Massachusetts, will help you hone your skills in lean project management through live online classes and real-world, industry-relevant projects.

According to Glassdoor.com, lean project managers earn an average annual salary of $97,761, with a maximum salary of around $135K. There are plenty of opportunities; are you ready to make your move and seize one?

FAQ

Q: What is meant by lean management?
A: Lean or Lean management is a business methodology that maximizes customer value while minimizing waste. Lean comes from the Toyota Production System (TPS) principles and seeks to develop a culture of continuous improvement within the organization.

Q: What are the lean principles?
A: There are the five lean principles:

  • Identifying value
  • Seeking continuous improvement
  • Mapping the whole value creation process
  • Creating a continuous workflow
  • Establishing a pull work system

Q: What are the benefits of lean management?
A: Lean management has many benefits, but these four stand out:

  • Improved productivity and efficiency. Employees who focus on creating value are more productive and efficient since they are not distracted by ambiguous tasks.
  • Concentration. When you apply Lean methodology, you reduce waste. As a result, your team focuses on activities that add genuine value.
  • A more intelligent process. By establishing a traction system, you will initiate work only when there is a demand for it.
  • Better use of resources. When you use Lean to base your production on actual demand, you use only the resources you need, and so avoid waste.

You might also like to read:

What is Lean Methodology?

What is Quality Control? A Beginners Guide

Lean Six Sigma Green Belt Exam Questions and Answers

How to Become Lean Six Sigma Certified: A Complete Guide

A Deep Dive Into the Five Phases of Lean Six Sigma

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