Lean Management: operating principle

Does the term ” lean management ” mean anything to you? It’s a management methodology developed to make every business process more efficient. It’s a culture of continuous improvement. It has spread around the world in recent years and has even become an industry standard.

The idea? Less waste and more added value for customers and companies. Here, we’ll explain how the Lean management approach works. Then we’ll talk about its application and the benefits of adopting this philosophy.

Definition of lean management

Lean is a well-known English expression. Keeping only what is essential is precisely the idea it wants to convey to companies.

Formalised by researchers at MIT, this approach has proved its effectiveness over the years.

The Lean philosophy can be applied in all areas:

• Lean management: organisational operations
• Lean purchasing: purchasing and supply
• Lean manufacturing: fluid production
• Lean logistics: circulation of resources
• Lean product development
• …

All business sectors can also adopt it:

• Lean office (administrative sector)
• Lean healthcare (health sector)
• Lean IT (technology sector)
• Lean Construction (building sector)
• …

Let’s move on to the famous ” lean management “. This is an intelligent, continuous management approach whose aim is to reduce costs and lead times in every area of a company’s operations.

Directly inspired by the operating mode used by Toyota in car manufacturing, it aims to :

• Eliminate superfluous operations,
• Eliminate unnecessary transport,
• Reduce waiting times
• Avoid overproduction

In addition to causing financial losses, these operations also represent a huge waste of time for the company. Eliminating them from the process can not only improve service/product quality, but also optimise profitability.

Where does lean management come from?

The origins of Lean go back to the late 1940s at Toyota. The car manufacturer was looking for ways to reduce processes that added no value to the deliverable. So they developed an approach known as lean manufacturing. Since then, their productivity and profitability have improved with other concepts such as just-in-time (JIT) production.

The Lean philosophy then began to spread to other areas. It was in 1988 that the term “Lean” was coined by John Krafcik. Since then, Lean thinking has become a popular management method.

Implementing a lean management approach

The implementation of a lean approach in a company’s operational process is based on 5 fundamental principles:

1st principle: Value determination

Value is the part of the solution provided by your company. It is the reason why customers are motivated to buy your product or service. It is this component that solves the customer’s problems.

How do you identify this value? The company needs to focus on what its customers really need. Find out what makes customers choose your company over your competitors.

Once you understand what they want, you can draw up a list of processes and activities that really add value. Consider any activity that does not contribute directly to this as superfluous.

2nd principle: Value chain mapping

The second principle of Lean management is to identify all the stages in the process needed to add value to your product or service. To do this, gather all the information about each stage. Include the stakeholders, resources, costs and timescales involved.

The objective? To visualise the impact of each process on the value chain. It will also help you identify where improvements can be made. It is important to involve all the teams in this process.

In this way, you will have a precise overview of the processes. Value chain mapping will therefore help you to understand how your company operates as a whole.

^3rd principle: Workflow optimisation

You can’t go through this stage without first mastering the various components of your value chain.

By way of illustration, if you notice that the production stages of a machine are lagging behind the others, you will be able to identify precisely the source of the problem and find a solution to optimise the flow. To make processes run more smoothly :

• Uncover any obstacles that might be causing interruptions and slowdowns.
• Identify bottlenecks in the value chain. Out of the many steps in the process, just one could add to delays and waiting times. You need to find that bottleneck and look for ways to fix it.
• Divide tasks into smaller batches to reduce the time needed for each operation. In this way, you can easily visualise each individual task within your value chain. The Kanban tool comes in handy for this.
• Set up a quality control system throughout the value chain. This makes each team member responsible for the quality of their work. It also helps prevent errors and unnecessary actions.

principle⁴: Implement a pull system

In order to guarantee the stability of the Lean Management workflow, you need to create a pull system. You only produce work when there is a real demand for it. The company then mobilises human, material and financial resources only when essential. This avoids unnecessary waste.

For example, restaurateurs should avoid preparing large quantities of dishes in advance. In such cases, their work does not meet a real demand. If no one comes to order from them, the restaurant will lose raw materials, time and money. That’s why many restaurateurs tend to prepare dishes to order. In this way, their workflow remains stable.

principle⁵: Continuous improvement

The fifth principle of the lean management improvement approach is to maintain the efficiency of existing processes. To achieve this, everyone must be involved in the constant search for opportunities for improvement. The lean manager must encourage every employee to put forward their suggestions, whatever their hierarchical level.

One way of encouraging this type of collaboration is to organise a regular meeting. This enables progress to be monitored and any obstacles to improvement to be identified. You can also adjust behaviour in real time and make rapid corrective changes to processes.

Regular feedback from employees is also essential. Employees must receive feedback on their work and the effects of their actions. Managers must take the time tolisten to their employees’suggestions . This can help to improve existing processes. What’s more, employees are more likely to contribute to results when they feel that their opinions are valued.

Lean management tools

There are many tools that can complement each other in the implementation of the lean management approach. Here are the most commonly used:

VSM

Value Stream Mapping (VSM) is one of the best lean management improvement tools. It is a collaborative tool that identifies all the activities required for production. It is a visual management tool.

You can easily distinguish between value-added and non-value-added activities, all grouped together. It is also known as Value Chain, Materials and Information Flow Mapping or Value Chain Mapping.

This tool differs from the process in that it represents a flow in motion rather than a static state. It covers a wide range of flows, including those of customers, information, parts, raw materials and so on. The VSM gives you a clear view of all your production activities, their relevance and their progress.

5S

The 5S method is applied to bring order to a working environment. It takes its name from the first letter of 5 operations in Japanese: Seiri, Seiton, Seiso, Seiketsu, Shitsuke. They respectively mean ” Select and delete “, ” Tidy up”,” Clean up”,” Standardise” and ” Follow up“.

The 5S method was initially adopted by industry to improve safety and boost employees’ operational productivity.

The methodology is also proving beneficial in a variety of sectors. It is also a tool for diagnosing problems and finding solutions to improve workflows. It’s a real weapon against waste and time-consuming tasks.

3M

The three letters M that give this method its name come from the Japanese words Muda, Muri and Mura. These mean ‘ Waste ‘, ‘ Excess ‘ and ‘ Irregularity ‘. They refer to sources of inefficiency within a company.

Firstly, we are talking about operations that cause significant expenditure in terms of time, energy and materials… without bringing value to the customer.

The second M refers to situations where equipment and staff have to cope with an excessive workload.

Finally, the third M refers to all circumstances that cause imbalances that could hamper competitiveness and the maintenance of productivity.

5P

The 5P method helps to identify the root causes of a problem by asking the question “Why? 5 times in a row.

Developed by the Japanese engineer Taiichi OHNO, it is the method par excellence for solving any type of problem encountered by a company.

The 5Ps can also be used as part of an improvement project. This method also facilitates decision-making in many situations. It can help to manage the corrective actions to be implemented and to find lasting solutions in the event of difficulties.

Kaizen

The Japanese words “Kai” and “zen” are combined to form the name of this well-known tool for implementing the lean approach. They mean “change” and “better” respectively, hence its common translation “continuous improvement”.

Its aim is to boost productivity. This involves eliminating everything that is superfluous, reducing risks, and improving workspaces, processes and activities. All of this is reminiscent of the principles of lean management, the other name given to this concept.

The Kaizen method also encourages small, rapid and regular changes to encourage improvement.

Kanban

Experts say that, like Kaizen, the Kanban method cannot be described as a simple tool, but rather as an essential mindset for reducing waste and optimising production.

This Japanese name means “visual map”. It gives the company better visibility of its stocks so that it can produce on demand the quantity it needs when it needs it.

In lean management, Kanban can be used to control production flow according to existing demand. It creates a direct link between the development of the solution and the customer’s needs. Its application aims to prevent both out-of-stock and overstock.

The benefits of lean management

This management philosophy can help optimise your business in many ways. Thanks to its application, you can :

• Focus on the activities that count
• Stay competitive in the marketplace
• Use your resources more efficiently
• Increase customer satisfaction
• Motivate your staff and colleagues

Lean management is the key to fine-tuning business operations. All sectors can benefit from its use.

However, in the field of procurement, the use of a purchasing management tool becomes essential. It helps to streamline all phases of the process and improve visibility of expenditure and suppliers. Discover our Weproc software and access all the tools you need to optimise your purchasing strategy and improve your company’s performance.

 

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