Back in the late 1940s, Toyota initiated a no-frills method for streamlining activities, which was eventually codified in 2001. The term "lean management" had been coined in a 1988 article about Google's Waymo self-driving project. Sensible improvements never go out of style. Managers today in many industries still turn to lean management principles to raise productivity and efficiency. Teams concentrate foremost on creating value without the distractions of fuzzy assignments. Traction is smarter, which means responding flexibly to genuine demand, thereby saving precious resources from being wasted.
Core principles
Over the decades, lean management philosophies and practices have evolved and crystallized into five principles.
- Identification of value — what is the customer willing to pay for? Can your company solve a problem or need?
- Mapping the value chain — showing the steps, including actions and people, that do or do not add value.
- Continuous workflow — chunking tasks and visualizing the flow helps reduce bottlenecks and interruptions.
- Traction — responding to demand. A pull system minimizes superfluous inventory, such as in a restaurant, which begins food preparation only after orders are taken.
- Continuous improvement — employees at all levels participate and hold daily meetings to review progress and goals.
Incremental lean thinking may be challenging to maintain with stability. Your teams must often focus on a few vital strategic issues to align around customer satisfaction. For example, you must monitor business performance and react in a timely fashion, using data to highlight gaps or shortcomings.
Over time, methodologies for delivering value with continuous improvement have combined two approaches: lean and agile models. The lean mindset embraces flexible working processes, driven by new ideas, to free up employees to be more customer-centric. Agile systems accelerated after 2001, focusing on iterative development, capturing feedback and refining products in quick cycles.
Some team compositions differ slightly between lean and agile models. Lean teams depend on work cells, which coordinate to perform cohesively and reduce former delays. Agile approaches, by contrast, utilize more cross-functional teams and flow-to-work models that match skills to the highest priority work.
Kaizen means "improvement" in Japanese
Kaizen underlies the spirit of lean management, getting better every day in every way. It stands for the pursuit of perfection. ("Kai" translates to "change" and "zen" to "good.") It strives to eliminate any waste that stands in the way of delivering customer value. You can remember types of waste by the clever acronym DOWNTIME.
- Defects
- Overproduction
- Waiting
- Nonutilized talent
- Transportation
- Inventory
- Motion
- Extra work processing beyond what is essential
Kaizen is embedded in small,
daily improvements. A corporate culture of engagement enhances employee empowerment and collaboration. At the same time, cutting-edge technology has been integrated as a central pillar. Digital
tools provide better visibility and control of production processes. Modern tools employ robotics, artificial intelligence and the Internet of Things to further reduce waste. For instance, smart
sensors anticipate downtimes and robots perform repetitive tasks.
Encouraging a lean culture drives all these functions by supporting open communication, knowledge sharing, and the recognition of both individual and collective contributions. To establish a Kaizen workplace culture, make sure to enlist the commitment of the executive team, with top-down employee buy-in and all staff on board.
How to love lean
Are you winning the game? Define your processes, key performance indicators and visualization systems to keep score. Learning by doing is a lean mantra, so establish routines. Be hands-on! Keep learning from challenges. About 80% of time should go to doing, with perhaps 20% to training and information.
Here are a few tips for implementation:
- Review your processes, beginning with the most glaring holes. Are you shipping too many batches rather than combining them? Are you processing data too slowly?
- Are you sacrificing quality by working staff too fast?
- Standardize tasks where you can.
- Build a deliberate consensus for making decisions, and then implement them rapidly.
- Don't reject unconventional solutions.
Return again and again to studying the Toyota way, the long-term set of 14 lean beliefs and values.