Lean principles can make a big difference in your business. I know because I’ve implemented them in my 30-year career, and I’ve watched them work in virtually every business I’ve ever seen them applied to. These techniques reduce waste, increase efficiency, and make companies more profitable. You’ll discover how to identify value, eliminate waste, and optimize. This isn’t just an abstract idea. It’s actionable information that can transform your operations and increase your profitability.
The Five Core Lean Principles
The value stream is the set of all specific actions required to bring a product or service through any design, production, and delivery processes and into the hands of the customer. Mapping out the value stream can be a real eye opener. You might find that you’re doing a lot of things that aren’t actually creating value. These activities are your targets for elimination.
Flow is the concept of making sure that everything moves through your processes as smoothly as possible. Think of a river that runs unobstructed. That’s the ideal of what you’re trying to create, as this makes you incredibly productive.
A pull system is a concept of only producing what the next step in the value stream needs when it needs it. This will help you eliminate waste and keep inventory costs low. It’s like cooking food for dinner so that there’s no waste and no one goes hungry.
Perfection might seem unattainable. However, the idea of perfection and always pursuing perfection through continuous improvement is how you make incredible progress. While you may never reach perfection, the pursuit of perfection at least ensures you’re always taking a step forward.
These principles first outlined in the book “Lean Thinking” by James P. Womack and Daniel T. Jones in 1996 have changed the game for businesses of all shapes and sizes. You’re borrowing a process that has been tested over decades.
Origins of Lean Thinking
Lean thinking originated from the Toyota Production System (TPS), which revolutionized manufacturing processes around the world. And its impact extends far beyond the factory.
Taiichi Ohno and Eiji Toyoda developed the TPS concepts between 1948 and 1975 as a post-World War II solution to Japan’s resource-poor environment.
The transformation of the lean concepts during this time frame is incredible. What began as an idea to increase efficiency for building cars morphed into a universal framework for improving businesses. You can apply the same principles to make any business, from a healthcare practice to a software company, more efficient.
I’ve also seen plenty of evidence that these concepts have shaped modern business operations. When businesses embrace lean thinking, they invariably outcompete other businesses. They’re more nimble, better equipped to respond to customer needs, and more profitable.
The journey from the TPS to today’s lean principles is a fascinating story. It’s a great example of how a truly great idea can outgrow its original context. And you play a role in the evolution when you implement these lean principles in your business.
The Eight Types of Waste in Lean
Identifying waste is the core principle of lean methodology, and there are eight types of waste to look out for. Each one adds little to no value to your business and could prevent you from reaching your goal.
Defects are products or services that failed to meet the requirements. If a customer encountered a defect, they likely asked for a refund, left a bad review, and you lost out on potential revenue. We’ve all experienced defects in products we bought, and it’s a terrible feeling. Don’t let customers feel that way about your products or services.
Overproduction is manufacturing more than you need. This creates inventory, which is a waste of capital, and can result in waste if the product becomes obsolete.
Waiting is any idle time in a process. This is the traffic preventing you from advancing toward your target. Waiting is one of the most common forms of waste.
Non-utilized talent is essentially wasted potential. This might be a talented employee with the ability to do so much more. I’ve seen businesses completely transform just by tapping into their team members’ overlooked skills.
Transportation is any unnecessary movement of materials or information. Like overproduction, it doesn’t directly add any value, and it adds a risk of damage or loss of the product.
Inventory is any excess inventory you’re holding onto. If you have a pantry full of beans, rice, and hardly anything else, then you store too much inventory. Implementing just-in-time systems can help to prevent this.
Motion is any unnecessary movement people or equipment make. Essentially, it’s when you’re moving something from point A to B without any other purpose.
Excessive-processing takes place when you’re doing more than necessary. This is peeling a potato twice. If I’m processing my order, and it goes through an assembly line three times, I know there’s an issue.
Recognizing these wastes is the first step to eliminating them from your business, and you’ll be surprised by how much more efficient you become.
5S Methodology in Lean
Sort: Eliminate any unnecessary items from your work area. If you haven’t used it in the last few months, chances are you don’t need it.
Set in order: Organize what’s left. Everything should have a place where it belongs.
Shine: Keep your workspace clean and organized. A clean workspace can help you produce higher quality work and spot problems earlier.
Standardize: Establish consistent processes. This allows everyone to more easily maintain the improvements you’ve implemented.
Sustain: Make 5S part of your culture. Regular audits and training helps engrain these best practices in your company’s culture.
I’ve witnessed 5S dramatically improve disorganized workspaces. It’s not just about being clean and organized – it’s about creating a workspace where work naturally flows.
You’d be surprised by how much time and frustration 5S can save you. Just imagine never searching for a tool or document again. That’s the magic of 5S.
Value Stream Mapping
Value stream mapping is a visual tool to analyze your processes. It’s essentially a visual roadmap of your product or service. Here’s how you do it:
Select a product family or service to map
Draw the current state map
Analyze the map for waste and inefficiencies
Create a future state map
Develop an action plan to achieve the future state
This process helps you identify hidden inefficiencies. You can clearly see where value is being added and where it’s not. It’s always an eye opener.
Use swimlane diagrams and spaghetti charts to make your maps even more powerful. These tools allow you to view the maps from different angles. There are software solutions that can create value stream maps for you, but a large paper and sticky notes is often sufficient.
I’ve used value stream mapping in manufacturing, healthcare, and services businesses. In each case, the insights from value stream mapping led to big improvements. You’ll likely find bottlenecks and areas for improvement that you never noticed before.
Continuous Improvement (Kaizen)
Kaizen is core to lean thinking. It’s the idea of making small daily incremental improvements. When you add up all those small improvements, you’ll see significant results over time.
Planning a Kaizen event involves selecting a focus area, assembling the right team, and defining specific objectives. The execution phase is intense, but you’ll also see rapid improvements and more committed employees.
Employee buy-in is key with Kaizen. Most of the time, your frontline employees will have the best improvement ideas. The key is creating an environment where all employees feel encouraged to propose improvements.
It’s also important to measure the results of Kaizen efforts. You can do this by establishing key performance indicators (KPIs) and tracking the progress. Additionally, make sure to celebrate successes to keep momentum high.
I’ve seen Kaizen completely change the culture of a company. It fosters a sense of ownership and pride among employees. You’re not just improving processes; you’re really developing people.
Benefits of Implementing Lean Principles
- Higher product and service quality
- Shorter lead times and greater efficiency
- Lower operational costs
- Higher employee morale and engagement
- Higher customer satisfaction
Quality improves as you reduce defects and standardize processes. You will receive fewer complaints and higher customer satisfaction scores.
Efficiency increases as you eliminate waste from your processes. You can then deliver what the customer wants faster.
Costs decrease as you remove waste from what you are doing. You can accomplish more with the same amount of resources, making your business more profitable.
Employees often become much happier and more engaged when you implement lean. They finally have the autonomy to make improvements, which leads to higher job satisfaction and lower turnover.
Customers become more satisfied as you deliver higher quality products and services faster. You are more responsive to what they need. This is a good and somewhat more advanced advantage. These benefits also all compound over time. The longer you use lean principles, the more it will impact your business.
Closing Remarks
The five basic principles of Lean, which stem from the Toyota Production System, are an excellent framework for improvement. If you optimize for value, eliminate waste, and optimize processes, businesses can see amazing things. I’ve personally seen how applying these principles can completely optimize an operation, make it more efficient, and increase customer satisfaction. However, keep in mind that Lean is not a one and done solution. It’s a journey of continuous improvement. As you apply these ideas, you’ll also find other ways to streamline processes and make your organization more successful.
