Lean principles aim to encourage consistent improvement, minimize waste, improve efficiency, increase profits, and enhance customer satisfaction.
Applying Lean management encourages companies to make the best use of their most valuable assets; time, money, and people. In this article, we will discuss the lean principles that can help organizations scale higher.
Understanding the Lean principles can help managers understand manufacturing, production, and operating systems and principles.
1. Defining Value
Value is how much someone or a third party is willing to pay for goods and services. Creating value, therefore, gives customers a reason to engage with your business. A good example of creating value is in solving a customer’s problem. If your business does not solve customer’s problems, they will move on to another organization or business that does this for them.
2. Setting up Business Processes
Also called mapping value streams, this is where businesses use their understanding of their value to customers to create practices and procedures that deliver this value. This is also where businesses evaluate their processes to identify any that do not deliver any value.
3. Developing Workflows
Once you understand which processes, activities, and procedures provide value and eliminate waste, it is time to develop continuous workflows. Workflows bring together all the different strategies in a production or delivery process and ensure they are tightly integrated so they can work together.
If these workflows do not work together efficiently, wastage happens, which is against the principles of Lean management. In this case, it is a wastage of time but in some cases, it can be a wastage of other types of resources.
4. Developing a Pull System
A pull system is helpful in eliminating the biggest wastes in Lean management; inventory. A pull system uses actual demand in place of predictions and forecasts to ensure production goes hand in hand with demand. Because if demand is ahead, customer satisfaction is affected negatively and if production is ahead, that could lead to wastage.
Using a pull system helps businesses produce products and deliver services when they are on demand. To ensure such a system works as optimally as possible, systems must be put in place to ensure there is very little time between a spike in demand and an increase in supply so that an equilibrium is maintained somewhat constantly.