The 5 Principles of Lean management
When the 5 Lean principles are combined into a company's processes and culture, they create Lean production, manufacturing, and operating systems. On this page, we dive into each of these in a bit more detail.
Identify the value
Creating value is fundamental for business and is why customers are willing to pay for products. If your product does not produce enough value, then customers will be less willing to buy the product. For example, there is no point producing milk with a higher fat and protein percentage if your money is made in volume. Equally, you want to avoid producing an 8 kg weaner over a 7 kg weaner if you’re only paid for 7 kg, etc.
Therefore, it is essential to identify the value to the customer that you want to create. Anything that does not contribute to this is unnecessary. This is one fundamental aspect of Lean, and it is crucial to be clear on your objective from the outset. Identifying value ensures that your business focuses on those elements that customers appreciate.
Value stream mapping
Value stream mapping involves figuring out the business workflow. You must identify the exact production system and who is involved. By identifying and clarifying every step in your business process, you can then begin to identify any steps that are not contributing any value to the end customer.
Mapping your value stream allows visualisation of your process. For example, how to get from soil to grain, or how get from calf to milk. This condensed form of the process aids in optimising the way you deliver value to customers. The product of value stream mapping is a physical map, making it clear to all involved the critical steps in the business process.
Once you have mapped your value stream, it will be easy to see which parts of the process deliver the most value and vice versa. It will also aid in the discovery of opportunities to reduce waste. By having a big picture overview, you can identify whom within the team can take ownership of different steps in the business process, and enable Lean businesses to understand how value flows.
Mapping the value stream allows you to see exactly where it is created as well as which parts of the process are not contributing.
Develop continuous workflows
Once the value stream has been mapped, it can be turned into continuous workflows. A typical production process involves several different teams, materials and steps that occur in a rigid sequence; therefore, it is crucial these steps are all coordinated. If the flow stops moving, then it is inevitable that mass wastage will happen, whether this is materials or time.
Visualisation of workflow and dividing it into smaller subsections is an effective strategy to predict potential barriers, and parts of the supply chain that may cause substantial waste if stopped, and proactively address them up front, to prevent any stoppage. Developing continuous workflows ensures that everything works in harmony and as efficiently as possible.
Create a ‘pull system’
A pull system involves creating based on actual demand for a product, instead of relying on forecasts. For flow to operate smoothly, things should not be manufactured ahead of time because, if unused, this creates waste.
Instead, creating a pull system allows you to make products in response to the customer orders. To be successful, you will need a short cycle time so that you can deliver quickly. But because you've adopted Lean thinking and leveraging Lean principles, with mapped value streams and continuous workflows, this will now be easier.
With a pull system in place, resources will be perfectly aligned with demand, and waste will be dramatically reduced. Continually improving processes will ensure you stay ahead of the curve and are consistently at the forefront. Organisations that adopt this approach are setting themselves up for long-term success and profitability.
Seek perfection with continuous improvements
The first four steps will help you create a Lean management system, but the final step allows you to improve and thrive continuously. Once you are at the final stage, you revisit any part of the business process that has opportunities for further improvement. Striving for continuous improvement results in continual efficiency increases, with productivity consistently improving in harmony with customer satisfaction.
The five fundamental Lean principles are cyclical. As you seek perfection, you regularly analyse each process for the increase in value, focusing on the elements that add value and eliminate those that do not. The pursuit of perfection leads to continuous improvement.