Lean was born out of manufacturing practices but has transformed the world of knowledge, business, and management in recent times. It encourages the practice of continuous improvement and is based on the fundamental idea of respect for people. Womack and Jones defined the five principles of Lean manufacturing in their book “The Machine That Changed the World”. The five principles are considered a recipe for improving workplace efficiency and include: 1) Defining Value, 2) Mapping the Value Stream, 3) Creating Flow, 4) Using a Pull System, and 5) Pursuing Perfection. The ensuing section provides a detailed overview of each principle.
5 Lean Principles Explained
1. Define Value
To better understand the first principle of defining customer value, it is important to understand what value is. Value is what the customer is willing to pay for. It is paramount to discover the actual or latent needs of the customer. Sometimes customers may not know what they want or are unable to articulate it. This is especially common when it comes to novel products or technologies. There are many techniques such as interviews, surveys, demographic information, and web analytics that can help you decipher and discover what customers find valuable. By using these qualitative and quantitative techniques you can uncover what customers want, how they want the product or service to be delivered, and the price that they afford.
2. Map the Value Stream
This second Lean principle is where you identify and map the value stream by literally mapping the workflow of your company. In this step, the goal is to use the customer’s value as a reference point and identify all the activities that contribute to these values. Activities that do not add value to the end customer are considered waste. The waste can be broken into two categories: non-valued added but necessary and non-value & unnecessary. The latter is pure waste and should be eliminated while the former should be reduced as much as possible.
When you have your value stream mapped, it will be much easier for you to see which processes are owned by what teams and who is responsible for measuring, evaluating, and improving that process. By reducing and eliminating unnecessary processes or steps, you can ensure that customers are getting exactly what they want while at the same time reducing the cost of producing that product or service.
3. Create Continuous Workflow
After removing the waste from the value stream, the subsequent action is to ensure that the remaining steps' flow runs smoothly without interruptions or delays. Some strategies for ensuring that value-adding activities flow smoothly include breaking down steps, reconfiguring the production steps, leveling out the workload, creating cross-functional departments, and training employees to be multi-skilled and adaptive.
4. Establish Pull
Inventory is considered one of the biggest wastes in any production system. A pull-based system's goal is to limit inventory and work in process (WIP) items while ensuring that the requisite materials and information are available for a smooth flow of work. In other words, a pull-based system allows for Just-in-time delivery and manufacturing where products are created at the time that they are needed and in just the quantities needed. Pull-based systems are always created from the needs of the end customers. By following the value stream and working backward through the production system, you can ensure that the products produced will be able to satisfy the needs of customers.
5. Pursue Perfection (Continuous Improvement)
After going through all previous steps, you already built your Lean management system. However, don’t forget to pay attention to this last step, probably the most important one. Remember, your system is not isolated and static. Problems may occur at any of the previous steps. Therefore, you need to make sure that employees on every level are involved in continuously improving the process. The company should be a learning organization and always find ways to get a little better with each day.
Applying the Lean Principles
The five Lean principles provide a framework for creating an efficient and effective organization. Lean allows managers to discover inefficiencies in their organization and deliver better value to customers. The principles encourage creating better flow in work processes and developing a continuous improvement culture. By practicing all 5 principles, an organization can remain competitive, increase the value delivered to the customers, decrease the cost of doing business, and increase its profitability.
