Anyone would agree that a business needs to eliminate waste and inefficiency to turn a profit, but many still don’t fully embrace this principle.
Lean methodology answers this by offering a method for businesses to minimize waste by implementing continuous processes for feedback, review, and learning to increase efficiency (i.e., becoming “lean”). The goal is to deliver the most valuable, cost-efficient, and best-priced services that satisfy a customer.
What is Lean Methodology?
Lean methodology originally sprouted in Japan at Toyota Production System. Now it has made its way into businesses, workplaces, and other knowledge-driven settings around the world. As Jim Benson of Modus Cooperandi said, “Lean is both a philosophy and a discipline which, at its core, increases access to information to ensure responsible decision making in the service of creating customer value.”
How Did Lean Methodology Originate?
Lean methodology originated in the Japanese automobile industry in the late 1940s and 1950s, specifically at Toyota Motor Corporation. It was developed to respond to the inefficiencies and waste of traditional mass production methods. The goal of Lean was to eliminate waste and improve quality and efficiency. The term "Lean" was popularized by James Womack and Daniel Jones in their book "The Machine That Changed the World." Lean principles have since been adopted in various industries beyond manufacturing and have become a widely used approach for continuous improvement.
Fundamentals of Lean Methodology
Though search inquiries on lean methodology will immediately bring “eliminating waste” to the front, this is not the complete definition. Fundamentally, the method emphasizes the idea of “continuous improvement.” Lean thinkers who brought the methodology from Japan to the West (specifically James Womack and Daniel Jones) specified five core principles:
- Value: Understand what customers value in a product or service
- Value Stream: What goes into maximizing value and eliminating waste throughout the entire process from design to production
- Flow: All product processes flow and synchronizes seamlessly with each other
- Pull: Flow is made possible by “pull,” or the idea that nothing is made before it is needed, thereby creating shorter delivery cycles
- Perfection: Relentlessly pursue perfection by constantly engaging the problem-solving process
The idea is to refine internal processes as much as possible to give consumers the highest value possible in a product or service. Anything that doesn’t contribute to the product’s value to the customer is considered inefficient.
Another key to lean is its definition of waste, of which there are eight types:
- Motion: Unnecessary movement of people or processes (equipment and manufacturing machinery, for example). Repetitive movements that do not add value translates to wasted time and resources.
- Over-processing: Doing unnecessary processes or steps than what is required to create a valuable product.
- Extra-processing: Products require more work or quality than necessary to deliver value to the customer.
- Defects: Manufacturing processes create defective products — which becomes wasted materials.
- Transport: Like motion, but over greater distances to include the transport of tools, inventory, people, or products further than necessary.
- Human Potential: Underused skills and talent due to poor employee management and team structure lead to a lack of morale and productivity.
- Waiting: Idle equipment and waiting on materials or equipment can slow down processes and efficiency.
- Inventory: Excessive products and inventory take up space, reveal overproduction, and create backwork.
It’s easy to see how continuous improvement is always possible and includes every level of the business, from talent management, manufacturing, IT, marketing, and more.
What Makes the Lean Methodology Unique?
Although maximizing efficiency may seem like a universal value, lean methodology is unique because it begins with the customer in mind. Rather than maximizing the bottom line for the sake of doing so, lean methodology is a paradigm for ensuring that customer value is a top consideration at every step of the process.
However, This doesn’t mean that employee satisfaction and well-being are not valuable. Nor does it assume that production efficiency is more important than humans.
Processes that create burnout, exhaustion, or fuel disharmony between people or levels of the business are just as problematic, if not more so, than a defective piece of equipment. Lean encourages leaders to consider a holistic picture of efficiency, with people and outcomes at the center.
What was in demand yesterday might not be valued tomorrow. Lean methodology creates a framework for constant adaptation to ever-changing standards for you, your business, and your products/services.
Pillars of Lean Methodology
These pillars work together to create a system that delivers customer value, engages and empowers employees, and continuously improves processes.
- Elimination of waste: The aim is to eliminate anything that does not add value to the customer.
- Continuous improvement: Lean methodology stresses the importance of continuous improvement and encourages individuals to look for ways to improve processes constantly.
- Respect for people: Lean recognizes people's importance and ability to contribute to continuous improvement.
- Focus on the customer: Lean methodology places the customer at the center of everything and focuses on delivering value to the customer.
- Continuous flow: Lean aims to create a smooth and uninterrupted flow of work, from the customer's order to the delivery of the final product.
- Pull-based production: Lean methodology is based on "pull-based" production, where work is only started when there is customer demand.
Why Should You Choose Lean Methodology?
Lean methodology can be accessible and learned quickly. Learning the method is important because although its applications are wide, it can easily be misconstrued and misapplied without deep engagement with its tools and strategies.
Lean management courses enable you to apply lean principles to various situations (such as offices and manufacturing) and give you concrete skills (such as using metrics and value-stream mapping).
One example of successful implementation of lean is Dakota Bodies, a U.S.-based truck manufacturing company in South Dakota. The company was struggling to keep up with market demand. After employees and managers participated in lean training, the company implemented a Kanban framework to help reduce inventory levels and keep "just-in-time manufacturing" humming (think Toyota). The result was 20 percent more in revenue and an increase in productivity of 5 percent.
Lean Methodology in Software Development
The lean methodology can be applied to software development to help organizations create high-quality software products while minimizing waste and maximizing efficiency. The principles of Lean can be adapted to the software development process in several ways, including:
- Focusing on customer value: Lean software development places the customer at the center of the development process and prioritizes creating software that meets their needs and expectations.
- Minimizing waste: Lean software development eliminates activities that do not add value to the customer, such as redundant work, overproduction, and waiting.
- Improving flow: Lean software development emphasizes the importance of creating a smooth and efficient flow of work, from requirement gathering to deployment.
- Continuous improvement: Lean methodology encourages continuous improvement, and software development teams can use this principle to review and improve their processes and systems regularly.
- Empowering teams: Lean software development places a strong emphasis on teamwork, collaboration, and employee engagement, which can help teams work more effectively and efficiently.
Applying Lean methodology to software development can lead to improved quality, reduced costs, faster delivery times, and increased customer satisfaction.
Lean Methodology Examples
Other examples of lean in action have yielded unexpected results. When Nike implemented a lean approach, they not only experienced less waste, but they also noticed an uptick in worker protections and improved labor practices.
Other studies show that lean management can reduce the “serious” and “critical” labor violations by almost 15 percentage points in certain areas of the global supply chain. These efforts show that lean values employee safety and well-being more than some traditional management practices. Ultimately, the framework benefits companies as a whole.
Another area where continuous improvement can enhance operations is in commercial aviation. Consider how much idle time and arcane processes are typical when dealing with airlines and airports. McKinsey notes that after adopting lean techniques, airline operations can reduce turnaround time for flights drastically with a few simple changes. McKinsey also found that lean methods can improve airline maintenance by 30 to 50 percent. Lean is vital for an industry like aviation, where there is always room to improve customer value by changing processes to streamline operations and enhance customer experiences.
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1. What methodology is lean?
Lean is a continuous improvement methodology that originated in the manufacturing industry, specifically at Toyota Motor Corporation in Japan. It is a systematic approach to identifying and eliminating waste in processes to deliver more value to customers with fewer resources. The lean methodology seeks to optimize workflow, minimize inventory, reduce lead times, and engage and empower employees at all levels. Lean has since been adapted and applied in various industries beyond manufacturing, including healthcare, service, and software development, to drive continuous improvement and achieve operational excellence.
2. What are the 3 lean methodologies?
- Lean Manufacturing: The original Lean methodology was developed for the manufacturing industry and is focused on reducing waste and improving efficiency in the production process.
- Lean Office: An adaptation of Lean methodology for administrative and support processes, focusing on reducing waste, improving flow, and increasing efficiency in office-based work.
- Lean Healthcare: An adaptation of Lean methodology for the healthcare industry, focusing on improving patient outcomes, reducing waste, and increasing efficiency in healthcare delivery.
3. What is Lean vs Agile?
Lean and Agile are both continuous improvement methodologies but have different focuses and approaches. Lean focuses on minimizing waste and maximizing value to the customer by systematically eliminating non-value-adding activities. Conversely, Agile is a flexible and iterative approach to software development that prioritizes customer collaboration and adaptive planning. Lean and Agile can be complementary and are often used together in organizations to drive continuous improvement and achieve operational excellence.