Lean management has its roots in a corporate management vision oriented towards constant improvement and evolution. No matter whether it is a product or manufacturing company, or whether it is a large, medium or small-sized service company: the lean approach can be applied to any type of company. The main challenge of lean management, in fact, is to reduce waste of time by creating and managing standardized processes that help business efficiency. The rationalization of processes will help to focus on how to generate effective value not only towards the end customer, but also within the company itself, encouraging the growth and development of internal resources, starting with top management.
What is Lean Management?
Lean management is based on lean thinking, that is the analysis of wasted time within a company and its reduction or elimination through the creation of method and process. Referring to lean thinking just as a working methodology would risk being reductive. Lean thinking, in fact, brings with it the need to evolve and improve mindset, culture and corporate values, looking for innovative and resolving solutions to specific problems. The origins of lean management date back to the Toyota Production System (TPS), developed by Taiichi Ohno, an industrial engineer at Toyota. The TPS is proposed as an alternative production system in of the post-war Japanese market, characterized by lack of resources and a low and uneven market demand. Ohno studied the American Fordist system looking for inspiration to create a model that would adapt to the Japanese one. Ohno learned from the Fordist system the importance of measuring and analyzing working times and, secondly, the need to create and apply standard working methods. However, the discovery of the American supermarket contributed most to the creation of the TPS method. Ohno was struck by this consumption model, then not very common in Japan, in which the consumer could choose the products independently, take them from the shelves, and independently go to the cashier to pay. Between the 1950s and 1980s, inspired by these elements, the Toyota Production System was strengthened and enhanced. Its goal is to guarantee high quality, at lower costs, with fast delivery times and with a strong sense of belonging and responsibility of individual workers. The main pillars of the TPS model that introduce lean management are:
- just in time, which consists in the need to produce on the basis of actual demand
- autonomation, autonomy and automation, that is automation aided by a human component, which consists in automatically identifying errors and anomalies. These automatisms help the individual worker to save time, who can instead concentrate on activities with higher added value.
This model allowed Toyota to distinguish itself worldwide, surpassing, with its production system, the Fordist one. Around the end of the 70s, there was a very remarkable turnaround: Americans began to be inspired by Japanese companies and to study the Toyota system. In the 90s for the first time there was talk Lean production to refer to the Japanese production which contrasted with the American mass production, way more rigid and less flexible. In 1996 Womack and Jones published the book “Lean Thinking“. This essay analyzes the entire Japanese system and the implementation of lean production, which will subsequently lead to the expansion of the lean model as a method that can be adapted to any context, process, area of human activity, company and project. “Lean” is therefore a philosophy, which is based on some fundamental pillars: in order to function, a process must foster time saving, costs, increase the value for the customer, improve the quality of life of the people who join the project.
The principles of Lean Management
The 5 principles of the lean model, applicable to business management, but also to the management model of a project are:
- Define value: in this phase, it is necessary to understand what is the real value that, as a company, in a project management, in the sales of a product or a service, we generate towards our final customer. To do this, you need to look at everything through the eyes of the customer. In this case, the question to ask is “how much would customers be willing to pay if they knew what lies behind the production process of my product or service?”.
- Map the value stream: In order to define customer value, and to answer the query above, we will need to question ourselves about our workflow and analyze it thoroughly. This will help us to identify any inefficiencies, redundancies, waste of time, low added value activities that we usually carry out and which do not generate real value for the customer; in the same way we will be able to understand which are the activities of greatest value, the one on which it is important to focus on, and which generates greater customer satisfaction. At this stage, we will also trace assets, which despite not being of value, are still necessary and non-negotiable.
- Create flow: having clear the value that the customer expects and the inefficiencies of our process, we will be ready to optimize the flow and find real optimization solutions. At this point, we will be able to reduce the waste of time and the inefficiencies generated by low value-adding activities that do not create results, or even find work methods that allow us to automate repetitive activities. We will recover the time to focus exclusively on what generates real value and satisfaction for our final customer.
- Establish pull: activities with high added value must always be driven by a customer demand, according to a PULL-based system. The end customer, therefore, must really perceive these activities as important which, in turn, must respond to an actual customer need. The risk we may incur, in fact, is that even a high-value activity represents a waste of time if its value is not really perceived or needed by the customer.
- Pursue perfection: it will be necessary to maintain an approach oriented towards continuous evolution and improvement of our process. The drive towards perfection must be constant and, according to the best of Japanese philosophies, it is fundamental to maintain a profound humility in understanding that we never really reached the goal. Thus, it will be possible to always act in an innovative way, following high quality standards.
The 5 principles of lean management must be considered as phases that recur cyclically with a view to continuous evolution and improvement, and they must be applied at any company level, starting with top management. A crucial element without which these principles will never work is the involvement of the company resources. Having clear corporate objectives and strategic guidelines, all resources must be involved, feel an integral part and backbone of the company or project. All resources must be motivated to achieve common objectives, not only by improving the process, but through a work of individual and shared responsibility, of collective collaboration, of continuous search for a solution to the problem.
The phases of Lean Management
Among the most widespread methodologies that guarantee the real application of lean management, we can find that of Deming cycle (PDCA) – based on Plan, Do, Check and Act steps. This method is characterized by a cyclical and circular nature. Each of these steps that we are going to describe, will recur in terms of continuous improvement and experimentation. The Deming cycle is a method that is structured in four main steps:
- Plan: it is the phase of defining the goals and expected results, on the basis of which the strategy, the action plan and the process guidelines are defined.
- Do: it is the executive phase in which what was previously planned takes place. Here, it will be necessary to pay particular attention to following the targets set out initially, and, therefore, stick to them.
- Check: it is the phase where we verify that there are no discrepancies between the two previous phases, or rather, between what was planned and what was actually carried out, in terms of activities.
- Act: according to the results in the previous verification stage, any corrections, improvements, process optimization will be implemented with a view to continuous improvement. This last phase brings us back to the plan step.
The benefits of Lean Management
The main benefits deriving from lean management are:
- streamlining of processes
- greater effectiveness and quality in achieving the ultimate goals
- reduction of working times, especially in relation to repetitive and low value activities
- greater qualitative focus on activities with higher added value
- development of individual skills and resources empowerment
- continuous improvement of the product or service offered, thanks to the attention to the customer’s objectives
- growth of perceived value of the product or service.
If you are a Product Manager, or aspire to be one, the Master’s Degree in Digital Product Management will help you deepen innovative methodologies aimed at generating value for your end customer, and achieving your goals in an effective and efficient way.