What is Lean?
In today’s dynamic environment, organization faces a constant challenge of delivering quality services with the limited resources at their disposal. Strained market environment has led organizations to constrain their budgets all the while expected to outperform their competitors through customer quality and retention.
Lean is a management method which focuses on maximizing customer value and minimizing waste. This method transforms organization’s approach by shifting their focus on technology and asset management to optimizing the flow of products and services.
How did it all begin?
The concept of lean manufacturing was introduced by Henry Ford in 1913. The idea behind the concept was to reduce the time involved in each process by introducing sequential steps into each of the process. This resulted in delivering perfectly fitted components into vehicles in a lesser time frame. While Ford’s process was very effective, their limited model of cars seemed to create a hindrance.
Other manufacturers around that time gained better market share as they filled the gap of customer demands in the market. While they invested in larger machines with better productivity, apparently lowering process costs, but this resulted in throughput times and high inventory.
Toyota production system: example of a redefined process
Toyota, in the 1930s, studied the production system designed by Ford and created innovative ways to implement this system to deliver variety of products while retaining good continuity in process flows. Through this implementation, Toyota shifted its focus from individual machine utilization to wastage in the production process flow.
Toyota identified the required machines; actual volume needed, self monitoring controls, process sequence of the machines, focusing on the required production per machine and the system for each process to identify and communicate the previous process step of its current needs.
Since its implementation of Lean, Toyota has grown to be the largest automaker in the world through rising sales and market share in every global market. Toyota stands out to be leading example of the successful Lean operating company.
Growth of the lean: Branching out to different fields
Success of Toyota has captured the world’s attention towards Lean implementation. Although its origin is based on a manufacturing, the principles are being applied by organization operating under different sectors such as retail, healthcare, construction, maintenance and government institutions.
The concept of waste management and simplifying unnecessary processes has proved to be successful and beneficial for many organizations. Lean has helped organizations solve commonly faced problems such as inventory management and production efficiency.
So what are the underlying principles of Lean:
To understand how Lean implementation can help your organization, it is prudent to fully understand the underlying principles on which Lean stands. While these principles are important from their own unique aspect, understanding the correlation between these principles is highly important. There are eight main principles that Lean comprises of:
The main objective of lean is to deliver customer value at the lowest cost. How is this important? It’s a simple equation: Delivery value defined by the customer at the lowest price. Achieving lowest price involves a lot of factors one of which is to eliminate the activities that add no customer value.
Basic system stability Stable systems become highly important factor for an organization to deliver value. Creating a baseline process which can be monitored and improved consistently is the first step in Lean implementation. In order to create a baseline, organizations need to answer and clearly establish these four criteria: manpower, machinery, materials and methods.
Leadership support Lean is an idea based on continuous improvement. This means that the commitment and seriousness of the management to implement Lean becomes key. Management support and zest to continuously improve and evolve is necessary to successfully implement lean and reap its benefits.
Employee empowerment & protection Lean is all about driving growth and having a clear strategy. Employee empowerment is important as giving responsibility and holding key people accountable not only makes employees important but gives them a sense of their value to the organization.
Having said that, Lean does not suggest organizations retain their entire manpower regardless of their performance. Lean focuses on eliminating waste (non value added activities). Where an activity is not required, organizations need to reassess the resource allocation.
Training This principle focuses on employee utilization to the activity most necessary for the organization. This requires cross functional training, which broadens an employee’s ability to contribute to the organization towards its needs and not limit the employee to certain tasks.
Communication Communication is a key factor while implementing lean. The impact of lean implementation is truly visible when the organization as a whole has fully understood the new vision of the management.
Continuous improvement Perfection is the goal and continuous improvement is the way to achieve it. This includes constantly reviewing process and identifies ways to eliminate waste. With change in market demands, comes change is operational strategy. Changes in operational strategy requires reassessing processes which means it is necessary to reassess the waste processes or sub processes.
Performance management Performance management comprise of three elements: Quality, cost and delivery. These three elements are directly linked to organization’s objectives. Addressing these objectives, helps organizations create value to its customers at the lowest price.
How can we help?
Implementing a successful lean operation requires a thorough understanding of the lean principles. At Falak, our core team can help you implement this by bringing together a team which involves the management, our experts and your employees to collaboratively work towards achieving a lean system.
Developing communication plan between management and employees
Integration between organization and supply chain
Planning out the right method to implement a lean structure.
We achieve a successful lean implementation through understanding your business, the processes involved and the people within the organization through workshops and training.