LEAN Management: How Does It Improve Your Business?

Are you familiar with the LEAN management system? It’s a management philosophy that uses a variety of different methodologies to promote smooth, efficient processes while cutting down on wasted time and materials.

Although it was first used in the manufacturing sector, its principles can be applied in a variety of sectors, including government agencies, healthcare businesses, and educational institutions.

But how, exactly, can it improve your business? Let’s find out.

The 5 key principles of continuous improvement

LEAN management is based on 5 fundamental principles, and it uses different methodologies to implement them.

1. Identify customer/consumer needs

Above all, you need to focus on what the customer considers important—not what you consider important. Remember that you need to meet their needs, not the other way around.

2. Understand your workflow

Start by mapping your processes, listing all the activities you need to deliver value to the customer.

3. Improve process flow

Now it’s time to analyze every step and every activity. What works? What doesn’t? What are the obstacles responsible for waste like lost time, overproduction, or delivery delays? What could you do to improve a given stage?

4. Match the workflow to customer expectations

Take your customers’ expectations into account to optimize your workflow and turn it into a pull flow. By producing only what your customer needs, when they need it, you avoid wasting resources.

5. Aim for continuous improvement

Perfection is unattainable. At the same time, nobody has ever become more efficient by saying, “Oh well, it’s not that bad. After all, nobody’s perfect. Let’s keep things the way they are.” 

It’s only by shooting for the moon and constantly improving your processes that you can achieve excellence.

4 proven methodologies

LEAN management employs several methodologies from the Japanese automotive industry. It’s up to you to choose the ones that best suit your workplace and management style.

Here are some of the most common ones.

The 5S method focuses on eliminating all forms of waste and constantly seeking more efficient ways to work. It uses 5 phases to help promote a culture of continuous improvement:

  • Sort – Eliminate the unnecessary
  • Set in order – Put everything in the right place
  • Shine – Keep the workspace clean
  • Standardize – Establish rules and standards
  • Sustain – Keep up the new practices

Bottleneck analysis is a technique that reveals the parts of the workflow that are most likely to impede production and limit process capacity. There are 4 stages to the analysis:

  • Identify the bottleneck
  • Take advantage of the bottleneck by optimizing the activity or step to improve performance and reduce waste
  • Switch to pull flow to slow the pace of other stages and queues
  • Increase the capacity of the bottleneck
  • Repeat the “bottleneck hunt” to tackle the next one!

Just-in-time is an inventory management strategy that reduces waste and increases efficiency. With this strategy, you only receive inventory when it’s needed for production and no earlier. The benefits are numerous: lower operating costs, better product quality, shorter production and delivery times, improved cash flow, and more. It does, however, require close communication with your suppliers and customers.

The Kaizen method is a structured, continuous process aimed at improving products, services, and systems. It has 5 phases:

  • Clarify what you are trying to do
  • Understand the current process
  • Create the new standard process
  • Develop an action plan
  • Quickly implement measures

All in all, LEAN management offers a strategic approach to optimizing your company’s processes. More than that: it paves the way for a profound change in organizational culture. By applying the basic principles and using its main methodologies, you’ll be promoting continuous improvement, innovation, efficiency, and customer satisfaction.

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