Origins
Reading this article is a process, as was when you woke up this morning, brushed your teeth, and commuted to work. Everything we do, from changing diapers to climbing mountains, is a process. Lean philosophy teaches us that all processes involve a certain amount of wasted resources, and that there are actionable ways to reduce that waste to make the processes more efficient.
Lean was developed by Toyota to eliminate “muda”, or non value-added work, on their assembly line but the term wasn’t coined until 1988. The “Toyota way” was about improving the flow/ smoothness of work and eliminating “mura” (unevenness) in the system.
It’s a common myth that, because lean’s origins was with Toyota, it’s a strictly a “manufacturing thing.” The beauty of lean is its elegantly simple methodology, which can be applied to any company or system that uses processes. In its eyes all processes, from the movement of materials to the development of information to the delivery of services, operate essentially the same.
While a manufacturer will use lean to make widgets faster, with fewer defects, and to be about producing to meet customer demand instead of to creating inventory for its own sake, an office manager could use it to streamline file handling or a retail owner to tighten up merchandise planning.
Lean has applications in everything from software development to start ups to the service industry. One of the most important applications, lean accounting, is a foundational tool that drives lean forward in every company using it (more about that in the next article).
Lean Philosophy
At its heart, lean is about maximizing customer value by producing the same product with less waste. Visibility is key. Waste hides in all companies, tucked under inventory and as an engrained part of habitual processes, slowly eating away at profits. Lean knows where waste hides; it exposes waste and eliminates it. Visibility enables actionability.
Most businesses are organized into segmented departments which operate semi-automously from each other. While efficient in some ways, this segmentation creates hiding places for waste.
Lean punches holes through these segmentations by mapping a company’s value stream (i.e. production cycle). Value streams bring together separate parts of the business and organizes everything into a horizontal flow encompassing all aspects of production.
When processes are unified in a value stream, everything becomes visible. Imagine moving a ship though a system of locks, as in the Panama Canal or the Rideau lock stations. Moving from one lock to the next slows down the entire process and any number of things could go wrong. Compare that to sailing down an open river, where rocks and obstacles have been removed. That’s the power of lean.
Lean may sound like a mammoth undertaking, but it thrives on small changes accumulating over time. You can implement it quickly and the first wastes you eliminate are usually right in front of you. You can start with lean right now by looking around your workspace for “things that bug you” (i.e. inefficiencies that have been nagging at you because they feel like obstacles in your routine), and dealing with them.
You won’t see the benefits of lean if you practice it one week and forget it the next. To be truly effective, it needs to become cultural in your company. Get the entire team involved and it will begin to change the way people in your company think about waste.
Don’t expect your successes to be individually large; the whole point of lean is to create a culture that recognizes waste and makes small changes that add up over time. Be consistent and you can expect improved productivity in the short term and increased profit (and morale once everyone is involved) in the long term.
The 5 Principles
Lean relies on iteration (repeating a process again and again to get closer to a desired result) to smooth out processes. Imagine your company’s production process as a bumpy wheel that become incrementally smoother as it turns.
The 5 core principles of lean are circular. As the wheel turns, the principles cycle again and again (which is why careful measurement and alterations are key to success). Measure well, expose waste’s many hiding places, and your bottom line will improve as the wheel keeps spinning.
5 Principles of Lean:
1) Define the value of your product (think of your product from your customer’s perspective and think about what they’re willing to pay for)
2) map every step in your value stream and eliminate all steps that don’t contribute to the end value
3) tighten up the value stream steps so that the flow gets smoother and faster
4) as your flow gets established, make it customer-driven, so that customer demand “pulls” the entire process instead of you “pushing” it.
5) repeat the process again and again, taking a data-driven approach to creating smoother flow and a process with no waste.
While that articulation of the 5 Principles focuses on creating products, let’s look at what it would look if your “product” is an idea (ie. if you’re a lawyer or a marketer).
1) Define what the value of your idea is to your customer
2) Review the entire process that leads to your deliverables, mapping each process along the way.
3) Redesign your process to be as smooth and efficient as possible
4) Remember that it’s about the customer, not about you. The river doesn’t start flowing until the customer, way downstream, opens the dam.
The “pull” of water creates the flow.
5) Get feedback. This is vital. Lean is about analyzing and repeating processes again and again.
