Lean Principles for Business Growth and Success

Lean Principles for Business Growth and Success

This article will cover the Lean principles that the Lean philosophy is based on. The five Lean principles were defined in a book published in 1996 that explains the foundation behind Lean thinking. The principles help managers remember the basics when implementing Lean in their company. They’re a simple guide to increasing the efficiency of every organizational process and workflow, reducing costs, improving product quality, and reaching higher customer satisfaction, just to name a few benefits.

Lean thinking was developed in the manufacturing industry, more specifically, in the bankrupt Toyota factories. Its success in turning Toyota into a global automaker is what made managers from other industries explore and learn Lean principles so they could apply them to their businesses. Today, Lean is widespread and has become one of the main methodologies used in the software industry.

5 Principles of Lean

The goal of Lean thinking is to create a culture where waste is identified and eliminated at every production step, employees are empowered, and customer satisfaction is maximized. It is based on five main principles:

Identify value

Customers define the value of products. Companies must conduct thorough research on the market’s needs and how much customers will value each feature of the product they’re developing. This minimizes the chances of placing products on the market that will not be purchased, creating a waste of investments, effort, time, and money.

Map the value stream

Mapping and analyzing every step of product production and workflow allows managers to identify where waste can be eliminated. This map doesn’t only include resources but also processes and information flows. Lean thinking encourages teams to eliminate anything that doesn’t bring value.

Create flow

Toyota pioneered the Just-in-Time process and perfected it throughout the years. Its main characteristic is that the production flow is uninterrupted and delivers the necessary components without delay in every phase. Bottlenecks must be resolved and lead times reduced so there’s a constant stream of activities.

Establish pull

The “pulling” system is based on producing products or services by demand. They’re pulled through the production process only if customers request them. In contrast, the “push” method makes predictions, gathers supplies, and delivers products hoping the forecasts are correct, and stores inventory in case they’re not. Lean avoids this issue altogether by manufacturing only what’s required.

Seek perfection

Lean encourages and supports continuous improvement (Kaizen). This principle emphasizes the flexibility of the methodology because it doesn’t insist on pursuing the same processes in all circumstances. Markets, teams, and inputs change, so there’s always a way to perfect the workflow and products even further.

Benefits of Implementing Lean Principles

Implementing all these Lean principles has been extremely beneficial for Toyota and many other companies worldwide. Although it emerged in the auto industry, today, it’s mainly settled in software teams. This doesn’t mean there are no benefits in manufacturing industries! The main results of applying Lean principles are improved efficiency and productivity. When managers make sure there are no unnecessary processes and make sure all bottlenecks are unclogged, teams can focus on what’s important and deliver projects more efficiently.

Customer satisfaction is enhanced because of the continuous attention to their needs. Lean advises producing only what’s requested by the market, so teams must keep their ear on the ground, making sure no demands go unnoticed. This approach, in turn, leads to increased profitability and greater competitiveness in the market because companies will know through thorough research which features are most valued by customers and offer them at a price they’re willing to pay. Additionally, the focus is on eliminating the wastes of Lean so much that costs plummet, leading to higher profits.

Streamlined processes ensure better employee engagement and job satisfaction as Lean emphasizes respect for people and empowering individuals. When employees see their opinions matter and notice that they have a say, they will feel more valued and most likely repay with loyalty to the company.

How to Implement Lean Principles in Your Business

Seeing all the benefits Lean can bring to a company, many managers seek a way to implement its principles in their projects as well. Here are the key steps you’ll want to take to become more Lean:

  • Understanding the current state of your business— You must know where you’re at if you want to reach your goal successfully. Also, make sure you’re implementing Lean for the right reasons and not just because it’s the latest trend in management!
  • Identifying areas for improvement— Once you’ve broken up your teams’ activities, start looking for those that don’t bring any value. Shift the focus from what “you've always done this way” to what customers ask for. You’ll soon see that many processes can be cut down to make way for a more flexible flow.
  • Defining goals and creating a plan— Before venturing on an organizational flip, make sure you know what you’re trying to achieve. Start putting numbers together and create a plan that is not too far-fetched.
  • Involving employees in the implementation process— One of the Lean pillars clearly states that there should be respect for people. Your employees might have a better idea of what needs to be improved and in what way simply because they’re the ones executing the tasks. They’ll feel more valuable and appreciated, and they might be more enthusiastic about implementing their own solutions.
  • Measuring and tracking progress— Keep track of your progress so you know how close or far you are from achieving the goals you set.
  • Continually refining and improving processes— Don’t forget to Kaizen! There’s always room for making processes even better. Running a business means adapting to change continuously and finding a way to optimize every activity.

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