Lean management: what is it and how to implement it

Lean management is...

...more of a philosophy than a methodology, employing a lean approach to production processes. To put it briefly and precisely, it is reducing costs and saving resource while obtaining better results.

The point is that this approach does not have any sets of rules or practices - it is based only on specific techniques. This tool helps to identify hidden losses in a timely manner and eliminate them. As a result, costs are reduced and team efficiency increases.

In general, whatever they call it - lean production, thinking, management, approach, even transformation. It has been labeled as such in different disciplines, from lean construction and lean healthcare to lean software development and even lean government.The conclusion from all this is that the Lean method is applicable almost everywhere and is suitable for any areas and directions.

Where did it come from and how does it work?

The principle, by the way, was founded in the 1950s at Toyota. There it was introduced by Taiichi Ono, an engineer who later became chairman of the board of directors. He developed his own production system and identified types of losses in it. There are 7 of them in total, and they are as follows:

1. Excessive production - when the company produces more products than it can sell. By the way, Taiichi Ono considered it to be the main type of loss, which caused the rest.
2. Large stocks, excess. In the modern interpretation, these are unrealized projects, as well as unused materials and resources. For example, unpublished texts, unused code or unapproved image layout.
3. Unnecessary functionality - it implies the options and capabilities that are present in the product or service, but they are not used by end users. For me, this is, say, the third camera in a smartphone.
4. Expectations and delays are all those moments when the team has to wait for the decision of others to continue the case. For example, when the project is submitted for approval or the designer/programmer/text artist is waiting for edits.
5. Defects and defects - resources and time are required to eliminate them, so it is better to monitor the quality of work from the initial stages. In some cases, of course, it's not without mistakes, but these are rather some exceptions.
6. Re-study or unnecessary stages of processing - this occurs when some people constantly transfer responsibilities to others. After all, they have to spend time every time to get to the point, and this reduces efficiency.Or when a newcomer is invited to the team in the middle of the project development, and he also needs to be given time to understand his tasks.
7. Not well-established movement - this implies both unnecessary transportation and constant switching between tasks.Examples - when materials between departments are delivered non-operationally, the project or part of it is transferred to another to work, several projects are hung on the employee at once, and he constantly has to switch.

Later, Jeffrey Liker, who conducted research on the Toyota production system, identified another, eighth type of loss - the unrealized creative potential of employees. This happens if a person is treated not as a person, but as a resource. He eventually loses interest, and the efficiency of the processes performed decreases.

In general, these losses are the basis, and the whole system works to eliminate them. But how - it's at your discretion, depending on the chosen concept and the tools involved.

Advantages of Lean

There are several main advantages of introducing such a methodology into the management system:There are several main advantages of introducing such a methodology into the management system:

1. Saving resources. If you eliminate all types of losses, you can eventually reduce costs, automate processes, remove unnecessary functions and eliminate unnecessary steps.
2. Increased employee engagement. If you reduce the waiting time and eliminate the surplus, people will be convinced of the effectiveness of the system and become more interested in the work.
3. Improving product quality. The system helps to identify and eliminate errors in projects.
4. Productivity growth. If you simplify business processes, reduce the time to complete tasks and implement a KPI system, it becomes easier to assess the performance of employees.

Principles of Lean implementation in the company

At one time, Toyota implemented 14 principles of the production system. Based on them, managers were able to establish production and become leaders in the car market. Now they have been somewhat transformed and are changing depending on the specific field of activity. But one thing remains unchanged - these are the values that manufacturers focus on. Here they are:

• Elimination of losses. All types of losses should be avoided. How to do it? Find out if the action benefits, whether it improves quality, whether it makes a profit and saves time. If not, then you have a "loss".
• Employee training. To create a quality product, the team must constantly learn something new. And the responsibility of management is to provide an opportunity for training, gaining new skills and knowledge.
• Continuous production. It is important that there is less "downtime" in the team's work. Even so, "on time" is the basic principle of this methodology. Therefore, the sooner the employee does his job, the faster he will receive feedback and make corrections faster.
• Team building. In addition to gaining knowledge, employees must also unite, work together and understand the value of the company's product. It is important to trust employees and appreciate their contribution.
• Elimination of defects. The team should focus on quality and the absence of any defects.
• Monitoring overall progress. Team members should understand their tasks and see the overall progress. Therefore, relevant information should always be available to all participants.

The very first, of course, Lean management used Toyota. However, behind them, the equipment was successfully introduced by other large companies such as Boeing, Lenovo, Jacobs Equipment Company (Danaher), Unior, Volvo and many others. To this day, many organizations continue to use this method and improve production efficiency.

Ways to implement Lean

There are a lot of ways in which you can set up production and introduce the Lean methodology into it.

Tools and concepts

First, let's talk about specific concepts and methods that can be used to adhere to the values of lean management and eliminate losses.

• Kaizen is one of the main production concepts, a kind of Japanese culture, philosophy or practice. Its main principle is continuous improvement. In business, it involves continuous improvement of processes and actions, employees and managers.At the same time, it is important to establish production without losses, which is adjacent to Lean management.
• Kanban is a management technique that emerged during the development of lean management techniques, that is, at Toyota. Nowadays it is rather a convenient way of distributing responsibilities, actively used in modern companies. By the way, you can read more about the methodology in a separate article .
• KPI is a system that allows you to set key performance metrics for a specific task. Helps to analyze the main activities of the company and assess their effectiveness. Additionally, it allows you to stimulate employees.
• Poka Yoke, "poka-yoke." It is a tool to prevent errors, namely the development of different devices or procedures to eliminate defects in production. Sometimes it is referred to as the "zero error principle" or "protection against a fool." Developed in the 1960s by Japanese engineer Shigeo Shingo, who also worked on the Toyota production system.
• SMART is a goal-setting method based on 5 principles in accordance with the letters of the acronym. Allows you to set an accurate, realistic and measurable goal. You can find out more about it in another article.
• SMED - Single Minute Exchange of Dies, translates as "quick replacement of stamps" or "quick changeover". Another concept, one of the best, that allows you to manage individual projects or even enterprises.At the moment, it is one of the best project management tools. It involves quick switching between production stages, as well as reducing financial and time costs when creating and storing products.
• 5S - workplace organization system, including 5 basic steps: seiri, or Sort - sorting things into necessary and unnecessary; seiton, or Set in order - arrangement and storage of things in strict order; seiso, or Shine - keeping the workplace clean; seiketsu, or Standartize - setting norms and rules; shitsuke, or Sustain - improvement and self-discipline.For this concept, it is important to follow the established steps by all employees of the company - from the cleaner to the manager.

Applications and services

Now we will talk about specific programs and services that will be useful when implementing Lean management principles in your company.

1. LeanKit is a program focused on performing Lean management tasks based on the Kanban method. The functionality is very thoughtful, deadlines are displayed clearly, plus it is convenient to monitor the performance of duties by other employees. Those who wish will be able to try the program, as there is a 30-day trial period. Then you will have to pay from $19 per month depending on the chosen tariff.
2. Kanbanize is another very simple and effective tool based on the Kanban method. Includes analytics tools and the ability to expand board settings at your discretion. There is a trial period for 30 days, then the use of the service will cost from $149-179 per month (this is for 15 users).
3. Worksection is a Ukrainian product based on the same Kanban method and Gantt charts. There is everything for convenient project management and several types of reports. It clearly shows where the task is idle and who is responsible for it. There is a free tariff with little functionality. If you need more, you will have to pay from $29 per month, depending on the option chosen.
4. Jira is a good, visual tool, again on the kanban. It is possible to prioritize, bind a task to a specific category and track the completion of duties on different versions of the project in one place. Plus, there is a mobile application that can be downloaded directly from the App Store and Google Play online markets. There is a free version with support for up to 10 users; with more employees, you need to pay from $7.5 monthly with a 7-day trial.
5. Trello is the most popular tool, very simple and at the same time effective. By the way, Jira and Trello have the same developer. There is also a mobile application, quite convenient and well worked out. There is integration with Microsoft services such as Dropbox and Teams, as well as with Google Drive. At prices, they did not go far from their brother - a free version for 10 boards, and paid from $5 per user per month.

Useful reading on the topic

If you want to delve into the topic of lean production, I advise you to read the following books:

• Michael George. "Lean production + six sigma in the service sector." The author delves into these principles and gives many life examples (of which the book consists mainly). He also considers the principles of introducing these techniques into the work of the company, specifically in the service sector. Plus, he lists the main difficulties associated with such processes.
• James P. Wumek and Daniel Jones. "Lean production: How to get rid of losses and achieve the prosperity of your company" and "Sale of goods and services using the method of lean production". The first book became a bestseller - it is quite fresh, the information in it is relevant. The second one came out earlier and has a relatively smaller practical orientation. However, both will be useful, because their authors know firsthand about the basics and pitfalls of the lean management system.
• Sigeo Shingo. "Study of the Toyota production system from the point of view of production organization." The author is the same person who developed and brought to mind the Poka Yoke, SMED and "Protection from the Fool" methods. Since he used to manage the Toyota automobile company, the examples in the book are given on it. However, he simultaneously considers the features of introducing individual elements of its production system into any other structure, so the book will be extremely useful to everyone who plans to master Lean management.
• Jeffrey Liker. "Tao Toyota: 14 principles of management of the world's leading company." The very 14 principles on which the production process of the Japanese automaker was based. By the way, the author is the same person who identified the eighth type of loss in the form of unrealized creative potential of the company's employees. For 20 years, he conducted observations, studied the company's philosophy, looked at the development of employees and highlighted the most successful cases.
• Raju Navi, Prabhu Jaidip. "Lean innovation. Smart cost technologies." This book can be called a collection of basic provisions, as the authors consider the basic principles of lean production, while visual cases lead to each of them.

Lean management is interesting and effective, it helps to reduce costs and minimize losses, motivate employees and give them a clear picture of how the project is developing.