Characteristics and practical application of lean management
Lean management started its conquest of the world with the Japanese giants, but is now also available to domestic SMEs. In fact, by adopting a lean approach and using lean tools, productivity can be increased by a factor of two to three - and this is just one of the many benefits of lean.
The meaning of lean
In a broader sense, lean management is a corporate management and organisation method that aims to produce products and services as efficiently, rationally and economically as possible. Lean management achieves efficiency gains by streamlining the production and value creation processes.
In doing so, lean starts from the needs of the customer and continuously seeks to eliminate or minimise activities that do not add value for the customer. These activities are referred to in lean terminology as waste. Eliminating losses shortens the production, value creation cycle, increases agility, flexibility, efficiency and productivity.
The key lean principles
Lean management is based on the methodology of the production and corporate management system of the Japanese car manufacturer Toyota. Two experts who have studied Toyota's production system, Daniel Jones and James Womack, have laid down the principles of lean management in their book Lean Thinking, which is also available in Hungarian.
According to Jones and Womack, these are the most important lean principles:
- Among the productive, value-producing processes of the company, it is necessary to identify those that do not add value (loss) for the customer and those that do.
- he chain of activities that are actually necessary to produce the product or service that is the outcome of the production process must be established. This chain is called the value stream.
- The conditions for the continuous operation of the value stream, i.e. the continuous flow of materials, resources, components and information needed for production, must be created.
- The established mechanism must be used to produce only what is needed at the time, in the quantities needed at the time. This is called a pull system.
- The pull system is also an effective way of minimising loss, but this, i.e. perfection, must be constantly pursued
The essence of a lean approach
The foundation of the lean approach:
- the continuous minimisation of losses,
- increase and shorten the efficiency of the production process,
- making the value creation process customer-centric.
An important element of the lean philosophy is that profit is not the sole purpose of a company's activities. The company's mission, in line with the lean approach, is directed towards higher goals. Although profit is one of the most important goals, the company must also take into account the needs of all the social or economic groups that are part of it or linked to it. A well-functioning lean company thus creates added value not only for its customers but also for its own employees, the state and even its competitors.
Lean tools and their application
Lean management recognises and uses many tools and methods. Of these, we will now discuss value stream mapping in detail (the others are just mentioned).
Value Stream Mapping
Mapping the value creation process is essential for achieving the goals of lean management. It is important that the mapping itself is always done on the spot, step by step, according to the phases of the process.
Value stream mapping analyses all elements and actors in the value creation process, from suppliers to the delivery of the final product. The end result of the value stream mapping is a flowchart, the value stream map. This helps to identify the value-adding and loss-generating activities.
More lean methods
In addition to value stream mapping, there are a number of other methods in the lean management toolbox. Some examples:
- Poka-Yoke
- Kaizen
- Kanban board
- 5S
- JIT
- TPS
- SMED
- Jidoka
- VSM
- TPM
- Heijunka
The professionally sound, appropriate use of these tools will result in a much more efficient business. A lean company is able to meet customer expectations much faster and more flexibly because it is free of unnecessary workflows. This translates into a tangible competitive advantage compared to similar competitors without lean management.
Expected benefits and results of a lean system
It is no coincidence that lean management has become one of the most popular methods among small and medium-sized enterprises.
A lean system can lead to significant improvements in the following areas:
- Productivity can increase
- Resource utilisation increases, downtime decreases
- Significant acceleration in inventory turnover, improving cash flow
- Reducing production time
- Reducing the proportion of defective products
- Reduction in production-related administration
- Increasing customer satisfaction
Frequently asked questions about lean management
What is lean management all about?
Lean management is a business management method that increases the efficiency of the production process by identifying and minimising waste while shortening it. The focus of lean management is on meeting customer needs as efficiently as possible.
What is lean?
The word lean literally means "lean". In fact, it means "stripping down" the value-producing activities of a company. As a result, only activities that really add value for the customer remain in the production chain, and loss-making processes are eliminated or minimised.
What are the benefits of applying a lean approach?
Lean management can increase productivity by up to two to three times, reduce downtime and scrap rates, and improve cash flow. Meanwhile, it shortens time to production, reduces administration and increases customer satisfaction.
Lean management: small and medium-sized enterprises can benefit
As already mentioned, the application of lean methods and the implementation of the lean philosophy has been achieved by Japanese companies, Toyota being the first. It is no coincidence that today many leading or dominant companies around the world apply lean management.
However, it would be a mistake to think that lean management is only worthwhile for international giants. Our experience shows that the implementation of lean management can significantly improve the efficiency of small and medium-sized enterprises. In particular, the application of lean methods and tools can produce outstanding results if the company's management sees the introduction of lean as a long-term learning and transformation process.
The high professional quality of the consultancy services provided by ProMan Consulting's well-trained professionals is a guarantee for the successful and efficient application of lean management.
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