An intro to Lean Organizations

The term lean was coined in a 1988 article titled Triumph of the Lean Production System, written by John Krafcik. Lean, being a reference to having no fat, or nothing extra, is a methodology that aims to improve the output of a process by removing waste (or muda in Japanese). In the context of lean, waste is defined as anything that consumes resources but does not contribute to value. Some examples of waste are correcting mistakes, waiting, tossing defective products, and unnecessary movement. Lean can be applied to an entire organization whereby certain departments are scrutinized for waste, it can be applied to product lines where the process for making the item gets simplified, or it can be applied to individual workers and their tasks. Lean was more formally defined in 1990 by James Womack and Daniel Jones as,

“…a way to do more and more with less and less – less human effort, less equipment, less time, and less space – while coming closer and closer to providing customers exactly what they want.”

Minimizing and eliminating non-value added activity is the primary focus of Lean.

The five primary Lean principles;

  1. Value– Define what the customer wants
  2. Value Stream– Identify where the value is added, challenge all process steps that do not add value
  3. Flow– The product should flow continuously through all steps
  4. Pull– subsequent steps should pull products from the preceding one
  5. Perfection– Management’s goal is to minimize the time and resources required to make what the customer desires

Becoming a truly lean organization takes 3-5 years, and will inevitably cause many headaches along the way. It starts with small projects and getting the entire company up to speed on what changes are happening. It means moving people around and hiring a lean leader to drive change. As parts of the organization change, there will be ripple effects that impact other areas of the business as well. That’s normal.

Lean organizations commit to long term thinking and continuous improvement. They build strong demand by building high quality products backed by high quality customer service. Lean organizations play long term games.

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