What is Lean

Guide: Lean Principles

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Daniel Croft

Daniel Croft is an experienced continuous improvement manager with a Lean Six Sigma Black Belt and a Bachelor's degree in Business Management. With more than ten years of experience applying his skills across various industries, Daniel specializes in optimizing processes and improving efficiency. His approach combines practical experience with a deep understanding of business fundamentals to drive meaningful change.

Lean Principles, rooted in the Toyota Production System, represent a transformative approach to business efficiency and customer value creation. These principles are not just a set of guidelines but a comprehensive methodology for process improvement and waste minimization. Central to Lean is the idea of delivering more value to customers using fewer resources.

This guide delves into the core principles of Lean – Identify Value, Map the Value Stream, Create Flow, Establish Pull, and Seek Perfection – and explores their practical applications in various business contexts. It also outlines a structured approach to implementing these principles, ensuring a sustained and impactful transformation in organizational processes.

Table of Contents

What are the Lean Principles?

The Principles of Lean are fundamentally about creating more value for customers with fewer revenues. The Lean Principles originated from the Toyota Production System (TPS), These principles are clear sets of guidelines and techniques aimed at improving processes, minimizing waste, and therefore resulting in an overall increase in customer value.

The Principles of Lean

The Five Principles of Lean are: 1. To Identify Value, 2. Mapping the Value Stream, 3. Creating Flow, 4. Establishing a Pull System, and 5. Seeking Perfection.

The reality is that in any production process, only a small percentage of activities are value-added from the customer’s point of view.

For example: in a bakery, value-adding activities include baking and decorating cakes, which directly meet customer needs. However, time spent waiting for ingredients to arrive or excessive inventory management is non-value-adding, as they don’t contribute directly to the creation or enhancement of the final product for the customer.

Identifying and eliminating or reducing the impact of non-value-adding activities is key to businesses being Lean. These non-value-adding activities are referred to as waste, or the Japanese term “muda,” and are known by eight popular categories: transportation, inventory, motion, waiting, overproduction, overprocessing, defects, and skills.

Lean Principles are industry-agnostic, meaning they can be applied to any business or process and are not just suitable for the automotive sector. Over the past 70 years, there have been plenty of examples of Lean being implemented in diverse sectors such as healthcare, software development, retail and service businesses. 

The Five Core Lean Principles

The Principles of Lean

1. Identify Value

The first core principle of lean is Identifying Value, this is rooted in a deep understanding of what the customer truly values. It is not about what the business thinks is valuable, but what the customer perceives as valuable from your product or service.

An example of this might be:  A service industry, like a hotel, which might analyze customer feedback to prioritize amenities and services that guests value the most.

To understand more about identifying customer value, take a look at our Critical to Quality (CTQ) guide.

2. Map the Value Stream

The second principle of lean is mapping the value stream. This involves conducting a full analysis of the entire process flow, identifying each action taken in the course of creating and delivering a product or service.

Common tools used in the step include: flow charts or value stream maps. For example, a manufacturer would chart the journey from raw materials to finished goods, identifying any step that doesn’t add value, like unnecessary movement of materials or delays in production.

Value Stream Map (VSM)

To understand more about creating a value stream map, take a look at our Value Stream Map (VSM) guide.

3. Create Flow

The third principle of lean is to create flow. This is a key step that involves ensuring the identified value-added steps flow in an efficient sequence and ensuring that the product or service flows smoothly without interruption.

This could involve redesigning a workspace for efficiency, cross-training employees for greater flexibility, or adopting just-in-time inventory to ensure materials are available exactly when needed.

4. Establish Pull

The fourth principle of lean is to establish a pull system. A pull system aims to produce only what the customer needs and when they need it. This is in contrast to the traditional push system in which most businesses operate, where products are made in anticipation of demand. However, the nature of holding excess stock in inefficient and not a lean method to run a business.

5. Seek Perfection

Finally, the fifth principle of lean is to seek perfection. The pursuit of perfection is an ongoing process of continuous improvement, often referred to as Kaizen. This involves constantly looking for ways to make processes more efficient and effective in delivering value. This could mean regular brainstorming sessions for process improvement, continuous training programs, or implementing a feedback loop where employees are encouraged to suggest improvements.

Implementing the Lean Principles in an Organization

Implementing Lean principles in an organization is a transformative process that requires strategic planning, dedicated involvement from all levels of staff, and a commitment to continuous improvement.

Step 1: Assessment and Planning

Before implementing the lean principles, it is important to understand and assess the current state of the business processes. This step would involve mapping out the current process with a process map or value stream map from start to finish and identifying inefficiencies, redundancies, and any steps that do not add value to the customer. 

Take the following image as an example of the potential current and future states of the process. This theoretical visualisation is always the aim with the lean principles to reduce and remove as much waste as possible from the process and increase customer value. 

Value add analysis

Value add analysis example

Key to the success of the assessment and planning of implementing lean is engaging and involving all relevant stakeholders in the process, including leadership, employees and possible customers, to ensure there is a clear understanding of the process and to secure buy-in for lean initiates to follow.

Step 2: Training and Engagement

A vital element to the success of implementing lean in a business, and in my experience, often the most overlooked element, is training and engagement. Educating employees about lean principles and methodologies is important. Furthermore, this should involve more than just theoretical knowledge but also practical insights into how these principles can be applied to their specific roles, making the role relevant to them. 

The goal of training and education should be to develop a culture where lean thinking becomes natural to them. This includes problem-solving, waste reduction, and continuous improvement.

This can be achieved by using engagement strategies such as workshops, seminars, and my favourite hands-on training sessions on real workplace problems. In effect, learners learn by doing while being guided by a qualified facilitator. 

Step 3: Pilot Projects

Once you have the foundations of areas to be improved and a team that is trained and engaged, the next step is to start improving with small pilot projects. The key is to start small and expand as confidence and competency in the business grow.

Once those initial projects have been completed and stakeholders see visible results this will further help develop the culture of lean. Going big on projects that fail will only increase resistance to future projects.

Use these pilot projects as learning experiences. Gather data, analyze results, and understand what works and what doesn’t. After successful pilot projects, plan to scale up lean implementations to more extensive areas or other processes within the organization.

Step 4: Continuous Monitoring and Adaption

Step three was just the start of a never-ending cycle of improvement, therefore, step 4 is about continuous monitoring and adaption. The business should continue to regularly monitor the progress of lean initiatives and use key performance indicators (KPIs) to measure success and identify areas for improvement.

You should encourage feedback from employees and customers.This feedback is valuable for understanding the impact of changes and uncovering new areas for improvement. You should also be prepared to adapt strategies and approaches based on the results and feedback. Lean is about continuous learning and adaptation.

Step 5: Building a Lean Culture

Finally and constantly, you should continue to develop a lean culture in the business, as lean is not a quick fix but a long-term commitment that requires long-term effort and dedication.

To ensure this is successful, leadership must actively support and participate in lean initiatives and set an example for the rest of the organization. Additionally, employees should be empowered to take initiative, suggest improvements, and make decisions that align with Lean principles. Lean thinking should be integrated into every aspect of the organization, from daily routines to strategic decisions.

Conclusion

Implementing Lean Principles is a journey of continuous improvement, requiring a strategic approach and a commitment to cultural change within an organization. It begins with a thorough assessment and planning, identifying areas of waste and inefficiencies. The process then evolves through training and engaging employees, undertaking pilot projects, and continuously monitoring and adapting strategies.

Ultimately, the success of Lean implementation lies in embedding these principles into the organizational culture, fostering a mindset of efficiency, customer focus, and perpetual improvement. Through this journey, businesses can achieve remarkable improvements in process efficiency, customer satisfaction, and overall value creation.

References

A: The first step in implementing Lean is conducting an educational assessment to gauge the current level of Lean knowledge within your organization. This will help you identify knowledge gaps and form the basis for targeted training and education.

A: Identifying ‘Value’ in Lean involves understanding what the customer considers valuable. This can be achieved through customer surveys, interviews, and data analysis. The aim is to discern what the customer is willing to pay for, and then focus your efforts on delivering that value efficiently.

A: Absolutely, Lean principles are not confined to manufacturing and can be applied across various sectors, including service industries like healthcare. For example, Virginia Mason Medical Center successfully implemented Lean to reduce patient wait times and improve safety protocols.

A: Metrics for measuring Lean success vary depending on the objectives. However, common Key Performance Indicators (KPIs) include cycle time, defect rates, customer satisfaction scores, and operational costs. These metrics help quantify the improvements achieved through Lean implementation.

A: While cost savings are often a benefit, Lean is not solely about cutting costs. The primary focus of Lean is to create value for the customer by streamlining processes and eliminating waste. This often leads to increased efficiency, improved quality, and enhanced customer satisfaction, in addition to cost savings.

Author

Daniel Croft

Daniel Croft

Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website learnleansigma.com, a platform dedicated to Lean Six Sigma and process improvement insights.

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