Lean Thinking is not a new approach. It rather is the continuation and translation of Frederick Taylor's ideas of Scientific Management into today's social and industrial environment. The focus has shifted from primarily manufacturing to all processes of an enterprise, but the key principle still is 'to create value without waste'.
To come closer to this Ideal, Lean Thinking is based on five core principles that should be followed in all processes to make them Lean:
The critical starting point is Value. Value can only be defined by the customer. A company must clearly understand what the customer values and what he is willing to pay for. Any activity that does not contribute to create value for the customer essentially generates waste and should be eliminated or reduced as far as possible.
Value Streams are the sum of all processes required to bring a specific product or service to the customer. This includes all direct manufacturing processes as well as all indirect activities, such as product development, procurement, marketing, or administrative functions.
Each of these processes is understood as a Value Stream with a clearly defined function in the over all value creation chain. Each activity can be optimized in order to create the targeted value without waste.
After specifying the values and identifying the value streams, the focus must lie on making the value streams flow. This may happen in the form of a one-time, top-down, radical improvement or as bottom-up, gradual, continuous improvement activities, depending on the situation and culture of the enterprise.
Nevertheless, the goal is to implement a process that runs without interruptions and generates products free of defects, hence, value without waste.
The Pull Principle (e.g. Kanban, Just-in-Time production) means producing parts and products only if there is a demand for it. As a result, parts and products are directly used as soon as they become available. This not only results in dramatically reduced amounts of work in progress, but also lets any defects become visible right away, providing opportunities for further improvements along the processes.
Implementing the above principles is not a one-time affair, nor can the "Creation of Value without Waste" ever be completely achieved. Lean Thinking is therefore often described as a journey rather than a single activity. Continuous Improvement activities and striving for perfection consequently must be systematically implemented in the organization and become part of the enterprise culture.
What is Lean?