What is Lean in the business? – How to use 5 lean principles

This article will help you to understand how Lean can help you with improvng your business results. What are its 5 principles explained in details. Which tools to use to be most efficient in applying particular principle.

this article covers:

• Lean management history
• 5 Lean principles
• Lean Principle 1: Value by product
• Lean principle 2: Value stream for product
• Lean principle 3: Make value flow
• Lean principle 4: Pull the value
• Lean principle 5: Pursue perfection
• 5 Lean principles check list download

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Lean management history

Lean is method, that helps shorten too long processes, and deliver required services, or goods to the customer as fast as possible. Lean helps to simplify complicated processes. It helps to re-organize mess, and muddle that are bothering and annoying people in any work environment. Lean is applicable for manufacturing, as well as in the office.

Lean was created by scientist Taiichi Ohno in 1940´s. But it was called Toyota Production System – TPS that time.

The term “Lean” was coined in 1988 by John Krafcik n his article “Triumph of the Lean Production System”.

In this 12 pages article Krafcik explains his research about different plants in different locations arround the world. He explains correlations between productivity, and quality results, and how to approach it. Check out my video reviewing this mind changing article.

Krafcik is proving, that plants operating with a “lean” production policy are able to manufacture wide range of models, maintain high level of quality, and productivity with higher probability, than plants working without lean principles.

Lean manufacturing case study in automotive – read here

5 Lean principles

5 key principles of Lean were identified by James Womack, and Daniel Jones in their book: Lean thinking. Womack and Jones defines lean as: doing more by less effort, and provide to customers what they really want.

These are the “5 Lean principles”:

• Precisely specify value by specific product.
• Identify the value stream for each product.
• Make value flow without interruptions.
• Let customer pull value from the producer.
• Pursue perfection.

Lets review each of them in little more detail.

To buy “Lean Thinking” book by J. Womack and D. Jones click on this affiliate marketing link: https://amzn.to/3d6Frl3

I may receive a commission if you sign up through this link. This is not affecting final product prices.

DMAIC improvement example in fast food restaurant – read here

Lean principle 1: Value by product

Prnciple number 1: Precisely specify value by specific product.

Here is, where exact requirements are defined by customers. Voice of customer and voice of the business are key methods in understanding it, reacting on it, and implementing it. To eliminate activities, customer is not willing to pay, team must understand ones, customer wants to pay, right? So, try to be specific as much as you can be in understanding customer. Designing a new process is a great opportunity to develop process as closer as possible to customer needs. It is a little more difficult in existing processes. Continuous improvement method to reach customer needs might be a good choice of reaching that state. But it is long term approach.

List of “Continuous Improvement Tools” I use the most – read here

I provide 30 minutes of consultations for free:

A3 report template

Great tool to report out you project progress:

• A3 form Excel template
• Restaurant example – filled A3 report (above used pictures)

To download entire A3 report template –click on the link below

Lean principle 2: Value stream for product

Number 2 principle.: Identify the value stream for each product.

Each product have own stream it is flowing through. Steps necessary for product creation are identified and followed. Value stream map is a great tool for identifying value stream and its processes. There are two different models, that requires a little different approaches. One is mass production. Second is made-to-order production. It is about how mix of parts, or information go through the process. How work cells are organized to create continuous flow. I will focus on these differences in my next videos. So stay tuned.

8 main steps of Kaizen event – read here

Lean principle 3: Make value flow

Principle number 3 is: Make value flow without interruptions.

Material and information required to fulfill customer requirements must have not barriers. These barriers are called wastes. It is required only value added activities to be performed. Non-value added are also wastes, that must be identified, eliminated and under control. There are 8 wastes of lean. Waste walk also called Gemba walk are tools to identify wastes.

The best Project manager? – this is how

Lean principle 4: Pull the value

Let customer pull value from the producer is principle number 4.

Product or service is done, once consumed, or required by customer. Pull signal for work, is the empty spot. Previous process fills in this empty spot. And empty space creates signal for upstream processes.

There are 8 questions you can follow for designing ideal value stream.

• Is process producing on takt time?
• Will you build to a finished goods supermarket, or directly to shipping?
• Where can you use continuous flow?
• Where to use supermarket pull system to control upstream processes?
• What is “the pacemaker” – single point to schedule production?
• How production mix is leveled at pacemaker?
• What increment of work will be consistently released and take away at pacemaker?
• What changes must be made to reach ideal, the future state design?

These questions were identified by Mike Rother and John Shook in their book: Learning to see. Value stream mapping to create value and eliminate muda. Link to buy this book see below.

I strongly recommend to have Learning to See book and Mixed model Valuestream for all managers, for all supervisors, engineers and leaders. You will be able to understand how valuestream should work, how to make value flow, and implement lean in any business, any process. It is really worth it.

If you would like to buy “Learning to see” book by Mike Rother click on this affiliate marketing link: https://amzn.to/3nrgHsJ

f you would like to buy “Creating Mixed Model VS” book by Kevin J Duggan click on this affiliate marketing link: https://amzn.to/3ZteKta

I may receive a commission if you sign up through this link. This is not affecting final product pric

How to calculate Takt Time and Cycle time? – read here (+template)

Lean principle 5: Pursue perfection

Last, the 5^th principle is Pursue perfection.

This is more about developing lean culture, spread lean thinking and philosophy. To demand perfection in organization is not one men effort. It must be whole organization thinking set up. And it is not a simple change. It requires embedment by senior management, spreading through larger leadership and encouraging employees

I will try to explain each lean principle in detail on examples in following videos and blog posts. Please stay tuned, if you are interested 😉 .

5 Lean principles check list download

5 Lean principles check list – this is what you will get: (preview)

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Yours sincerely Erik.