Lean thinking is a management philosophy and practice focused on optimizing business and production processes by eliminating waste, enhancing efficiency, and consistently delivering customer value.
Origin and Development of Lean Thinking
Lean Thinking originated from the study and summarization of the Toyota Production System (TPS), developed by the Japanese automaker Toyota.
In the early 20th century, Henry Ford revolutionized automobile manufacturing by introducing “flow production,” significantly boosting production efficiency but eventually struggling to adapt to diverse market demands.
In the 1930s and post-World War II era, Kiichiro Toyoda, founder of Toyota Motor Corporation, and Taiichi Ohno, an executive at Toyota, deeply analyzed this limitation. They realized that a series of simple innovations could simultaneously ensure continuous flow and product diversity. They revisited Ford’s original ideas and developed TPS, which aims to enhance efficiency, lower costs, eliminate waste, and guarantee product quality. This laid the foundation for what we now know as Lean Thinking.
After extensive global research on automotive production methods, MIT’s International Motor Vehicle Program (IMVP) published “The Machine that Changed the World” in 1990. Authors James P. Womack, Daniel T. Jones, and Daniel Roos explored how Toyota identified weaknesses and waste in traditional mass production methods and refined them into lean production. Their book popularized the term “Lean Production.”
In 1996, Womack and Jones further distilled the lean principles in their subsequent book, Lean Thinking, highlighting five core principles:
- Identify customer value clearly.
- Map the value stream for each product, challenging and removing non-value-adding steps.
- Enable continuous flow through remaining value-creating steps.
- Establish pull where continuous flow is not feasible.
- Strive for perfection, continuously reducing steps, time, and information needed to serve customers.
Principles of Lean Thinking
Lean thinking encourages identifying and reducing waste generated unintentionally by process organization. It revolves around five key principles:
- Define Value from the Customer’s Perspective
Value is what the customer is willing to pay for. Understanding customers’ explicit or implicit needs is crucial. Often, customers themselves may not clearly articulate their requirements, especially regarding novel products or technologies. Techniques such as interviews, surveys, demographic analysis, and web analytics help uncover customer value.
- Identify and Map the Value Stream
Once value is defined, analyze all activities contributing to this value from the customer’s perspective. Activities that don’t add value for the end customer are considered waste. Identifying and mapping value streams enables organizations to eliminate unnecessary processes and thereby reduce costs.
- Create Flow
After removing wasteful activities, the remaining value-creating processes must flow smoothly, avoiding unnecessary delays or bottlenecks. Ensuring continuous flow boosts overall efficiency.
- Establish Pull
Implement a “pull” system to produce based on actual customer demand rather than forecasts, preventing overproduction and excess inventory. Pull systems (like Kanban) limit inventories and ensure resources flow smoothly through processes, minimizing waste and improving efficiency.
- Strive for Perfection
Continuously seek improvement opportunities, aiming for zero waste, maximum efficiency, and perfection. By regularly reflecting on performance and driving incremental improvements, Lean Thinking becomes deeply embedded in organizational culture.
Lean Thinking Core Practices
- Kaizen (Continuous Improvement)
Kaizen is about making small, incremental improvements consistently rather than occasional massive changes. It’s the mindset of seeking daily, continuous enhancements throughout the organization.
- Kanban
Kanban is a visualization method to manage workflow and inventory. It helps teams focus on tasks that add immediate value and avoid unnecessary work. Kanban visualizes workflow to ensure only essential tasks are performed, preventing overproduction and reducing work-in-progress (WIP).
- Automation
Lean emphasizes intelligent automation to streamline routine tasks, reducing manual interventions and mistakes. Automation helps workers focus on value-added activities instead of repetitive tasks, driving productivity and efficiency.
- Andon (Real-time Quality Alerts)
Andon systems allow workers to immediately highlight problems in real-time, encouraging prompt responses and problem-solving. Empowering team members to stop processes when issues occur facilitates rapid problem-solving, fostering a quality-oriented culture.
- SMED (Single Minute Exchange of Die)
SMED focuses on reducing setup and changeover times, enabling greater flexibility in production. This principle supports responsiveness, allowing rapid shifts between activities, enhancing overall operational agility.
- Kanban
Kanban visually manages workflow through simple signaling systems, ensuring that work progresses smoothly and only according to actual demand. It prevents unnecessary accumulation of inventory and helps teams manage priorities clearly and effectively.
The Seven Wastes of Lean Production
Jeffrey Liker’s 2004 book, The Toyota Way, identified seven common types of waste within the Lean framework, as follows:
- Overproduction: Producing more than the customer currently demands.
- Waiting: Idle time and delays during process transitions.
- Transport: Unnecessary movement of materials or products.
- Over-processing: Performing unnecessary tasks that don’t add customer value.
- Excess Inventory: Holding more stock than required, increasing storage and management costs.
- Unnecessary Motion: Non-ergonomic, inefficient movements by workers or equipment.
- Defects: Producing defective products requiring rework.
Lean Thinking Core Insights and Culture in SEM
Lean Thinking seeks to create a lean culture where customer satisfaction and employee engagement drive sustainable growth. It promotes continuous learning and improvement, developing a culture where every employee is responsible for identifying and eliminating waste in their work. The fundamental insight of Lean Thinking is that by collaboratively identifying inefficiencies, organizations can improve their processes, deliver better customer value at lower costs, and cultivate employee empowerment and satisfaction.
Ultimately, Lean Thinking aims to embed a sustainable, improvement-oriented culture, combining customer and employee satisfaction to foster profitable innovation while minimizing unnecessary costs to customers, suppliers, and the environment.