Step-by-Step Guide on How to Use Lean Management for Solving Business Problem
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Any good accomplishments often demand systematic approaches and lean management is no different. When sincerity is granted to the steps followed this policy collaborates well with your system or business and allows it to taste a good flavor of success.
Lean management originated from Toyota Production System (TPS). Developed by the Toyota company engineer, Ohno, in 1980, it focused on value addition through waste reduction, thereby achieving savings in costs and efforts. Value addition was defined as any action or process that was tangible enough to induce customers to buy the products of the organization, in preference to that of other competitors. Since the basic principle of lean management is market-driven, it is considered the most powerful management technique at present. The implementation of the lean management or TPS of Toyota was effected through seven steps of waste recognition and elimination. In Japanese language, waste was called ‘muda’ and hence this step-by-step procedure was known as Seven Mudas.
Over Production was exceeding the market demand, resulting in idle inventories that put pressure on working capital of the company. The inventory cycles of raw materials, work-in-progress, and finished goods should be as short as possible and any increase in length is a waste of available resources, leading to inadequate returns on investments. Motion dealt with wear and tear, damage, and safety of products during the time of handling them by the employees, equipments, or producers. Waiting involved products that were lying unprocessed or undelivered. Over processing was putting more effort on a product than was actually required. Transportation was concerned with transit damages, products lost in transit, and transport delays. Transportation always remains one of the major cost centers that do not result in value addition. Flaws are quality defects, flaws, or issues that force the process system to rework the entire production plans. This could seriously affect cost minimization.
The lean management principles are implemented in 5 steps. They are
- value addition through waste elimination
- focus shift to managers and engineers who add more value to the product than the average employees
- deferred deliveries until there is actual demand in the market leading to value addition
- avoidance of departmental evaluation systems due to the tendency of this practice to isolate each department through localized loyalties
- giving employees adequate time to adapt to changes caused by lean management
