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Lean Management
Copyright 2021, Faulkner Information Services. All
Rights Reserved.
Docid: 00011316
Publication Date: 2111
Report Type: TUTORIAL
Preview
Lean management offers an enterprise the opportunity to maximize its
resources, beginning by specifying value from the point of view of the
customer. Although lean management can be traced as far back as the days
of the first assembly line, the concept gained significant traction when
US organizations began studying the methods of their Japanese counterparts
and borrowing the best of those methods. The lean management tools of
analysis, process redesign, and continuous innovation can offer
significant benefits to an organization willing to closely examine how it
does business and learn from experience.
Report Contents:
Executive Summary
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Lean management attempts to accomplish the tasks of an enterprise in a
quality fashion and in the shortest possible period of time, using a minimum
of resources.
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The concept of lean management can be traced at least as far back as the
assembly line design of Henry Ford. However, it first took its name in the
1990s when the study of Japanese manufacturing processes led to a
revolution in practices in the
States
customer, on processes, on quality, on employee participation, and on
continuous innovation led to dramatic results in many cases. No
company should ignore the possibility that it may be able to reduce
expenses and increase ROI by a rigorous reworking of its processes.
Despite popular misconceptions, lean management does not necessarily mean
cutting staff or programs. It is equally as important to recognize what
works well. Nor does lean management mean an automatic decision such as,
for example, “Put everything in the cloud.” Careful evaluation and
analysis may suggest any number of profitable directions for a company to
take. Such evaluation is the essential starting point of lean management.
Description
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The term lean management may be used in two interrelated ways. It may
refer to a company’s management processes and, in a broader sense, it may
also refer to the way the company manages all its processes. The two
are closely connected and, in both cases, management buy-in and support is
essential if lean management is to succeed.
Lean management is not a single technology or even a single approach, and
there is no way to purchase it in a software package. It is a body of
knowledge collected from both the thinking and the practical experience of
a number of individuals and organizations. The first use of the term
“lean” in a business sense began with lean manufacturing. Examples of
other uses of the word now in circulation include lean enterprise, lean
thinking, lean accounting, and lean production.
The principles of lean management have been implicit in organizational
best practices for decades, but they have not always been recognized under
that name. The concept as such first gained currency by name in the
in response to the perceived threat of Japanese competition in the fields
of automobile and other manufacturing in the 1970s.
In 1990, James P. Womack, Daniel T. Jones, and Daniel Roos published The
Machine That Changed the World: The Story of Lean Production (Simon
and Schuster; revised edition, 2007), followed in 1996 by Womack and Jones’
Lean Thinking (Simon and Schuster; revised edition, 2003). Womack and
Jones pointed toward Toyota as their principal model and urged the adoption
of the principles behind Toyota’s startling success. A familiar term to describe
the principles behind that success is the Japanese word kaizen,
meaning continuous and rapid improvement.
The idea of lean manufacturing promoted by Womack and Jones contains
concepts that are specific to the manufacturing business rather than to
service or other non-production enterprises, and they have particular
applicability to manufacturing issues, but those same concepts can also be
applied more widely. Table 1 illustrates the principles of lean
management.
| Area of Concentration | Guiding Principles |
|---|---|
|
Customers |
Understand customer needs and use them to guide the business. |
|
Processes |
Analyze the way work is presently done, identify improvements, |
|
Quality |
Aim for as close to zero defects as possible. Techniques such |
|
Employees |
Empower employees. This may involve organizing employees into |
|
Suppliers |
Construct win-win relationships with vendors, building those |
|
Inventories |
Utilize the principles of just-in-time supply to keep |
|
Monitoring |
Use effective metrics to identify both the requirements and the |
|
Innovation |
Build creativity and market responsiveness into the business, |
An overall goal of lean management is to “get it right the first time.”
Reducing exceptions and corrections reduces costs. By contrast,
superfluous management structures impede efficiency and innovation;
inefficient work processes cause steps to be repeated or unnecessary steps
to be performed; defects in quality require repetitive correction or
replacement; and neglect of employee ideas and insights wastes time while
possible improvements are delayed or postponed. Lean management aims to
accomplish a task in a quality fashion, in the shortest possible period of
time, using a minimum of resources. Specifically, lean advocates a waste
reduction concept called DOWNTIME and an efficiency concept called
just-in-time production. DOWNTIME is an acronym that identifies the
sources of waste (called “muda” in the original Japanese): defects,
overproduction, waiting, non-utilized talent, transportation, inventory,
motion, and extra-processing.1 Just-in-time production entails
closely monitoring demand for a product and creating the products to fill
that demand as needed, rather than doing so in advance and storing the
inventory.2 Another related approach is continuous
manufacturing, which is similar to just-in-time in that it provides raw
materials into a manufacturing process as needed, based on a close,
continuous assessment of needs.3
Lean management, however, does not necessarily equate to small or reduced
numbers of employees. The specific situation must determine the optimal
management structure. Simply reducing a work force is not lean management;
such force reduction may and on occasion verifiably turns out to reduce
rather than improve efficiency. Lean management requires careful analysis
followed by redesign and commitment to continuous improvement. Early efforts
may not even succeed; persistence is required. It will be noted that the
elements in the table above apply regardless of specific technologies
involved.
Current View
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One relatively common practice is the combined use of lean management and
agile project management. Both focus on expending just the right amount of
work on necessary processes. This similarity of approach suggests that
organizations with a lean orientation may more readily accept agile project
management and that organizations employing agile project management may
find an increased impetus to adopt a lean management approach. The
combination of the two approaches is sometimes called “next generation
agile,” “agile sigma,” or “continuous development.”4
A number of training organizations, consulting firms, vendors, and
conferences offer assistance in creating the conditions for lean
management, including the Lean Enterprise Institute. Depending on the
specific methodology selected, companies that offer training in lean
management may employ specialized vocabulary and recommend specialized
employee roles (for example, the Black Belt and Green Belt of Six Sigma),
often based on the Japanese practices originally studied by Womack and
Jones. The quality of such vendors varies, and there are no clear market
leaders.
Lean management has also grown beyond its roots in manufacturing into
fields such as healthcare. A review of the scholarly literature published
in 2021 found that lean management both “helped improve teamwork,
communication and coordination between staff” and that it “was correlated
with higher levels of stress, job strain, anxiety, work intensification
and dehumanisation.”5
Outlook
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Lean management is a mature field. Its management techniques are
long-standing, well-developed, widely taught, and frequently implemented.
Since it is not a technology, lean management does not depend on
creative invention, although technological improvement can make it
more effective. For example, one emerging trend is “digital lean
manufacturing.”6 This approach employs concepts and practices
of traditional lean management with the aid of contemporary data capture
and analysis tools. As Big Data grows and expands, digital lean management
can be expected to evolve as well.
Continuing pressures on the organization to operate in a lean fashion make
it certain that, for the foreseeable future, the struggle to achieve lean
management goals will continue. One of the issues concerned in lean
management will be to ensure that companies do not become too lean — that
they adopt efficient methods that produce the best results, rather than
those that simply employ the fewest people.
Lean management solutions will always vary from company to company
because no two organizations are exactly alike and, therefore, no one
solution fits all cases. Lean management is an outcome of careful process
analysis, and this analysis must be unique to the organization being
studied.
The principal obstacle to implementation of lean management techniques is
the inertia that an organization faces when its business appears to be
relatively successful. The temptation exists to maintain current
structures, to solve problems by adding to or reducing the number of
employees rather than by examining processes, and to wait until a crisis
stimulates genuine self-examination. Such a crisis, when it comes, may
cause reflexive action rather than the thorough analysis that lean
management requires for success.
The enterprise must be prepared for some efforts at lean management to
require adjustment or even to fail. To a larger extent than perhaps is
recognized, lean management is a learning process, one that should be
engaged in continually. With the rapid changes taking place in the
technological environment, for example, with cloud computing and mobile
devices, continual analysis and evaluation become even more important.
The principles of lean management will likely continue to become more
firmly entrenched in many enterprises. Unfortunately, lean management may
be confused with simple cost cutting. They are by no means the same: lean
management must begin with careful process analysis, and its results
cannot be predicted in advance, nor is cost saving its only purpose or
result.
Recommendations
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Lean management is not a single technology or technique but a philosophy
and an approach. An enterprise interested in implementing lean management
requires major buy-in from senior management, and it also requires the
commitment of employees who understand the importance of continuous
process improvement.
Whether outside vendors can assist in this process is a decision that
must be made on a case-by-case basis in terms of the organization’s goals
and structure. It is easy to find vendors willing to lend their services.
However, a vendor that employs a “cookie cutter” approach, recommending
the same steps at company after company, may do more harm than good.
The quality of companies that claim to provide training and services
related to lean management varies widely. A company in search of outside
assistance in implementing lean management techniques should take
advantage of every opportunity to send staff to audit classes, examine
training materials, and conduct site visits to other companies that have
implemented the vendor’s approach, keeping in mind the differences between
both the structure and the culture of the companies visited.
Companies considering the adoption of lean management principles must
remember that cost cutting does not by itself necessarily equate to lean
management, a term that implies process analysis and control. An
organization must begin the move toward lean management using rigorous
system analysis to identify gaps, unnecessary steps, and other
inefficiencies in present processes. Some of these may be “low hanging
fruit” that are correctable without drastic process changes, leading to
immediate results and building enthusiasm for the lean management program.
The organization will then be able to begin considering farther-reaching
structural changes, bearing in mind questions like the following, some of
which may have difficult answers:
- How will such changes affect employee morale?
- What is the appropriate management structure for the organization?
Often a flatter organizational structure can be achieved, but that is
not an automatic decision and must be considered in light of the
company’s overall goals and requirements. - What planning is required to make the transition from the present
condition to a state of lean management? An enterprise almost certainly
cannot afford to suffer a major loss in revenue or a major increase in
expenses while moving to a new form of organization. - What impediments stand in the way of a move to lean management? For
example, are there union or related issues? - How receptive is management to receiving ideas from employees?
Businesses must keep in mind that lean management is not an ultimate goal
in itself. It is a means, not an end; a tool, not a product. For example,
a process may be reduced to its lowest cost, only for the business to find
that it has insufficient inventory available for cyclical events, or has
ignored changing market conditions.
Experience has shown that lean management techniques depend significantly
on the buy-in of the organization’s employees. They must be involved in
all steps of the process and must be helped to understand both the goals
and the means of lean management. Lean management tends to put a premium
on employee cooperation and morale. As a result, the enterprise should
consider the use of self-governing work teams as a possible element in its
lean management strategy.
Lean management can assist an enterprise in achieving its goals, but
should not determine them. Lean management is a tool, not a destination.
For example, it might be assumed that a flat management structure is the
prototypical lean management structure, but Toyota does not have a flat
management structure. A flatter structure may hinder rather than help the
control of an enterprise; it depends on the nature of the processes
involved. This example illustrates that the outcomes of the process
analysis associated with lean management may be surprising. There is no
single model for lean management, any more than there is a single model
for the enterprise. But the goal will always be the same: to accomplish
quality work in the shortest possible time with the minimum required
resources.
Web Links
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- ASQ: https://asq.org/
- Lean Enterprise Institute: http://www.lean.org/
References
1 “What Is Lean?” ASQ (American Society for Quality).
(Retrieved October 22, 2019)
2 “Lean Thinking and Methods – JIT/Kanban.” United
States Environmental Protection Agency. (Retrieved October 22, 2019)
3 Neha Mookuparambil. “FDA Proposed Approach Aims to Improve
Efficiencies to Advance Pharma Manufacturing.” Pharmaceutical
Engineering. April 30, 2019.
4 “How Lean Six Sigma and Agile
Can Work Together.” Villanova University. August 15,
2019.
5 Zeyad Mahmoud, Nathalie Angelé-Halgand, Kate Churruca,
Louise A. Ellis, and Jeffrey Braithwaite. “The Impact of Lean Management
on Frontline Healthcare Professionals: A Scoping Review of the
Literature.” BMC Health Services Research. 2021.
6 Stephen Laaper and Brian Kiefer. “Digital Lean
Manufacturing.” Deloitte Insights. August 21, 2020.
About the Author
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Geoff Keston is the author of more than 250 articles
that help organizations find opportunities in business trends and
technology. He also works directly with clients to develop communications
strategies that improve processes and customer relationships. Mr. Keston
has worked as a project manager for a major technology consulting and
services company and is a Microsoft Certified Systems Engineer and a
Certified Novell Administrator.
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