Lean Management: Definition, Benefits and 5 Main Principles

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Lean Management: Definition, Benefits and 5 Main Principles

Lean Management Definition Benefits and 5 Main Principles

Lean Management is one method that is quite often used by an organization, companies, or certain agencies. This method is claimed to be able to make companies able to improve the quality of their products more efficiently.

Well, if there are some of you who are interested in becoming a Project Manager, it is good for you to understand Lean well to be able to run a company organization more effectively.

Then, what is Lean Management? Find the answer by reading the article for Lean Management below.

What is Lean Management?

Reporting from the official Page Gantt Pro, Lean Management is a method carried out by the company to be able to improve the quality of production, increase its value and also reduce the presence of waste.

The main objective of this method is to reduce the frequent waste in terms of time, budget and resources.

In addition, the Lean method will also focus more on taking the time to improve production quality. For this reason, improving the Lean method must also be able to produce more quality products and not cost too much.

Broadly speaking, companies that utilize this method must prioritize the level of production based on existing requests, not on offers.

Lean management history

This waste or waste avoidance has a long history in the manufacturing industry. Today many concepts are considered Lean keys to be rediscovered after years by others to reduce waste or waste.

Lean Manufacturing is applied to most of the Toyota Production System or TPS. The term Lean itself was first introduced in an article titled “Triumph of Lean Production System” in 1988 written by John Krafcik.

This article is based on the Master’s thesis at MIT Sloan School of Management. Before this study, Krafcik himself worked as a Quality Engineer at Toyota-GM Nummi.

The founder of the Toyota Motor Corporation named Kiichiro Toyoda directed his employees to do machine casting work and found a very much problem in the process of making it.

In 1936, the process experienced a new problem and then he developed the principle of Kaizen. The Toyota Cal’s view is that the main method of Lean is not a tool, but the reduction in three types of waste or waste is a work that is not able to add value, excessive loading, and inequality.

Finally, this principle helps reveal problems more systematically and makes the work process easier with the right tools when there are various ideal ways no longer can be used.

A Japanese industrial engineer and businessman named Taiichi Ohno, who is considered the original Toyota production system is capable of offering to focus on reducing seven Toyota waste to be able to increase the value of customers thoroughly.

The Lean method itself can identify three types of waste commonly called 3M, namely young, muri, and mura. Young is a waste that leads to resources and is unable to provide more benefit value for the company.

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MURI leads to excessive use of equipment or recruitment of employees, while Mura is an operation that is not indicated evenly and has the potential to reduce productivity over a long period.

Lean Management’s goal

The purpose of the implementation of Lean Management is to reduce 3M as we have explained above.

1. Improve product quality

As we have previously mentioned that the Lean method is more focused on improving product quality. Thus, this method can make the company spend time improving product quality from time to time.

2. High customer satisfaction

Because of its quality products, it automatically increases customer satisfaction. More and more customers are satisfied, it will be better for companies to run their business for a long period. Because the customer has the potential to make a continuous purchase

3. Save costs

Applying this method can also help companies save costs during production time. Because one of the objectives of the implementation of Lean Management is to reduce 3M as we have explained before.

So, companies can make a healthier budget for the company’s production processes and other things.

4. High profit

Customer satisfaction on product quality will give birth to a high level of sales. The company will benefit from the high of the products they sell. So, in a long period, they can develop their business better.

Principle of Lean Management

Reporting from the Smart Sheet page, in implementing Lean Management there are five principles following the book entitled Lean Thinking by James P. Womack and Daniel t. Jones. The five principles of Lean Management are as follows:

1. Focus on Value

Always oriented to things that are essential for customers. Focus on the production of goods or services that can affect customers, and leave other things. Some forms of questions that might be able to help you find value in your product are as follows:

  • How is the timeline from production and also the distribution needed?
  • What is the appropriate price?
  • And, what are the requirements and conditions that must be fulfilled?

With more focused value, then you can start reducing the unnecessary process then find a variety of essential things you have to do.

2. Create a value stream and eliminate the rest

After finding the value of your product or service, you must now be able to create a production stream to teach the value. In Lean Management, this process is one very important process.

Because from this thing, you can find various processes that you should not need and waste a lot of time. The value stream in question is certainly not only limited to product activities but also concerning other divisions.

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One effective way that can be done is to make a brief description related to how a production process can run thoroughly. This point will also further understand how an actual business operation.

3. Creating Flow without obstacles

The next thing you need to do is convince yourself that Value Stream above can run smoothly without obstacles.

The Lean Enterprise Institute recommends the Lean Management actors to ensure that the previous value-based process can move with a strict workflow, so the production process or service can run smoothly.

This process is indeed not easy to do, because it is likely that you have to check the process that occurs in the company’s external environment. But if you do this, your productivity level can increase rapidly.

4. Using the “pull” system

The point is that it is not hoarding inventory items but remains focused on meeting customer needs related products and services are very important points you must do.

In this case, the pull system means that every customer can attract products or services when they are indeed in need. That means, companies can only produce products and services in the amount and also the right time.

The main objective of this concept is to reduce and eliminate resources that are not needed. So that it will reduce expensive maintenance costs that can have an impact on the increase in selling prices.

5. Improvisation and development

The final step that must be done is how to be able to re-develop the four concepts above which you have previously worked well. So, you must continue to repeat the process and eliminate waste and also unnecessary activities in the future.

You must always remember that Lean is not a process that then you just leave it. You still have to repeat it continuously, because the process is inefficient and a waste that does not need to happen again in the other sectors.

Conclusion

If you successfully understand and also apply the principle of Lean Management above correctly, then you can increase productivity and efficiency. This has been proven by many companies, which most of them can increase productivity by 40 – 60%.

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