5 Principles of Lean
You’ve heard of Lean management and you know it’s origins come from Toyota’s revolution of the manufacturing world in the ‘80s. But how do the 5 principles of Lean translate into today’s market and how to do you, the Lean Manager, apply them to your team?
Wait. Seven or Five Principles of Lean?
At LeanKit, we subscribe to seven modern tenets of Lean management that, at their essence, are people-oriented (more on that later). In contrast, the 5 lean principles, first described in 1997 by Lean Enterprise Institute founders James P. Womack and Daniel T. Jones, are conceptually similar but are process-oriented. Each of the 5 principles of Lean build on each other and then begin again to create a continuous cycle of improvement. Those five key principles are: value, value stream, flow, pull, and perfection.
The 5 Lean Principles
In the manufacturing sector, the Lean Manager and her team constantly review their product and service from the eyes of the customer. How does the product help the customer do his job, accomplish his mission, improve his position?
Guiding questions: What does our customer need? Why and when do they need it? What are we producing that fulfills that need? How and when are we getting it to them?
Map the Value Stream
Once you determine the Value you provide (what you’re making, why, and for whom), Lean Managers evaluate each process that leads toward that end goal, moving into the next of the 5 principles of Lean: Map the Value Stream. When determining what happens and who does it, the Lean Manager creates a physical ‘map’ for every step of the process for each part of the business: production, R&D, marketing, HR, etc..
Imagine you are producing child-sized tables for classrooms. As a Lean Manager, you identify every step in every process that gets that table to the children who need them.
For materials: Where does the wood go when it is delivered by the supplier? What happens next? Does it come to the factory pre-cut or do we cut it to specifications? Who does that? Where do we get wood glue, nails, and finishing seal?
For production: Where do we keep the tools needed? What happens next? Does it change if the order is for 50 tables or for 5,000?
For sales and customer service: Do we know who the decision maker is in each childcare center, or school, or school district? Do we know what their current inventory looks like or if they plan to build more schools, install more portable classrooms in the coming years? When a customer needs to order a table (or 20,000), what happens next?
Guiding question: What happens next and who does it?
With the Value Stream Map in hand, the Lean Manager moves into the third of the 5 Lean principles: creating flow by analyzing each step in the process, finding ways to maximize efficiencies, and reducing waste. Returning to our table manufacturing example, a Lean Manager might ask her team, what tools do we need for each step and are each of these tools needed every day for production to run smoothly? Can we abandon the traditional assembly line model and approach the production process in a new way that reduces the lag time between steps?
Lean Managers optimize flow in all aspects of the business -- not just the production arm. Following every Value Stream to the customer, the Lean Manager evaluates the steps with her team to determine if each is necessary and, if so, if there are areas to reduce friction, inefficiencies, or stalls in the flow of the Value to the customer.
Guiding question: How can we think in a smart, streamlined way to reduce the steps needed to provide the most value to our customer?
In the fourth of the 5 Lean principles, the Lean Manager next considers the customer’s perspective on the final product, effectively looking at the operations of the business in reverse on the Value Stream Maps. When does the customer actually need the product in hand? The idea of the customer being able to ‘pull’ the value as needed is what truly revolutionized the manufacturing industry when Toyota brought it to market. Instead of investing in materials, production, and then storage to be ready for a customer’s order, Lean Managers can use the customer’s true needs to direct a more sensible model saving cost, space, time, and resources.
Guiding question: How can we transform our approach so that we have exactly the quantity the customer needs, exactly when she needs it?
Finally, the Lean Manager identifies areas of improvement and implements meaningful change, seeking the perfect and most efficient processes to bring the greatest Value to the customer. In practice, these key 5 Lean principles are cyclical. As the Lean Manager seeks perfection he constantly analyzes each process for the increase in Value (reduced cost, time, resources used, space, etc.). He focuses on the elements that add value and eliminates those that do not. He tightens the flow and delivers the Value as the customer needs.
Guiding questions: Did we execute our plan and realize gains in efficiency? Where else can we improve our approach to bringing Value to our customers?
The 5 Lean principles have helped guide the engineering and manufacturing industry for decades. The process constantly spirals upward as the Lean Manager seeks perfection, continually tweaking, simplifying, and improving each process in the business. So why does LeanKit assert that the modern Lean relies on seven principles Instead of five? Read The New Lean to find out.
Keeping up the pace with disruptive competition is a challenge facing all businesses today. Learn more about how Lean can help your team and your organization get ahead by reviewing these excellent resources:
- Download the 2016 Lean Business Report to gain insight into how over 3,000 people across multiple industries are applying Lean across all disciplines of knowledge work.
- Read this blog on Lean principles by LeanKit co-CEO Jon Terry: Welcome to the New Lean.
- Watch this webinar on how to launch a sustainable transformation by using Lean Leadership, Culture, and Tools.
- Learn more about continuous improvement by reading this page.