Lean management

Revision as of 21:09, 27 April 2023

Abstract

Lean management is a popular approach to improving efficiency, reducing waste, and enhancing quality in organizations. It originated from Japanese car manufacturing companies such as Toyota in the 1940s and 50s as a response to the country’s socio-technological economic problems of increased competition levels and resource limitations.

The approach to this response is known as the Toyota Production System (TPS) and it is based on two principles: jidoka and kaizen as well as the “just-in-time” (JIT) concept. The principles focus on using machine automation and allowing human hands to focus on other tasks and well a commitment to continue improving processes and reducing waste. The just-in-time concept is trying to avoid unnecessary time and resources spent on production that is not being used. It is based on the idea of only producing exactly what is needed, when it’s needed, and in the right quantity.

However, implementing lean management can be challenging, and many organizations struggle to achieve the desired results of improving efficiency, reducing waste, and enhancing quality.

The article will present lessons learned from case studies of organizations that have successfully implemented lean management. The case studies reveal that successful implementation of lean management requires a clear understanding of the principles and tools of lean management, as well as a commitment to continuous improvement and employee engagement. The article will cover these common tools and practices. The case studies also highlight the importance of effective leadership, training, and communication in achieving successful implementation of lean management.

Lastly, the article will 'offer recommendations for organizations that are considering implementing lean management, based on the lessons learned from the case studies.

Theory behind lean

Lean management started in the Japanese automotive industry in the 1940s and 1950s when the companies had limited resources and a competitive market. To face these challenges of resources and competitiveness, Toyota developed a production system that eliminated waste and increased process efficiency and known as the Toyota Production System (TPS). The positive results of lean management in the 1970s and 1980s led to increased interest in western countries, and General Motors, Ford, and Boeing all began to adopt lean models into their production process. Today, lean management is widely used to improve efficiency and reduce waste in a many different industries such as in healthcare, service industries, and software development.

Lean management is a business philosophy and management approach which originated from the Japanese manufacturing industry in the mid-20th century. It aims to increase efficiency and minimize waste by reducing costs and improving quality and defining value and it can be applied in any organization or role. The idea behind lean management is to ensure continuous improvement of the organization by creating value for the customer and producing a product or service which is needed while minimizing waste in all stages of all processes. Lean management enables organizations to be more flexible, adaptable, and responsive to changing customer demands, as the demands are always being listened to and incorporated into the produced product or service. Every aspect or part which is not needed by the customer will not include in the product or service.

7 types of waste

Eliminating waste is one of the most important activities in lean management and for building a successful company. The idea comes from a Toyota executive, Taiichi Ohno, and he identified 7 types of waste found in any process (1). He is considered to be one of the founders of lean management in Japan.

Waste in lean can be defined as:

"Waste in Lean is any activity that consumes resources but brings no value to the end customer." (ref: https://kanbanize.com/lean-management/value-waste/7-wastes-of-lean)

However, not all waste can be eliminated in an organization and some waste is necessary to keep up customer satisfaction. An example is in software testing which is a step in product development that is necessary to have a high-quality product, but the customers are not willing to directly pay for it. Because of this, the waste is categorized into two groups:

• Necessary waste - non-value adding, but necessary to allow for high-quality products. These activities can be testing, planning, reporting, etc.

• Pure waste - non-value adding, but unnecessary to allow for high-quality products. These activities can be waiting and do not bring value to the product and can be eliminated.

The 7-types of waste explained and about avoiding waste for project managers:

• Transportation, Unnecessary transportation of resources which does not add any value to the product. Eg. movements of parts under production, transported healthcare.
  • Project management: task switching, interruptions, unnecessary long marketing funnel

• Inventory, Over-stocks of resources and other inventory which is typically in the case of a company trying to be "on the save side" of avoiding delays, production defects, and more. Eg. Stacks of parts that are waiting to be completed, finished products waiting to be shipped, unneeded documentation in healthcare, etc.
  • Project management: purchased online tools that teams rarely use, and office supplies that exceed needs.

• Motion is, Unnecessary movement of employees or machines and can be complicated. Eg. moving people working on products, movement of healthcare staff or patients from one unit to another. This can cause injuries to people and extend production time.
  • Project management: badly structured workspaces and lack of organizational paths, too many meetings, the extra effort to find information, and so on.

• Waiting, Unnecessary waiting of people and goods. Eg. people waiting to begin the next phase, patients waiting to receive help, etc.
  • Project management: waiting for approval from higher management.

• Over-processing, a product with unnecessary steps and features which have not been met by customer demands.
  • Project management: multiple levels of approval for small tasks

• Over-production of products not needed. The products which are not being sold by exceeding customer demand lead to costs.
  • Project management: filling out unnecessary amounts of documents

• Defects, in a product, in a surgery, mistakes made in healthcare, which leads to rework or elimination. It is again obvious that this will cause excessive costs or production delays.
  • Project management: an incorrect collection of data

Optimizing processes to eliminate waste is crucial for a successful company and project manager. Wasteful activities can lower profitability, increase customer costs, and decrease quality, and employee satisfaction. Because of this, it is crucial to identify the non-value-adding activities. These activities must be improved or eliminated as part of adopting lean in a company.

In addition, it is argued that an eighth type of waste also can be added to further profit from lean management (ref).

• 'Goods and services not meeting the customer’s needs, patients not receiving the healthcare they need, etc.

The theory can be applied to many organizations and roles in organizations. Lean management principles have and can be expanded to more industries other than production processes including in healthcare, construction, and software development.

Lean principles

Lean thinking principles designed to remove waste.

The 5 lean principles are:

1. Value: Focus on creating value for the customer by understanding their needs and preferences. Value is defined as anything for which the customer is willing to pay.
2. Value stream: Map out the entire value stream for a product or service, from raw materials to delivery to the customer. Identify and eliminate all steps that do not add value to the product or service.
3. Flow: Ensure that work flows smoothly and continuously through the value stream, without delays or interruptions. Minimize waiting times and work-in-progress inventory.
4. Pull: Use a pull-based system to produce goods and services in response to customer demand. Only produce what is needed, when it is needed, and in the quantity needed.
5. Perfection: Strive for continuous improvement and perfection in all aspects of the value stream. Emphasize the pursuit of excellence and never-ending improvement.
6. Respect for people: Treat employees as valuable resources and partners in the improvement process. Encourage collaboration, teamwork, and empowerment.
7. Standardization: Standardize work processes and procedures to ensure consistency and quality. Develop standard work instructions and visual management tools to facilitate communication and understanding.
8. Continuous improvement: Encourage continuous improvement through a culture of experimentation, learning, and innovation. Encourage employees to identify problems and propose solutions

The principles are designed in a way to remove all waste from a process and in an organization. The key point is that lean management is trying to do more, by using the least amount of effort, energy, equipment, time, facility space, materials, and capital while meeting the customer’s needs and giving them what they want (1). This can be summed up as doing more by avoiding all waste.

Lean tools

Lean management has a range of tools that are designed to follow the principles of lean management. These tools can be used by project managers who uses lean leadership or those who does not.

Lean management tools designed to follow the principles of lean thinking: (REF) (KAN LAVES SOM TABEL MED BILLEDER AF VÆRKTØJERNE)

1. Value stream mapping: A visual tool used to map the flow of materials and information through the value stream. It helps identify waste and areas for improvement.
2. 5S: A methodology for organizing the workplace to improve efficiency, safety, and quality. The 5S's stand for Sort, Set in order, Shine, Standardize, and Sustain.
3. Kanban: A pull-based system for managing inventory and production. It uses visual signals to signal the need for replenishment and helps reduce overproduction and waste.
4. Just-in-time (JIT): A production strategy that emphasizes producing goods or services only when they are needed, in the quantities required, and without excess inventory
5. Poka-yoke: A mistake-proofing technique that aims to prevent errors from occurring in the first place. It involves designing products and processes in such a way that mistakes are less likely to happen.
6. Kaizen: A continuous improvement process that involves everyone in the organization. It emphasizes small, incremental changes to improve processes and eliminate waste.
7. Visual management: A technique for communicating information visually, using charts, graphs, and other visual aids. It helps employees understand their roles and responsibilities and enables them to monitor their performance and progress.

These tools and techniques are designed to help organizations identify and eliminate waste, improve efficiency and quality, and create value for the customer and allow project or senior manageres to follow lean management principles. They are widely used in lean management and can be applied in a variety of industries and organizational contexts. (REF)

Application: How can lean management be implemented in a team

Lean management can be implemented within a team, department, and whole organization. However, the adoption of lean in different settings follows the same steps.(REF: https://kanbanize.com/lean-management/implementing-lean) Before implementing lean management it is important to set clear and manageable goals for the team and communicate them to the team. For project managers who might lead a team toward lean management could for example be goals of optimizing the workflow for faster deliveries in the team. For a more successful implementation it is important to clearly define the goal as it can help with understanding and motivating the team.

Lean management can be adopted in the following ways:

1. Develop a clear understanding of lean management principles:
   1. Before implementing lean management, it is important to have a clear understanding of the principles that underlie it. This involves understanding the importance of continuous improvement, eliminating waste, and creating value for the customer.
2. Establish a lean management team:
   1. Select a person responsible for leading the implementation if lean management. In implementation in teams it would most likely become the project manager. Establishing a team of individuals who are responsible for leading the implementation can also be a possibility for bigger cultural changes in organsizations. This persons and teams should have the knowledge, skills, and experience needed to implement the lean principles explained above.
3. Identify areas for improvement:
   1. Conduct a thorough analysis of the project or organization to identify areas where lean principles can be applied. This can involve analyzing processes, workflows, documentation, softwares to identify areas of waste and inefficiency.
4. Implement lean management tools and techniques:
   1. Once areas for improvement have been identified, it is important to implement lean management tools that can help eliminate waste and improve efficiency. This can involve implementing relevant tools such as value stream mapping, 5S, and kanban as explained above.
5. Provide training and support:
   1. Project managers or other employees must be trained on lean principles and the tools used in lean management. This will help ensure that everyone in the organization is aligned with the lean management philosophy and can contribute to its implementation. There can potentially be created methodology of usage of tools to ensure futher alignment of workflows throughout the teams.
6. Monitor and evaluate progress:
   1. It is important to monitor progress and evaluate the impact of lean management in the team. This can involve tracking key performance indicators (KPIs) and conducting regular audits to ensure that the team is on track to achieve its goals.
7. Continuously improve:
   1. Lean management is a continuous improvement process. As such, it is important to regularly review progress, identify areas for improvement, and implement new lean principles and tools as needed. Potentially lean leadership can be a helpfull leadership style to ensure sontinouse improvement of lean in the team or organization (REF: 2).

Adopting lean management requires a long-term commitment and a willingness to change. It is important to communicate the benefits of lean management to all stakeholders in the organization and to create a culture of continuous improvement.

Pros and cons of lean management

Pros of Lean Management:

• Increased efficiency: Lean management can help organizations eliminate waste and improve efficiency, leading to reduced costs and increased productivity.

• Improved quality: Lean management focuses on delivering high-quality products and services that meet customer needs and expectations. This can help organizations build a strong reputation and gain a competitive advantage.

• Increased employee engagement: Lean management encourages employee participation and empowerment, leading to increased engagement and job satisfaction.

• Faster response to customer needs: Lean management emphasizes delivering value to the customer, which can help organizations respond quickly to changing customer needs and preferences.

• Continuous improvement: Lean management is a continuous improvement process, which means organizations are constantly looking for ways to improve and become more efficient.

Cons of Lean Management:

• Resistance to change: Implementing lean management can be challenging, and some employees may be resistant to change.

• Time-consuming: Implementing lean management can be time-consuming and may require significant resources and investment.

• Narrow focus: Lean management can sometimes result in a narrow focus on specific processes or areas of the organization, which can lead to a lack of attention to other important areas.

• Lack of flexibility: Some critics argue that lean management can be inflexible and may not be suited to all industries or organizational contexts.

• Overemphasis on cost-cutting: In some cases, organizations may become overly focused on cost-cutting at the expense of other important goals, such as innovation or employee satisfaction.

It is important for organizations to carefully consider the pros and cons of lean management before implementing it. While there are many potential benefits, it is also important to be aware of the challenges and limitations of the approach.

Conclusion

summary of the article