Less waste, more agility. That’s at the heart of the LEAN approach to process improvement, a methodology that strives to give customers maximum value and quality, which in turn helps secure business processes. After all, any process that’s not working only serves to cost time and money.
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When used effectively, the results can be significant. For one ISO 9001: 2008-certified global manufacturer, adopting the LEAN approach reduced its waste by 20%, increased productivity by 35% and boosted on-time deliveries by 90%.
Another company reduced its travel time by 10% and its mileage by 29%. And still, another saves $1,000 annually just by instituting one small change inspired by the LEAN approach. Although this methodology was born out of manufacturing practices, it can apply to process improvement across varied industries. To better understand the effects this approach could have, let’s take a closer look at what it is and its key principles.
Although this methodology was born out of manufacturing practices, it can apply to process improvement across varied industries. To better understand the effects this approach could have, let’s take a closer look at what it is and its key principles.
LEAN Defined
LEAN is a system designed to provide continuous process improvement. It's closely aligned with Six Sigma, a complementary methodology that strives to eliminate defects to improve quality and prove better service. LEAN focuses on reducing the amount of time between processes and activities, building a strong culture, and getting rid of the waste that stands between value and quality for customers and businesses alike.
Consider a simple analogy to better understand what LEAN is. To make yourself a sandwich is a relatively simple task, right? If you're making sandwiches for a dozen guests, it'll be more challenging, and if two of your guests help you out in the kitchen, the process will be faster but you'll also have to coordinate a little bit. What if you were catering sandwiches for 1,000 people? That kind of large scale planning and execution would require many steps, from coordinating supplies to discerning the type of sandwiches everyone likes to hiring servers to make sure everyone gets their sandwich.
Simply put, when there's a lot to coordinate, there are a lot of opportunities for things to go awry. It's the same in business. With multiple complex processes, inefficiencies naturally occur, wasting valuable time and money. LEAN aims to trim the fat to save time, increase efficiency, boost quality and provide long-term success.
Principles of The LEAN Approach
The LEAN approach doesn't just minimize waste and increase profits. It also may increase customer satisfaction, boost productivity, improve employee morale, simplify unnecessarily complicated processes and improve quality. The approach works using five key principles:
Defining value: What is the customer willing to pay for? To get a firm grasp on what customers want and/or need, even if they're not fully aware of those needs, many businesses use quantitative and qualitative techniques like web analytics, surveys, and demographic data.
Mapping value streams: Every step of the process is a value stream. Anything that doesn't add value to the customer is one of two types of waste: non-value and necessary, and non-value but unnecessary. The second should be gotten rid of altogether. The first should be reduced.
Creating flow: Once the wastes are removed, it's essential to make sure the rest of the steps flow without any delays or interruptions.
Establishing a pull-based system: This type of system reduces inventory and items that are a work in process while making sure everything needed for a smooth workflow is readily on hand. This system delivers just the quantity of products needed at the exact time they're needed.
Pursuing perfection: While the first four steps are important, this one is largely hailed as the most critical. Every employee should be on the same page, pursuing perfection at every step and continually learning so that the business improves continually.
How to Apply the LEAN Approach to Process Improvement
Using the LEAN approach isn’t a timely only event. It’s really more of a framework and a mindset. It's a daily practice that has to be implemented across the organization to be effective. Otherwise, one team might streamline its processes and optimize performance while the other struggles and brings the organization down overall. Consider implementing it as a phased methodology. Start by defining the goal before moving into the following steps:
Measure: Look at specific data
Analyze: Figure out some of the causes of the problems you're trying to solve
Generate: Start coming up with solutions to improve processes
Implement: Take action based on the solutions you've generated
Control: Ensure that the measures taken have helped you meet the goal and make sure the solution remains enacted