What Is Lean?

On occasion, I get asked to describe Lean and explain what it does for an organization.  Over the next couple of blog posts, I will provide an overview of Lean and the five key principles of the methodology.

Lean concepts are often associated with Toyota and the Toyota Production System (TPS), but it should be noted that the principles have been around in various forms for many years.  They have been proven to be just as effective in improving service operations as they are in improving manufacturing processes. 

In any organization, it is not uncommon to encounter processes that are overly complex, impeded by waste and wasteful practices, have a poor workflow, and which do not fully meet customer needs.  These problems could be due to a number of differing things, such as the process being poorly designed, an aging process in need of maintenance and improvement, poor discipline around running the process, or changes in customer expectations.  These issues create processes that are more costly to run than they ought to be, produce results more slowly than they should, and provide varying levels of value and quality to customers.  On occasion these processes are not fully understood by the staff that runs them, and can be difficult for the employees and customers to navigate.  Lean can be used to address and improve these situations.

The Five Principles Of Lean

At its core, Lean is just what the name implies:  using the same or fewer resources to accomplish more.  The Lean methodology focuses on maximizing value creation, streamlining processes and removing wasteful practices from them.  These actions increase the capacity of processes to provide service to customers.  The five principles of Lean are:

Value: Identify the core value created by a process.  This is always viewed from the customers’ perspective, so Voice of Customer (VoC) analysis plays an important role in identifying customer expectations and how they perceive the value they get from services.  The goal is to maximize the value produced by the process.

Value Stream: Identify and map the stream that produces the value in a process.  Improvement teams use tools like Value Stream Mapping (VSM) and standard process mapping to accomplish this.  Value streams stretch beyond just the process itself and can include a variety of factors like service design, inputs provided by vendors, marketing, production, service delivery, logistics, and technology systems.

Flow: Ensure that work flows quickly and smoothly through a process.  Improvement teams will work to place related work tasks in close proximity to keep work moving quickly between them.  They will also work to reduce or eliminate batch processing, delays, and any other interruptions to the flow of work.

Pull: Only produce what is needed when it is needed.  Traditional business processes tend to push work from upstream steps to those downstream.  If the downstream step is busy and not ready to receive more work, then the output sits idle (see Eliminating Waste below).  Lean processes are set up so that the downstream steps set the pace, and work is done only when a downstream step indicates it is ready to receive it.

Seek Perfection: Produce the highest quality services possible. Improvement teams will use a variety of tools and approaches to develop processes that produce high-quality, high-value services.

Additional Concepts To Know

Along with these five key principles, there are a couple of other concepts mentioned earlier that are important to understanding Lean: eliminating waste and reducing complexity.

Eliminating Waste:  Lean defines waste as anything that impedes the adding of value to a service, and which causes a process to operate in a less than optimal manner.  There are eight types of waste:

  1. Rework
  2. Producing more than is needed
  3. Movement of materials or information
  4. Unnecessary motion or movement of staff
  5. Work sitting idle in process
  6. Resources and inventory sitting idle
  7. Unnecessary additions to, or over-processing a service
  8. Underutilization of staff and their skills/knowledge

In any Lean improvement effort, the project team works to identify waste and its root causes, and actively seeks out ways to reduce or eliminate it.  The total elimination of waste is not always possible, as some factors like government regulations, university policy, or process requirements may necessitate that some stays in the process.  This is referred to as Type 1 or business necessary waste.  When this is encountered, the team will take steps to minimize it as much as possible.  The second type of waste results from activities that are identified as being both wasteful and not serving any purpose in a process.  These are classified as Type 2 or pure waste.  When this is encountered, the team takes steps to completely eliminate it from the process.  For more information on this subject, see my previous blog titled Identifying Waste In A Process.

Reducing Complexity:  Every step (task) in a process requires time to complete it and represents a risk.  The fact that every task takes time is self-explanatory.  The more steps in a process or, the more intricate each step is, the more time it takes to provide customers with the service they desire.  The element of risk comes from the fact that at each step in the process there is always a chance that something could go wrong and negatively impact the service being created or the customers’ experience.  The more complex a process gets, the greater the chance that something could go wrong.

For these reasons, Lean teams look for ways they can reduce the complexity and remove unnecessary steps.  The result is a process that can rapidly provide a service, and do so with a greater chance of producing excellent results for the customer.

Over the next couple of blogs, I will cover the five principles of Lean, and we will take a more detailed look at the methods and tools used by Lean practitioners to improve service processes.  We will also look at how Lean methods fit in with other improvement approaches, like Six Sigma.  As always, I welcome your questions or comments.  You can email me at clayton.taylor@asu.edu.

About the Author:
Clayton Taylor, MBA, is a Management Research Analyst, Pr. and Certified Six Sigma Master Black Belt working in the Office of the Executive Vice President, Treasurer and Chief Financial Officer at Arizona State University. He currently consults with nine diverse Business and Finance operational areas to lower costs, improve operational efficiency and provide the highest quality customer experience to internal and external customers. Mr. Taylor can be reached at clayton.taylor@asu.edu.

References:
Sayer, N., Williams, B. (2012). Lean For Dummies. Hoboken, NJ: John Wiley & Sons
Womack, J., Jones, D. (2003). Lean Thinking. New York, NY: Free Press