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What is Lean Management?
What exactly is lean management? Lean management is a type of business theory that strives to create more value for clients by using the fewest resources. An organization that practices lean management knows the value of their customers and clients and seeks to increase the key processes in which their clientele is kept happy and continually willing to work with the business or company. This type of management is more a way of thinking rather than a reduction program for cost and expenses.
How did this theory come about and why do companies and businesses want to utilize it?
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The history of lean management can be traced to the automotive process that was started by Henry Ford. When Ford came up with the idea of making a motorized car, he invented the process known as flow production. For the viewing public, the most prevalent example of flow production is that of the assembly line, where part after part comes down a conveyor belt, each being fitted to another part that has also traveled down the belt or one that has been fitted by an employee.
The system was of course revolutionary from the standpoint of a new way of manufacturing, however, in terms of how it furthered sales of the Model T, Ford initially failed. While the Model T was again a starting point of what would become a huge industry, the world wanted more, like variety - something that Ford did not have at the time.
Subsequently, Toyota started looking at Ford's flow production and came up with a way to keep the assembly line idea going, as well as providing the variety that consumers were looking for. This would become the Toyota Production System; this system did not focus on just the manufacturing process, but that of the process of the product itself.
What does this history show in regards of lean management today? As described by author James Womack in his books on lean management, there are five principles that mark this process -
- Specify the value desired by the customer
- Identify the value steam for each product
- Make the product flow continuously
- Introduce pull through each steps
- Manage toward perfection so the number of steps and the amount of time and information are continuously dropping.
With the above start of lean management, there is a misconception that lean management is only for manufacturing jobs and businesses, however that is not the case. Lean management can be used in all types of business settings, such as health care or government companies. Many companies and businesses actually don't use the word 'lean' when they describe the type of management they use, usually phrasing the title with their business name, such as the Toyota Production System. This is to show that lean management isn't just a program or a cost reduction program, but something that can be defined by that of the organization and how they operate.
Reference: Lean Enterprise Institute retrieved at http://www.lean.org/
Screenshot by author courtesy of Amazon.