The 5 basisprinciples of Lean Management

Lean Management is a way of leading and organising that revolves around value for the customer, removing waste and continuous improvement, together with the people who do the work. It rests on five principles: value, value stream, flow, pull and perfection.

What is Lean Management?

Lean Management comes from the Lean philosophy and focuses on managing process improvement. Today it is often combined with Six Sigma.

Instead of trying to control everything yourself, Lean Management encourages shared responsibility and shared leadership. Its two main pillars are therefore:

• Respect for people: employees and their commitment are the most important asset an organisation has. Without them, no product is made, no service is delivered and the customer gets no value.
• Continuous improvement: a little better every day, in small steps.

The Lean house

How this fits together is often drawn as a house.

• The roof is the goal: meeting customer demand with the highest quality, at the lowest cost and with the shortest lead time.
• Two pillars support the roof. The first is just-in-time: work keeps flowing (flow) and you only make what the customer asks for, when they ask for it (pull). The second is built-in quality: errors become visible immediately and the process stops, so no error passes on to the next step.
• In the middle are the people. They build the house from the inside, with respect for each other and through continuous improvement.
• The foundation consists of stable, standardised processes that everyone understands and that deliver a predictable result, and of operational management: constantly checking whether actual output matches what was required and expected.

Throughout the house, people come first. You notice this most when problems arise. The question is not “Who failed?” but “What is wrong in the process that allowed this error to happen?” That way you look for the cause instead of someone to blame. It is a fundamentally different way of looking at things than in many organisations.

Where does Lean Management come from?

Lean Management is derived from the Toyota Production System (TPS), which Toyota employees developed from the 1950s onwards, without calling it Lean at the time. In 1996, James Womack and Daniel Jones summarised the approach in five principles in their book Lean Thinking. Lean is now used widely, in manufacturing and also in healthcare, government and services.

The five principles help you set up processes smartly, remove waste and keep improving. Below we go through them one by one, using car maintenance at a garage as an example.

The 5 principles of Lean Management

1. Value: who is the customer and what do they want?

Who is the customer of the process, and what is value for that customer? It sounds like a simple question, but in practice the answer is often difficult. The customer does not have to be a paying customer. It can also be an internal customer waiting for your work, or a new employee as the customer of the onboarding process.

Take car maintenance. Why does the customer have it done? They want to drive a well-maintained car so they don’t end up stranded by the roadside, and they need a car that passes its roadworthiness test. Before you map the process, be clear about what the customer really values. Anything that doesn’t contribute to that is not value.

2. Value stream: map the process

By mapping the existing process as it really runs, you see which steps add value and which don’t. Waste such as waiting, unnecessary steps and rework also becomes visible. People often think their own process runs fine, until they see it on paper.

In Lean you often use a value stream map for this, with a sheet of brown paper and sticky notes. For each step, ask: does this step add value? Is it necessary? How long does it take, and how often does it go wrong?

For car maintenance you might see: making an appointment, driving to the garage, waiting for a courtesy car, collecting the car, paying the bill and driving off. Much of that is waiting. The garage itself also has a process you can map in the same way.

3. Flow: keep the work moving

Flow means the product or service doesn’t sit still, but moves from step to step without interruption until it is finished. You achieve this by removing as much waste as possible, such as errors and waiting. What remains are mostly the steps that add value and that the customer is willing to pay for.

You can’t remove all waste at once. You do it step by step. Don’t let what seems impossible at first hold you back. At the garage, flow means for example that the parts are ready when the car arrives, so the mechanic can start straight away.

4. Pull: start work on customer demand

With pull, the process only starts when the customer asks for a product or service, and delivers exactly when the customer wants it. So you don’t produce for stock in the hope that someone will buy it. Where work can’t run in one continuous flow, pull makes sure no more is made than needed, for example with a kanban system.

Pull in manufacturing means producing to customer demand. Pull in services means customer demand pulls the service through the process. A process with little waste helps, because then you can deliver quickly. The garage, for example, restocks parts based on what was actually used, instead of keeping large stocks.

5. Perfection: keep improving

The fifth principle could just as well have been the first. It means you keep looking for ways to do better, and for the next improvement step. Then you start again at the first principle.

A daily or weekly start helps, in Agile terms a daily stand-up. In it, you discuss together what is going on, who is doing what and where further improvement is possible. For the garage, the ideal would be that the customer doesn’t have to do anything: the car is collected, serviced and returned.

Lean focuses on processes and improving them, within a culture that strives for improvement. A clear vision belongs with that: where do you want to go as an organisation, and how will you get there?

What does Lean Management deliver?

The benefits are varied, but can be summed up as: more satisfied customers and more satisfied employees. Customers get a faster answer to their question, or better quality for the same price. That means fewer complaints, and employees get more recognition for their work.

When do you use Lean Management?

Lean Management can be used widely. The tools suit a quick improvement of a few days as well as a longer project, in which you dig deeper into process performance and the root causes of problems.

Green Belts and Black Belts learn which tool adds value at which moment, and so help organisations achieve high-quality processes with short lead times. Want to learn how to tackle process improvement in your own organisation? Read more about the Green Belt or Black Belt training course.

The video with this article explains the principles of Lean Management visually.