Lean —
Maximum value, minimum waste.
A philosophy that originated at Toyota and today drives the world’s most efficient manufacturing plants. Understand the principles on which Lean is based.
What is Lean?
Lean is a management philosophy that originated from the Toyota Production System. Its sole goal is to maximize value for the customer while minimizing waste—anything that consumes resources but does not add value.
Lean is not a set of tools. It is a way of thinking in which every employee constantly seeks better ways of working—and the organization gives them the freedom to do so.
In their book *Lean Thinking*, James P. Womack and Daniel T. Jones identified and defined the five principles of Lean Management, which aim to ensure the efficiency of an organization’s operations and processes and maximize value for the customer.
In their book *Lean Thinking*, James P. Womack and Daniel T. Jones identified and defined the five principles of Lean Management, which aim to ensure the efficiency of an organization’s operations and processes and maximize value for the customer.
The 5 Principles of Lean
01
Value
Define value from the customer's perspective—what they are willing to pay for.
02
Value Stream
Map out all the steps and eliminate those that don't add value.
03
Flow
Ensure that processes run smoothly without interruptions or delays.
04
Pull
Produce only what the customer actually wants—when they want it (not based on an estimate).
05
Continuous Improvement
Involve all employees in the culture of continuous improvement. Repeat the cycle—improvement never ends.
— /LEAN PRINCIPLES
How to Apply Lean Principles?
Each step addresses a specific problem encountered in real-world operations—from identifying an idea through the SG4/SG5 approval processes and managing responsibilities, all the way to archiving successful projects in the idea library.
01
Identifying Value: Understanding what is truly valuable to the customer.
This area is a key step in the Lean approach, as all processes and activities should be focused on creating value for the customer. This step involves a thorough understanding of the customer’s needs, expectations, and preferences to ensure that the products or services the organization provides are truly useful and important to them.
understanding the customer
defining a value
distinguishing value from waste
customer engagement
Steps for identifying value:
Understanding the Customer:
Gain a clear picture of who the customer is, what their needs, challenges, and goals are. Tools such as surveys, focus groups, or feedback analysis are used.
Defining Value:
Determine what the customer considers to be value-added—this could be quality, price, delivery speed, customization, or other factors.
Separating Value from Waste:
Identify activities that contribute to value (value-added) and eliminate those that do not (non-value-added).
Customer engagement:
Direct interaction with customers to understand their priority requirements, which helps tailor products or services.
Gain a clear picture of who the customer is, what their needs, challenges, and goals are. Tools such as surveys, focus groups, or feedback analysis are used.
Defining Value:
Determine what the customer considers to be value-added—this could be quality, price, delivery speed, customization, or other factors.
Separating Value from Waste:
Identify activities that contribute to value (value-added) and eliminate those that do not (non-value-added).
Customer engagement:
Direct interaction with customers to understand their priority requirements, which helps tailor products or services.
Value types:
Functional value: The
customer needs the product or service to serve a specific purpose.
Emotional value: The
customer wants the product or service to evoke a positive feeling.
Economic value: The
product must be reasonably priced in relation to the expected benefits.
customer needs the product or service to serve a specific purpose.
Emotional value: The
customer wants the product or service to evoke a positive feeling.
Economic value: The
product must be reasonably priced in relation to the expected benefits.
The Importance of Identifying Value:
Avoiding Waste: Without understanding what the customer values, an organization may invest resources in activities that are irrelevant to the customer.
Increasing satisfaction: A proper focus on value increases the likelihood that customers will be satisfied and loyal.
Competitive advantage: An organization that better understands customer needs can offer more tailored solutions.
Increasing satisfaction: A proper focus on value increases the likelihood that customers will be satisfied and loyal.
Competitive advantage: An organization that better understands customer needs can offer more tailored solutions.
02
Value Stream Map: Identify all steps in the process and eliminate those that do not add value
Value Stream Mapping (VSM) is a Lean tool used to visualize all the steps in a process that creates value for the customer. The goal is to understand how the value stream works, identify inefficiencies, and propose improvements.
defining the scope
measurement of key parameters
Identifying Waste
designing the future state
Implementation of Changes
Steps for creating a value stream map:
Defining the Scope: Determine which process or product will be mapped, from start to delivery of value to the customer.
Documenting the Current State: Visualize all steps in the process, including value-added and non-value-added activities. Symbols are used to represent the flow of materials, information, and activities.
Measuring key metrics: For each step, record cycle time, wait time, waste, inventory, or other relevant metrics.
Identifying waste: Detect areas where time, resources, or energy are being wasted (e.g., excess inventory, downtime, overproduction).
Designing the future state: Based on the analysis, design an optimized process with an emphasis on smooth flow and the elimination of non-value-adding activities.
Implementing changes: Carrying out improvement proposals and integrating them into daily processes.
Documenting the Current State: Visualize all steps in the process, including value-added and non-value-added activities. Symbols are used to represent the flow of materials, information, and activities.
Measuring key metrics: For each step, record cycle time, wait time, waste, inventory, or other relevant metrics.
Identifying waste: Detect areas where time, resources, or energy are being wasted (e.g., excess inventory, downtime, overproduction).
Designing the future state: Based on the analysis, design an optimized process with an emphasis on smooth flow and the elimination of non-value-adding activities.
Implementing changes: Carrying out improvement proposals and integrating them into daily processes.
Key aspects of the value stream map:
Material Flow: Illustrates how raw materials or parts move through processes all the way to the customer.
Information Flow: Tracks how information (e.g., orders) is transmitted within the organization.
Time Analysis: Helps distinguish how much time is actually spent adding value versus time lost due to waste.
Information Flow: Tracks how information (e.g., orders) is transmitted within the organization.
Time Analysis: Helps distinguish how much time is actually spent adding value versus time lost due to waste.
03
Flow: Ensure that processes run smoothly and without interruption
Flow is a Lean principle that focuses on the smooth and uninterrupted execution of processes so that value for the customer flows through the system without unnecessary downtime, delays, or waste. It involves creating conditions where work, materials, information, or products move efficiently from the beginning of the process to its completion.
removal of obstacles
streamlining processes
minimizing downtime
uniformity
Key aspects of the flow:
Removing Obstacles: Identify and eliminate anything that hinders the flow of value, such as excess inventory, waiting, or unnecessary steps.
Simplifying processes: Improve process design so that processes flow as smoothly as possible, without inefficient pauses or redundancies.
Minimizing downtime: Focus on minimizing downtime between individual steps.
Evenness: Ensure that each step in the process maintains a consistent pace, thereby preventing uneven workload (known as “mura”).
Simplifying processes: Improve process design so that processes flow as smoothly as possible, without inefficient pauses or redundancies.
Minimizing downtime: Focus on minimizing downtime between individual steps.
Evenness: Ensure that each step in the process maintains a consistent pace, thereby preventing uneven workload (known as “mura”).
Steps to Achieve a Smooth Flow:
Process Mapping: Use a value stream map to identify all steps and points where downtime occurs.
Eliminating Non-Value-Adding Activities: Eliminate or streamline steps that do not add value for the customer.
Resource Optimization: Ensure that people, machines, and materials are available exactly when they are needed.
Create a pull system: Transition from a “push” system, where products are manufactured based on estimates, to a “pull” system, where the process is driven by actual customer demand.
Eliminating Non-Value-Adding Activities: Eliminate or streamline steps that do not add value for the customer.
Resource Optimization: Ensure that people, machines, and materials are available exactly when they are needed.
Create a pull system: Transition from a “push” system, where products are manufactured based on estimates, to a “pull” system, where the process is driven by actual customer demand.
Advantages of a continuous flow:
Shorter cycle time: Eliminating unnecessary downtime reduces the total time required to complete the process.
Reduced inventory: A steady flow reduces the need for excess inventory between individual steps.
Higher quality: A smooth flow minimizes errors caused by interruptions or unnecessary handling.
Customer satisfaction: Faster and more consistent processes lead to a better ability to meet customer needs.
Reduced inventory: A steady flow reduces the need for excess inventory between individual steps.
Higher quality: A smooth flow minimizes errors caused by interruptions or unnecessary handling.
Customer satisfaction: Faster and more consistent processes lead to a better ability to meet customer needs.
04
Pull System: Manufacturing or providing services based on customer demand, not on estimates
Pull is a principle that ensures products or services are produced or provided only based on actual customer demand, rather than on forecasts or inventory levels. This approach minimizes overproduction, reduces inventory, and allows for more flexible adaptation to market needs.
The primary goals and benefits of pull include minimizing overproduction and inventory, adapting more quickly to changes in demand, improving process efficiency, and increasing customer satisfaction through faster delivery and higher quality.
The primary goals and benefits of pull include minimizing overproduction and inventory, adapting more quickly to changes in demand, improving process efficiency, and increasing customer satisfaction through faster delivery and higher quality.
made-to-order production
Just-In-Time (JIT) inventory
customer focus
signals in the system
Key aspects of pulling:
Made-to-order production: Products are not manufactured until a customer order is received.
Just-in-Time (JIT) inventory: Inventory is replenished only when necessary.
Customer Focus: Processes are driven by actual customer needs, thereby eliminating waste.
System Signals: The use of visual or digital signals (e.g., Kanban cards) to manage the flow of materials or tasks.
Just-in-Time (JIT) inventory: Inventory is replenished only when necessary.
Customer Focus: Processes are driven by actual customer needs, thereby eliminating waste.
System Signals: The use of visual or digital signals (e.g., Kanban cards) to manage the flow of materials or tasks.
Examples of pulling applications:
Manufacturing: Using the Kanban system to replenish parts only as needed.
Retail: Automatically restocking merchandise based on current sales.
Healthcare: Ordering medications or medical supplies based solely on current usage.
E-commerce: Manufacturing personalized products only after an order is received.
IT and software: Working on new features or projects based on actual user requirements.
Construction: Ordering building materials based on the construction schedule.
Retail: Automatically restocking merchandise based on current sales.
Healthcare: Ordering medications or medical supplies based solely on current usage.
E-commerce: Manufacturing personalized products only after an order is received.
IT and software: Working on new features or projects based on actual user requirements.
Construction: Ordering building materials based on the construction schedule.
05
Continuous Improvement
Continuous improvement is a Lean principle that focuses on the ongoing identification and implementation of changes that lead to improvements in processes, products, or services. This principle involves systematically seeking out opportunities for improvement, engaging employees at all levels, and embracing the philosophy that even small steps can lead to big changes.
team involvement
regular feedback
small, frequent changes
data and analysis
Key aspects of continuous improvement:
Team involvement: Employees directly involved in the process are the best source of suggestions for improvement.
Regular feedback: Gathering information from customers or users to identify weaknesses.
Small but Frequent Changes: Improvements are implemented gradually, which minimizes risk and increases sustainability.
Use of Data and Analysis: Decisions about improvements are based on metrics and evidence.
Regular feedback: Gathering information from customers or users to identify weaknesses.
Small but Frequent Changes: Improvements are implemented gradually, which minimizes risk and increases sustainability.
Use of Data and Analysis: Decisions about improvements are based on metrics and evidence.
Benefits of continuous improvement:
Improving the quality of processes and products.
Reducing costs through more efficient processes.
Greater employee satisfaction through active employee involvement.
The ability to respond quickly to changes in the market or technology.
Reducing costs through more efficient processes.
Greater employee satisfaction through active employee involvement.
The ability to respond quickly to changes in the market or technology.
— / 7+1 Types of Waste (Muda)
What Lean Considers Waste
01
Overproduction
To produce more than necessary, or sooner than necessary.
Overproduction
02
Waiting
Inactivity of people or machines between steps.
Waiting
03
Transportation
Unnecessary movement of materials and products.
Transportation
04
Overprocessing
Go above and beyond what the customer expects.
Overprocessing
05
Inventory
Materials and finished products are billed separately.
Inventory
06
Movement
Unnecessary movements by workers.
Motion
07
Errors
Defective items, repairs, and returns.
Defects
+1
Untapped Talent
People's untapped potential and ideas.
Skills / Talent
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