5 Principles of Lean

5 Principles of Lean

Insights | 21 April 2015

What connotations does the word “lean” suggest for you? Typical responses are: slim, no fat, just enough, no waste. And that’s exactly what we are talking about when we talk about the management philosophy of Lean.

“It needs less of everything to create a given amount of value, so let’s call it Lean.”

John Krafcik

Lean is a way of thinking to help speed up business processes, reduce cycle times and complete more work within a given timeframe. Lean identifies potential areas where waste and bottlenecks (think queues, constraints, and limitations) can be eliminated from a process to further maximise process performance.

“Lean Thinking” is not a new phenomenon. One of the first pioneers of Lean was Henry Ford. Toyota first became interested in Ford’s approach in the 1930s and then more specifically after World War II. Ford was producing 8000 vehicles per day, yet Toyota had only produced 2500 vehicles in 13 years!

So what are the 5 principles of Lean and what do they mean?

  1. Define Value. Understand what adds or enables value in the eyes of the customer. The critical focus here is on how the ultimate customer defines value: what is the customer willing to pay for? Value can be interpreted differently by different people – beware of falling into the trap of defining value on behalf of your customers.
  1. Map Value Stream. The value stream is concerned with all the activities from start through to handover to a customer, again with focus on value. Non- value adding activities (waste or “muda”) should be eliminated/minimised.
  1. Create Flow. The core concept here is to ensure your product “flows” to the customer – no waiting, no detours, no interruptions. Ideally move from batch and queue to continuous flow and focus on the needs of the product or service, not the organisation.
  1. Establish Pull. Simply put: you only produce what the customer wants, when the customer wants it. You need to clearly understand customer demand to move from a “push” to a customer driven “pull” process, as deep and complete as possible.
  1. Pursue Perfection. By achieving the first 4 principles, waste should be eliminated to some extend but Lean is not just “once off”; it is a complete philosophy, a way of thinking. Principles 1 to 4 become a continuous cycle that encourages continuous improvement.

Lean principles can be applied to everything from production, logistics, distribution, services, health, construction, maintenance to public sector processes, with the aim of reducing turnaround time and costs, while improving quality.

The true value is to have Lean become your philosophy – the principles become simply “the way things are done around here”.

“Quality means doing it right when no one is looking.”

Henry Ford

Read our previous article on the Benefits of Lean Six Sigma

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