05 Aug What is Lean Management?
by Wayne Forster July 2020
You may have heard the term “Lean Management” used a lot in business circles over the past few years, and how it can help your business be more productive and profitable. In this article, I’ll try to explain what Lean is, and how it works.
First I’ll tell you what it isn’t. It isn’t an acronym. It also isn’t a specific step-by-step program with an instructor’s manual. Lean is really an approach to running a business, or any type of organization, built on two foundational principles:
1) elimination of waste
2) continuous improvement
It’s a long-term approach that systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality.
At its core, Lean is a “way of thinking” about how to manage an organization.
Where did Lean originate?
While many of the practices around Lean management date back to Henry Ford’s assembly line, the roots of today’s approach to Lean lie in the production system developed by automobile manufacturer Toyota, which they called “The Toyota Way”.
By focusing on value to the customer, elimination of waste, and continuous improvement of work processes, Toyota became the most successful car manufacturer in history. Today, the Lean tools and methods used by Toyota have been adopted and adapted by companies in various sectors, including health care, service industries, transportation, and construction, to name just a few.
So, how does Lean work?
In Lean initiatives, teams use collaborative tools to search for ways to eliminate waste and improve efficiency. They focus on designing processes that eliminate variation and create continuous workflow, thereby increasing predictability of outcomes. These processes invariably lead to higher quality and lower costs. Teams learn to work together in an atmosphere of trust and respect, all focused on achieving value for the customer.
How are teams formed?
Lean teams are best formed around work functions. If you want to eliminate waste and improve efficiencies on a production line, then the team must consist of those people who work directly on the production line. If you want to improve patient care in a hospital, the Lean team must consist of those staff who directly provide patient care. Lean is based on the premise that those actually doing the work are the ones who best know how to improve processes.
At its core, lean is a 'way of thinking' about how to manage an organization.
How do the teams function?
Through experience with Lean over the years, coupled with adaptations from Toyota’s approach, businesses and organizations have developed specific team meeting structures to facilitate Lean initiatives. Call these the tried and true methods, if you will. One such structure is called the “huddle”. Huddles are 15 minute daily meetings (2-3x a week for smaller businesses) where team members suggest process improvements or ways to eliminate wastes, and review progress on improvements identified at previous meetings. One team member acts as facilitator (ideally, a different facilitator each huddle). Suggestions are recorded on a huddle board, with action steps listed and responsibilities assigned. The time limit is strictly adhered to. Once the 15 minutes are up, the meeting ends. To help ensure meetings don’t go over the time limit, everyone is required to stand – no sitting.
Another typical meeting structure is the weekly or monthly leadership meeting. In larger organizations with multiple departments or work areas, you might have several Lean teams. The leadership team would consist of one representative from each smaller Lean team who meet regularly to report on improvements made and to discuss any improvements that require coordination between different work groups. Supervisors or representatives from management may also sit on these leadership teams. True to the Lean approach, these meetings have a time limit, usually one hour, to ensure maximum effectiveness.
What is management’s role in Lean?
The role of management in Lean initiatives is to provide the Lean teams with the resources, time, and empowerment to eliminate wastes and improve processes. Without the full support and buy-in of owners and/or senior management, Lean initiatives are doomed to fail. If Lean teams identify improvements, and these improvements are then constantly vetoed by senior management, the teams become demoralized and cease to be effective. In my experience, if a Lean initiative does not have the full support of the owner or senior management, it’s best for the organization and its people not to begin the initiative in the first place. Starting a Lean initiative without that support, and hoping to build the support during the initiative, has proven time and again to be the wrong strategy. In fact, the most successful Lean initiatives are those in which top management doesn’t just support the process, but “champions” it. They are its biggest advocates.
Empowerment is key
One of the key features of the “Toyota Way” was the authority given to a front-line production worker to shut down the assembly line if they discovered a flaw or a mistake in the production process. The problem would then be fixed before production was allowed to resume. This was completely unheard of in automobile assembly at the time. In those days, if an assembly line worker found a problem, they reported it to their supervisor who in turn reported it to their manager. It then went up the line from there. As a result, it could take days or weeks to fix a design flaw. In the meantime, defective parts would continue to be produced. In many cases, the problem was not fixed, because the fix was considered too expensive or too time consuming. Production targets were more important. Toyota changed all that. They empowered their front-line employees to identify problems and correct them. This approach is now a key feature of Lean.
As mentioned earlier, Lean is really a way of thinking about how a business or organization operates. It’s based on the premise that improvement is a continuous process; that businesses and organizations can always find ways to eliminate wastes, improve quality, and provide better service to their customers.