What is Lean Management & How To Make Processes Leaner?

A large number of firms are participating in the market in this contemporary business world and are competing for the same target group. As a result, with each passing day, competition becomes more and more vicious and businesses will find ways to reduce customer’s turnover and achieve a competitive advantage over others. So, there is a way to gain such competitive advantages through an approach known as “Lean Management”.

What is Lean Management?

Lean Management is basically a concept, an approach to run a company through continuous improvement, bringing exceptional value to your customers. Its implementation focusses to achieve small but gradual improvements in business processes at regular intervals in order to result in higher performance, reliability and customer satisfaction. Lean Management has become a common method across many industries and fields due to its nature of existence.

How Lean Management came into being?

The main ideology of boosting “efficiency and reliability” came into action by Toyota in the late 1940s. Their aim was to maximize customer satisfaction by removing all procedures that don’t contribute or add some benefit to the end customer.

There are two basic steps of Lean Management. First one is to seek continuous improvement of the problem and the other one is to pay close attention to consumer’s feedback.

This approach has achieved great outputs and founded the car manufacturing company very highly in the eyes of the customers.
As a result, many other companies or firms adopted the lean manufacturing model in their own sectors. It doesn’t matter whether they are business-to-business (B2B) or business-to-consumer
(B2C) oriented companies, they have definitely performed better than before after adopting the model of Lean Management.

In simple words, Lean Management can also be referred as “Waste Management”, irrespective of whether you own a profit-driven business or an NGO, you need to discontinue processes that do not work or result in loss of sales, you need to eliminate malfunctioning programs and most importantly, you need to recognize the point of view of the customer in order to identify opportunities.

Benefits of Lean Management

In this modern business world, Lean process management has a wide variety of applications and even a wider list of benefits. Some of them are:

• Enhanced Quality : The quality of the market offering inevitably improves by eliminating redundant processes, as your employees will be free to focus on quality control rather than on “wasteful tasks.”
• Sustainability : Less redundancy in business processes that do not in any way contribute means greater sustainability and better long-term adaptability.
• Stronger brand recognition : The reputation of your brand will certainly increase once you pay attention to the needs of your customers and reduce harmful processes.
• Reductions in manpower : Lean process management helps you with fewer people to do more things. If the process is fully optimized and efficiently manufactured, your employees will produce faster and not waste time on menial tasks.
• Cost decrease and profit increase : Higher productivity and better quality with less redundancy mean a significant decrease in sales growth.
• Reduced risk of overbuying and less space : Due to the waste reduction process, lean management space will be created.

This is because the reduction in raw stock will save additional space that can be used more effectively, such as purchasing inventory for a new product’s output. And this is only a cursory description of the full extent of the influence of Lean Management. Like any other application of the method, however, this also has limitations.

Drawbacks of Lean Management

Even processes that are aimed at improving quality are faced with difficulties and sometimes can backfire. Here are some of Lean Management’s most famous disadvantages:

• Employee resistance : It is a general rule that many employees are reluctant to embrace change, particularly if they have been in the company for a long time. Therefore, it is compulsory to provide training and make your employees understand the need to embrace lean management as a compulsory growth process.
• Problems with Inventory : Holding a lower stock is a traditional practice with lean management to reduce additional costs. This would make you dependent on your suppliers, however. In this way, timely and efficient delivery of goods will be of vital importance to you, and any disruption to inventory processes can cause a lot of headaches.
• High implementation costs : Lean implementation in a company that has never used it before could force all ongoing production processes and systems to end up in their current state. This, in turn, will result in higher costs in organizing employee training or bringing in new equipment. For small and medium-sized enterprises whose financial capabilities are easily depletable, such a limitation can be noxious.
• Extra costs of implementing a proper IT system : A process like lean depends on complex procedures and on continuous monitoring. Thus, it will allow you to incorporate effective enterprise resource planning (ERP). Only by these systems will you track effectively what is happening within the organization and what are menial or obsolete processes. However, this can be an expensive approach, especially for smaller businesses. Regardless of the fact that lean management is aimed at improving performance, many still have problems with such drawbacks.

Implementing Lean Process Management in Your Business

This is a step-by-step guide on how to use lean process management in your business:

Step 1: Set Clear Goals

You need to find your “why” before you start. Many organizations know how to do their processes, but they don’t know why. So you need to know where you’re right now, where you’re heading, and how you’re reading that destination. If you want to ignite this change in your organization’s philosophy, you must first convince your team. This can only be achieved by using a specific strategy to set clear goals. Then, by diminishing processes, you will be able to set a clear path for others to follow, motivate their thinking, and navigate their work processes. It’s time for the real challenge after you have set clear goals – to ask others to embrace this idea

Step 2: Ensure Your Staff is Coached and Prepared

In the modern business world, the ideology of “one-man-army” has long gone. No matter how many great ideas or plans you have, you’ll be out of the race in no time if you can’t find the right team to support you. As a consequence, you need to plan your team for the next step. More–you need to persuade them to embrace the lean philosophy and coach them with their new lean mindset on how to carry out their daily activities. You need to note, however, that sometimes dealing with the human factor can thwart your plans and make the work process even more complicated. This is because it might be a big challenge to convince everyone to embrace something else–remember, most people are afraid or reluctant to change.
It is therefore up to you to familiarize your workers with the concept of lean management, to clarify their benefits from both an institutional and a personal perspective. You have to inform them that this idea is closely linked to adding value. In addition, this will hopefully result in the company’s higher profits. And they are constantly developing greater opportunities in a well-respected company. Not because they don’t believe in it, people avoid change. But they’re afraid they’re not going to be part of it. It is therefore up to you to explain to them that together you should embrace and develop the lean philosophy as individuals as well as as as a team.

Step 3: Introduce Your Team to the 5 Lean Management Principles

You’ll have to adapt them to the five core lean management concepts once you’ve made your team embrace the change.

1. Identify Value

The value is the part of the solution that your customer wants to pay for. Any extra operation that does not bring value to the end product or company is considered redundant. Therefore, you must first identify the value you want to deliver to your target audience before you start with anything. You should note that you should look at the big picture when you identify the value. Taking into account all actions relevant to the processes from the manufacture of equipment to its dispatch is necessary. If not, you may make a misjudgment and identify a valuable process/employee as waste, or vice versa.

2. Map the Value Stream

This is the move you need to chart the organization’s workflow. All the individuals and activities involved in making and delivering the end product to the consumer must be included. You will be able to visualize the entire production process by making the map. Then you can identify which of the people or actions that are involved make the process late and ineffective. This “big picture” allows you to easily identify and cross all the menial steps that do not bring any value.

3. Create a Flow

Next, you need to make sure this workflow stays smooth and efficient. Although this is not an easy task, the process must be monitored so that it always adds value. This phase is extremely important as it consists of controlling your mapping processes. Then make sure they are running smoothly. It is important to note that it can be a fairly menial job itself to build a flow. It requires a great deal of devotion, care for detail, and critical thinking. There are therefore two ways of achieving it that are widely adopted. The first is to pick the long road and go for the development of manual flow. The second option is to use specialized software to monitor the flow on your behalf. Through workflow automation, it will achieve the monitoring of the sale process and save you the trouble of micromanaging every single action to achieve the desired result.

4. Establish Pull

Through default, a pull system means you’re giving someone a business deal if there’s a need for it. The distinction between push and pull is that, even if these tasks are not of high priority, supervisors often delegate tasks to their co-workers in the former approach. Usually, the tasks are assigned in a queue when you go for a pull strategy. Each of which has a specific priority. The concept here is to delegate assignments to staff only if they are of high priority or if there is a need for them. Through setting up such a program, you can maximize and use the current inventory of stocks. The best product/service is delivered at the right time to the right audience. You need to concentrate on two aspects when implementing lean process management: cycle time and project completion efficiency. The idea is to train your team to aim for shorter cycle times while effectively completing tasks.

5. Continuous Growth

Only 50 per cent of a job well done is to implement the first four steps. The rest lies in the effective implementation of lean management and the quest for opportunities to improve the process. If you want to do it correctly, you must have faith in your managers. And you have to share with them your set of responsibilities. In many situations, as much as micro-management is efficient. It can be difficult to go through the steps mentioned above all by yourself. And at the same time striving to be everywhere can cost a lot of time and resources. Training your managers, therefore, is always a great idea. Show them what you want, set up concrete KPIs. And let them perform their tasks. It is not an easy task to seek continuous growth and improvement. If you’re trying to implement a process like lean management, though, it’s a must.

You should have a convenient lean management system in your company that adds value to customers if you have followed the last 3 major steps meticulously. It is important to note, however, that the process explained above can be very time-consuming and costly. Especially when done by hand or from scratch. It’s not that easy to establish a lean mentality because it requires a lot of commitment, effort, and expertise. As a consequence, it could cost you a lot manually following the above-mentioned steps. We live in the digital age, where our fingerprints contain all kinds of shortcuts. That’s why you can always use Business Process Management Software (BMPS) to automate tasks for you and help you out if you’re trying to adopt a lean process but lack the necessary resources or skills.

For more details and enquiries about Lean Management, get in touch with us.