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What is Lean Thinking?

Lean thinking is a five-step thought process proposed by James Womack and Daniel Jones in their book Lean Thinking to guide executives and managers through a lean transformation. The five steps are:

  1. Specify value from the standpoint of the end customer by product family.
  2. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
  3. Make the value creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  4. As flow is introduced, let customers pull value from the next upstream activity.
  5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

How do you implement lean? (Source: Lean Thinking, Chapter 11: An Action Plan.)
Getting Started

  • Find a change agent, a leader who will take personal responsibility for the lean transformation.
  • Get the knowledge about lean techniques and how to implement them as part of a system, not as isolated programs.
  • Find a lever by seizing the crisis or by creating one to begin the transformation.
  • Forget grand strategy for the moment.
  • Map the value streams, beginning with the current state of how material and information flow now, then drawing a leaner future state of how they should flow and creating an implementation plan with timetable.
  • Begin as soon as possible with an important and visible activity.
  • Demand immediate results.
  • As soon as you’ve got momentum, expand your scope to link improvements in the value streams and move beyond the shop floor to office processes.

Creating an Organization to Channel Your Value Streams

  • Reorganize your firm by product family and value stream.
  • Create a lean promotion function.
  • Deal with excess people at the outset.
  • Devise a growth strategy.
  • Remove the anchor-draggers.
  • Once you’ve fixed something, fix it again.
  • “Two steps forward and one step backward is O.K.; no steps forward is not O.K.”

Install Business Systems to Encourage Lean Thinking

  • Utilize policy deployment.
  • Create a lean accounting system.
  • Pay your people in relation to the performance of your firm.
  • Make performance measures transparent.
  • Teach lean thinking and skills to everyone
  • Right-size your tools, such as production equipment and information systems.

Completing the Transformation

  • Convince your suppliers and customers to take the steps just described.
  • Develop a lean global strategy.
  • Convert from top-down leadership to bottom-up initiatives.

The fundamental objective of lean thinking is to provide perfect value to the customer through a perfect value creation process that has zero waste. To accomplish this, lean thinking changes the focus of management from optimizing separate technologies and assets to optimizing the flow of the product or family of products through the entire value stream.

Eliminating waste along the entire value stream, instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. Also, information management becomes much simpler and more accurate.