What is Lean Management?

History of Lean Management

In the late 1940s, when Toyota laid the foundations of "Lean Manufacturing", the goal was to limit processes that did not add value to the end product.

By doing so, leaders were able to make significant improvements in productivity, efficiency, cycle time, and profitability.

Following this significant impact, Lean thinking has spread to many industries and evolved into the 5 fundamental principles of Lean management as outlined by the Lean Management Institute.

Indeed, the process of continuous improvement has become essential for the sustainability of companies. To maintain and increase their market share, they must have the right product, at the right time and at the best price. Likewise, with an ever more competitive market, customers are more and more demanding in terms of costs, deadlines and quality.

Aware of these imperatives and anxious to be part of the market leaders, any company has a great interest in innovation, technological monitoring and, above all, in the continuous improvement of its own performance. Approaches based on continuous improvement, such as lean management, often face strong resistance to change from employees, who see them as a mechanism used by business leaders to maximize their profits at the expense of working conditions and the well-being of employees, but that we can derive several advantages .

Therefore, we have concocted this article to go back to the fundamentals and describe the implications of a Lean transformation from the perspective of decision-makers and managers, its implementation and to understand the principles and tools underlying their implementation. .

What is Lean Management?

The principles and methods of Lean appeared in Japan, in the early 1950s, at Toyota, in a country devastated by the Second World War, where resources are very limited and precious. The optimization and elimination of waste are essential. Toyota's production system, known as the Toyota Productive System, has devised methods and techniques to increase productivity, reliability and quality, making Toyota products highly competitive and profitable. The group's success on the vehicle market aroused the curiosity of Americans who undertook research to unlock the secret of this success.

In addition, lean management is a method that aims to improve the performance of the company through the development of all employees. The method in question therefore leads to finding the best operating conditions by having staff, equipment and sites work together in order to create added value with the least possible waste.

In the context of lean, we always try to identify the origins of malfunctions, excessively long deadlines, non-quality or difficulties encountered by the company's employees in order to deal with them using a relevant tool.

Inspired by the Toyota production system, Lean Management is therefore a method of management and organization of work which aims to strengthen the performance of a company and, more concretely, the quality and profitability of its production.

We should add to this that this approach therefore optimizes the processes by limiting the times of non-added value (useless operations or transport, waiting, overproduction, etc.), sources of poor quality and complexity. It should be said that this process is supported by an important managerial dimension which allows employees to be able to carry out their activity in good circumstances. In other words, to be effective, Lean Management relies on indicators to accurately measure performance.

However, this performance is also the fruit of individuals, with their own skills. In a context of increasing automation, Soft Skills, that is to say behavioral skills that are difficult to quantify, will gain more and more weight.

Example of lean management

Let's see below a real example to understand the importance of the concept of Lean Management.

Amazon Lean Management Example

Many companies are exposed to various forms of waste (time, talents, unnecessary movements, defects, etc.). In order for all activities to become more efficient, this large company, intended to manage heavy distribution logistics, has bet on Lean.

Seattle-based Amazon is one of the big companies that has invaded the e-commerce distribution market.

Over time, Amazon has become an ever-growing e-commerce giant, reaching US$469.8 billion in revenue in 2021, thanks in part to its efficient delivery processes and customer experience of the web platform.

By adopting Lean, Amazon was able to identify the factors that could cause waste of time, then eliminate them in order to implement a strategy of continuous improvement. This approach is not only aimed at reducing, but at permanently eradicating all that is unnecessary in the process. This explains the success of the Lean method at Amazon, which should also work at other companies in the same industry.

More specifically, it is the adoption of these three stages: the "stand-up meeting", the "security council" and the "success story". The "stand-up meeting" is a kind of small meeting, of 15 minutes maximum, between colleagues which is practiced in the first hour before each one does his work, it is essential for the development process.

This meeting will be led by a Lean Manager who will give security advice to everyone. Then comes the success story, a sharing of improvement on the procedures to be done for the different activities of the company. As a result, at Amazon, everyone has taken their share of responsibility for the proper follow-up of the method. This device is a source of motivation for employees and makes them more efficient. It is a management method that targets industrial performance. So when packages are packed and shipped faster, they will be delivered to the customer faster.

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