Lean management is a production methodology that focuses on optimizing the production process by minimizing waste.
Initially developed in the automotive industry by Toyota factories in the 1970s, this inventory lean management method has expanded to apply to all types of industries, companies and services.
The essence of lean management is to eliminate waste from manufacturing while advocating for value creation.
The elimination of waste is achieved by optimally coordinating all the company’s processes.
Waste is any activity that consumes resources but brings no value to the end customer.
Lean management particularly tracks down seven wastes of lean manufacturing practices:
- Overproduction - This can cause all other types of wastes and results in accumulation of unwanted stock.
- Inventory waste - This refers to the waste produced by unprocessed inventory. It means making more than the customer wants or in advance of customer demand.
- Waiting - Refers to wasted time because of slowed or halted production in one step of the production system chain while a previous step is completed. This wastage of time impedes the fluidity of production process.
- Transport - Transportation waste is the movement of materials that does not directly correspond to some value-adding manufacturing process.
- Overprocessing waste - Means putting more work into producing the product than the customer values. It refers to adding more value than the customer requires.
- Motion - Unnecessary movement of the worker or machine.
- Defects - Defects can cause rework or even worse, they can lead to scrap
Introducing lean management into a value chain implies improvement of the production system from two points of view: that of the company and that of the client.
Lean management aims at aligning perfectly those two points of view. As such, lean management conforms with the principles of agile methods, whose main purpose is to optimally respond – through different tools: cycles, feedbacks, etc. – to clients’ expectations in order not to get lost in unnecessary developments that would not improve their satisfaction.
Lean management has other tools at its disposal for its application: the Kanban model (pull flow production system method: lean production is determined by client orders according to the application of the just-in-time lean principle), the 5S methodology, etc.