The lean methodology is all about eliminating waste and improving efficiency to maximize and deliver consistent customer value. Under lean, if a process doesn’t bring value to the customer, it’s considered wasteful and is eliminated or reduced as much as possible. It’s a development method and guiding mindset that helps teams refine their processes in the name of efficiency, effectiveness, and continuous improvement.
Here, you’ll learn about the origins of lean as well as 7 key benefits of adopting the lean methodology.
An intro to lean methodology
The lean methodology grew out of lean manufacturing. The concept was introduced in manufacturing to improve profits by reducing costs as opposed to relying solely on increased sales. If a company can eliminate waste and become more efficient, it can save money, which increases overall profits.
While the roots of lean manufacturing can be traced back to the 1400s, Henry Ford first fully integrated the entire production process, creating something called flow production in the form of an assembly line.
This was a revolutionary change in car manufacturing, but while Ford certainly enhanced flow, he didn’t leave much room for variety. In the 1930s and ‘40s, Japanese manufacturers Kiichiro Toyoda, Taiichi Ohno, and others at Toyota made a series of simple innovations that allowed them to provide both continuity in process flow and a wide variety of vehicles, creating the Toyota Production System.
This form of lean production enabled the elimination of waste, reduced costs, increased efficiency, and made information management simpler and more accurate. Lean methodology was further distilled and explored in the books The Machine That Changed the World by James P. Womack, Daniel Roos, and Daniel T. Jones, and Lean Thinking by James P. Womack and Daniel T. Jones.
The latter book also introduced the five key principles of lean:
- Identify Value
- Map the Value Stream
- Create Flow
- Establish a Pull System
- Seek Perfection
Learn more in our article, Understanding Lean Agile and the 5 Lean Principles.
Of course, lean thinking has evolved beyond manufacturing and has been adapted and applied to everything from healthcare to construction to logistics and distribution to government to software development.
1. Increased efficiency ⏳
The application of lean to business processes is all about reducing waste to increase efficiency. But how do you figure out which processes provide value?
Once customer value is identified, teams can create a value stream map. Value stream mapping tracks each of the steps and processes to bring a product from inception to delivery. Organizing your processes visually where everyone can see them allows teams to clearly see what does and doesn’t provide value. If any steps or processes don’t bring value to the customer or are found to be otherwise wasteful, they are eliminated or reduced as much as possible.
A team can’t be efficient if they’re wasting time on tired processes that don’t provide customer value. Adopting lean methods helps to get rid of those processes, so you can dedicate your team’s energy exclusively to the processes that do, thereby increasing your team’s value flow, efficiency, and productivity.
2. Reduced bottlenecks 🛑
A bottleneck or broken process, no matter how small, can totally derail a workflow or make it impossible to meet a deadline.
With lean, tasks aren’t blindly or randomly assigned. Teams work together to ensure work is evenly distributed and deadlines are met. They discuss any potential bottlenecks in advance so they can be solved before they become a financial burden or delay work. Since capacity and WIP (work in progress) items are continually forecasted, monitored, and adjusted with lean, bottlenecks are anticipated in advance, every team member participates, and no one’s time is wasted.
3. Fewer costs (and fewer surprises!) 💸
Eliminating waste means saving money—no matter the industry. Overproduction, having too many materials to store, overhiring, and production bottlenecks are expensive and wasteful. These wastes can be eliminated with better management of processes and systems, enabling companies to always have the right number of employees, amount of materials, and working hours at any given time.
Adopting the lean methodology means increasing efficiency, which benefits any company’s bottom line. Make sure every cost is accounted for and necessary to the production process by consistently reviewing your company’s work processes and eliminating any costs that don’t add value.
4. Systems can adapt better and faster 🌎
Businesses today must adapt faster than ever due to increasing customer demand, rapidly evolving technological advancements, and the COVID-19 pandemic.
The larger the size of the organization, the harder it is to adapt. Long-running business systems were not designed to be flexible, so when adjustments need to be made, it may take months or years before the entire organization is on the same page.
With lean, teams can better adapt. Lean systems aren’t as rigid, so it’s easier to make adjustments along the way, meaning teams will better adjust for unexpected circumstances. The lean methodology can help any business, no matter its size, adapt to changing times gracefully, as lean is the exact opposite of a set it and forget it process.
5. Stakeholder visibility and strong customer relationships 💞
The lean methodology leans into both stakeholder and customer needs, which results in a better end product. Progress in lean is measured based on the value delivered to the customer instead of the completion of tasks.
With lean, customer value is paramount. Every project and task begins with considering the point of view of customers and putting yourself in their shoes. Feedback is gathered alongside product development instead of at the end to ensure new information is considered and that the final product will be exactly what the customer needs or wants.
6. Continuous improvement mindset 🧠
Lean is the enemy of the status quo. Lean demands the constant fine-tuning and refinement of processes and enables a continuous improvement mindset. It’s not a “set it and forget it” process, as lean is all about consistent process improvement. No matter how successful or efficient the company is, there is always room for improvement and new, innovative ways to bring value to the customer.
This attitude instills a continuous improvement mindset in everyone involved on the team, whether it’s a small development team or an entire lean enterprise (SAFe). Teams can anticipate and expect regular feedback from leaders, managers, and stakeholders. With lean, innovations and iterations are less precious and more plentiful. The team continues to improve and fine-tune their skills and processes with each passing product.
7. Increased team engagement 🤝
Employee disengagement is expensive. Disengaged employees have higher absenteeism, lower productivity, and lower profitability — all of which can majorly drain a company’s resources. If a company’s culture doesn’t inspire employees to show up and do their best, that company is going to hemorrhage money every year until its bottom line bottoms out.
A lean organization, on the other hand, puts teams on the frontline of product development. Under lean management, employees have direct and regular contact with managers about how their work is going and how the process could be improved. Since teams are more involved in the process, they are more engaged and more likely to actively participate, provide feedback, and buy into their work.
Engaged employees are a company’s greatest asset. Bringing everyone into the process gives teams ownership over the outcomes, boosting their creativity as well as their accountability. Increased team engagement means enhanced efficiency, effectiveness, and team morale.
You can apply the lean methodology anywhere to reduce waste and improve efficiency. Let’s recap. The top benefits of adopting lean include:
1. Increased efficiency
2. Reduced bottlenecks
3. Fewer costs (and fewer surprises!)
4. Better and faster systemic adaptation
5. Stakeholder visibility and strong customer relationships
6. Continuous improvement mindset
7. Increased team engagement
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