Lean is a systematic approach to reduce or eliminate activities that don't add value to the process. It emphasizes removing wasteful steps in a process and taking the only value added steps. The Lean method ensures high quality and customer satisfaction.. A Lean system describes a business or business unit that holistically applies Lean principles to the way it plans, prioritizes, manages, and measures work. The goal for any Lean system is to maximize customer value. While Lean thinking can greatly improve the productivity and function of a team or department, Lean implementations that spread across the entire organization have the greatest impact on the customer.

Lean systems use a Lean approach to identify and eliminate waste. They systematically discover and act upon opportunities to improve. These are two of the fundamental concepts of Lean: Eliminate anything that does not add value to the customer, and work systematically and continuously to create more value for the customer.

• Enabling value-added activity: These activities do not add value to a customer. They are necessary for continuity of a process.

In any process, almost 80 – 85% activities are non-value adding activities. The aim of LEAN approach is to identify them in the process. And use specific lean tools to eliminate or reduce them. Thus, Lean improves process efficiency.

Guiding Principles of a Lean System

Although transforming into a Lean system involves a great deal of effort, Lean’s lightweight, flexible nature makes it easy to scale than more structured, regimented methodologies. Practicing Lean thinking begins with a thorough understanding of these 7 Lean principles.

Optimize the whole

Visualize, optimize, and manage the entire organizational value stream as one value-generating system. Make decisions that optimize the entire organization’s ability to deliver value to the customer, not just one team or department.

Create knowledge

A Lean system is a learning system; it grows and develops through analyzing the results of small, incremental experiments. In order to retain the insight and knowledge gained from constant experimentation, Lean systems must provide the infrastructure necessary to properly document and retain value learnings.

Eliminate waste

Lean systems use this definition of waste: If your customer wouldn’t pay for it, it’s waste. Waste can be anything from context switching, to too much work in process, to time spent manually completing a task that could be automated. Lean thinkers are relentless about eliminating any process, activity, or practice that does not result in more value for the customer.

Build quality in

Lean organizations set themselves up for sustainable growth by building quality into processes and documentation. They automate and standardize any tedious, repeatable process or any process prone to human error, which allows them to error-proof significant portions of their value streams.

Deliver fast

In Lean, flow refers to the manner by which work moves through your organizational system. Good flow describes a Lean system with a steady, consistent flow of value delivery, while bad flow describes a system with unpredictable delivery and unsustainable habits.

In a Lean system, organizations and the teams within them define, visualize, and refine their processes to optimize for a consistent flow of value.

They actively manage flow by limiting work in process, or WIP.

Defer commitment

This Lean principle says that Lean systems should function as just-in-time systems, waiting until the last responsible moment to make decisions and deliver work. This is based on the idea that the longer we wait, the greater the chance that our decisions will be well-informed, based on data that reflects the reality of the market.

Respect people

At its core, all successful Lean systems are rooted in one thing: Respect for people. Lean systems are designed to maximize customer value while minimizing waste, out of respect for the customer.

Out of respect for employees, Lean systems encourage environments that allow everyone to do their best work. In Lean systems, team members continuously strive to optimize processes to allow everyone to deliver the most value they can provide.

Removing Waste: 5 Key Principles

Lean manufacturing, or lean production, is a production method derived from Toyota's 1930 operating model "The Toyota Way" (Toyota Production System, TPS). The term "Lean" was coined in 1988 by John Krafcik, and defined in 1996 by James Womack and Daniel Jones to consist of five key principles; 'Precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection.'

However, Lean finds its application in any environment, where process wastes are witnessed. Lean can be applied to manufacturing as well as service industries. It causes no doubt that Lean, nowadays, is being adopted by service sectors with botharms. Process waste identified in Lean Methodology is known as “Muda”. Muda is a Japanese team for wastes – introduced by the Japanese engineer Taiichi Ohno of (Toyota) in 1960s.

Using the Lean methodology, you can remove below mentioned eight types of waste ("DOWNTIME" is the acronym for the eight wastes). These wastes are further explained below:

The Five Principles of Lean

These Lean principles can be applied to any process to reduce the wastes. They are:

1. Define Value: The customer defines the value of a product or service. Hence, the first step is to identify customers. Ask yourself, what does the customer value? Figure out customer’s expectations from your products or services. Classify the process activities into Non-Value added, Value-added and Enabling value added.
2. Map the value stream: The value stream mapping shows the workflow process steps for a product or service. The value stream mapping helps to identify & eliminate NVA activities. This eventually helps you to reduce the process delays and thereby improves quality of product/service.
3. Create Flow: Create flow to the customer by ensuring continuous flow system in producing product or service. Flow will optimize the process to maximize process efficiency.
4. Establish Pull: establish pull approach by meeting system beat time. The beat time is the rate at which a product must be ready to meet the customer demand. JIT (Just in time) is a tool promoting Pull system. This ensures smooth workflow of the process without any disruptions. It also helps to diminish inventory level.
5. Seek Continuous Improvement: Finally, you must put consistent efforts to improve the existing business processes to cater ever-changing customer needs. This ensures elimination of waste and defects free products & quality service to customers.

Benefits of a Lean System

When an organization holistically applies these Lean principles, it is able to function in a healthier, smarter, more sustainable way. This directly results in business value.

When the organization wins, the people within it win too. Members of Lean systems are not only more productive, but often more fulfilled and less stressed too. Here are the top ten benefits Lean practitioners report:

•     Manage team / process complexity
•     More efficient business processes
•     Better management of changing priorities
•     Better project visibility at the team level
•     Increased team productivity
•     Reduced lead time
•     Increased team morale
•     Improved visibility to stakeholders
•     Reduced costs
•     Predictable delivery of customer value

Introduction to some important Lean tools

1. VSM (Value stream mapping): As already discussed, VSM helps to identify process wastes and causes of these wastes.
2. Kaizen: It’s a continuous improvement approach focusing on small – small improvements. It involves the commitment of down level people in the organization towards process improvements, facilitated by subordinates and supported by management.
3. Just in Time: It’s a pull approach to meet customer demands as & when it flows from a customer.
4. SMED (Single minute exchange of dies): It improves equipment changeover time. It works on a principle of reducing changeover time to within ten minutes.
5. Poke Yoke: It’s a mistake-proofing device used in assembly to alert operators on defects or failures.
6. Jidoka (Autonomation): Also known as intelligent automation. It stops the assembly or production line if a defectoccurs.
7. Heijunka: It’s the concept of Line Balancing. The aim is to evenly distribute the load by balancing production lines.
8. Gemba (Go & See): The aim is to go to the actual place of work. Observe the process and executions in real time with care. Record the observations. It’s another way to find process pitfalls.
9. Kanban: It’s a signal system to manage inventory level. Kanban boards can be displayed and managed to see the current inventory level on a real time basis. It also alerts to the management to bring the attention over excessive inventory. Excessive inventory ties up the working capital and blocks it from productive usage.