What is lean management?

The word ‘lean’ points to the principle behind the management method, i.e. efficiency. There are three ways to achieve this: focus on adding value for customers, avoid all kinds of waste and continuously improve. Lean management originated in Japan, where the approach was first applied in car manufacturing. Although manufacturing companies were the first to adopt lean management, or more precisely lean production, its basic concept has been taken up by practically all industries. Over time, new methods for optimizing business processes emerged. Examples are lean leadership, lean development, lean administration and even lean thinking.

What does lean management do for the company?

Lean management has a positive effect on several levels. Thanks to simplified processes, work can be done faster and better without unnecessary intermediate steps. This boosts productivity and revenue. Customers and employees also benefit. When the team pools its individual competencies, the employees are more motivated and can drive the change process forward. By reducing waste, further resources can be freed up. Depending on the company and industry, this means lower prices, higher quality, greater availability or more individuality for customers.

What are the five lean principles?

The lean management method is based on the following five basic principles:

• Value identification: The company must know what added value it delivers to its customers.
• Value stream analysis: The company must know in which process steps added value can be created.
• Create workflow: The company must define a smooth workflow that can be maintained long term.
• Define the pull system: The company only works when the need arises.
• Continuous improvement: The company must continuously monitor and optimize its processes.

How lean is my management? How do I make it leaner?

According to basic principle number five, optimization is theoretically never complete. This may sound extreme and demanding at first, but perfection is not the goal. It’s more about raising awareness and responding to change in an agile way. If you want to know how efficient the workflows in your company are and how you can increase efficiency, it’s best to start with the basics. The five principles set out here serve as a guide. You should also ensure that your company goals are always clear and measurable. The business blog provides you with a  guide to smart-defined goals.

Do you know the added value of your company?

To answer this question, be aware of what your customers are willing to pay for. What do they need from you and what don’t they need? The better you know your customers’ needs and problems, the more accurately you can evaluate and optimize your contribution to the solution.

Identify and eliminate waste

You have certainly already experienced situations in your daily work where resources were wasted – and not only energy or money, but any kind of resources that contribute to value creation. Some examples are labour, technology, infrastructure, energy, space, transport, know-how, etc. Because waste is always associated with unnecessary costs, companies strive to minimize it as much as possible. Process-oriented lean management provides a remedy here, as all work processes are made clear and optimized.

Use tools and methods in a goal-oriented way

Value stream analysis

One method that offers support in optimization of processes is value stream analysis. The value stream, i.e. all steps, staff and resources involved in the creation of the end product, is visualized. Admittedly, this involves a lot of work. But the visualization provides a good overview and helps you with the initial findings and conclusions. Think about how long the different processes take, how much time is needed for the work steps and where delays or waste occur. It’s important to note that the approach here must be fact-oriented. Opinions and assumptions can distort the initial situation.

PDCA cycle

A simple but effective model for continuous improvement is the PDCA cycle. PDCA is short for plan-do-check-act. The process is repeated over and over again and builds on the newly gained knowledge. As such, the model fits in perfectly with lean principles.

Other tools

Specific tools can also help companies streamline their processes. PostFinance for example offers the Cash & Multibanking Tool (CMT) and various accounts receivable solutions to help you keep your finances under control at all times without much effort.

Change doesn’t happen overnight

Lean management has clear advantages and is very popular. However, companies should be aware that it’s not a one-size-fits-all solution, and it should be applied and adapted to the specific situation. To become leaner, the company must rethink things in a way that goes beyond pure optimization of processes. It can be helpful to pick the low hanging fruit first by implementing lean management in sub-areas that are easy to improve and enable quick successes. From here, the approach can be rolled out step by step as far as required.