Small or big business, every business goes through stages to manufacture a product. In those stages, you would get waste and by-products. Once the product is finished, before dispatching the products are stored in warehouses. These are the processes a product is involved in before reaching its owner. Not all these steps are necessary, some of them can be skipped.
Have you ever wondered if the cost you’re paying for a product is the actual price i.e., the actual cost involved in producing the product? There are some unnecessary expenditures added to the final price, these expenditures are incurred during production, these costs can be skipped. Here is where Lean Management comes into the picture.
Lean Management
According to some, the definition of lean management is, it is an approach to running an organization that reinforces the concept of continuous improvement, while others believe that, it is a technique developed to minimise the waste in the process of manufacturing a product and maximise the value of a service or product to a customer without compromising on quality. This concept was shaped as a part of lean thinking by the Toyota Production System.
This system was developed by Eiji Toyoda and Taiichi Ohno in between 1948 -1975. You can say that both lean management and TPS share the same principles, they believe reducing the cost by eliminating waste with reducing the quality and improve customer value. This process reinforces continuous improvement, flexibility, and maintaining better relationships with customers and suppliers. The view of this principle is to reduce three types of wastes in an organisation they are, non-value adding work, overburden and unevenness.
It follows a variety of techniques to deliver value to its customers, such as Just-in-time, total quality management, total productive maintenance and workplace redesign. The lean management system has deployed many tools to link customer value to the process. The ultimate goal of lean management is to provide customers with products of the utmost quality and zero waste.
To achieve this, lean thinking optimizes the flow of products and services by eliminating the waste in the entire value stream instead of individual points. It streamlines a process which needs less capital, space, human efforts to make services and products with fewer costs and fewer defects.
Lean Management in companies
Digitalization and technological advancements have made it easy for customers to get a product in the market. Brands should always be on their toes to retain their existing customers and acquire new customers. With technological advancements, the e-commerce industry has become a game-changer. Now you can simply order products online, so brands have to put a tough fight against both their competitors and e-commerce companies. In all these chaos you cannot compromise on quality. Companies should up their game to meet ever-changing customer needs, they should provide them with high quality, low cost and high variety of products.
How it helps businesses?
Lean Methodology will help businesses in delivering value constantly in an everchanging market place. It will help organisations to grow in a principled and disciplined way. It will also help organisations in improving themselves constantly and focus more on customer value.
Optimises your business
When a business follows lean management it not only streamlines the flow of work but it also optimises the organisation in whole. You can only streamline the flow when you involve in understanding the value stream or workflow around the company. To optimise the business and make it a lean-enterprise all departments and employees of the organisation should share and communication. So it improves internal communication within the organisation and helps your organisation in achieving the goal together.
Quality
Lean management will build quality into the system. To deliver high-value services or products to the customers, the organisation should have an error-free system that helps them in performing their goals with compromising on quality. For an organisation to grow, they must automate and standardize their business.
They don’t have to automate all the processes, they can only automate processes that are tedious, prone to human errors and repeatable. By doing it the employees can focus their skills and efforts in improving, innovating and growing the company. They can develop quality in the system by sharing, following good practices etc. And help in creating an environment for the employees to build quality within the organisation.
Create Knowledge
A single idea of a person or team is what later on shaped into an organisation. They need to refresh their knowledge regularly. So to always stay in the loop you must hire and retain talent. Your employee’s efforts are what takes your business towards growth. So you must create a system or policies to share knowledge, identify growth areas, cross-train them, create team-stability.
Fast Delivery
The goal of lean management is to aim at maximising customer value by reducing waste. Once the products are finished they’re stored in the warehouse before they are distributed, the warehouse charges are also included in the product price. To improve customer value the organisations can opt to deliver fast by managing the flow. Limiting the Work-in-Progress is not easy, but it will help you in delivering fast, which will, in turn, reduce the price of the product and you can reduce the product to customers as quickly as possible.
Conclusion
If you think lean management will only help in streamlining your production or help only manufacturing businesses then you’re highly wrong. Almost all industries are implementing the lean management system in their organisations to improve their business. It optimises all aspects of the business and helps you in providing your customers with great value without compromising on quality. It will help your employees in improving their communication within the organisation and it will help them in improving themselves and the organisation. In every process of making a product, there is a waste of some sort. If you streamline the flow of the work, you can reduce or eliminate waste and provide your customers with quality products.
