What Is Lean Management?

The most successful businesses are those that can deliver customer value and continuously improve over time. These are just a few of the core principles of lean project management, a system that can be applied to numerous workplace processes. What is lean management and what are its benefits?

Understanding lean project management

The lean management system is a strategy that focuses on the idea of continuous improvement. Lean management principles strive to put effective changes into place that help a business become increasingly efficient, with higher quality products over time.

By optimizing company resources and striving for systematic improvement, greater value is created for customers. Production processes are streamlined to cut out any steps that don’t add value, from unnecessary transport to overproduction.

The basics of lean project management

Lean product management has its roots in manufacturing and was originally inspired by the super-efficient Toyota production system in the 1940s. The system was formalized and given a name by MIT researchers, with the idea of “lean” management being a process stripped down to its core essentials. The ultimate ideal in lean management is to not only add value for the end customer. It’s also to reduce all waste during the production process and boost employee engagement through continuous improvement.

The 5 lean management principles

There are five core lean management principles that help this system work, sparked by Toyota’s production practices.

1. Identify value

The first step is to think from a customer’s perspective. Ideally, all businesses should provide products or services that actively improve customer lives. This means adding value defined by need, whether it’s solving an existing problem or improving a current solution. If there are any steps in the production process that don’t add value, they should be considered waste and removed from the equation.

2. Value stream mapping

The second step in the lean management principles is value stream mapping. You’ve already identified value, so now it’s time to map out your company’s workflow and pinpoint where value is added. You should look at all the procedures and employees involved in a product’s manufacturing journey, from material sourcing to inventory storage and point of sale. Applying this lean principle shows where the most value is generated during the journey, providing a visual aid for managers to understand and streamline the process.

3. Create continuous workflow

With this greater understanding of workflow through value stream mapping, you want to make sure that the flow is unhindered. Are there any bottlenecks or places where the workflow breaks down? You can use lean management techniques like Kanban boards to facilitate better communication between different teams. It’s often helpful to break up the full production process into small, manageable blocks. That way, you can remove any blocks that are more hindrance than help.

4. Develop a pull system

A pull system ensures that production responds to demand, decreasing waste. For example, if you go into a restaurant, the chef usually doesn’t start preparing your meal until you’ve already ordered. If the chef prepares hundreds of plates in advance and no one turns up for dinner, the food is wasted. A similar idea applies to other types of manufacturing and workflow. Basically, work should be pulled only when there is adequate demand. This fundamental lean management principle minimizes overhead costs.

5. Facilitate continuous improvement

Finally, lean management principles state that businesses should never sit back and rest on their laurels. There are always ways to continue improving, even when your workflows are optimized. Problems can always arise in the future, so you should continuously be analyzing your processes to look for new ways to boost efficiency.

The benefits of lean product management

Following a lean management system offers myriad benefits for businesses. Here are just a few reasons to adopt lean principles:

• Greater efficiency in everyday tasks

• Boost in employee productivity

• Smarter work processes based on actual demand

• Cost-effective use of resources

With a more focused, efficient use of employees and physical resources, businesses can look to the future and fine-tune growth strategies. For all these reasons, it’s worth implementing lean management principles in your everyday production.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.