What is lean methodology? (Principles and applications)

By Indeed Editorial Team

Published 20 May 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

A tested and trusted way of promoting the flow of value, reduction of waste and enforcement of growth in an organisation is through the lean methodology. Most businesses in recent times have discovered the benefits of utilising this procedure, which comprises workable and efficient principles. If you're looking for a business technique that can enhance productivity, reduce cost and add value to your customers, then understanding how lean works is essential. In this article, we answer the question 'What is lean methodology?', discuss the principles of lean, how to implement it, the application of this framework and its benefits.

Related: Different types of project management methodologies

What is lean methodology?

A simple answer to 'What is lean methodology? is that it's a practice that involves promoting value and effectiveness through the elimination of waste. Lean has two core pillars, which includes to improve business operations continuously and to respect people. The continuous improvement cycle usually goes from identifying opportunities in the process workflow and planning how to improve a process, to execution and review on how changes work for a team. Lean helps organisations decide on how to invest their energy, time and money without waste. It also aims to maximise customer value with little resources.

5 key principles of lean methodology

The five key lean methodology principles include:

1. Value

Lean methodology has a common principle which is value. Most companies practising this technique understand how customers value their products. Since they also know that customers can affect the overall sales of products and services, they make the price of their goods affordable for their customers. This same understanding of their customer behaviour towards their products can help them minimise waste, especially relating to production cost. With this, companies can have high chances of making great revenue profits.

2. Value streams

Value streams are the summation of the lifecycle of a product. This lifecycle usually starts at the research and development stage and continued through how customers use a product. A thorough study of the activities that go on in the lifecycle of a product can help companies know what gives more value. They also plan to make better improvements, increase their value, revenue margins and reduce waste.

Related: What are metrics in business? (Plus examples and formula)

3. Flow

With this principle, companies can keep track of their value stream. They use the flow principle to ensure every step is correct and aligned. When there is a smooth flow of value in a company, then they can meet other necessary standards. Companies also have the access to deliver products and services as planned.

4. Pull

The pull principle explains why companies manufacture the exact products their customers demand and at the period they demanded it. This principle can enhance the flexibility of a company and minimise delivery cycles. Such companies don't manufacture products according to schedule. They produce them when there's an order by customers. Doing this makes the operation of the company more flexible.

5. Perfection

This methodology provides companies with the opportunity for constant growth. Looking for ways to minimise waste and increase productivity and product value can promote the operations of a company. Most companies that seek perfection go further to employ rigorous measures which help them assess value streams and changes that enhance productivity.

How to implement the lean method

The different ways of implementing lean in an organisation include:

1. Setting clear goals

Before communicating with your team, it's important to set clear goals. Clearly define your set goal and how you plan to achieve them. Your goal may be to achieve an optimised workflow for faster deliveries. It can also be to increase your general business profit within a particular time frame. Clearly defining your goals can help you know how to share them with your team and motivate your team to work together in achieving the set goal.

2. Communicating with your team

You can work with your team members to minimise waste. This can be more effective when you've discovered the different areas of waste in the company. While meeting with your team, clearly define every step of action, especially when you plan to work for a change. Unite your colleagues in their decision towards achieving a common goal.

3. Offering employee training

You can implement lean through employee training and give them opportunities to learn new skills and other organisational ethics. Employees also get the chance to upgrade their careers, gain value and feel valued. When employees learn so much from an organisation, it can increase loyalty.

4. Creating a value stream map

By creating a value stream map, you monitor how materials and processes flow from an organisation to the customer. It also helps an organisation identify areas of waste for further inspection. Controlling waste with the help of a value stream map helps companies increase their revenue margins.

Applications of the lean methodology framework

Industries that apply the lean methodology framework include:

Software

Most software developers use agile, which is lean methodology framework, to achieve a flexible approach to projects. Agile helps break complex tasks into small steps for easy implementation. It also produces better and efficient end-products from a development cycle through optimised software. Developers also have the privilege to know what the values of their customers are. They focus on the key features of a software programme to enhance their decision-making abilities and productivity.

Read more: The 6 agile methodology steps for project management

Healthcare

The lean methodology also helps healthcare sectors to reduce waste, satisfy patients and minimise their expenses in hospitals. Most healthcare sectors integrate the Sigma framework in running their activities. The Six Sigma framework is a metrics-based system that helps minimise medical errors and any form of defects from processes that concern taking care of patients. Most hospital managers combine these methodologies through:

  • reducing unimportant tests and procedures

  • minimising patient movement at hospitals

  • reducing the wait time of patients

  • reducing the excess supply of inventories and outdated facilities

  • encouraging constant upgrade of technology to promote productivity

Manufacturing

The manufacturing industry is popular for utilising the lean methodology. Manufacturing industries benefit a lot when they know the value customers attach to products, helping them to minimise waste. They can also provide more value to their customers by reducing production costs to the barest minimum. They use this methodology to retain loyal employees and attain their full potential as an industry.

Sales and marketing

Sales and marketing companies use this methodology to enhance productivity together with the value customers assign to their products. They first use research, data and analytics to find out what their customers need. Once they get this information, they use it to improve their services. Paying attention to the needs of customers first can give the sales and marketing department of any company to increase their productivity and gain better insight into media campaigns.

Advantages of lean methodology

Below are some of the many advantages and benefits of this methodology:

Increased productivity

Companies that utilise this methodology may have an increase in productivity and render efficient services. This is because they deal with distractions and provide employees with guidelines that help them pay attention to important tasks.

Improved process

The pull principle helps companies that use this methodology to identify gaps in the manufacturing of products. It can also enhance its manufacturing process by only producing products when there is a need for them. By doing so, companies can effectively monitor their value stream and pull out excess production.

Reduced waste

This methodology helps companies find out better ways to channel their resources to reduce waste, increase value and revenue margins. They usually achieve this when they manufacture products according to the demands of customers. Companies not only pull out excess but also only use the required resources for production, reducing waste in multiple ways.

Reduced cost

Lean helps to maximise profits. Companies achieve this not only by reducing waste but also by being knowledgeable about the price customers can afford to pay for products. You can also curtail waste by keeping account and reviewing how a production process went.

Improved quality

One way of bringing value to customers is by producing quality products. Companies can go the extra mile to bring innovative solutions to the demands and needs of customers. Lean gives organisations space to tend to their customers and also improve their operational standards.

Enhanced focus

The lean methodology helps enhance the focus of a company by minimising unnecessary activities like too much inventory and unimportant tasks. Doing so helps companies focus more on operations that provide customers with value.

Strong customer relationships

Lean helps businesses secure a strong customer relationship through affordable value and the price of goods. With lean, customer value is a priority. This methodology also makes gathering information from customers easy, which in return can produce satisfying products for customers.

Read more: 10 ways to consistently offer good customer service

Systems can adapt faster and easier

Lean isn't too rigid to adapt to. This advantage has made it easy for different systems of the world to adapt faster. It helps businesses at any growth stage adapt to change without being affected. The need for businesses to embrace the use of this methodology keeps increasing daily as customer demands increase and technology evolves.

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