Lean Management

• Lean management includes methods and concepts, to organize processes more efficiently.
• The focus of this management philosophy is on minimizing wasteful measures and factors.
• Lean management is based on five core principles: Customer added value, process optimization, flow principle, pull principle and continuous improvement.
• The areas of application range from the automotive industry to the office environment and healthcare.

Lean management is a corporate philosophy that encompasses methods for the continuous improvement of processes. The aim is to increase efficiency within the company and improve product quality by optimizing value creation processes and focusing on customer orientation and avoiding waste.

What is Waste in the Sense of Lean Management?

In general, waste in the sense of lean management refers to all work steps, processes, etc. that do not add value to the product or service offered. This can relate to technology, the workplace, working hours, employees and much more. 

Examples are:

Waiting times: Waiting times could be characterized as excessively long processing times for incoming customer inquiries, late responses to applications from potential employees or delayed decisions and instructions from superiors.

Product errors: Faulty products or incorrect deliveries require unnecessary reworking and therefore waste time and resources without offering customers any added value.

Overproduction: If planned quantities are exceeded, avoidable storage costs are incurred. Particularly in the case of perishable or technical products, there is a risk that they will lose quality and value over time and, in the worst case, can no longer be sold.

Unused potential: Personnel are among the most valuable resources of any company. If employees are not actively involved in processes, valuable know-how and the associated potential remain unused.

Complex interrelationships, potential and inefficient processes are analyzed using various methods. The following practices are among the best known in the field of lean management.

Value Stream Analysis

As part of the value stream analysis - also known as a value stream map - the entire value creation process is analyzed and visualized to uncover and eliminate waste.

At the beginning, the actual state value stream analysis of a specific product family or product is conducted - starting from goods issue to goods receipt. The following data is analyzed:

• Cycle times
• Set-up times
• Batch sizes
• Operating times
• Capacities
• Stock levels
• Rework and reject rates.

All internal information flows relating to specifications and planning as well as external information flows between customers and suppliers are also mapped.

In the final step, the target status value stream is presented, which contains as few wasteful factors as possible and is tailored to the customer's requirements.

5S Method

The 5S method of lean management is used to organize and design workplaces and is based on five stages.

• Sorting: The first step is to remove unused items from the workplace. This ensures greater clarity and saves time searching for specific items.
• Systematize: Required items, on the other hand, are tidied up and arranged at the workstation according to their importance.
• Cleanliness: The next step is to clean the existing work equipment. In this way, errors caused by soiling can be avoided and wear and defects can be detected more quickly.
• Standardization: The first three steps are then standardized and are conducted after each activity has been completed.
• Self-discipline: Finally, it is important to involve employees so that they contribute to maintaining order in the long term. Here, managers should point out deviations from the defined standard and achieve sustainable optimization of the workplaces.

Just-In-Time (JIT)

Just-in-time is a lean management method for controlling the flow of materials. The required components are only delivered when they are needed in production. In this way, manufacturing companies can not only minimize their inventories and thus tied-up capital but also increase their economic success. However, the JIT method requires close cooperation between companies and suppliers to ensure a smooth production process.

Continuous Improvement Process (CIP)

The continuous improvement process encompasses all measures that contribute to optimizing products and services as well as processes and individual activities within the organization. In the CIP, processes are systematically and continuously improved by collecting ideas, implementing optimization measures and monitoring results. It is important to involve employees and influence their mindset so that improvement measures are initiated independently, and potential is identified.

The following features are characteristic of the continuous improvement process in the sense of lean management:

• Employees are required to contribute to the CIP.
• The focus is on a large number of quickly implementable and unbureaucratic improvement measures.
• As the name suggests, the CIP is a continuous process and not a temporary project.

Kanban

The Kanban method also refers to the control of material flow and production through visual signals and the limitation of stocks.

In this lean management method, material restocking within production is controlled using so-called Kanban cards. The aim is to streamline production by only requesting required materials and not producing excess quantities. Any requirements that arise are signaled on both sides by corresponding Kanban cards.

Defect prevention / Poka-Yoke

The use of error prevention techniques and quality management systems is intended to ensure error-free products and services. Poka-yoke is a lean management method of preventive quality assurance and continuous quality improvement. For this purpose, various mechanisms are integrated that indicate or completely prevent the occurrence of errors.

By concentrating on essential work steps and minimizing waste, the implementation of lean management results in the following benefits within the organization:

• Reduction of redundant operational processes and bureaucracy
• Minimization of the error rate in process sequences
• Improvement of product and service quality
• Increase in customer satisfaction
• Minimization of inventory levels and costs in production and logistics