Where Does Lean Management Come From?

The origins of the approach can be traced back to the manufacturing industry. As part of the International Motor Vehicle Program (IMVP), scientists James P. Womack, Daniel T. Jones, and Daniel Roos examined the prevailing differences in development and production conditions within the automotive industry. In the resulting book ‘The Machine That Changed the World’, they developed new approaches for a development and production system with increased efficiency and quality compared to other systems. On this basis, Lean Production emerged, which was primarily shaped by Toyota. The Japanese automaker is considered a pioneer in Lean Management and introduced the so-called Toyota Production System (TPS) as early as the 1930s to reduce waste in the company. This measure made production more efficient, faster, and cheaper.
Over time, the methods were adapted and generalized, extending their influence to other industries. This led to the term ‘Lean Management’, which was initially coined in 1992 by Pfeiffer and Weiß, although the focus remained on production.

“In everyday office life, Lean Management deals, for example, with eliminating interface problems or undefined responsibilities in collaboration.”

Managers and business consultants continuously developed the methods used, even beyond pure production. Over time, this resulted in an entire leadership philosophy, which is now generally known as Lean Management.

The optimization approach for leaner business processes now exists in various forms and is divided into diverse applications, such as Lean Development and Lean Leadership. In everyday office life, Lean Management deals, for example, with eliminating interface problems or undefined responsibilities in collaboration.

The Five Principles of Lean Management

The ‘lean management’ is a leadership and organizational concept with the approach of continuous process optimization for efficient design along the entire value chain. It thus addresses all areas in the company where waste occurs and errors happen that one wants to avoid. The goal is to harmonize existing processes, create stronger customer orientation, and reduce costs within the framework of particularly process-oriented corporate management. To meet these requirements, companies can orient themselves to the five principles of Lean Management.

Five Principles in Lean Management

1. Customer value is at the center (Identify Value)
   In this first step, the customer’s perspective is adopted to identify their wishes and requirements. In Lean Management, a company’s activities should always be aimed at creating these added values for customers. If this is not the case, it is considered waste.
2. Identify the value stream (Map Value Stream)
   In the second step, the entire value chain is examined closely. This is to identify the processes and activities that create actual added value for the customer. Based on this analysis, the particularly important core processes are highlighted, and potential for streamlining or even saving processes may emerge.
3. Ensure a smooth workflow (Create Flow)
   Based on the value stream analysis, all work processes should then be planned and designed to be as smooth as possible. Particular attention should be paid to potential bottlenecks and the cross-functional and cross-departmental collaboration of individual teams.
4. Act According to the Pull Principle (Establish Pull)
   To reduce waiting times or delays, it is recommended to establish a pull system, aligning work with demand. This way of working is intended to conserve available resources and guarantee a stable workflow.
5. Continuous Improvement (Seek Perfection)
   This fifth and final step in Lean Management is of particular importance, as it involves continuous improvement. Processes and procedures in companies are not static, and the conditions and requirements are also subject to change. Therefore, the pursuit of perfection is an important and ongoing component of Lean Management.

To put these principles into practice, there are numerous methods and tools for support. Kaizen, the 5S method, and Kanban are well-known examples, which are explained in more detail in a further article here in the magazine.

Advantages and Disadvantages of Lean Management

As it is a universal approach, Lean Management methods can be used in various industries and are not limited to a specific company size. They can be individually adapted to the needs of customers and the respective company. With good implementation of the methods, improvements quickly become visible with relatively little effort, as most do not require lengthy training or further education and can be implemented promptly in one’s own teams. This increases the motivation of employees to actively apply the methods. For a holistic application in the company, it is particularly important to create awareness for Lean Management and anchor it. If this succeeds, Lean Management can lead to higher productivity, quality, customer satisfaction, and competitive advantages.
However, active application in practice requires a high degree of self-discipline. Therefore, it is important that employees understand the advantages of the methods and identify with them so that they are motivated to apply them. The approach of reducing waste could also jeopardize a healthy error culture. If the Lean culture is implemented too strictly, there is a risk that employees get the impression that no more mistakes are allowed, as they are instilled with the idea of reducing waste and constantly becoming more efficient. Sometimes, however, it is not possible to further optimize the process due to prevailing circumstances.

Conclusion

In Lean Management, the main focus is on streamlining processes and creating added value for customers. To implement this objective, companies can orient themselves on the five principles of Lean Management: Identify Value, Map Value Stream, Create Flow, Establish Pull, and Seek Perfection. If the principles are well implemented and holistically anchored in the company, productivity, quality, and customer satisfaction can be increased as a result. The entire company, i.e., both employees and managers, must accept the application of Lean methods and drive them forward together. Because Lean Management can only be truly effective if all parties involved pull together, as otherwise the processes and methods cannot be implemented stably.