How to Manage Waste Better with Lean

The lean methodology helps organizations of all levels scale their businesses by cutting down on what it calls wastes. Lean helps identify process inefficiencies and removes them to improve operations. The result is improved productivity, reduced costs, and higher customer satisfaction levels. 

Let’s see how Lean works and how businesses can use the approach to transform their everyday operations.

What is Lean?

At its very core, Lean is a philosophy — a structured approach that helps businesses identify wastes at various levels, and work on systematically eliminating them. It is imperative to understand the nature of this waste. The term refers to any inefficiency in a process that consumes resources but doesn’t add any value to the business.

Lean has had far-reaching effects. From its origins at the Toyota Production System where it revolutionized manufacturing in the 50s and beyond to its entry into the software industry where it inspired the groundbreaking agile approach, Lean has made its transformative power felt everywhere.

Understanding the Lean Methodology

Lean begins with a thorough understanding of processes which add value to a business. This involves evaluating them from the customers’ point of view. It is also imperative to understand flow — how processes flow and sync with each other. This uses the notion of “pull” wherein nothing is produced beforehand and is only readied at the precise time it is needed. This reduces turnaround times.

Lean targets continuous improvement to achieve a state of perfection. All activities that do not contribute any value to the customer are removed and others are made more efficient in the pursuit of perfection. The goal is to deliver maximal value to the customer.

While it might seem like lean focuses solely on removing waste from processes, the real focus is on delivering customer value. Lean targets the creation of products and services that deliver the highest attainable value levels for customers without compromises of any sort.

Classifying Waste Types

Central to the philosophy of Lean is an understanding of waste and its various types. Once all the different kinds of waste are identified, Lean practitioners can then work on removing them in a systematic way as fast as possible.

• Over-processing is considered a waste since more steps are introduced in the process than are actually needed to deliver the desired value to the customer.
• Extra-processing requires more steps than are currently being followed to deliver the target quality and value levels.
• Unnecessary motion of people or resources is a waste since it doesn’t contribute any value and incurs expenses instead.
• Defects in products are considered wastes since it renders products unusable.
• Waiting is considered a waste too. This happens when a process is waiting for another one to finish or is waiting for equipment to begin.
• The transportation of tools, inventory, and other resources over large distances is also considered a waste.
• Overproduction is a waste since more products are produced than are essential. These will take up unnecessary space for storage and contribute additional costs too.
• Underutilization of human skills and resources is also a waste since it lowers productivity and leads to poor management

How to Manage Waste Better

Lean prioritizes fast delivery of products and services. Based on the understanding of the customers’ needs, the products are created and delivered, and feedback is then gathered from customers. Products are constantly improved to deliver more value based on customer feedback. This makes the business agile and nimble.

Central to Lean is the empowerment of employees. The methodology helps teams understand the value of their work and gives them autonomy to make decisions. Lean promotes a culture of continuous improvement and inspires the workforce to work towards greater value realization for the customers.

Summary

Lean is focused on the needs of the customer and ensures that all stages of production are dictated directly by the voice of the customer. The result is unprecedented value delivery for end users. This contributes to customer loyalty and higher retention levels which increases business profits. Lean works by cutting down on all wastes, which are process efficiencies and do not contribute value to the customer.

The Lean methodology has found applications in diverse industries ranging from manufacturing to software development.