Lean Management

Lean Management, also known as Lean Enterprise or Lean Thinking, is the management philosophy behind the Continuous Improvement structure developed by Toyota. With Toyota Lean Management is actually a part of the broader Toyota Production System. Generally speaking, Lean Management is a management structure as well as a organisational culture in which every employee strives to maximise customer value. An important of Lean Management is that an organisation has to strive for flow, in other words, a process without interruption.

Lean Management can also be described as a ‘culture of continuous improvement’, although one could argue this is more of a result flow than an objective in itself. Toyota has discovered that interruptions can be categorised in seven types called ‘wastes’. The seven types of wastes are:

1. Transport
2. Inventory
3. Motion
4. Waiting
5. Overproduction
6. Processing
7. Defects

If none of these wastes occur anymore, then flow in the process has been achieved. In practice, it only results in minimising waste as it is impossible to eliminate them completely.

Lean Management vs. Toyota Production System

The Toyota Production System (TPS), of which Lean Management is a part, goes further than just continuous improvement. Toyota applies 14 management principles which can be seen as part of the Four P’s (People, Process, Philosophy and Problems). TPS goes further than the focus on continuous improvement with the application of Lean. Whereas Lean Management ensures increased quality and cost savings, the Toyota Production System is a broader management strategy.

Achieving success with Lean Management

Many other organisations have adopted Lean Management as a means of outperforming their competition, increasing output per employee and increasing customer satisfaction. If a company wants to be competitive in the long term, then Toyota’s 14 management principles offer guiding principles.

Lean Management is about managing a culture and structure of continuous improvement. Creating Flow in processes is the objective and in order to achieve that, the wastes have to be reduced.

Lean Management vs. de Six Sigma Way

Whereas Lean had its origins at Toyota, Six Sigma originates from Motorola and General Electric. Motorola developed the Six Sigma project structure and General Electric added its structure of organisation. Lean and Six Sigma fit together seamlessly. Both methods endeavour to achieve the highest quality and customer satisfaction. In other words they are both customer and process centric.

Lean Management will generally focus more on improving short cycles and Six Sigma is often a project based approach. Combine Lean and Six Sigma in your organisation and you create a culture of ongoing (even daily) and project-based continuous improvement.