Lean thinking

Lean thinking is a holistic improvement philosophy. It has its roots in Toyota’s way of working and it has played a significant role for many successful organizations in improving the way they work.

The starting point of Lean thinking is customer value: the most important task of a company is to create value for its customers. When the desired value to be created for the customer has been defined, activities can be approached from value creation point of view: all activities can be classified in to value creating activities (which transform material, information or even a human being into direction the wanted by the customer), supporting activities (which are necessary but do not directly add value in the eyes of the customer: they enable value creation, help us manage risk, they are required for legal reasons, to overcome technological limitations etc) or to waste (activity which does not add value nor is necessary for other reasons, and which could be removed with no or minor investment).

Improvement in line with Lean thinking means that once we have defined the intended customer value and identified value creating activities as well as activities that do not create value, we strive to eliminate all waste and organize all value creating activities into value streams where the flow is as smooth as possible. Key value streams include for example order to delivery –process, the material flow across our operations and the whole supply chain, as well as new product introduction process.

When we aim to improve the flow in our value streams, it is important to understand the variation, and remove unwanted sources for variation. By removing variation our processes become more stable and we can ensure smooth operations and high quality. Another key enabler for good flow is standard work.

Continuous improvement is the engine of Lean: we strive to eliminate waste and improve the flow constantly. Key people in continuous improvement are the people who work in the processes: it has been said, that the biggest waste of all is underutilizing the intellect of people.

A solid foundation for continuous improvement is performance measurement, and taking the performance indicators as a part of the daily management. This way deviations can be noticed early, and it is easier to tackle their root causes. Systematic continuous improvement means identifying problems, and analyzing them so that we understand their root causes, creating and testing solutions, standardizing the tested improvements into our work, and following up and ensuring that the implemented changes are in fact also improvements. This systematic logic is also known as Deming’s cycle or PDCA cycle (Plan-Do-Check-Act).

There are a lot of tools and principles related to Lean thinking. They can be grouped in different ways. In the picture below, some key tools and principles are grouped according to so called Toyota house.