Lean: Concept and its application
Lean is a method that grew out of the Toyota Production System in the middle of the 20th century to create a more effective and efficient business by motivating and engaging the workforce to eliminate wasteful practices. In general, it helps business to increase overall profitability and customer satisfaction by reducing non value additions.
In today’s competitive world, we are forced to do more with fewer resources. One way in increasing effectiveness and efficiency is to adopt Lean Management techniques. All types of business can benefit from it. The manufacturing industry has been implementing the Lean approach for many years. This tool provides ways to help organisations identify and reduce waste in their processes and procedures and ultimately enhance their value.
There are eight categories of waste identified by the Lean method. They are: Transportation - transporting items or information not required to perform a process from one location to another. Inventory – An inventory or information that is being stored or not being processed due to overproduction. Motion - unnecessary motion of personnel, equipment or information due to inadequate workspace layout, missing parts or tools. Waiting - time waiting for parts, tools, supplies or the previous process step. Overproduction - producing more than what is required to meet current demand. Extra processing – activity that is not adding value or required to produce a functioning part, product or service.
Defects - Non-conforming products or services requiring resources to correct defects. Unutilised/unrecognised talent - Failure to effectively engage employees in the process and fully utilise their knowledge and skills
Lean principles are particularly useful for organisations and activities that work in a systematic way. Another important concept in Lean is ‘5S’, a system designed to improve efficiency through a systematic approach to organisation and cleanliness in the workplace. The system includes five fundamental guidelines - sort, set, shine, standardise and sustain.
The concept of Lean has already been adopted by most countries. I believe that greater understanding of the Lean principles can help an organisation reduce the cost by removing non-value adds rather than just cost-cutting, thereby delivering key insights productively by deviating from the traditional approach.