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Fundamental of

Lean Management

What is Lean Management?


A systematic approach to the
identification and elimination all
forms of waste from the value
stream

The Value Stream Concept

The Defination
Lean is the Systematic identification and
elimination of waste (non-value added activities)
through continuous improvement by flowing the
product [or service] at the pull of the customer
in pursuit of perfection.
-James Womack

Lean Management: History

Lean Management: Concept


Lean manufacturing concept is to
o maximize their profit,
o minimize their cost of production, and
o eliminate waste.

Lean Management: Framework

Lean Management: Framework

Lean Management : Framework

Continuous Improvement:
o
o

Focused on solving problems


incrementally.
Solution by experiment helps in
learning process

Respect to People:
o
o

Respects people by giving them the


authority to solve their problems .
Uses the knowledge of the people
who actually add value to the process
and also able to get buy in by
engaging all the employees.
Guide the people to solve their
problems by asking the right
questions, till they find the root cause

Lean Management: Application


Lean principles can be applied to nearly anything
from optimizing management to developing
vertical and horizontal integration that help with
optimizing the flow of products.

Lean Management: Principles


Lean Management System works on the following 5
principles:
Value
o specify what creates value from the customers perspective.

The value stream


o identify all the steps along the process chain.

Flow
o make the value process flow.

Pull
o make only what is needed by the customer (short term
response to the customers rate of demand).

Perfection
o strive for perfection by continually attempting to produce
exactly what the customer wants

Lean Management: Principles

Lean Management:
Modern vs Lean

Lean Management: Elements


Lean management consists of 3 key elements:
1. Lean tools, system and structure:
o
o

2.

Front line involvement and engagement:


o
o

3.

Manufacturing often starts with value stream mapping whereas the office may
start with specific process or problem solving.
Initiation steps, and a comprehensive plan covering competency building,
training, deployment and culture change.
The involvement of the people
Engagement needs to be created through ownership and a new structured way
of working that empowers the front line.

Leadership actions and behaviours:


o
o
o

Lean is often sponsored by the top of the organisation and left for the front line
to deliver.
But if its left there without senior/middle management knowledge and support,
a void will develop - will jeopardise successful deployment.
Managers at all levelsneed to know what Lean involves and also what their role
is as a leader

Lean Management: Elements

Benefits of Lean Management

Company It ensures less waste which means low


expenditure and investment. The reduction of waste
will ensure improved product quality, profitability and
optimized production.
Customers It ensures improved customer care
services and efficient supply of goods and services to
clients.
Employees It ensures motivated employees due to
the safe working environment that the method avails
to them.

The Benefits of Lean Management:


Social Intimacy vs Economic Efficiency

Benefit in Risk Management View

Creating a culture of transparency and constructive


problem solving encourages staff to identify and
mitigate risks and inefficiencies.

Standardizing work increases the predictability of


outcomes and captures best practices.

Understand the implications of changes before rolling


them out across the organization and can make course
corrections early and often