Lean management – what is it? Tools and examples of application

Wondering how you can better manage your business to reach its full potential while reducing the waste of your resources? Implementing a lean management strategy may be the answer!

Lean management – table of contents:

1. Lean management – what is it?
2. Principles of lean management
3. Lean management tools
4. Examples of lean management in e-commerce
5. Benefits for your business
6. Summary

Lean management – what is it?

The mission of the lean management concept is to create the highest quality products and services while minimizing losses incurred during their manufacture and execution. It was pioneered by Toyota with the introduction of TPS (Toyota Production System), which contributed to its success and has been adopted as a standard process in many other companies.

Principles of lean management

The practice of lean management is implemented according to the following principles:

1. VALUE

Focusing on the value that the consumer should receive when purchasing a product or service. Components of the process that do not contribute to this value are considered unnecessary and should be eliminated.

2. VALUE STREAM
It involves finding defects in the various stages of the process that are a source of wasted resources, e.g., time, money, raw materials, and removing them.
3. FLOW

Next, we need to look at whether process performance has improved after the changes, whether there are any irregularities or bottlenecks. These are constraints that disrupt the efficiency and prevent the achievement of strategic goals. It is therefore necessary to make sure that the flow runs smoothly (without reducing the quality of products or services).

4. SUCTION SYSTEM

Optimizing work, delivery, use of resources, etc. are desirable outcomes of lean management, but overproduction should be avoided. This is because producing too many products or services, not in line with current demand, leads to losses that we want to avoid.

5. EXPERIENCE

This is the most important principle on which the concept of lean management is based. Originating in Japan, the kaizen approach strives for continuous improvement and self-improvement. The application of new standards of conduct in the context of the company’s operations should come as a one-time initiative, but as the beginning of a long-term strategy.

6. BUILD COMMITMENT
When running a business, it is worth paying attention to a sometimes overlooked but equally critical aspect – the human factor. After all, it is up to your team to ensure that the change you have initiated will be accepted and permanent. Employees need to feel that they are respected, their opinion counts and they can openly share their ideas. This approach increases commitment to building a strong, stable brand.
7. BIG PICTURE

An enterprise consists of an extensive network of relationships – the various stages of operational processes are interdependent, for example, overproduction can lead to unnecessary inventory. For this reason, the study of the effects of introducing lean management should be carried out on many levels, rather than piecemeal.

Lean management tools

Depending on the type of industry a company operates in, we can apply different types of tools designed to reduce the waste of various resources.

Bottleneck analysis

It involves looking at the processes that cause delays or block the smooth operation of the areas in question. You can consider bottlenecks as, for example, insufficient training of employees for the position they are taking on, resulting in mistakes made by the employee; working too slowly, reducing the efficiency of the process, etc.

Just-In-Time Method

The JIT concept allows the company to manage its inventory more efficiently – so we can increase its turnover and reduce the costs associated with stocking it. It is based on delivering products or services to consumers in the right quantity and at the right time, improving process efficiency.

5S

The 5S principle refers to the organization of a safe workplace that will enable an employee to perform his or her duties as efficiently as possible. The name derives from the 5 elements, indicating what activities must be performed to achieve the desired result:

• Sort – remove unnecessary items from your workstation;
• Set in order – closely related to the selection, designation of the place and labeling of each item necessary for the work;
• Sustain-maintaining – order is important in terms of safety and keeping machines, tools in working order;
• Standardize – systematization of all assumptions and standards introduced in earlier stages;
• Shine – involves applying the implemented standards in daily work.

Poka-Yoke

It is an assumption that improperly constructed procedures, not people, are responsible for errors at a given stage of the process. Therefore, work should be done to improve them.

Visual management

It is based on replacing verbal information with visual aids in the form of drawings, lines, arrows of different colors. Messages conveyed in this way are much easier to perceive.

Kanban

It is a method of graphical representation of any business process used to optimize work, increase timeliness. In its basic form, it includes columns To Do, In Progress, Completed.

Value stream mapping

It involves drawing up a flow chart of a given company process and identifying factors that contribute to lower efficiency.

Examples of lean management in e-commerce

Here are some suggestions on how you can implement lean management techniques into your e-commerce business. You must treat them as a new, long-term way of management, not just a project with a deadline.

1. Employee training

The success of a company is largely dependent on the commitment and skills of its personnel. Each person occupying a position should have adequate experience or training. Such an employee will make fewer mistakes, work more efficiently and feel that he or she has been well-prepared for assigned duties. Improving the skills of the staff should be based on the application of acquired knowledge in solving real problems that arise in the company.

2. Efficient communication

Effective communication of information is key to achieving strategic goals. Exploit a variety of communication channels for this, allowing staff to monitor the progress of a given process in real-time, contact other colleagues or share ideas. In addition, it is advisable to hold regular team meetings (live or online), where members can discuss current task-related issues and improve relationships.

3. Short delivery times for customers

The buyer of your product cares about time. The big advantages of shopping on the Internet, which many people pay attention to, are convenience and the ability to deliver the shipment to the place indicated by the customer. However, you should make sure to carry out this service efficiently and as quickly as possible. To this end, remove those factors in the supply chain that can prolong the shipment of an order, or generate additional costs, to provide the best possible service to the customer.

4. Emphasize on the website

Your online store website is your business card. Take care of its appearance with UX principles in mind, prepare well-optimized product descriptions, insert high-quality photos showing your assortment, etc.

5. Invest in technology

Implementing technological solutions can significantly improve process efficiency. One example of an application is the RFID system, which uses radio waves to identify and track goods that are shipped to the customer. Transponders (called tags) are placed in tags, for example, and can receive and send a signal. In this way, you can instantly locate where a product is and have continuous control over the supply chain.

6. Outsourcing

Outsourcing allows you to delegate given services to external companies. Running an online store involves several tasks in various fields in which you don’t require your professional expertise and your precious time. For example, you can outsource website design, logistics and supply chain management (such as dropshipping), IT, running a marketing campaign or creating content for the site to a separate entity.

7. Lean management as a duty

If you want to see the results of your efforts in implementing lean management, it must become a mandatory practice, not just an option for willing individuals.

Benefits for your business

Why use lean management tools in your industry? In the most general terms – it provides an opportunity for continuous improvement, which translates into, among other things:

• Sustainable and long-term development of the company;
• Achieving business goals;
• Greater business returns;
• Lower costs;
• Better performance of individual processes, departments;
• More effective detection of irregularities;
• Better management of owned resources;
• Reducing process execution time.

Summary

Reorganizing your processes and changing your approach to management strategy in favor of a lean management philosophy requires a lot of effort and commitment, yet effective implementation can bring tangible benefits and success to your business.

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