Principles of Lean Thinking

Customer Value:

Value of the product or service from a customer perspective: to serve their needs.

The customer and their satisfaction are the key to survival. Many organizations invest resources to achieve this goal, but often the results are worse than expected: Customers complain because you have not understood or have not been able to give what was asked.

Result: objective failure and waste of resources to do first and fix later.

The cause has been shown by many in the lack of an effective and simplified approach to this key issue. Lean Thinking fills this gap by proposing a very pragmatic and effective path.

Analyzing in depth the way a company works you can see that, unfortunately, only a small fraction of the time and effort spent in an organization adds value to the customer.

Not only that, if the value is key, entering into any company you find that there is no one who is responsible, ie there is no one who has both global and responsibility on the entire value stream, the functional organization. It often leads to have portions of the flow "without a master", with the consequence that individual process areas operate optimally from their point of view but not from the point of the creation and flow of value to the customer.

The first step in waste elimination can therefore only be a clear understanding of what is this "value", that is what it takes, is to be achieved, maintained and delivered.

The use of resources is justified only to produce value, otherwise it is wasted. In most businesses a lot of activity that does not add to customer value persists because it is seen as inevitable and unavoidable. These deviations produce large efficiency losses and waste.

Identify the Flow of Value:

What does not add value is waste and should be removed. Focus on what adds value.

The second principle of lean thinking concerns the identification of value throughout the flow of production of goods or services.

The value stream is the set of activities required to ensure that a given product (good or service) cross in the most effective of the three fundamental processes in all sectors:

  • the definition of the product from concept, through detailed design and subsequent "engineering", until the actual operation;
  • information management from order to delivery and planning of detail;
  • the practical realization of the product or service made available, that is "delivered" to the end customer.

Analysing the value stream inevitably brings to light significant amounts of waste in the form of redundant tasks, repetitions and errors within the enterprise and across the supply chain to the end customer.

Principles of Flow

Link all stages without creating delays. Organize continuous processes.

The third principle of lean thinking. Once you identify the various phases making up the value stream for a given product or service, eliminating all activities that are wasteful, it is necessary to ensure that the remaining phases in the stream can proceed without obstacles or barriers.

It should be possible to work on each project, order and product from beginning to end in such a way that there are no waiting times, inactivity, or errors during a phase or between one phase and another.

Applying the concept of flow, inevitably leads to a critical review of the principles of the business organization. In particular, since the basic processes cut across functions, what comes in to question is the functional organization and especially the barriers between one function and another.

A logical follow on is to include changes to the layout of offices and departments according to the use of technologies and equipment.

Working on these aspects can have great impact on the fluidity of the process. The value activities and waste identification can also highlight striking differences between the total processing time and the total "value added" time - performing tasks that add value to the product or service.

Customer Pull

Link production with demand. Start your process only if requested by the customer.

The reduction of lead times and increased flexibility introduced by the elimination of waste allows the introduction of the logic of "pull" in lieu of the schedule based on "push". The purpose is to "do" and produce only following a request by the customer.

In the past “mass production” had generally greater stability than is the case today, both in terms of volume and mix. This allowed high optimization through the implementation of large quantities of products making high economies of scale. In recent years however, this appears increasingly unstable not only in quantity but also in terms of the flexibility to meet customer demands.

The key to winning is to stay in tune with the new features of the market demand. That is to make sure that the end user is the one to pull the company's production flow. This way activates the flow of true value, one free from waste (eg inventories of finished products replaced by new products, systems devised by the warehouse management, stocks of unsold products, etc.).

It follows that to decrease the level of inefficiency eliminating waste should not be limited to the corporate system: Lean suggest a logical extension to their suppliers to make an intelligent partnership throughout the supply chain.

Seek Perfection:

Both time and customer expectations change, stay inquisitive. Always look for opportunities for improvement.

The search for perfection is a real challenge for any Lean company.

When Lean techniques start to be applied along the entire value stream you realize that the process of reducing effort, time, space, costs and errors never ends even though the result of our efforts increasingly meet the wishes of the customer.

Obviously perfection is a moving goal and should not be considered as if it were possible now, and once for all, the perfect product. If anything perfection is a constantly moving target that requires constant work and an active process of systematic improvement.

This improvement can sometimes occur through major innovations and considerable organizational and technological leaps but more frequently the result of many small but systematic refinement (kaizen).

Results of applying the Principles of Lean Thinking

Typically the improvements obtained by a proper and methodological application of Lean are of the order of:

  • increases in productivity from 20 to 60%
  • reduction of work in progress (stocks) from 30 to 70%
  • reduction of defects from 20 to 40%
  • reducing set up times by 50% al'80
  • reduction of meters traveled from 40 to 80%

Improved quality and reliability of information 
Greater involvement and empowerment.

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