Most businesses are highly wasteful. It is simply in their nature. This can be more so the case when teams find themselves trying to achieve more with less - stretching themselves thinly, increasing the likelihood of mistakes and limiting the potential to spot opportunities for improvement.
In this article, we explore Lean - a business approach which can help drastically cut waste and increase customer satisfaction.
What Is Lean?
Although there are plenty of tools and processes that go into Lean, at its core Lean is a holistic approach to business. As the name suggests, Lean is all about finding smart ways to minimise waste throughout all business processes whilst maximising value to the customer.
Adopting a Lean business approach is all about focusing on identifying potential inefficiencies, mitigating those efficiencies and finding new ways to deliver a more valuable product and service. Although Lean doesn’t necessarily focus directly on generating profit, ultimately it will do this by helping lower costs and making your business offering more desirable.
Lean Fundamentals and Principals
Understanding the ultimate goal of Lean is easy. However, effectively applying it to your business requires a wealth of knowledge and experience. There are five principal areas to consider when taking a Lean approach:
1. Define Value
The first step in applying Lean is defining value. This should be entirely focused on delivering value in alignment with customer needs. For example, at this point, you will want to consider how your product solves the customer’s challenge, how long it takes to get the product to the customer and how much the customer will be willing to pay.
2. Map Value Stream
Having a clear definition of value will allow you to create a value stream. The value stream will be made up of all activities and processes which contribute to creating value as defined in the first stage of the process.
For example, this could include areas such as design, manufacturing, hiring, HR, admin, delivery, customer service and procurement. Once you have a clear idea of what contributes to creating value, it will be easy to see what doesn’t contribute to creating value - this can be considered as waste and should be removed from the process.
3. Create Flow
After you have created a value stream (with the waste removed), you can focus on streamlining the remaining activities to ensure they are working at maximum efficiency. This can be approached in several different ways depending on the business process you are applying it to.
The goal of this stage is to tightly knit each step within your value stream in order to ensure the efficiency of the entire process. This could include actions such as streamlining the transportation of materials to introducing communication tools.
4. Establish Pull
The result of improved flow is reducing the time it takes to get a product or service to market. This offers businesses that use Lean an opportunity to reduce the costs and admin associated with holding inventory by taking a ‘Just In Time’ approach to customer fulfilment.
For example, when you work backwards from the value stream you will be able to establish customer requirements ahead of time and better understand how to meet those requirements in a timely manner.
5. Seek Perfection
Following the first four steps outlined in this guide will likely help you make significant, positive progress in your business. However, as we mentioned before, Lean is a holistic approach to business - meaning it isn’t simply a case of following the process once and forgetting about it.
For Lean to have a real, long-term impact on your business you need to consistently apply the principles throughout time. Always looking for new ways to increase efficiency and better serve your customers the value they seek.
Applying Lean to Your Business
The Lean approach is most popular within the manufacturing space. Yet, many businesses have seen huge success in applying it to any and all processes.
For example, a Lean approach to sales and marketing can help you better understand what resonates with your customers and cut out sales and marketing techniques that have little or no positive impact on results.
A great exercise to start with is to ask which process in your business is currently the lowest performing and seek to apply the Lean principles to that area. Once you have carried out the process and established a system for continuous improvement in that area you can then move on to the next biggest challenge…and so on.
Summary
It is clear that Lean is a fantastic approach for businesses to take in order to trim waste. By applying Lean you can better serve your customers, low prices and increase profits across the board. Although Lean is most commonly used in areas such as manufacturing, the same approach can be applied to almost any business process - helping you achieve the benefits of Lean across the board.