Lean is a business philosophy and a methodology aimed at eliminating as much waste from a production process as possible. It originated with the Toyota Production System but it has widely been adopted by manufacturing, service and tech industries worldwide.
Lean organizations minimize waste, reduce costs, increase quality and speed up delivery times. Each of these benefits the customer and the revenue of the business.
The term lean is derived from the metaphor of cutting unwanted fat from fatty meat so that all the customer is left with is the lean meat they paid for in the first place.
Lean and continuous improvement are related methodologies. Continuous improvement teaches that there is never a perfect product or process and that the quest for improving these things is never-ending.
Likewise, lean cultures acknowledge that there is always more fat that can be trimmed from the production process. Within lean cultures, every individual in the organization is encouraged to experiment in waste-reducing activities.
Value vs non-value-adding activities
Having a lean mindset means looking at every activity in the production process and business operation and asking whether that activity is adding value to what the customer is paying for or not. If it is a non-value-adding activity then reasonable steps should be taken to eliminate it.
For example, if a widget factory is taking a step to shape a component that does not add to the function or value of the product then that step should be eliminated. In software, if a feature doesn’t benefit the customer or the business then it should not be built.
Under the lean system, organizations attempt to identify and eliminate the following seven wastes:
In order to eliminate some of these wastes, lean organizations strive for just-in-time (JIT) delivery. This means that they build only the components and products that are needed to fulfill existing orders. When production exceeds orders then they risk overproducing and building up an inventory that might not be ordered. Having excess inventory also risks creating more defects since the defects might not be noticed until they’re in the hands of customers. This means that all of the stored inventory that was built since the defects started being introduced will need to be scrapped. It can seem counter-intuitive at first but just-in-time delivery makes wastes visible which were previously hidden.
Another lean methodology is Value Stream Mapping. In this exercise, the duration of each step of the production process (including materials and information) is visually depicted so that waste can be analyzed and resources can be efficiently allocated. When software companies value stream map their development process they often discover how much waste there is during the hand-off (waiting) of tasks from one step of the process to the next. For example, the average waiting time between design and development or development and QA could add up to weeks.
Going lean requires sign-off from all levels of a company. It requires a shift in mindset and a commitment to continuously eliminate waste.