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What is Lean?

What is Lean?

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“Lean is a systematic method for delivering greater value to customers by minimizing business process waste…” 

The term “Lean” was coined to describe Toyota’s business model (Toyota Production System) during the late 1980s by a research team headed by Jim Womack, Ph.D., at MIT’s International Motor Vehicle Program. The “TPS house” diagram has become one of the most recognized symbols in modern business. A house was used to demonstrate strength only if the roof, pillars, foundations are strong. A weak link weakens the whole system.

Lean is a systematic method for delivering greater value to customers by minimizing business process waste in its many forms (“Muda“) without sacrificing productivity or quality. It is often practiced within the context of a holistic business system. Lean also takes into account waste created through overburden or unnecessary stress (“Muri“) and waste created through unevenness in work loads (“Mura“). Working from the perspective of the client who consumes a product or service, “value” is any action or process that a customer would be willing to pay for.

A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tool, tactic or a cost reduction program, but a way of thinking and acting for an entire organization to continuously improve it’s processes, products and services.

Organizations in all industries and services, including healthcare and governments, are using lean principles as the way they think and work. Many organizations choose not to use the word Lean, but to label what they do as their own system, such as the “Toyota Production System” or the “Akamai Business System”. Why? To drive home the point that lean is not a program or short term cost reduction program, but the way the company operates.

The term lean transformation is sometimes used to characterize an organization moving from an old way of thinking to lean thinking. It requires a complete transformation on how an organization conducts business. This takes a long-term perspective and perseverance for success but the benefits that await can be astonishing…. 15% to 20% improvements in quality, delivery, customer satisfaction and employee satisfaction year-over-year, every year.

Interested in learning more?…

Lean Thinking