The 5 Lean principles in a nutshell
#1 Principle: Identify Value
It is important to understand that the definition of Value is not the end but the means through which we tackle the needs of our customers.
But who are our customers? Lean considers as Customer anyone who has an interest in the Product or Service provided by the Company, obtained as a result of a Process. Therefore, anyone participating in the Product or Service Production Process can be considered to be a Customer.
We can classify our customers into two categories: Internal and External.
The easiest customers to identify are External customers. Among these, those who will use the Product are often mistakenly considered the only ones with whom we have to compare. But there are other categories of External Customers: for example, the Community in which we operate with our factories and offices, or the public bodies with which we work and interact for a series of services we use (waste disposal, granting of authorizations, etc.).
Then there is the category of Internal Customers, which are all those who, working for the Company, participate in the production of our Product or Service.
Defining Value is therefore understanding the needs of all these categories of actors and being able to identify them and prioritize them.
We define value by identifying the priorities and needs of our customers, internally and externally. Identifying these priorities is part of the Company's Business strategy which must focus on activities that add value, while identifying those that do not.
At a high level, this is the first step needed to identify waste. In essence, the identification of Value allows us to identify 'Strategic Muda', that is, those strategic decisions made by the Company’s management that may threaten the company's survival in the long run.
Those managers who understand market dynamics and the evolution of internal and external customer’s needs should be aware of those strategic choices that do not generate long-term value.
An excellent methodology for achieving this path of growth of skills is, for example, the structured adoption of the "Kata" (roughly translated from Japanese, the "Way of Guiding Choices and Actions"), and recognizing that Value is a continuous pursuit of the needs of our customers.
#2 Principle: Map the Value Stream
To maximize Value for all our "Stakeholders" (external and internal Customers), we must ask ourselves a fundamental question: what limits our ability to generate value?
The answer is: Waste, that in Japanese is called Muda.
The only solution to waste is to be able to identify it systemically.
But what is Waste? With a very simple answer, but complex at the same time, we can say that Waste is anything that limits the “flow of value”, or Value Stream, towards the Customer. Every delay in the delivery of an order, every defective product, every injury of an operator in the factory, every one of these items is Waste.
So, how can we define waste systematically, so that we become able to see it? How can we "learn to see" waste? The answer is to be able to draw the Map of the "flow of Value": the Value Stream Mapping. We may want to stress, though, that the technique of Mapping the flow of Value must be understood as a tool, not as the end of our path towards Continuous Improvement (Kaizen).
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How can we, as Managers, really understand the "flow of Value" if we do not experience it firsthand?
Lean Thinkers have for decades adopted a Japanese term to identify this practice: "Genchi Genbutsu" - or "Go and See". That is, we cannot delegate to others to experience, in first person, how Waste is our "Number One Enemy" in the production of Value. We cannot, therefore, delegate to others the activity of mapping the flow of Value, but we must be directly involved in it.
In this way, we will achieve more than one goal, in the continuous challenge towards Continuous Improvement: we will be able to understand, without filters, where our Flow of Value stops; our Team will feel directly supported and empowered by our discreet presence ... we do not want to take away from the Team the pleasure of learning and, why not, even making mistakes and learning from their mistakes!
We will also begin to design strategies to eliminate, systematically and definitively, what hinders the race of Value towards our Customers: in a simple sentence, we will be able to identify the path -Roadmap- towards a new state of balance, which will be better than the current one.
#3 Principle: Flow
The Third Principle identifies the source of Value: Flow. The Flow is defined as the product of two indicators: speed and quantity. From a Lean point of view, this means that, to maximize Value, we must act simultaneously on the two indicators. Quantity identifies the number of raw materials and components that our processes transform into finished products, while Speed identifies how much we are capable of transforming by the unit of time. In summary, the greater the flow, the greater the value for our customers.
So how will we be able to increase the flow? Following the Roadmap drawn through the identification of the Value Stream, and systematically removing every 'bottleneck' (Muda, Walls, Walls) to the flow of Value!
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As Lean Thinkers and Managers, we are aware that there are different ways to increase the Flow of Value: the Pure Flow, the Predefined Sequence Flow, and the Pulled Flow.
Our main objective will be to identify the Flow model that, in the Continuous Improvement Roadmap, allows us to progress from the current state to the future state in the fastest and most effective way, always keeping in mind that the Roadmap is a conceptual model of continuous improvement: the objectives will always be constantly evolving, as well as the Roadmap and the Future State.
That's why the Lean philosophy relies on the concept of the True North: to identify the only real fixed point of our path towards Continuous Improvement: Value.
#4 Principle: Pull
The Fourth Principle establishes the importance of Flow in the generation of Value: but how can we be sure that the actions of Continuous Improvement and the related Flow that we are gradually increasing are really generating Value?
The only way we can be sure of this is to ensure that our customers themselves "gage" the flow, in quantity and time. This is the concept of Pull.
The fact that the Customers are in command of the operating sequence is the best guarantee that our every action dedicated to the gaging of Flow will maximize the Value generated.
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Leaving the modulation of the flow to the customers does not mean delegating the management of the organization to them.
Lean Thinkers and Managers know that their task is to systematically structure their Organization so that the Flow is always synched to the Customer Pull.
As the Organization changes and adapts to welcome (and learn from) every signal coming from the market, the Value for all our Stakeholders will increase.
#5 Principle: Pursue Perfection
Technologies, Corporate Culture, Customers, Globalization and Markets: everything around us is constantly changing, and we must learn to identify the 'true North', the Goal of Continuous Improvement, and understand that this Goal corresponds to a Path to a constantly evolving state, not to a definitive state.
In summary, Perfection is an unattainable state, and our goal should not be to achieve it, but to continuously adapt our processes to pursue it.
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Pursue Perfection - or "Chasing Perfection" imposes to the Lean Thinker and Manager a continuous exercise of alignment of the corporate culture to the evolution of the customer’s needs.
This means that, over time, every improvement action will lose effectiveness and a new cycle of improvement will become necessary.
The most important consequence of this is that the corporate culture and the skills of the people who live in an organization must, in turn, become fluid and flexible, capable to adapt to this continuous evolution.
To become a Lean expert and successfully master the fundamental tools of this methodology present on a global scale, consult our courses which, in addition to transferring state-of-the-art skills, prepare you for a certification recognized worldwide issued by the International Independent Board for Lean Certification (IIBLC®).
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