Why Every Business Needs a Lean Mindset (Not Just Manufacturing)
Lean focuses on delivering more value to customers with limited resources by cutting waste and optimising processes. Lean is a framework and methodology that can be applied to modern day businesses and not just for manufacturing. Lean emphasises on respect for people, allowing them to take initiative and ownership, improve continuously (learning and implementation). Lean is also an action learning process aimed to develop and refine problem solving capabilities. Pioneered by Henry Ford and revisited by Japanese industrial engineers Kiichiro Toyoda, Taiichi Ohno, and others who established the Toyota Production System (TPS), the concept of Lean came into being.
For the longest time, Lean was used in manufacturing and production floors. The effective use and implementation of Lean techniques made a dramatic improvement and created success for manufacturing businesses. Cutting of wastes, providing value to customers, establishing a Kaizen (continuous improvement) mindset, and improving action learning became hallmarks of Lean. It was later realised that principles of lean and what they offer can be applied to every industry and business. Each business across industries can achieve and replicate what manufacturing businesses have achieved so far i.e. streamlining workflows, getting rid of waste (muda), and giving maximum value to a customer. A value is Lean is defined as what a customer is willing to pay for.
Lean Mindset Works for All Businesses
Any industry that is involved in value-creating activity will succeed leveraging Lean thinking or a Lean mindset. When business will discard anything (plans/ processes/ working systems) that is wasteful, the costs will decrease and workflow will become smooth. Now, which business would not want to cut down on unnecessary costs and enhance efficiency? This is why it is said that Lean is a mindset and goes beyond refining manufacturing business.
Lean can be easily applied where involved stakeholders are actively working on problem-solving and finding new and effective ways to deliver value. It can be applied in business looking to identify obstruction in their workflow and eliminate wasteful activities. Today, Lean thinking or a Lean approach is used in sectors like Healthcare, Retail, FMCG, Construction, Supply Chain, Logistics & Distribution, etc. Read below to learn more about why Lean thinking is important for businesses.
Table of Contents
1. Lean Focus of Value Maximisation for Customers
2. Every Business Generates Waste (Not Just Factories)
3. Lean Helps Businesses to Stay Adaptable to Any Change
4. Lean Encourages Employees to Engage
5. Lean is Versatile and Works in Multiple Industries
1. Lean Focus of Value Maximisation for Customers
Lean is more than an efficiency enhancement exercise. While it’s true that Lean does identify seven to eight different types of waste. It eliminates them and improves speeds, however, its role extends beyond providing operational optimisation. The main focus of Lean thinking is to create maximum value even with limited or minimal resources. If any product or service is not providing value to the end customer then the entire process must be revisited. Fundamentally, Lean focuses on creating maximum value for the customer and minimal or zero waste for the business.
For example, a cosmetic company can use Lean principles (Pull) to create only those products based on customer-demand rather than predictions. A law firm can map a value stream to oversee the entire process in handling a client’s case. Hospitals can use Lean Kaizen practices to find opportunities that deliver better care for patients.
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2. Every Business Generates Waste (Not Just Factories)
In manufacturing business and production units, many types of waste are generated. It can be defective parts, equipment downtime, excess inventory, motion etc. Lean suggests that anything that does not provide value is a waste. In fact, any unnecessary use of time and resources is also deemed wasteful by Lean. For example, having overcomplex workflows can lead to frustration and confusion. Waiting to seek approval or rework on a product due to quality issues is also a waste of time, money and effort.
- In the Healthcare sector, manual data entry of patients’ details is a waste, instead automation can make this process smoother.
- In an Educational institution, students or faculty seeking approvals from top management may cause frustration. To solve this issue, some degree of freedom to take initiative and action must be allowed.
- In Retail, creating more products than actual customer demand leads to an inventory excess, which is again a waste. To counter this, the JIT (just-in-time) method should be used.
3. Lean Helps Businesses to Stay Adaptable to Any Change
Businesses, whether big or small, keep getting hit with waves of change, every now then. Inflation, economic upheaval, change in market dynamics, changed customer preferences, to name a few. Each change creates a series of challenges and obstruction that hampers business growth and opportunities to carry out smooth operations. This becomes glaringly obvious especially in businesses that cling to old and outdated practices and show resistance to change.
Businesses that adopt Lean become adaptable as they are continuously looking for ways to improve, stay updated on the latest market trends, and customer preferences. In a way, Lean enables businesses to survive by providing a cushion against the tremors of unforeseen changes. A Lean mindset isn’t just about what you do today — it’s also about incorporating practices that help you stay afloat tomorrow.
4. Lean Encourages Employees to Engage
Lean enables employees to become more engaged. It offers them a platform to give suggestions, feedback and increase their visibility in the company. The more engaged the employees are, the better results will be delivered. In traditional business settings, usually the power to take decisions is centralised to the upper management. However, a business operating with a Lean mindset allows employees to take initiatives and do the problem-solving without relying heavily on approvals from the top management. The problem solving encouraged at every level makes workers more engaged and feel valued. When employees are seen, heard and have the tools to improve skills, they are more likely to deliver better results.
- For instance, in a university, a student can suggest audio visual tools for better learning and remembrance rather than simply relying on traditional methods of learning.
- A customer care executive can suggest that customers with a similar set of initial queries will be given an automated response via chatbot. Later more advanced queries can be handled by a customer care representative.
5. Lean is Versatile and Works in Multiple Industries
Lean has shown success in many manufacturing factories and large corporations like Nike, Harley-Davidson, Amazon etc. But did you know that Lean thinking is all about being versatile and can be implemented in multifarious industries? For example, the following sectors have shown successful implementation of Lean:
1. Construction – A construction business benefits from Lean thinking by reducing waste, streamlining process, and delivery of projects on time. Lean also creates a safe working environment which benefits all the frontline workers.
2. Government Sectors – Lean thinking would cut down on waste (Red Tapism and Bureaucratic Inefficiency) in Government sectors. This will automatically speed up the administrative workflow and serve the citizens better.
3. Retail – A retail business that leverages Lean uses feedback and suggestions of customers to define value. They further use value stream mapping for identifying wasteful activities and delivering quality products to customers.
4. Education – Schools and universities use Lean for creating a student-centric learning environment and reduce administrative burden.
5. Healthcare – Hospitals use Lean for reducing administrative tasks, provide better patient care (maximising value), and minimise waiting time for patients.
And beyond the above mentioned industries, Lean mindset or Lean methodology can be successfully used in the paper and packing industry, agriculture, poultry, etc. An effective Lean consultancy for your business will help you identify areas of improvement, detect waste, and create a culture of continuous improvement.
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