Understanding Lean Methodology and Its Applications

By Indeed Editorial Team

Published June 9, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

For most organizations, the primary goal is to increase revenue. The lean methodology provides a framework for companies to focus on decreasing waste while adding value to the products or services they provide to consumers. Understanding how improving processes can add value and decrease waste can help you implement this methodology in the workplace. In this article, we define lean methodology, describe its primary concepts, consider its benefits, discuss its practical applications, and provide useful implementation tips.

What is lean methodology?

Lean methodology is a business process that aims to provide value to customers by focusing on continuous improvement, creating organizational knowledge, reducing waste, respecting people within the organization, increasing innovation, and improving efficiency in the workplace. It offers businesses of any size the opportunity to implement smart and sustainable business practices to achieve their goals.

By providing a strategy that aims to optimize value across the entire operation, businesses can improve speed and quality throughout the production process, improve the supply chain and delivery processes, and decrease the vision to value cycle. These factors ultimately add value for the customer. In the long term, this results in better business outcomes.

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The pillars of lean methodology

There are two primary concepts that guide this methodology and help deliver value to customers, known as the pillars of lean. They are:

Continuous improvement

Those who operate according to the methodology believe in constant improvement. Typically, they implement mechanisms that allow them to track improvement within the organization. This might include organizing, measuring, and reporting on lean initiatives and activities. There are several applied improvement processes that leaders follow to enable them to structure continuous improvement, such as plan, do, study, act (PDSA) and define, measure, analyze, improve, control (DMAIC).

Respect for people

Often, the employees who are responsible for producing goods and services generate ideas for improvement. Under the lean methodology, those in leadership positions recognize this and take the time to listen to their employees, placing as much value on their ideas and feedback as they do on their customers'. Listening to employees allows companies to identify areas for improvement.

This pillar advocates a similar approach for employees and customers by seeking to take advantage of their collective knowledge base. To demonstrate respect, the leadership group ensures that the organization adheres to its processes and works on improving them. Part of this improvement focuses on quality. This means the organization optimizes standard processes to allow for greater team efficiency and work quality.

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Benefits of adopting lean methodology

There are a wide range of benefits associated with adopting this methodology, including:

  • Decreased waste: A company that produces according to consumer demand can better manage its resources by using only those it needs. This means it can allocate its resources more efficiently and eliminate waste while creating value for its customers and increasing revenue.

  • Increased productivity: Implementing guidelines to manage workflow and allow employees to focus on the most important tasks helps to eliminate distractions and increase productivity.

  • Improved processes: Using the pull concept helps the company to only produce products when there's a demand for them. This allows it to ensure that each element in the value chain is operating at an optimal level.

  • Enhanced focus: The methodology helps improve organizational focus through the reduction of wasteful activities, such as downtime and unnecessary tasks. This allows employees to concentrate on activities that bring more value to customers.

  • Reduced costs: Companies can maximize profits by reducing waste and understanding the maximum amount customers are willing to pay for a product.

  • Improved quality: By focusing only on what provides value to customers, companies can improve the overall quality of their products. They can also better meet their customers' needs and offer them new, innovative solutions.

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Tips for implementing lean methodology

If you're considering implementing this methodology, consider the following tips:

Offer employee training

Skilled employees offer many benefits. It's important that the process of continuous improvement focuses on offering employees ongoing training to help them improve their skills and advance their careers. This makes employees feel valued and increases the organization's employee retention rate. Valued employees are more likely to contribute to the long-term success of the company.

Create a value stream map

A value stream map illustrates how materials, processes, and parts move through an organization. It allows companies to identify areas of waste and implement steps to eliminate them. Value stream maps also help to improve processes and enable organizations to increase revenue.

Communicate with teams

Communication is often key to the success of an organization. It's important for leaders to communicate with employees about issues and work together to create a plan to overcome them. They can do this by using action steps.

It's important that the leadership team clearly communicates each step with employees. Ideally, they explain what the issue is, how they plan to rectify it, and the reasons for these changes. Not only does this increase employee engagement, but it ensures the team is working toward the same goals.

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Lean methodology applications

You can apply the lean philosophy in these areas:

Health care

Reducing waste and improving processes is a continuous goal for those in health care, especially for providers in the public sector, where there are often shortages in the resources they require to provide necessary services. To address these issues, many health care organizations use the lean methodology. Another popular methodology is six sigma, which uses metrics to focus on reducing medical errors and defects in health care processes. Those providing health care services often use the lean and six sigma methodologies together.

The two methodologies help health care organizations to:

  • Reduce patient wait times

  • Improve efficiency by implementing technology

  • Improve inventory management by minimizing surplus supplies, replacing outdated equipment, and eliminating unnecessary data

  • Save time by minimizing the movement of patients

  • Eliminate unnecessary tests and procedures

Manufacturing

One of the first industries to embrace the lean philosophy was the manufacturing industry. There are five lean principles that apply to manufacturing:

  • Determine the value of the manufactured product to the consumer.

  • Map each of the steps in the manufacturing process that add value for the consumer, including ordering, purchasing, receiving, making, and delivering.

  • Look for ways to reduce pressure points and eliminate waste by removing steps that don't add value for the consumer.

  • Create circumstances in which consumers demand products rather than focusing solely on pushing sales.

  • Create a workplace culture that continuously improves, aims to eliminate waste, and makes use of standardized processes to improve quality.

Sales and marketing

Those in sales and marketing frequently rely on market research, data, and analytics to determine consumer attitudes and how much they value a given product or service. Companies use this information to improve their products and services. They also use it to better understand and improve their sales processes. It provides valuable insights into the marketing processes and channels that are likely to produce the best results. This gives the company the opportunity to improve its marketing efforts.

Software development

One lean philosophy that software developers commonly use is the agile methodology. This methodology focuses on providing software developers with the flexibility they require to adapt to changes that occur during the development process. It also focuses on continual improvement by dividing large processes into smaller, more manageable steps that incorporate feedback loops.

By optimizing the software throughout the development process, developers can ensure that the final product meets consumers' needs. It also helps to provide developers with insight into the value that consumers give to the final product. Within the agile methodology, there are multiple frameworks that companies can adapt to best fit the continuous improvement process.

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