The Toyota Production System might be the most influential business methodology most people have never heard of.
Founded in the 1980s on the principle of kaizen, a Japanese word meaning “continuous improvement,” the Toyota System’s highest goal was to deliver cars to customers as quickly as possible.
To reach this goal, Toyota had to eliminate every possible source of waste.
The Toyota Production System (TPS) is a prime example of Lean principles — a management approach that aims to reduce work without surrendering value.
If you’ve been contending with waste and inefficiency in your own office, Lean might be the answer.
This article will tell you everything you need to know to get started with Lean.
What is the Lean concept?
In 1950, Eiji Toyoda — nephew of the Toyota Corporation’s namesake — visited a Ford plant in Michigan.
He’d learned that Ford’s car factories produced 8,000 cars every day, while Toyota manufactured 2,500 every year (just under 0.1% of Ford’s capacity).
However, after studying Ford mass production processes in detail, Toyoda concluded that they wouldn’t work in the much smaller Japanese market.
Toyota needed an entirely new system. One that could scale to the size the market demanded without compromising quality and without Ford-style mass production.
That’s how the Toyota Production System, the forerunner of Lean, was born.
Toyota’s new system relied on 2 concepts: Jidoka and Just-In-Time.
Jidoka roughly translates to “automation with human intelligence,” also sometimes called autonomation.
Under a Jidoka system, any problem in the production process stops the entire factory. Workers have an incentive to find and solve the problem quickly because they can’t continue working until they address the issue.
By calling attention to even the smallest malfunctions, Jidoka prevents them from festering into larger problems.
Ultimately, this principle fosters a tradition of continuous improvement, which Toyota describes with the Japanese word ‘kaizen’.
Just-In-Time means that each process in the factory produces no more than the next process requires.
Just-In-Time is about the elimination of waste. The factory only makes as many automobiles as the market demands.
They only receive as many parts as they need to make that number of cars. The parts plant only receives as many raw materials as they need to make the right number of parts. And so on.
Pairing Jidoka with Just-In-Time reveals the final goal of each Lean principle and process.
It’s a 3-part goal: high quality, low cost, and short lead times.
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What are the 5 Lean principles?
Lean has come a long way from its origins at Toyota. Whereas the TPS rested on 2 principles, modern-day Lean is based on a 5-step process.
1. Specify value from the customer’s perspective
When building Lean processes, the first step is to think from the customer’s point of view.
You want to create a product that solves at least one problem for your customer.
What problem is that, exactly?
What does your customer have to do during their day that makes them wish there was an easier way?
Among the potential solutions to that problem, some of them have value — that is, they’re useful enough that the customer would pay money for them.
What would your ideal customer believe is worth paying for?
Remember the old maxim: “customers don’t want to buy a quarter-inch drill; they want a quarter-inch hole.” The customer’s definition of value depends on their own needs.
So how can you find out what your customers need?
It starts with having the right technology.
This is the staging-mondaycomblog.kinsta.cloud customer relationship management (CRM) template.
With a little customization, this template can schedule meetings with your users, track the stage of each user relationship, and record the lessons you’re learning about how your market defines value.
To get an accurate picture of your potential customers, you’ll need to use every weapon in your arsenal: surveys, interviews, online data gathering, and more.The staging-mondaycomblog.kinsta.cloud CRM can also integrate with the other apps you use to communicate with your customers, like Outlook, Slack, and Zoom.
2. Identify all steps in the value stream
In step 1, you discovered what kind of solution your customers deem valuable.
For Toyota in the 1950s, it was a hand-built car that felt personal instead of mass-produced. For you, it could be an app, subscription software, a piece of hardware, or a disposable good.
In step 2, you need to map out your value stream: the sequence of steps that leads to the production of your valuable product.
You can illustrate your stream using the staging-mondaycomblog.kinsta.cloud software development roadmap, as shown below:
Once you’ve identified the steps in your value stream, you might discover some that do not actually create value themselves.
Maybe one of your managers has to approve every new feature.
If that doesn’t serve a clear purpose, it’s an example of waste. Waste is the mortal enemy of a Lean workplace — your job is to cut as much of it as you can.
Not all waste in your value stream can be cut. Some work doesn’t directly create value but can’t be eliminated.
In those cases, all you can do is reduce it as much as possible through automation, integration, and other technology.
But if waste can be cut and doesn’t create value, Lean puts it on the chopping block.
3. Place the value-creating steps in a tight sequence
By this point, there should be no steps left in your value stream that don’t either directly contribute to creating value for your customers or support the creation of value by other parts of the company.
Your next step is to figure out how close together you can place them.
One of the 3 key objectives of Lean methodology is to obtain the shortest lead times. From the moment the customer discovers a need to the moment you fulfill it, as little time should pass as possible.
To do this, you need to make sure your steps follow in a smooth sequence that makes sense to everyone involved.
Lean experts call this “creating flow.”
Start by illustrating your value stream using the staging-mondaycomblog.kinsta.cloud work calendar.
With a complete image of your workflow, you can see where you waste time.
Does one department have much more or less work than the others? Are some functions allotted too much time or not enough? Is there anywhere you can break down a phase into multiple smaller steps?
Software development philosophies like Agile, and their related frameworks like Scrum, can be great inspirations for creating flow — though they aren’t identical to Lean, as we’ll discuss in a moment.
4. Ensure customers can pull your value as often as they need to
“Pull” is another crucial concept for understanding Lean principles.
Lean workplaces are built around eliminating waste. But some managers occasionally go overboard, cutting out so much that they can’t deliver value when a customer requests it.
Inventory-based systems are a good example. The owner of a grocery store might reduce inventory to avoid losing money when goods spoil. But if they cut out too many perishables, customers can’t buy the goods, and they’re losing money anyway.
The key to finding balance here is to eliminate forecasts from your workflow. In a pull system, customer demands are king — no work is started if a customer hasn’t requested it.
A customer requests manager, like the one from staging-mondaycomblog.kinsta.cloud pictured below, can be the cornerstone of a pull system.
With this template, everybody involved in your value stream can see every customer request. Every customer need can pull value from your value stream in real-time.
5. Seek perfection
Lean production is an endless cycle. Never forget kaizen: “constant improvement.”
The 5th and final Lean principle is to repeat steps 1-4. Every time you’ve updated your processes so customers can pull value in real-time, evaluate how far you’ve come, then start over from the beginning.
How can you eliminate even more waste? Can you get the steps in your value stream even closer together? How can you evolve to meet your customers’ needs even more efficiently?
There’s a staging-mondaycomblog.kinsta.cloud template for this step, too: our sprint retrospective.
It’s designed for Agile, but adapting it to Lean isn’t hard. In fact, flexibility is the whole point of staging-mondaycomblog.kinsta.cloud.
With this template, you can build a retrospective that your whole organization can see, understand, and interact with.
Kaizen doesn’t work unless it becomes a pillar of your organizational culture. And making high-level cultural changes starts with the right tools.
What is unique about Lean?
Lean is often compared to other process improvement tools, methodologies, and frameworks. How is it different from 4 of the most popular?
Lean vs. Agile
Both Lean and Agile are focused on shortening lead times as much as possible in order to create more consistent value for the customer.
They’re also both highly concerned with people — both customers and employees. The customer’s needs and the employee’s capabilities form the basis of both an Agile process and a Lean pull system.
The main difference is the type of process they target. Agile focuses on development — creating a new product from scratch.
Lean focuses on producing a project that’s already well-defined — though there may be some room for adjustment, as described in step 1.
It’s possible — and common — for a company to use Agile methodology for one function and Lean thinking for another.
Lean vs. Scrum
Scrum is a framework used to put Agile philosophies into practice.
Both Scrum and Lean focus on providing value to the user. And they’re both hostile toward excessive planning on the front end.
However, there are differences. Scrum originated in software development, while Lean has its roots in manufacturing.
As such, Lean is generally better for companies that produce and sell existing products, while Scrum serves companies that develop new products from scratch.
Lean vs. Six Sigma
Six Sigma is a manufacturing strategy developed in the 1980s. Its name comes from statistics: adherents aim for a failure rate of 6 standard deviations — or sigmas — below the mean.
That means that the process should permit no more than 3.4 errors for every million units produced.
Because both methodologies are focused on industry, Six Sigma is more like Lean than either Agile or Scrum. But they have different goals.
The goal of Lean is to reduce waste, while Six Sigma’s goal is to reduce variations between products. In other words, process control vs. quality control.
Like Lean and Agile, Lean manufacturing and Six Sigma can coexist, and often do.
Lean vs. Design Thinking
Design Thinking is a human-centered design approach. It’s about developing products by starting from the user’s perspective and using that point of view to re-contextualize the problems being solved.
In that way, it’s a lot like the first step of Lean — defining value from the customer’s perspective.
However, like Agile, it’s more focused on development than production.
Lean and Design Thinking can go well together, but combining them only makes sense if you’re starting with a problem, not a product.
What are the best Lean tools?
In the 5 principles section, we touched on several staging-mondaycomblog.kinsta.cloud templates that make it easy to implement Lean processes. Well, those aren’t the only ones.
We built staging-mondaycomblog.kinsta.cloud as a “Work OS” for the modern office. Above, you can see an example project management workflow.
With templates, automations, and integrations, you can build whatever workflows you need — whether you’re Lean, Agile, both, or something else entirely.
Lean principles in your workplace
Lean isn’t just about removing parts of your process. It’s about improving all of them.
staging-mondaycomblog.kinsta.cloud gives you a holistic overview of all your processes, so you can pursue kaizen in the way that works best for your team.
Think Lean sounds right for your business? Check out what we can do.
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