Learn about Japanese management philosophy – Lean Management

Lean Management is a concept of business management, based on maximizing the value for the customer while minimizing potential losses. In its assumptions, Lean Management focuses on full utilization of resources in an organization. The most important advantage of this concept is that it reduces the cost of business operations. Additional benefits are that it improves the quality of products manufactured or services provided, reduces inventory and improves the inventory turnover rate, and increases the productivity of the company. With this method, it is possible to get a product that is much more responsive to customer expectations and needs.
Lean Management also contributes to employee satisfaction. Employees will be able to identify with the success of the company through their involvement.

Lean Management goals

The basic assumption of the Lean Management concept is to achieve an efficient, well-functioning organization. The task of Lean is also to streamline key processes in the company and improve the quality of products and services.
This method is also aimed at ensuring the most satisfactory financial results, reducing inventories and production costs, shortening production lead cycles and acquiring new customers.
Proper use of this method allows you to create processes that require far less physical labor, less space, less capital, and less time compared to traditional business systems. Companies using this management concept are able to react and adapt to changes much faster.

Key principles of Lean Management

Striving for perfection

The basic premise of Lean Management is to strive for perfection by, among other things, adapting the company to current market conditions and creating clear organizational structures.

Importance of human resources

The goal of Lean Management is not only to flatten the hierarchy, but also to give more importance to human resources. Involving all employees in the change process and instilling a “Kaizen” spirit are important elements of Lean.

A systematic and continuous process of change

It should also be remembered that managing a company in accordance with the principles of Lean Management should be a continuous and holistic process. During this process complex changes will be systematically introduced concerning both structures and processes or roles in the organization.

Flexible organizational structure

To be able to implement Lean principles in the company, it must be characterized by a flexible organizational structure. It is also necessary to divide responsibilities and tasks, separate teams and small organizational units that will work on specific projects.

Elimination of muda

In its principles, Lean focuses primarily on valuable activities for which the customer will be willing to pay. All other activities are commonly referred to as waste (or muda). Sources of waste include: overproduction, excess inventory, unnecessary processing, unnecessary movement, unnecessary transportation, and waiting. Many experts add another source of muda – unused employee potential. The goal of Lean is to eliminate waste.

Willingness to make possible mistakes

When deciding to introduce the concept of Lean Management in a company, it is necessary to be ready to make possible mistakes. Without proper training or expert support, implementing Lean in a company can be difficult and very time consuming. Decisions made without prior analysis may cause mistakes and misunderstandings. A side effect may be discouraging employees from engaging in the change process. Additionally, the implementation of Lean can also contribute to an increased demand for skilled personnel. By doing so, lower-skilled employees may feel threatened.