Lean Thinking

Lean is a concept that is most often associated with manufacturing.  But the concept of lean, delivering a service more efficiently, either by producing more or do more with fewer resources. The goal is to produce value while eliminating waste.

Value is defined as something the customer is willing to pay for. Value-adding activities transform or enhance information or materials into an end product that the customer wants. Non-value adding activities use up resources, but do not contribute to the value of the end product from the perspective of the customer. Examples of waste include overproduction, defective products, excess motion, transportation, and waiting.

Lean principles focus on creating value by:

• Defining value from the perspective of the end user
• Determining a value system by:
• Identifying the steps that create value
• Mapping the value stream
• Challenging each step by asking why? five times 
• Lining up value and creating rapid, sequential steps
• Creating process flow
• Pulling parts, products, and information from customers
• Continuously improving
• Reducing and eliminating waste

The "Waste" reduction process begins with the question "What can we do to improve?" Some answers may include:

• Stop the flow of defective products at their source
• Flow processes together
• Eliminate excess material handling
• Eliminate or reduce pointless process steps
• Reduce wait time (for parts, orders, other people, or information)

Lean suppliers are able to respond to the changing needs of their customers.  Their prices are generally lower because of the greater efficiency of their lean processes which results in a higher quality product.

Lean procurement processes such as e-procurement and automated procurement leverage the world wide web and systems that remove the human (error) element from processes.

Lean customers know their business needs and can specify their requirements. They expect high levels of quality and delivery performance. They value speed and flexibility and are always looking for ways of continuously improving their total supply chain to reduce costs. Lean customers expect value from the products that they purchase.

Lean workers know that improving processes will make their lives less complicated and more successful by reducing wasted effort and creating flow.

Lean concepts mark the path forward for corporate survival and success. Companies that want to succeed need to adopt lean processes, and work add value and eliminate waste at every level of the organization. 

Adapted from: http://bit.ly/c5b6Vv