Lean methods consistently show staggering results across many sectors. A famous example of this is Harley Davidson. Facing bankruptcy in the early 80’s, Harley Davidson’s CEO decided to implement lean practices in order to turn things around. In a few years, Harley Davidson went from turning inventory twice a year to seventeen times per year, increased US revenues by eighty percent, and increased their operating profits by $59 million.
Results like these are common when lean principles are intentionally applied. In fact, lean results are most impressive and sustainable when businesses understand that lean is a journey of continuous improvement. Lean rules and principles enhance daily operations by challenging the way work is currently completed, how the work process is designed, and how value is placed on products and services.
Rules of Lean
There are four simple rules in the lean process that help organizations enhance their daily operations.
- Every activity should be structured the same way. Creating identical activity structures helps make the process repeatable, exposes variations in output, and fosters innovative thinking.
- Customers should have clear channels of connection to the supplier. Eliminating ambiguity and creating a common understanding of requests creates an environment of customer satisfaction and service. (This applies to internal and external customers)
- Every flow path should be analyzed for simplicity. Often, flow paths include extra unnecessary steps that create confusion and encourage errors. Simple and specific flow paths are easier to follow and help to identify and reduce errors or defects.
- Improve through experimentation. This last rule benefits the organization by enabling an environment and culture of lifelong learning.
Principles of Lean
The five leading principles of lean provide a strong foundation to help businesses grow and thrive using lean tactics.
The first principle is to gather information directly from where the work is done in order to learn the true facts and engage the people involved in the process. However, before any changes are made, the second principle requires a shared vision of the goals and objectives, as well as the processes and tasks that achieve them. Only when everyone understands how things work and what needs to be changed will the organization be able to drive towards meaningful growth.
Creating systems around this newfound knowledge is the next step. The third principle focuses on creating systems to identify and deal with problems in the process, and the fourth principle focuses on creating systems to identify and deal with waste in the process. Both of these principles posit that these new systems will lead to more effective problem solving, productivity, and content quality.
These four principles speak to the last one: Create a learning organization. Learning where problems come from, how they are created, and experimenting with systems that will quickly identify and solve those problems is at the very core of what it means to be a lean organization.
The Bottom Line
The bottom line for lean’s effectiveness is this: It creates a continuous learning environment that easily adapts to changing customer needs and positively impacts the bottom line, employee engagement, and customer satisfaction.