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Lean Management Principles

Instructor: Kasandra Lane
Lean management is when a company strives for constant improvement while considering their customers' values. In this lesson, we will discuss the importance of lean management and the core principles that help companies thrive when using this style of management.

Why Lean Management?

Have you ever fallen in love with a product, but discovered that it was impossible to find when you needed it? Lean management is a management style that focuses on the customers while eliminating any waste within the business process. In other words, lean management is about keeping the customers happy.

Lean managers push to improve products and production times by eliminating waste. Lean management's main focus is how to make the best of any and all changes while focusing on the needs of customers. In this lesson, we are going to concentrate on the core values, or principles, of lean management.

Lean Management Principles

As we discuss the principles of lean management, keep in mind that the main goal of these principles is the value of the customers. When a company centers their business plan on the values of the customers, they can ensure their focus has little to no wasted time or resources.

  1. Know your customers: Know and understand the values of customers. By knowing your customers' wants and needs, you will keep them happy and gain new customers, as well. Customer satisfaction is the key to success in any business.
  2. Identify each step: Identify each step in the business process, consider each one and remove steps that do not meet the values of customers. This step is where we begin to slowly get rid of waste. This means improving the production of products by eliminating unnecessary steps to improve production time.
  3. Re-evaluate: Re-evaluate the business process with corrected steps. Once the process has been corrected, make sure you find customer value in each step of the process. This will ensure the business is not wasting any time or resources on unnecessary steps.
  4. Monitor and evaluate: When each principle is met, this will help ensure that customer values are met. This will also keep wasted time at a minimum and eventually eliminate it.

Lean Management Principles in Practice

Before we make a connection with each principle, consider this scenario. Say an electronics retailer produces a one-of-a-kind tablet accessory. It's very popular with their customers. However, one day the company gets bad news: this product is going to be unavailable for some time due to production costs. What can the company do to instill lean management principles to improve production of this product?

  • They could cut production time by eliminating unnecessary production steps (waste).
  • This would not only make the customers happy, but the company as well, because they would have cut costs on their side, which in the long run increases profit and customer satisfaction.

With that being said, how can you instill the lean management principles within your business?

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