Lean Systems Thinking: Definition & Example

Lesson Transcript
Instructor: Ashutosh Juneja

Ashutosh has over 18 yrs of exp. in managing business & IT teams. He holds a Bachelors degree in Electronics Engineering and a Masters degree in Information Systems.

In this lesson, you will learn the concept of lean systems thinking. You will understand the lean principle which helps in achieving goals and objectives of an organization. A few examples are also presented.

Lean Systems Thinking

Lean systems thinking is a business methodology aimed at understanding how to organize human activities in order to deliver more productivity to the society and value to individuals while eliminating waste. The term, which was coined by James Womack and Daniel Jones, aims at creating a unique lean enterprise that sustains growth by aligning customer satisfaction with employee satisfaction. It suggests that this satisfaction leads to an optimal and profitable production or delivery of goods and services while minimizing over-expenditures to customers and suppliers and saving the environment.

It bases its ideology on the fact that if an enterprise trains employees to identify and quantify time and effort wasted on their job, and maximizes it, the quality outcome is less expensive, and the employee develops competency and teamwork.

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  • 0:00 Lean Systems Thinking
  • 0:53 Systems Thinking Methodology
  • 1:32 Linking Goals and Actions
  • 3:03 Examples
  • 4:41 Lesson Summary
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Systems Thinking Methodology

Peter Senge, an American scientist, shared his approach towards systems thinking. According to him, the learning organizations are the ones where people nurture their thinking ability to create outstanding results. Such organizations adapt quickly to customer needs and are able to excel in their fields.

According to Senge, systems thinking focuses on how an individual interacts with the system. It does not focus on the individual in an organization, but rather it focuses on the individual's interaction within the organization. Having different points of view from different people about a system allows new ideas to remove waste from the system. He insisted on having a collective intelligence approach to work differently.

Linking Goals and Actions

The first step in the lean systems thinking is driving out waste so that all work adds value and serves the customers' needs. There is a need to evaluate value-added and non-value-added steps in every process as to achieve this purpose.

According to Womack and Jones, these five key principles are used to link lean thinking with its goals and actions:

1. Value

It means the customer's need for a product or a service. Value can be the price point of a product or a timeline for a delivery.

2. Value stream

After determining the value, one must prepare the value-stream mapping by determining all the actions taken by a product or a service in any process. It's similar to preparing a step-wise flow of a product or a service after removing the waste (unnecessary steps) in the process.

3. Flow

After removing the waste from the value stream, the next step is to smoothen the process flow towards the customer. This will ensure the flow is free from any delays or interruptions. It improves the time to market to the customer.

4. Pull

This involves 'just in time' manufacturing, which means delivering products as needed. Customers can 'pull' the product as needed, so there's no need to build products in advance and create expensive inventory. This saves money to the manufacturer.

5. Perfection

Lean isn't a one-time process, but rather it's a continuous process. All the above steps will help in making lean thinking a part of organization's culture. A continuous effort is required from every employee to perfect a system to get the maximum benefit.


One can observe the examples of lean systems thinking in the following industries:

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