Lean Management is a lean manufacturing philosophy based on the TPS (Toyota Production System).This system constantly strives to shorten the time-lag between the customers ordering the consignment to the shipment of the consignment by eliminating waste. In short, it means more production with less means. Any organization can benefit from this philosophy. As long as an organization can identify a value stream from the time a customer orders a product till the time he actually receives it, these principles of management can be applied so as to eliminate waste.
Client awareness is one of the main reasons for this paradigm shift amongst manufacturers. Customers want more and more value for their money, and seek better and a more superior quality product. Also, the customers seek customized variants and shorter lead time in time delivery.
Share-holders too have become wiser over the years. They too seek a larger share in the profits; a higher return on their investments. And at the same time, they want more new products to be introduced at even shorter intervals!
Today being a buyer’s market, the rules of the game are being re-written so to say. Manufacturers, the world over, are vying and trying to out- do each other to become more efficient and competitive in the tough market that exists today.
The parameters to measure efficiency and performance have changed. To quote a few instances;
Manufacturers have learnt the lesson the hard way! They have learnt that the only way to survive in this ‘dog-eats-dog’ game would be to abandon the age old procedures. They constantly strive to improve upon themselves, and provide more and more value to the customer. The manufacturers have realized, albeit late, that for them to survive in this rat-race they not only will have to provide ‘value for money’, but also strive to improve the following three aspects:-
At the same time, they have to strive to cut down on over-head costs and the profit-devouring price escalation.
Lean Management relies on an integrated system to facilitate team interaction and track progress through a strategic improvement cycle.
In Lean Management, value of a product is always determined through the customer and not through the company. What the customer defines as value may not be what the company perceives as value. And in the long run, it has been proven that the customer is ‘always right’!
The term ‘lean’ was coined by a research team headed by Jim Womack at MIT’s International Motor Vehicle Program during the late ‘80’s.Womack is of the opinion that managers and management professionals who embark on ‘lean’ transformation should consider the following three principles:-
