Lean Methodology: The 5 Principles of Lean Methodology

Lean methodology is a set of practices and principles aimed at the optimization of business processes. The two overarching pillars of lean thinking are continuous improvement and respect for people. In practice, lean methodology aims to create as much value for the customer as possible, while simultaneously fostering an efficient workplace that values respect and teamwork. Lean manufacturing provided the original framework for the application of lean practices. Today, lean methodology is applied across many fields, from healthcare to software development.

The history of lean methodology originates from practices initiated by Toyota in the 1930s and 1940s.

• Transition to automobiles: In 1934, Toyota entered the automobile industry. Inspired by Henry Ford’s workflow innovations and Frederick Winslow Taylor’s book, Principles of Scientific Management, Toyota engineers Shigeo Shingo and Taiichi Ohno sought to eliminate waste by scaling back their production processes to the bare essentials, aka operating “lean.” This lean approach allowed the fledgling automaker to lower costs and keep profit margins high.
• Continuous improvement: In 1936, the government commissioned Toyota to create a line of trucks. After encountering numerous production problems with this new line of vehicles, the company implemented problem-solving initiatives inspired by the Japanese concept kaizen, or continuous improvement.
• Toyota production system: This process-improvement strategy would become the key operating principle of the company’s manufacturing process. Known as Toyota Production System or TPS (in 2001, it became known as “The Toyota Way”), this revolutionary management system would lay the foundation for lean management, lean thinking, and lean methodology.
• Post-WWII Innovation: In the aftermath of WWII in Japan, the practice of lowering costs via mass production and the creation of economies of scale was no longer as straightforward; Ohno recognized the need for scheduling production based on actual sales rather than sales targets. This “pull” rather than “push” method led to less overproduction and became a key component of lean manufacturing.
• “Lean” gets its name: Although the principles of lean methodology had been applied to manufacturing by the late 1930s, the term “lean” had yet to surface. In 1988, John Krafcik coined the term in an article titled, “Triumph of the Lean Production System.” In 1990, Daniel Roos, Daniel T. Jones, and James P. Womack would write the seminal book on the subject titled The Machine That Changed The World. Today, the application of lean methodology can be seen in industries outside of manufacturing, including healthcare and software development.

The pillars of continuous improvement and respect for people are distilled into five main elements, which function as guiding principles for how to create a lean system.

1. 1. Value identification: The foundation of lean methodology is the elimination of waste from the workflow. In other words, get rid of anything that does not add value to the work process. Any inefficiency is considered waste. Anything that benefits the customer is considered valuable. This includes anything that directly meets the customer needs, as well as operations that are geared toward customer value (i.e. quality assurance, customer service, etc.).
2. 2. Value stream mapping: Once you’ve identified the value produced by your team members, the next step is to use a lean management tool to visualize the value stream for your customers. A common lean tool is called a Kanban board. Kanban boards visualize the entire lifecycle of a product or project.
3. 3. Efficient workflow: The implementation of lean methodology involves creating a smooth flow of work. This helps reduce different types of waste in order to deliver the product to the customer in a timely manner. When establishing an efficient workflow, look for bottlenecks that impede the product development process.
4. 4. Pull system: A pull system involves only creating new work when there’s customer demand. Instead of pushing new work to team members who are actively working on tasks, a pull system queues tasks until team members are ready for more work. This is a lean method for reducing overproduction and shortening cycle time—the time it takes team members to complete a task.
5. 5. Improvement: Of all the lean concepts, continuous improvement reigns supreme. Lean organizations are hyper-focused on ensuring everything they do creates greater value for the customer. This means evaluating performance, striving for perfection and including teams at all levels in the improvement cycle. There are a number of project management techniques for ensuring that processes are continually evaluated to reduce inefficiencies and over-processing. Lean techniques include lean Six Sigma, root cause analysis, and the PDCA (plan, do, check, act) cycle.

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