Lean Management

The Five Fundamental Principles of Lean Thinking

Dr. James Womack has developed five fundamental principles of lean thinking:

1. Define value in the terms of the customer.

2. Identify the Value Stream.

3. Make the Process Flow.

4. Pull Value from the Customer.

5. Pursue Perfection

Define Value in Customer's Terms

Define value in the customer's terms. Value must be defined for a specific service or product. Value means meeting customer needs, prices, and be available when needed. Another way to define value is: What are the things customers are willing to pay more for?

Identify the Value Stream

"The value stream is the set of all the specific actions required to bring a specific product (whether a good, a service, or, increasingly, a combination of the two) through the three critical management tasks of any business: the problem-solving task running from concept through detailed design and engineering to production launch, the information management task running from order-taking through detailed scheduling to delivery, and the physical transformation task proceeding from raw materials to a finished product in the hands of the customer." (Lean Thinking, Womack and Jones, p19.)

The Three Types of Process Steps in The Value Stream

There are three types of process steps in the value stream:

a. Steps that definitely create value such as material transformation.

b. Steps that are currently necessary but create no value, such as inspection.

c. Steps that create no value and that can be eliminated, such as waiting.

Organizations must first know what their value streams are and have the capability to classify the value stream process steps

Make the Process Flow

Once value is defined, the value stream is known, and wasteful steps are eliminated, the focus becomes making the value-added process steps flow. Information and material should never stop moving.

The first step is to focus on the ideal process for providing...