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Lean Management - Long Outdated or Cutting-Edge?

Lean management is known to almost everyone in industrial companies, many have daily contact with it. In mechanical and plant engineering and the automotive sector, it is almost a must to have implemented "Lean" in the company. Lean management has also long since found its way into non-manufacturing companies. And yet, when it comes to the questions of what the goals are, what exactly it means when a company is "lean" and how it shapes everyday work, the answers are still very different and sometimes meager. In a series of newsletter articles, we would therefore like to present the most important basics of lean management and show why it is indispensable for so many companies.

In our first article, we would like to clarify the question of why lean management is still relevant today. To do this, we need to go back in history a bit and look at where lean management came from and what its goals are.

Emergence "out of necessity”

Lean management originated in Japan, or more precisely, the Toyota production system has its roots there. After the Second World War, Japanese car manufacturers were faced with a great challenge: Western car manufacturers were growing strongly, and with assembly line production, cars could be manufactured at great speed and low cost. Japanese producers could not keep up, their production was not modern enough to keep up with the other manufacturers in terms of costs and lead times. Battered by the Second World War, they also did not have enough money to buy new, technologically advanced equipment or large stocks. Instead, they had to find other solutions, especially Toyota, to keep up with the world leaders. Instead of purchasing new equipment, Toyota focused on optimizing existing production processes and material and information flows.

This was the birth of the Toyota Production System (TPS). TPS is designed to produce products of the highest quality, at the lowest cost and in the shortest possible time. To achieve this, TPS constantly aims to consistently avoid Muda (waste), Mura (imbalance) and muri (overload).

So, in times of crisis, a company had to get creative, focus on what existed and get the best out of it, even if resources were limited - a challenge that many companies are facing right now.

One of the guiding principles in Lean Management is: problems are unrealized treasures. The crisis in Japanese is called Ki-Ki. If you look at the individual parts of the word, you find the terms "catastrophe" and "opportunity"; Lean understands the crisis as an opportunity. The current time means a crisis for many companies. Some will fail, others will emerge stronger than ever. Is Lean one of the decisive factors here?

Wanting to understand the recipe for success

While Western production systems, such as Ford and Taylor, became less successful as market conditions changed, Toyota became more successful. Managers, engineers, and production specialists from all over the world visited Toyota in Japan to understand "the Toyota Way" of production. To summarize the philosophy and tools of TPS, the international experts created the term "Lean Management".

The main purpose of lean management is to add value to the customer based on their actual needs by optimizing resources. The aim is to avoid wasting time, effort, or money by identifying each step in a business process. Then, those steps that do not add value are revised or cut out. For this, all processes are aligned according to five key elements: a continuous flow and a steady pace ensure calmness in the work system; the pull principle avoids overproduction and inventories; the zero-defect principle prevents costs from rejects and rework, optimal quality is promoted; besides lean culture and lean leadership ensure the holistic application and pursuit of lean management.

Lean management as a success factor

Lean management is certainly not the newest philosophy in the corporate world, but it is still far from obsolete. In fact, with the current economic and corona crisis, it could not be more topical. To successfully emerge from the crisis, companies need to be creative in finding solutions, and they need to adapt quickly to changes and challenges. This is not something that one manager can do alone; the entire team must pull together. It is necessary to think around corners, to turn entrenched standards upside down - for the better. 

Producing products and services of high quality, at the lowest possible cost and in the shortest possible time is even more important in times of crisis than in economic highs. Because lean management is more than just the application of various tools from the method box, it can be used to achieve a turnaround in adverse times. This is because lean is a holistic approach that has a lasting impact on the mindset of the entire organization and turns them into daily problem solvers. Challenges are not shrunk from but used to become better. It is a transformational method to change organizations. If that is not what is needed now, then when?

Curious now? You can look forward to our next article on lean management. In the next newsletter, we will discuss lean leadership, its understanding of leadership and core ideas, as well as how lean leadership can look in daily practice.


Shari Widmann
Consultant I IMIG Germany

For further information please contact us either by mail: marketing@imig.com or by phone: +49 7152 928 460.

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