Lean Management Guide for Beginners

Customer satisfaction is the ultimate goal of any organisation. Satisfied customers prefer your organisation over your competitors. It also elevates your brand image and loyalty. 

The crux of the matter is customer satisfaction depends on the timely delivery of good quality goods. However, the distinguishing factor is the price of a good or service. Price structure sets you apart from your competitors and is the point of difference from your competitors.

Cost reduction is possible if the processes and performance are optimized. Reduced costs directly reflect in your profit margin. This benefit can then transcend to your customers.

The cost of production reduces when waste generated during the production process is eliminated.

The Toyota Production concept or the Waste Reduction or waste management in production philosophy was developed by the Toyota Motor Corporation. 

The idea was to preserve the value with less work and zero waste. The Toyota Production System (TPS) was established on two factors – “Jidoka” (automation with a human touch) and “Just-in-Time”. The aim was to reduce or eliminate defects in production and produce goods as required. These ensured a continuous and smooth flow of production.

With Jidoka, the equipment stops when a problem arises. It helps in easy monitoring of the process and solving the issue right away. 

 Just in time means making only “what is needed, when it is needed, and in the amount needed”. 

According to the American Society for Quality, the definition of Lean Manufacturing is “Lean is defined as a set of management practices to improve efficiency and effectiveness by eliminating waste. The core principle of lean is to reduce and eliminate non-value-adding activities and waste.” 

The 8 wastes of lean manufacturing are – 

  1. Defects
  2. Overproduction
  3. Waiting
  4. Non-utilized talent
  5. Transportation
  6. Inventory
  7. Motion
  8. Extra-processing

The TPS has given a few fundamental principles that the organization can follow to eliminate waste. 

Lean manufacturing or lean management system has 5 guiding principles –

  1. Identify value – It refers to understanding the perceived value of the customer. It means the value a customer places on any company’s products or services and the amount he is willing to pay. 

This is why companies must eliminate waste to decrease the cost of production and improve their profit margin so that the product price is competitive.

  1. Map the value stream – each step involved in the production process is mapped using a flowchart. It notes the flow of materials and information at each step. The flowchart shows how value is added to the product throughout the process. It also helps to identify the areas that do not add any value and eliminate those activities or steps.
  2. Create flow – After eliminating the unwanted steps, the next step is to create a workflow. Ensure that the value-adding steps run smoothly. A smooth workflow includes activities like breaking down the steps, workload management, cross-functional teams, training & development, etc.
  3. Establish pull – Out of the push and pull concepts lean management relies on the pull concept. It refers to making products on demand. It limits the inventory WIP (work-in-progress) from piling up. 
  4. Seek perfection – The TPS philosophy also introduced another concept of lean improvement or continuous improvement. The company should aim for a continuous improvement of processes. The company and its employees should aim at achieving perfection. 

“The most dangerous kind of waste is the waste we do not recognize.”–Shigeo Shingo

A strong focus on improving customer-perceived value through lean manufacturing benefits the company holistically. It helps to not only identify and eliminate waste but also incentivizes the company to aim for perfection, improve profitability and enhance its brand image.

Understanding these basic principles of quality management is crucial if one wants to succeed in manufacturing.

Hence MIT School of Distance Education (MITSDE) and MIT Skills bring to you a PGDM Operations & Lean Six Sigma (Green + Black belt) course.

The bundled course gives you a holistic approach to imparting necessary skills. The  21-month operations management course with Lean Six Sigma (Green + Black belt) focuses on the basics of operations management, gives hands-on training in analytical tools, provides expert guidance and throws light on the global best practices.

MIT Skills is a constituent of MIT Pune and imparts skills-centric industry-relevant knowledge to ensure enriching professional advancement and increased employability.

The course imparts the following learning outcomes- 

  • Basic Concepts, importance and Need for Operations Management
  • Product Lifecycle Management (PLM)
  • Global operational excellence practices
  • Principle of lean management
  • Application of Lean Concepts
  • Manage team dynamics
  • Project prioritisation matrix
  • Work with multiple levels
  • Hypothesis Testing

This comprehensive course is guaranteed to bridge the gap between the required skillset and industry demands and make your dream job a reality.