What is lean? Lean methodology and the five lean principles

What is lean methodology?

Lean methodology is a set of principles and methods for improving work by removing waste. Waste is any activity that uses time or resources without adding value for the customer.

The Lean Enterprise Institute describes lean as creating needed value with fewer resources and less waste. It pairs that with constant experimentation toward perfect value with zero waste.

In practice, lean asks three questions of any process. What does the customer value? Which steps create that value? What gets in the way of those steps flowing smoothly?

Who invented lean?

No single person invented lean. It grew out of the Toyota Production System, which Toyota built up over several decades. Toyota describes that system as resting on two pillars: jidoka and just-in-time.

Jidoka traces back to Sakichi Toyoda, whose looms stopped automatically when a thread broke. It means building quality in by stopping at the first sign of a problem. See the jidoka page for how it works today.

Just-in-time was developed by Kiichiro Toyoda. It means making only what is needed, when it is needed, in the amount needed.

Taiichi Ohno, a Toyota production engineer, turned these ideas into a working system on the shop floor. Eiji Toyoda, who later led the company, backed that work. Ohno's book Toyota Production System describes the result in his own words.

The word lean came later. John Krafcik used the term lean production in a 1988 Sloan Management Review article, "Triumph of the Lean Production System". He was a researcher on MIT's International Motor Vehicle Program at the time.

The 1990 book The Machine That Changed the World, by James Womack, Daniel Jones and Daniel Roos, brought the term to a wide audience. It compared lean production with traditional mass production.

In 1996, Womack and Jones wrote Lean Thinking. It took lean beyond car making and set out the five principles below.

The five lean principles

In Lean Thinking, Womack and Jones summed up lean in five principles. They are the usual starting point for any lean effort, and each one builds on the one before.

1. 1

   Value

   Define value from the point of view of the end customer, for each product or service family. Value is what the customer would willingly pay for. Everything else is a candidate for removal.

2. 2

   Value stream

   Identify every step that brings a product to the customer, from order or raw material to delivery. Sort the steps into those that add value, those that are needed for now, and those that can go. A value stream map is the standard tool for this.

3. 3

   Flow

   Make the remaining steps happen in a tight sequence, so work moves without waiting in queues or batches. Limiting work in progress helps, as the guide on why limiting WIP makes teams faster explains.

4. 4

   Pull

   Let the next step or the customer pull work, rather than pushing work forward on a forecast. Nothing is made until someone downstream needs it. Kanban is the common way to run a pull system.

5. 5

   Perfection

   Repeat the cycle, because every round of improvement exposes new waste. There is no finish line. This is the idea behind kaizen, or continuous improvement.

What counts as waste?

Taiichi Ohno grouped the waste he found in mass production into seven types. They are overproduction, waiting, conveyance, processing, inventory, motion and correction.

Many lean practitioners now add an eighth: talent that the organization does not use. The eight wastes page gives an example of each, from offices as well as factories.

Naming waste makes it visible. A team that can see waiting or rework on a board can start to remove it.

Core lean concepts

A few ideas come up again and again in lean. Knowing them makes the methods easier to follow. The glossary defines each term in more detail.

Value-added and non-value-added work. A step adds value only if it changes the product or service in a way the customer cares about. Lean aims to cut the rest.

Muda, mura and muri. Muda is waste, mura is unevenness and muri is overburden. Uneven work and overloaded people tend to create waste, so lean tackles all three.

Just-in-time and jidoka. The two pillars of the Toyota Production System: make only what is needed, and stop to fix problems at the source.

Gemba. The gemba is the place where the work happens. Lean leaders go there to understand a problem, rather than relying on reports.

Standard work and kaizen. A standard records the current agreed way to do a job. Kaizen improves it, and the improved method becomes the new standard.

Respect for people. Lean depends on the people doing the work to find and solve problems. Toyota names respect for people as one of the two pillars of the Toyota Way, next to continuous improvement.

The core lean methods

Lean has a large toolkit, but a handful of methods do most of the work. Each one links to a page with steps, a worked example and common mistakes.

Seeing the process: value stream mapping and the gemba walk, which means going to where the work happens.

Organizing the workplace: 5S and standard work.

Making work flow: kanban, takt time, heijunka and SMED for faster changeovers.

Building in quality: poka-yoke, andon and jidoka.

Solving problems: PDCA, A3, five whys and the fishbone diagram.

Aligning the organization: hoshin kanri, which links yearly goals to daily work.

The full library is on the lean tools page.

Types of lean

The same principles apply wherever work flows through steps. Each field has adapted lean to its own kind of work, and the names below are the ones you will meet most often.

Lean manufacturing applies lean to making physical products, where it started. The lean manufacturing guide covers the tools on the shop floor.

Lean office and lean service apply it to administrative and service work, such as approvals, order handling and customer support. The waste there is often waiting, handoffs and rework, hidden in queues and inboxes.

Lean healthcare applies it to patient care and hospital processes. Virginia Mason in Seattle began building its management system on the Toyota Production System in 2002.

Lean software development applies it to building software. Mary and Tom Poppendieck set out the approach in their 2003 book Lean Software Development. Teams use kanban boards, WIP limits and flow metrics.

Lean startup applies it to new products under uncertainty, through the build-measure-learn loop that Eric Ries described in The Lean Startup. The lean startup tools hub covers the software for each step.

Lean construction applies it to building projects, where the work moves between trades on site. Its methods include the Last Planner System, which plans work with the crews who will do it.

Lean, Six Sigma and agile

Lean focuses on flow and waste. Six Sigma focuses on reducing variation and defects with statistics. Many organizations combine them as Lean Six Sigma.

Agile shares lean's focus on short feedback loops and small batches. Kanban, in particular, came to software from lean manufacturing.

The guide to lean and Six Sigma explains the differences in more detail.

How to start with lean

Start with one process that matters to a customer and that the team can change. Walk it and draw it on paper first, as the guide on value stream mapping on paper suggests.

Pick the biggest waste you can see and run one small improvement with PDCA. Measure before and after, then hold the gain with standard work.

Make problems visible every day. A short daily huddle at a board, with clear owners for each issue, keeps improvement going after the first project.

Add software only when paper limits you. The lean manufacturing and lean management guides cover what to use, and when.