Lean management is a method of operating an organization that needs continuous improvement, a long term plan to work systematically, incremental changes in processes in order to improve productivity, efficiency and quality. The ultimate goal of lean management is waste reduction through maximizing customer value. To effect this business processing method, the knowledge of Lean tools principle need to be systematically applied. It’s implementation in a BPO setting will produce the desired output and help in robust process. Lean allow business to discover inefficiencies in their organization and deliver better value to customers
It is necessary to identify, prioritize and eliminate waste in the total value streams, instead of isolated points, creates processes that need less human effort, less resources, less space, and less time to make products and deliver services at far less cost and with fewer defects, compared with traditional business systems. There are five basic principles of lean management:
1. Defining Value:
Every company must perceive what worth the client value upon their products and services. It is this value that determines the quantity of cash flow the client is willing to pay for the product and services. Target cost accounting focuses on what the client is willing to pay for certain, features, products and services. From this the required budget of those products and services is determined. It’s the company’s job to eliminate waste and get benefitted from the business processes so that the customer’s profit can be achieved at great revenue for the company.
2. Map the Value Stream
The second Lean principle is to identify and map the value stream. During this step, the goal is to use the customer’s price as a point of reference and determine all the activities that contribute to those values. Activities that don’t add value to the client is considered waste. The waste is broken into two categories: non-value added but necessary and non-value & unnecessary. By reducing and eliminating spare processes or steps, one can make sure that customers are getting exactly what they require while at the same time reducing the cost of producing that product or service.
3. Create Flow
After removing the wastes from the value stream, the subsequent action is to confirm that the flow of the remaining steps to run smoothly without interruptions or delays. Some strategy to make certain value-adding activities flow smoothly include: breaking down steps, reconfiguring the production steps, leveling out the workspace, making cross-functional departments, and training employees to be multi-skilled and adaptive.
4. Establish Pull
The method of making sure that nothing is made ahead of time and builds up work-in-process inventory that end the synchronized flow is to use a pull approach. Inventory is considered among the largest wastes in any production system. A pull-based system allows delivery in-time and manufacturing where products are created at the time when they are needed and in just the quantities needed. Pull-based systems are always created from the requirement of the end customers. One can ensure that the products produced will be able to satisfy the needs of customers by following the value stream and dealing backwards through the production system.
Wastes are prevented through the achievement of the primary four steps: 1) defining the value, 2) mapping value stream, 3) creating flow, and 4) adopting a pull system. However, the fifth step of following perfection is the most vital among all of them. It creates Lean thinking and continuous process improvement a part of the organizational culture. Overall quality management is a strategy to work systematically and continuously to remove the root causes of poor quality from the production processes so that the plan and the deliverable products are moving towards perfection. Each employee in the business need to strive towards perfection whereas delivering products based on the customer needs. This relentless pursuit of the perfect is key attitude of an organization to find ways to get better every day.