Lean refers to a philosophy or practice that is applied to production or other aspects of business with the main goal of minimizing wastage without compromising the so-called product or value for clients and/or customers. Â The core philosophy of so-called lean organizations is to provide customers with value for their products for example with a lean approach or strategy in the business. Â In this way, all parts of a particular business process will be optimized to run more efficiently and with fewer resources and hopefully minimal waste.
The concept of lean organizations was first applied in the manufacturing and production processes. Â As part of Toyota’s strategy to streamline and optimize its production, the company created TPS or the Toyota Production System that basically focused on curtailing unnecessary expenses without having to affect the value provided for customers. From this manufacturing perspective, many organizations have adopted their own lean strategy in order to do more work with fewer resources. Â Through a lean manufacturing strategy or philosophy, companies will be able to have a better bottom-line in terms of operations cost without having to worry about coming up with a product that is consistent and highly-valued by customers.
For organizations to employ the lean principle, several “wastes” are identified in order to eliminate them in every process. This strategy is applied not only to the manufacturing industry but may also be used for ther business processes. Â Common wastes include basic business process items like waiting times and overproduction. Â In waiting times, steps in a process may not be taken because some parts may have to wait for another in order to proceed. Â If there is overproduction of goods, there is also wastage in the sense that goods will be stagnant in warehouses and will be waiting for customer demand before they are actually shipped out. Â Mismanagement of inventory and defects in the process also contribute to wastes that are to be identified and eliminated or minimized through a company’s lean strategy.