What if every element of the processes you engaged in added value, eliminated waste, and maximized efficiency? That’s the power of lean thinking, and by embracing it, you can transform how you work and how things are done, even within a small business operation.
What is Lean?
Lean is a business management framework that teams and organizations use to maximize value by streamlining workflows and eliminating waste. Its practices and principles help companies improve operational efficiency, empower people, elevate product quality, and deliver optimal value to customers. Lean’s versatility means it can be applied to various industries, processes, projects, and lines of business, and, yes, businesses of any size.
History
Like Kaizen, Lean can be traced back to the development of the Toyota Production System in post-war Japan. However, its systematic development gained traction in the 1980s when Lean principles gained popularity in the United States, particularly in the manufacturing sector.
By the turn of the century, Lean principles experienced wider adoption in various industries, including services, healthcare, and software development.
Key principles
Lean focuses on identifying and trimming waste from processes, resulting in reduced costs, improved efficiency, and better customer value. Its core tenets include:
Value Creation: Define value from the customer’s perspective and deliver that value efficiently.
Waste Elimination: Identify and eliminate waste in all forms, such as human error, extended downtimes, unnecessary steps, excess inventory, and product defects.
Continuous Improvement: Aim for perfection (maximum value with zero waste) by continuously improving processes and incentivizing innovation.
People Empowerment: Drive employee involvement by equipping them with the right tools to identify problems and implement solutions.
Flow and Pull Systems: Facilitate smooth workflows in tight sequences to reduce delays and inventory costs. This helps to ensure that products and services reach customers at the right time.
Methods and techniques
To achieve its aims, the Lean framework provides well-defined methods and techniques, some of which are also used by other business philosophies like Kaizen. These methods include value stream mapping, continuous improvement, just-in-time, and 5S.
- Value Stream Mapping (VSM) allows organizations to evaluate the flow of resources and information required to create and deliver a product or service to the customer. VSM helps ensure that every step in the entire process actually adds value by eliminating waste and identifying opportunities for improvement.
- Continuous improvement is geared towards waste elimination and optimal productivity over time, facilitated by implementing Kaizen principles and techniques on a more systematic and broader scale.
- Just-in-Time (JIT) is an inventory management technique that aims to reduce waste and improve efficiency by receiving goods only as they are needed in the production process. This approach helps reduce inventory costs and the risk of overstocking.
- The 5S methodology is a workplace organization system that aims to improve productivity, reduce waste, and enhance overall workplace efficiency. Originating in Japan, 5S is widely used across industries around the world to help companies create and maintain a clean, uncluttered, safe, and efficient work environment.
Expected outcomes
Lean aims to deliver the following results and benefits:
Increased efficiency: By eliminating waste, businesses can reduce costs and improve productivity.
Improved quality: By maximizing value for customers, businesses can deliver high-quality products and services that meet customers' expectations.
Higher customer satisfaction score: Good quality services and reduced waiting times help improve customer satisfaction.
Increased profitability: Happy customers and optimized processes lead to greater productivity and higher profits.
How to implement Lean in a small business
So, how can small business organizations actually implement lean thinking in their operation?
1. Map your value stream
The first step is understanding your value stream. This means identifying every step in your process, from the moment a customer request comes in to the final product or service being delivered. But lean thinking asks a critical question at each step: Does this add value?
In lean terms, value is anything the customer is willing to pay for. Anything else? That’s waste. So, when you map your value stream, you can pinpoint inefficiencies. Maybe it’s a bottleneck in production or an unnecessary approval step in your workflow. The goal is to remove what doesn’t serve the customer or the process and focus on what does.
Value, in lean terms, is anything the customer is willing to pay for. Anything else? That’s waste.
For example, a hospital using lean might realize that the process for admitting patients is full of redundant paperwork and unnecessary waiting times. By streamlining those steps, they can improve both patient satisfaction and staff efficiency.
2. Engage employees in continuous improvement
Lean thinking isn’t a one-time project. It’s a culture. And a lean culture relies on the collective brainpower of every employee. When it comes to making operations more efficient, the people on the ground—those directly involved in the processes—often have the best insights into where improvements can be made.
Toyota, one of the pioneers of lean, implemented a system where employees are empowered to stop the production line if they notice an issue. They can make real-time suggestions for improvements because they are trusted to know the intricacies of their work better than anyone else.
Smaller organizations can implement this principle by involving employees in identifying waste and suggesting improvements to foster a similar environment. Regular meetings or, in more practical terms, feedback loops (referred to as kaizen events) can be used to capture and implement small, incremental changes. This collective effort builds a sense of ownership and drives innovation at all levels of the organization.
3. Apply the "5S" system
One of the core tools of lean thinking is the 5S system, a simple yet highly effective way to organize your workspace for maximum efficiency. The 5S stands for Sort, Set in order, Shine, Standardize, and Sustain.
- Sort: Remove unnecessary items from your workspace—whether it’s physical clutter or digital files. If it’s not essential, it’s a distraction.
- Set in order: Arrange tools and resources in a way that makes them easily accessible, reducing the time it takes to find what you need.
- Shine: Keep the work environment clean and orderly. A tidy workspace promotes efficiency and reduces the chance of mistakes.
- Standardize: Create standard processes for tasks so that everyone follows the same steps, reducing variability.
- Sustain: The most critical step! Make sure these practices become habits, so they are sustained over time.
By following the 5S system, companies not only create a more organized and efficient environment but also foster a sense of discipline and pride in the workspaces.
4. Focus on customer value with a pull system
Lean thinking prioritizes delivering what the customer wants when they want it—nothing more, nothing less. This is done through a "pull system," which contrasts with the traditional "push" approach many businesses still use.
A push system means you produce as much as you can, as fast as you can, then push it onto the customer, hoping it matches their demand. The result? Often overproduction, leading to waste.
In a pull system, production is driven by actual demand. You only produce what the customer has ordered or needs. This method minimizes excess inventory, reduces waste, and ensures that resources are used efficiently.
For example, a software company might use a pull system in development. Instead of building features that customers may or may not use, they focus on feedback and build only what is requested or will add real value to the user experience.
5. Create a culture of continuous learning
Lean thinking is not static; it’s a journey of constant improvement. To sustain lean, organizations must create a culture of continuous learning. That means training employees on lean tools and techniques and encouraging them to always look for ways to enhance processes and solve problems.
This can be done through regular workshops, on-the-job training, and sharing success stories of how lean improvements have positively impacted the organization. The goal is to instill a mindset where people are constantly asking, “How can we make this better?”
Explore more
To learn more about building a lean culture in your small business, check out our GoSkills resources on Kaizen principles and Six Sigma, both powerful frameworks that complement lean thinking and drive efficiency.
Better yet, check out our course - Introduction to Lean Six Sigma. It’s completely free and is designed to explain the fundamental concepts of lean and Six Sigma.
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