Entrepreneurs create a LEAN business model on canvas in order to identify strengths/weaknesses and solutions in their business.
Lean is a customer-centric methodology used to continuously improve any process through the elimination of waste in everything we do; it is based on the ideas of “Continuous Incremental Improvement” and “Respect for People.”
The basic principles of LEAN are:
- Focus on effectively delivering value to the customer
- Respect and engage people
- Improve the Value Stream by eliminating all types of waste
- Maintain Flow
- Pull through and demand management
- Strive for Perfection
The customer defines value or value-added with the following three conditions:
- It must transform the product or service by adding value
- The customer must be willing to “pay” for it
- It must be done right the first time
If we don’t meet all three of these criteria, then we have non-value-adding activities or waste.
The following are the wastes most commonly associated with LEAN:
- Transportation: Is there unnecessary (non-value-added) movement of parts, materials, or information between processes?
- Waiting: Are people or parts, systems or facilities idle — waiting for a work cycle to be completed?
- Overproduction: Are you producing sooner, faster, or in greater quantities than the customer is demanding?
- Defects: Does the process result in anything that the customer would deem unacceptable?
- Inventory: Do you have any raw materials, work-in-progress (WIP), or finished goods that are not having value added to them?
- Movement: How much do you move materials, people, equipment, and goods within a processing step?
- Extra Processing: How much extra work is performed beyond the standard required by the customer?
Behaviors of a LEAN Leader:LEAN leaders effectively exhibit the following behaviors every day. They know how the business serves the customer by:
- Understanding what customers want, need, and value, or what will thrill them
- Knowing how the business satisfies the customer
- Improving the effectiveness of how the business satisfies the customer
They build ability in the people through:
- Guiding problem solving — root cause, right problem, right resources
- Leading by example
- Asking open-ended, probing questions
They show a continuous improvement mindset by:
- Continually challenging the status quo
- Knowing that there is always room for improvement
- Understanding that the customer’s requirements change
They focus on process and results by:
- Obtaining results
- Ensuring that how the results are achieved is the most effective utilization of all resources
- Improving how the organization accomplishes results
They demonstrate an understanding of the value stream at a macro and micro level through:
- Knowing what the customer requires and how the value stream works
- Having knowledge of the overall value stream, including tributaries
- Asking questions when changes are made at the local level to ensure that the team understands how the change will impact the customer and the balance of the value stream
They create a culture to sustained improvement by:
- Identifying, modeling, and encouraging LEAN behaviors
- Finding the lessons in every “failure” — blame does not foster improvement or innovation
- Respecting and improving standards — questions when the organization is deviating from the standard