What is it?
Lean management is a system derived from Toyota’s lean manufacturing methodology, which systematically aims to reduce waste, improve workflows and eliminate non-value-adding activities. This ultimately creates more value for customers, with fewer resources.
What benefits does Lean provide?
The benefits of lean management techniques are very similar to those of lean production. Any activity that fails to add value can be considered waste, including wasted effort. Lean can result in significant cost savings for the labour-intensive service industry, by reducing staffing levels and eliminating errors. However, organisations must avoid compromising on quality.
The concept of doing more with less has significant appeal to the not-for-profit sector. The UK’s National Health Service has used lean management successfully to improve bottlenecks in accident and emergency departments.
Questions to consider when implementing Lean
- What will we gain? Will the cost outweigh the expected benefits?
- Can we make the required cultural change?
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Lean management in the garment industry
The garment manufacturing industry in Sri Lanka faces many challenges as a result of low-cost apparel manufacturers worldwide, and must find new ways to stay competitive.
Economic growth in the country has resulted in high cost of maintenance for companies, with the management of operational costs being specifically challenging. The ‘price per unit’ which was once a competitive advantage in the industry in Sri Lanka, is no longer able to compete with the high volumes of countries such as China, Vietnam and Bangladesh which are offering better pricing options.
With this in mind, many large organisations in the country have looked at lean manufacturing as a valuable tool to reduce costs through the elimination of waste.
For example, there is a major contribution to an organisation’s working capital from its raw material sourcing and stock holding. The lean theory helps the organisation to understand the causes of non-value-add activities such as stock holding and to develop mechanisms to reduce these.
Many companies in the industry have originated from mass manufacturing, with stock holding days averaging between 65 and 85. With lean implementation they have managed to reduce stock holding to between 20 and 40 days, creating a positive contribution towards working capital management and space saving.
Related and similar practices
- Total quality management (TQM)
- Six Sigma
- European Foundation for Quality Management Model (EFQM)
- ISO 9000
Article: Lean Manufacturing
Website: Lean Enterprise Institute
Articles: McKinsey - Lean Management: New Frontiers for Financial Institutions
White paper: A Lean Approach to Change Management
Article: Top 25 Lean Tools
“Lean...provides a way to do more and more with less and less – less human effort, less equipment, less time, and less space – while coming closer and closer to providing customers with exactly what they want.”
Lean Thinking, second edition, Womack and Jones, 2003