The term “lean enterprise” is commonly used in business to describe the reduction or elimination of inefficiencies in the manufacturing process. The principles behind lean enterprise originate from the Toyota Production System created by Toyota Motor Corporation. Although the philosophy has existed for years, the goal remains the same today, which is to increase value and service for customers. C Tek Lean Solutions will gladly explain more about lean enterprise and how it can benefit your business.
What is Lean Enterprise?
Lean enterprise can be simply summarized as the art of maximizing value for customers while simultaneously reducing waste. Lean enterprise also aims to use as few resources as necessary in the process. Customers ultimately have the final say in what they believe constitutes a value-added product. Customers make the decision based on determining what they are willing to pay for, and how much money they are willing to spend.
The Origins of Lean Enterprise
Lean enterprise is a concept that was created in the early 1900s by Toyota Motor Corporation. The launch of the term coincided with the introduction of the Toyota Production System. The management philosophy was largely practiced from 1948 through the mid 1970s. In 1986, the Lean Six Sigma methodology also emerged to complement the core principles of lean manufacturing. Ultimately, both methods use data to find and correct problems in the production process and to eliminate mistakes. Lean enterprise strives to maximize value for its consumers while reducing the volume of resources and finances that are spent on creating products and services for consumers.
Principles of Lean Enterprise
As with any methodology, there are core principles of lean enterprise that companies follow for successful implementation, including:
- Value Stream
Value refers to the way that customers evaluate a product and assign value based on how it satisfies their wants or needs.
Value stream refers to the full life cycle of a service or product. This includes the acquisition of materials, sale and delivery of products, manufacturing, and consumption by consumers.
Flow evaluates the value stream to determine areas of inefficiency or stagnation. Any parts that are considered wasteful or that don’t add value for consumers are eliminated.
Pull is the principle that no product should be created until or unless there is clear demand from customers. The concept behind pull is to reduce excess inventory and prevent a surplus of raw materials needed to create products that customers may not ultimately purchase.
Finally, perfection is another core principle of lean enterprise. Perfection is the concept that products should not be inferior in quality, and they should only make customers happy and satisfied. Any product that does not produce those final advantages should be removed from the manufacturing process, as they are ultimately considered to be items that drain resources and create waste.
Lean manufacturing provides many advantages for companies that adopt its principles, which includes increased production and efficiency, happier customers, and an increase in revenue and bottom line. C Tek Lean Solutions has all the details you need on what makes lean enterprise an asset for business.