Principle 1: Define what creates value for the customer

Lean is about doing what creates value for the customer. Neither more nor less. This does not only apply to goods or to what you produce, but also to delivery, logistics, information, etc. It is therefore about minimizing the processes, workflows and communication you have in the organization that do not create value for your customers.

The concept of value is always defined in relation to the customers. Also remember that every organization has internal customers that you also have to take into account.

In all companies there are many supplier-customer relationships. Here, too, value is defined by the customers.

How to find out what the customer wants

The tools here can be used to optimize and identify what has value for your customer. Both external and internal. Here it is largely about finding out what the customer thinks. Therefore ask your customer. Use e.g. the following tools:

• Market and customer research.
• Follow-up inquiries on orders.
• Focus groups with potential customers when developing new products or when developing the company.
• Data from customer complaints.

Many companies work from the expectation that customers are satisfied without having analyzed their needs sufficiently. In Lean, the customer's value is defined much more specifically, which minimizes the risk of delivering a service or product that is too refined or too simple.

Principle 2: Determine the value chain

A company's value chain consists of all the activities that contribute to creating value for the customer.

When you determine your value chain, you identify all the activities that are currently is needed to create value for the customer. That is to produce your product or service. All things are written down. Identify the actions that do NOT help create value. The task is then to minimize the number of activities that do not create value for the customer.

Value chain analysis

To map the value chain, you can use a value chain analysis (in English "Value Stream Mapping"). A value chain analysis is an examination of how your value, product, service or performance is produced and moves through the organization. Who is involved in the production, when, waiting time between stations etc.? Ultimately, the goal is to find out where in the chain there is waste.

A value chain analysis takes place in three general steps:

1. Mapping the current value chain.
2. Set goals and define gaps.
3. Future chain and tasks.

Principle 3: Create flow in the value chain

The most powerful tool for eliminating waste in the value chain is to create flow, by keeping goods and information in constant motion. That is to create a work process with as few inappropriateness, stops and return runs as possible. The creation of flow often requires extensive changes in the organization's workflows, and it may be necessary to change both layout and organization to create fertile ground for ultimate flow. Often the right flow means major improvements both in relation to administrative processes and in production.

How to create flow

Here, too, the value chain analysis is a very central tool, as from the survey you can identify and later eliminate bottlenecks, waiting times, overloads, redundant or long transport times, etc.

Keywords to create flow:

• Stabilization of processes. Eg. with 5S [link]
• Workload leveling
• Move activities close together
• Work in small batch sizes
• Focus on the chain – not departments.

Principle 4: Create traction

Many companies work in advance to create calm and to be ready for orders. Orders that may never arrive. To get away from this, you need to work on creating "pull" instead. This means that the company must stop "pushing" goods forward in the value chain based on forecasts and expectations, as the probability that you will guess correctly is very small. It is far more effective to "pull" goods and information forward in the organization, based on real customer needs, in the form of orders.

The goal is to complete as many steps as possible in the value chain based on the customers' moves. This helps to minimize the throughput time and thereby creates better flow. However, this requires that the company is always ready for orders. A prerequisite for this is that you always have excess capacity. An excess capacity created by reducing waste.

Create features by working with these areas

Reduce the need for inventory by creating a draft. That is in that goods are only produced when they are requested/ordered.

Keyword:

• Shortening lead time with flow is the most important tool for creating traction.
• Shorten time horizons for all activities – planning, measurements, etc.
• Visibility in structure, planning, orders etc.

Principle 5: Implement continuous improvement

The fifth and final principle is called "kaizen" and is about your organization having to be geared to constantly pursue continuous improvement. According to Lean thinking, all processes can always be improved, and the Lean organization pursues improvements every day.

These continuous improvements can be both small improvements that collectively lead to large improvements and to larger improvements at the tactical and strategic level. To make this possible, it requires a fundamental culture where there is a constant focus on continuous improvements. The visibility and commitment of management is the key to creating it.

Keep the focus on ongoing improvements

To create a culture in the company where you are constantly aware of becoming more and more Lean, you can use the following tools:

• Decentralized improvement boards
• Everyone gets a shared responsibility for improvements
• Measurements and reward systems
• Visible management that executes, demands and recognizes continuous improvement.