Lean is based on the following five principles.
- Create value. Specify what creates value from the customer’s perspective. You need to understand what is important to the customer.
- Value stream. Identify all the value processes along the process chain. This is where Lean looks at reducing the non-value added processes from the work. Value-added activities are those for which the client is willing to pay. For example, if you’re doing the inspection at the end of production, the client is not paying for the inspection, the client is paying for the product which you are making. Hence the inspection becomes a non-value added activity.
- Flow. Make sure that the value process flows. This is achieved by reducing inventory in the process and handling one piece at a time. If you have more inventory between the processes, there is a good chance that the defects will be hidden in this pile of inventory. However, if you have only one item being processed at the time and there is no inventory in between the processes, any defect which enters the process will be highlighted and will get immediate attention.
- Pull. Make only what is needed by the customer don’t create a lot of products and keep that as inventory. This leads to flexibility to quickly switch from one product to another product. In pull, you are working on what the customer is demanding. The opposite of this is the push, where produce first and then your marketing or the sales department push to sell these.
- Perfection. Just like in Six Sigma you strive for perfection by continuously improving your processes. You perfect your processes and remove defects from your work processes.