The overriding principle of Lean is to maximize customer value while minimizing waste. Simply, Lean means creating more value for customers with fewer resources.
A Lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.
To accomplish this, Lean thinking changes the focus of management from optimizing separate technologies, assets and vertical departments to optimizing the flow of products and services through entire value streams that flow horizontally across technologies, assets and departments to customers.
Eliminating waste along entire value streams, instead of at isolated points, creates processes that need less human effort, less space, less capital and less time to make products and services at far less costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost and with very fast throughput times. Also, information management becomes much simpler and more accurate.
Why Go Lean?
Toyota has been applying Lean principles in its business since the 1950’s. In the west, the last 2-3 decades has seen an ever increasing number of companies identify Lean as the only way to improve quality and delivery performance while reducing the cost and engaging and empowering staff.
New Zealand is currently 24 in the OECD for workplace productivity, squeezed in between Greece and the Slovak Republic. If action is not taken soon we risk becoming a third world country. No longer can New Zealand rely on the usual commodities to ensure sufficient growth is achieved and must turn to workplace productivity and innovation to achieve higher levels of GDP.
The government has recognised this for some time and supports both innovation with the “better by design” programme and has a number of opportunities for Lean funding.