Lean production is a Japanese system that helps cut down on costs in manufacturing plants and factories. A company that implements lean techniques should also adopt a lean organisational structure.
In a lean organisational structure, the organisational arrangement should flow along product and process lines rather than along functional areas. For instance, some lean companies set up integrated product and process teams as self-organised work teams. A dedicated team for each product family could include expertise from different functional areas such as marketing, purchasing, manufacturing, quality assurance and customer relations.
Work teams in lean organizational structures should not be set up to report through many layers in a hierarchy. Instead, the reporting structure should focus on a connected set of activities in a horizontal stream.
A lean organisational structure helps promote lean objectives such as minimising waste through continuous improvement. This sort of structure reduces the need for non-essential functions and enhances efficiency and flexibility.