Lean management definition

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Lean management definition
Lean management relies on standardisation, error elimination and inventory management. (Digital Vision./Digital Vision/Getty Images)

Lean management is part of the lean production ethos developed by Toyota in the 1990s. Due to its effectiveness, lean production has been adopted across the world, in both the private and public sector. Lean management is designed to eliminate waste in order to deliver the product at a price that will satisfy customer demand. Through a series of constant improvements, or “kaizen,” lean management should in theory deliver more productivity and higher quality at a lower cost to the business.

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Through a series of constant improvements to the supply chain and production process, lean management aims to achieve “kaizen.” Kaizen refers to the natural adoption of a process of constant improvement as a way of working. In traditional management systems, improvement is achieved through changing the way people work. In lean management, improvement is part of the everyday work flow.

Horizontal and vertical structure

Lean management is structured vertically, with directors at the top, above managers, above middle managers, above supervisors, above those working on the shop floor. The production process however is horizontal, like an assembly line. When lean management is implemented, “consultants” are deployed to manage one specific element of the horizontal process. They use the lean management tools at their disposal to fix the problems that seem the easiest.

Value stream

The value stream refers to the production process. The value starts at the very base of the production process and is delivered to the customer. The aim of lean management is to ensure that the value, whether that be a car, a computer, a book or a service, is delivered in the right quantity, within the right time frame and at the lowest possible cost to the business. The quantity, time frame and cost are determined through constant refinements until no further improvements can be made.

Just in time

Just in time production, or “JIT,” is the concept of lean inventory management. Just in time production demands that only the right amount of items are produced and that they are produced just in time for customer demand. This reduces inventory management demands and storage costs as well as ensuring that production inconsistencies are eliminated.

Zero defect

Through standardisation and JIT, lean management achieves a standard of “poka yoke,” or zero defects. This improves customer satisfaction and reduces waste; both of which are beneficial to the business. The zero-defect standard is achieved as a net result of error-proofing the production process through constant improvement. Poka yoke literally translates from Japanese as “the process in question is incapable of generating a defect.” In practical terms, the poka yoke standard relies heavily on the elimination of variation and adherence to a management-defined standard.

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