Lean Management in the Age of Digital Transformation

Digital transformation has taken up the business world entirely. All businesses utilize the digital age to obtain a competitive edge, sustain themselves in the market, and stay relevant to their customers. Digitization, digitalization, and digital transformation have reached almost all remote corners of the civilized world.

Lean management has also reached almost all businesses in their operations. The basic principles of this management, delivering value to the customers, reducing waste to zero, and constantly improving the business, have proven fruitful.

Let us discuss lean management and digital transformation and see how they complement each other in the digital era.

About Lean Management

Right from its birth in the late 1940s by Toyota, Lean manufacturing has evolved into a principle that helps businesses to last long. Toyota’s reason for inducing lean manufacturing was to eliminate the processes that add value to the planned end product. This proved a successful strategy for Toyota as they improved productivity, product efficiency, cost efficiency, and manufacturing time.

This success has been admired worldwide, and lean thinking has become part of the manufacturing process in the West. The term Lean was popularized, and later the method evolved into the most revered principles.

As we mentioned earlier, lean management reduces the time taken during product development and discovers new methods to improve business operations. Let us look into the fundamental lean principles to understand better.

Basic Lean Principles

Lean management was drawn to its present method after much evolution rather than a momentary creation. Here are the basic principles of lean −

Identifying value

The first principle of lean management is to identify the value you wish to provide to your customers. By identifying the value in your product that your customers are willing to pay for or the solution it offers to the problems they face, you are not only calling for recurring customers but establishing a solid authority.

Mapping Value Stream

Lean management clearly eliminates the processes that do not provide value to the end product. To get there, value stream mapping plays a significant role. When the values stream is mapped, you clearly understand the roles of each team contributing to the end product, making it easy to identify the process that is not adding value.

Creating Continuous Workflow

The following principle after value stream mapping ensures that all the teams involved working smoothly. Creating a continuous workflow makes it easier to remove process roadblocks. Roadblocks and bottlenecks are common in product development as it involves cross-functional teamwork. Visualizing the workflow makes the entire process smoother.

Creating Pull System

A pull system makes product development even more efficient after creating a continuous workflow. A pull system is a process of taking up a particular development task upon demand. This system helps provide what is required in the correct quantity, thus reducing overproduction.

Continuous Improvement

This final principle, probably the most significant one, involves your team playing skills. Although you implement the above four principles through this process, you can make the entire process more successful. You can take the insights of your teams by conducting daily stand-ups, taking in weekly reports, etc., to see what has been done and analyze what can be done.

Lean Management Benefits

Adapting to lean helps businesses to improve the entire business process and involve all individuals irrespective of the hierarchy. Let us look into some of the crucial benefits of adopting Lean management.

• Lean management helps in increasing the focus of all the individuals involved in processes that add value to the end product. It eliminates the activities that contribute nothing to the end goal.

• Highly focused employees majorly draw high productivity. When unessential activities are taken out of the process, it makes it easier for the individuals to contribute efficiently to the set goals.

• The pull system in lean management helps everyone in the business work on a specific task based on the need. Thus, making it easier to move on to the next task without wasting much time.

• Resources are used wisely without making an effort. When the tasks are attended based on the need and the production does not exceed, the resources usually do not go wasted.

Thus, lean management provides a flexible, stable, production system that improves performance on the whole and meets customer needs effectively. Now let us see how lean management can be adapted in the age of digital transformation.

Lean Management and Digital Transformation

Through industry 4.0 digital transformation allowed businesses of all industries to flourish in the digital era. It helped businesses to improve their operations, become cost-effective, and provide better customer experience.

Just like lean management focuses on what really matters, digital transformation helps with automating mundane tasks and utilizing advanced tools to increase the focus on crucial tasks in providing value to customer satisfaction.

Digital transformation has given businesses the opportunity to utilize technologies like cloud computing to implement cost-effective strategies for business productivity. It helped them revolutionize the use of resources thus establishing a successful transformation of business similar to lean management.

Lean management, although effective can be burdensome when dealing with huge volumes of data. In order to implement a successful lean strategy, it is vital to gather the data to analyze. Digital transformation has introduced several data collection and analysis tools that help lean management practitioners in data analysis.

Lean management and digital transformation often complement each other. When continuous improvement can slow down the workflow, the latest method like Agile can speed up heavy tasks.

Bringing these two together can add more value to the customer experience and bring true purpose to the workforce's contributions and strategies. These two forces can help discover new ways to work and improve along with bringing everyone in the organizational structure to the fold.

Implementing Successful Lean Management in the Digital Age

Lean management has been in practice for decades now but there are a few challenges companies face when they try to implement it in the digital era.

To successfully carry out lean management, organizations must also ensure well-planned change management. All stakeholders must be on board with the idea. Without proper communication, there won’t be rational thought among the stakeholders thus resulting in resistance and failure.

It is also important to note that lean digital transformation faces significant risks depending on the size of the organization. It is proven that companies or startups with less number of employees have drawn successful lean digital transformation compared to giants with thousands of employees.

Another crucial measure to successfully implement lean digital transformation is to gather requirements collectively from all stakeholders. Taking inputs from the workforce will help the lean digital transformation meet business needs effectively.

Conclusion

Digital transformation is here to stay and it is important for organizations to adapt to it. Bringing together lean management and digital transformation can draw better results for organizations. The key here is to identify the processes that do not add any value to the end result and either change or eliminate them.