The core idea 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.
Lean thinking is a technique promoted by Toyota with the intention of making production more cost effective. The first line of the first text book on the Toyota Production System published by the Toyota Motor Corporation education department in 1973 is said to state this:
"The Toyota Production System is a series of activities to lower cost by improving productivity through the thorough elimination of waste."
Toyota Production System or TPS which was created by Taiichi Ohno around the 1950s is said to be the origin of Lean Production. Lean consists of a set of tools which helps in the identification and eradication of the wastes. Wastes can be defined as all activities and tools that do not add value to the customer. A customer will not pay for the wastes which add to the cost of...