What unites a Japanese automaker, a banking service and a Ukrainian biotechnological production? This is Lean - the art of doing more with less effort.
Lean is not a management trend or a pill for optimizing production. It is a system that stimulates a business to become better every day than it was yesterday. The heart of the philosophy is the principle of kaizen - continuous improvement through small but permanent changes that everyone implements: from a production line worker to a manager. The key task is to create maximum value for the client, spending a minimum of resources.
Lean originated in post-war Japan, when Toyota was looking for a way to produce quality cars in conditions of resource shortage. For comparison: in 1950, Ford produced hundreds of times more vehicles. Toyota could not compete in quantities, so it relied on quality and efficiency. This is how the Toyota Production System/TPS was born, or what we call maximum efficient production today. The TPS ideology, which became the basis of Lean, is based on the formula "0−100", where 0 - zero losses, zero defects, zero injuries, zero incidents as the ultimate goal and 100 - 100% involvement of the team in improving processes.
For the practical implementation of Lean in production, TMP / Total Productive Maintenance is used - an equipment performance management system. This allows you to reduce costs, increase equipment reliability, ensure high product quality, and involve the team in continuous improvement.
Why is Lean not only about factories?
Although Lean was born in a factory, its principles are not limited to production lines and are applied anywhere where there are resources, processes and people. It is an environment and a set of tools for improving business efficiency. According to Lean Institute Ukraine, today 64% of American companies use this approach as a key operating philosophy, and the average global growth of enterprises that use Lean is 7% per year. Lean is developing especially rapidly in the banking system, logistics, medicine, education and the public sector.
In Ukraine, Lean has been spreading noticeably since 2016 with a growth rate of 5−7% per year. Key areas of application are the food industry, mechanical engineering, pharmaceuticals, logistics. In 2019−2020, Lean goes beyond production - the system is being implemented in IT, agribusiness, energy, and the public sector. This proves that it is effective for almost any area and can even be used in everyday life.
From crisis to operational excellence: Ukrainian context
Lean is about the long-term perspective. When a company chooses a marathon rather than a sprint, it introduces the basis for systemic changes. Many Ukrainian enterprises in 2022 simultaneously faced two challenges: war and an energy crisis. For production with high energy costs, this was a point of rethinking approaches. Actually, the Lean system in this situation has proven to be an effective tool in solving this problem, because its principles allow you to turn complex challenges into specific actions.
Lessons of effective optimization
The product must be competitive, and the company profitable, and Lean in this becomes the answer to the company's desire to reduce costs, in our case as production - this is the consumption of energy resources and materials in turbulent conditions. The implementation of Lean as a methodology begins with the foundation. The basic requirements are the standardization of processes and the implementation of the 5S system: sorting, monitoring order, monitoring cleanliness, standardization, self-discipline.
An organization is an appropriate organizational structure that ensures the achievement of the strategy, the consistency and sustainability of the results achieved. Leadership helps all employees understand the company's strategy and goals, supports people on the path to their achievements, manages performance and, of course, increases engagement.
Next, columns are introduced that support operational excellence. What does this mean? Teams focus on eliminating losses, maintaining equipment in perfect condition, and constantly developing their skills. Problem solving and root cause analysis, quality control, resource efficiency analysis, and inventory optimization are combined with process standardization and people being held accountable for the results. This allows us to focus on reducing costs throughout the chain: production, logistics, and inventory. The efficiency of these areas increases sales volumes, provides a competitive advantage, and the ability to influence product costs.
Interestingly, cost reductions, in particular through energy optimization, can reach 3-5%. And the rate of natural gas replacement with biogas can reach a record 75%. Such dynamics are possible thanks to a focus on key areas of operational activity based on the company's strategy and goals.
What are the five pillars of operational excellence?
Strengthening the brand through quality and service. Value is determined by customers. Raising standards at all stages of interaction with them helps ensure the reliability of the prooductions and timely service, which directly affects the level of satisfaction, and therefore - on profitability.
Less costs - more systematic. Lean eliminates unnecessary costs and inefficient processes. This allows you to offer competitive prices and increases the marginality of products.
Leadership development. Mentoring leaders demonstrate an example and involve teams in continuous improvement. This means that decisions are made where there is expertise, that is, every person in the company affects the result.
Continuous learning. Employees acquire skills of related professions and become multifunctional, which makes the company more resilient and flexible to market changes.
Involvement and responsibility. Teams independently control processes, propose improvements, which increases productivity and quality without additional resources.
Lean is not about a quick result, but a "long game". It is a way of thinking that helps companies not only survive the crisis, but also generally become more efficient and closer to the customer. For Ukrainian enterprises, especially today, this is not an abstract concept, but an effective tool for increasing productivity, reducing costs, and developing teams. After all, a company's success is achieved where each person influences the result, and fewer losses mean more value.
