Value is what customers are willing to pay and must be determined according to customer needs for each type of product/service. There are many techniques to determine the value of products/services from the customer’s perspective such as interviews, surveys and market research.
In this principle, businesses need to determine goals to achieve the value of the product/service. From there, businesses can list necessary activities and eliminate unnecessary activities that cause waste.
After eliminating waste from the value flow, this principle will help arrange the steps smoothly without interruption or delay. In addition, the elimination of waste still takes place within this principle.
Inventory is considered one of the biggest wastes. Many businesses stock raw materials according to predicted demand while lean management uses the pull principle, which means only creating products/services at the time of need in the required quantity. The pull principle is implemented based on customer needs. To do this requires businesses to conduct extremely accurate market research. In addition, all processes must be streamlined to avoid wasting time and improve work efficiency.
Preventing waste is done through the above 4 principles but the principle of “Seek perfection” is important. Because the core meaning of lean management is continuous process improvement. Every employee of the business needs to aim for perfection while providing products/services based on customer needs.
The 5 principles of lean management allow administrators to recognize inefficiencies in business operating systems and bring more value to customers. By implementing all five principles, businesses can stay competitive, increase customer value, reduce waste and increase profits.
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