9

Lean Management
Giovanni Atti

Quality management is increasingly associated with the elimination of waste,

scraps, duplicates, and excessive bureaucracy to improve the efficiency of the
manufacturing processes and the quality of products for the benefit of the end
customer. This means creating a mindset and modus operandi such that
everything, which does not add value, is eliminated.
In a few words, this is the lean management; a management philosophy
summarized in “more value for less work,” which finds its origin in the Toyota
production system.
Following Taylorism and Fordism, which can be considered its forerunners,
today lean management is the management system for excellence. It has had
such an impact on post-industrial working organization studies that the term lean
is commonly combined with many activities (lean government, lean
manufacturing, lean software development, lean construction, lean maintenance,
etc.) to highlight their slenderness and effectiveness.
Although, already in the 1990s Womack, Jones, and Roos1 had predicted that
lean production and lean management would have become the management
standard of the twenty-first century, there are few companies that apply it
adequately.
In his essay: “Implementing a lean management system,” Jackson and Jones
(1996) highlights that the profit strategies associated with mass production are a
luxury that only few can afford, and that thanks to lean management, it is now
possible to be competitive and make quality products, even managing small
quantities. He argues that a lean company can double the products in half the
time and at 50% of the cost compared to a traditional company, improving,
among other things, the average level of their quality. Perhaps these are not
always the expectations of whoever decides to embrace the lean philosophy.
However, it is proven that those who have done it2 have achieved remarkable
results.
Undoubtedly, lean management requires time, patience, long-term plans,
consistent commitment, and efforts at all levels and a substantial change in
mentality. It certainly requires relentless attention to the process and to the small
progressive improvement made day by day. It is certainly easier to apply it in
countries where individualism is less rooted. However, in a global economy it
undoubtedly represents a necessary option for businesses aspiring to success.

9.1. Lean Management: Some Introductory

Concepts
Several authors have attempted to define lean management.
Monczka, Trent, and Handfield (2005) argue that when company stocks have
such a high turnover rate that inventories become negligible, it means that
companies have adopted a system known as lean supply chain, a combination of
purchases, transportation, and manufacturing focused on just-in-time (JIT).
Shook (in Liker, 1998) defines as lean the operational philosophy that reduces
the time between a customer’s order and the delivery of the requested goods
through the elimination of waste.
Womack and Jones – in their book Lean Thinking (2003) – claim that all
activities defined as lean pursue three objectives: speeding up flows, pull
planning systems, and a tireless pursuit of excellence.
Lean management is often presented as a production practice, which tends to
eliminate all types of waste and optimize the quality of the products at the same
time. It is a way of thinking3, an operating philosophy that combines technical
and sociological aspects or, in other terms, the soft and hard sides of the
enterprise (Liker & Meier, 2005). As Liker states in a study on the Japanese
automotive industry4: “it is an organizational system in which technical and
social aspects are perfectly integrated and synergistic.” It is a pervasive belief
that drives and unites the work of all those involved in the production chain.
9.2. Origins and Traits of Lean Management
The term lean or bare was coined in the 1990s by Krafcik and Womack to
identify the Toyota production system, designed and developed by Taiichi Ohno
to eliminate waste, empower the workforce, reduce stocks, and increase
productivity.
The 10 rules of lean production can be summarized as follows:

(1) Eliminate waste;

(2) Minimize inventories;
(3) Streamline production flows;
(4) Adapt production to market demand;
(5) Meet customer requirements;
(6) Achieve the optimal solution from the beginning;
(7) Empower workers (empowerment);
(8) Make the project adaptable to rapid changes;
(9) Establish partnerships with suppliers; and
(10) Create the culture of continuous improvement (kaizen).

Several authors identify lean with a set of tools (value-stream mapping,

kanban, poka-yoke, etc.) to eliminate waste. As waste is eliminated, quality
improves and processing time and costs are progressively reduced.
The seven wastes originally considered by Taiichi Ohno (1993) were

(1) Defects in products and services (they have a direct impact on the
bottom line and have to be found and removed. Associated costs include
quarantining inventory, reinspecting, rescheduling, and capacity loss. Six
Sigma and other quality management processes, along with continuous
process improvement (CPI also called Kaizen) and business process re-
engineering, are all approaches one can deploy to reduce defects and
save costs.
(2) Overproduction (manufacture of products in advance or in excess of
demand wastes money, time, and space).
(3) Transport (moving a product between manufacturing processes adds no
value, is expensive and can cause damage or product deterioration).
 Waiting (processes are ineffective and time is wasted when one process
(4) waits to begin while another finishes. Instead, the flow of operations
should be smooth and continuous. According to some estimates, as much
as 90% of a product’s time in manufacture is actually spent waiting).
(5) Unnecessary inventory increases the need for working capital, consumes
productive space, and can lead to too much transporting. It applies to
raw materials, work in progress (WIP), and finished goods. Too much
WIP usually results from overproduction and waiting).
(6) Unnecessary motion (originally this referred to ergonomics; if workers
needed to bend, stretch, walk, and lift, they had to cope with health and
safety risks. Now, the same is true for machines. If a robot’s motion is
not optimal, then it wastes time.
(7) Inappropriate or overprocessing (overprocessing is doing more to a
product than the end-customer needs. The result is a longer and more
expensive production process. Examples include using components that
are more precise, complex, or higher quality than necessary. This also
applies to overspecified plant and machinery, which cost more to buy
and maintain. Toyota became famous pioneering low-cost automation,
and immaculately maintaining older machines to drive down whole-life
costs. So investing in smaller, simpler, more flexible equipment assets,
and doing no more than your quality standards require.

Womack and Jones (2003) identified the eighth waste: to make products,
which do not comply with specifications or do not meet customer requirements.
Other authors have later identified other types of waste (Bicheno & Holweg,
2009). Among these, it is worth mentioning the inappropriate use of human
resources skills, the shortcomings of the communication system, and the
ineffectiveness of certain reporting systems.
It is worth remembering that the competitive advantage of lean management
production systems is not associated with hard technology. Presses and robots
used by Toyota are manufactured in fact by suppliers available to every car
company. In lean systems, there is holistic integration of technology, people,
organization, products, and strategies, a kind of sociotechnological matrix that
permeates every activity and the entire production chain. This culture did not
start and develop spontaneously, especially outside Japan; it requires a
continuous creation and maintenance effort.
The Toyota way (Liker, 2003) is a learning-by-doing system. Top
management includes professionals with multidisciplinary background, which
needs to be constantly updated. Clever direction is required by management as
well as a sophisticated system of indicators providing a picture of the
performance level to lay the foundation for continuous growth. Being the best in
class is part of a dynamic status, which requires constant improvement toward
increasingly higher targets.

9.3. The Lean Enterprise

The adoption of lean management models represents a medium to long-term
process which involves the alignment of workforce modus operandi with top
management vision and mission; it also involves a substantial revision of the
organization and existing procedures and, sometimes, the removal of non-
executives and managers incapable of appreciating and sustaining the necessary
change. Table 9.1 developed by Jackson and Jones (1996) highlights the main
differences between management systems typical of mass production and lean
ones.
The lean organizational model is based on five cornerstones5 (Liker & Meier,
2005) – philosophy, process, people, partners, and problem solving:

(1) Philosophy. Top management see the company as a value generation

vehicle for the benefit of customers, communities, companies, and
production chains (Nassimbeni, Sartor, & Orzes, 2014). Its long-term
goals can also affect short-term ones. Corporate vision and mission must
be defined, adopting management systems consistent with them.
(2) Process. Process involves transversely all functions, removing sector
boundaries and rivalries. Every problem needs to be highlighted and
addressed. When appropriate, it is necessary to stop the process under
investigation and to improve it to ensure the expected quality. Process
standardization with the inclusion of frequent checkpoints and the use of
poka-yoke6 is the basis for continuous improvement and the
empowerment of workers. It is useful to have process instability
indicators, measuring their variability and dispersion rate with respect to
the expected average. Visual controls help to identify problems. All
methods and technologies must be largely tested. The flows have to be
 simplified, eliminating waiting times and waste. To do this, it is
appropriate to adopt the “5Ss.”7

Table 9.1: Comparison between Mass and Lean Production.

Mass Production Lean Production
Customer Produce in large quantities and Produce what requested by customers,
satisfaction according to statistically with zero-defects, when needed and in
acceptable quality levels and the ordered quantities.
scrap the unsold.
Leadership Non-participative and coercive. Leadership is broadly participative and
consistent with the company vision.
Organization Individualism and bureaucracy of Teamwork and “flat” organizational
military matrix. structures.
External Commeasured to costs. Long-term and collaborative.
relations
Information Inadequate and based on formal Rich and focused on visualization and
management reporting, limited to control systems managed by workers.
management.
Culture Culture of loyalty and obedience, Culture of involvement focused on
risks of alienation and conflict. growth and long-term development of
human resources.
Production Work centers for large quantities, Universal machines controlled by men,
functional layouts, minimum layouts with cells or working islands,
competences, extended use, large multirole staff, small production lots,
stocks. zero stocks.
Maintenance Carried out by specialists. Carried out by production, maintenance,
and industrial engineering personnel.

Source: Adapted from Jackson and Jones (1996).

(3) People. Managerial success requires leadership skills. Leaders must be

properly selected and their turnover carefully managed. Toyota’s motto
in the 1960s was “before cars, we build people” (Liker, 2003). It is
necessary to invest in skills and teamwork, add value to the organization
by offering growth opportunities to staff and partners. Technologies,
people, and processes must be interrelated and inseparable. It is