What is Lean?

Henry Ford defined the lean concept in one sentence: “We will not put into our establishment
anything that is useless.”

Lean manufacturing is a system of techniques and activities for running a manufacturing or

service operation. The techniques and activities differ according to the application at hand but
they have the same underlying principle: the elimination of all non-value-adding activities and
waste from the business.

Lean enterprise extends this concept through the entire value stream or supply chain: The leanest
factory cannot achieve its full potential if it has to work with non-lean suppliers and
subcontractors.

Types of Waste

1. Overproduction
2. Waiting, time in queue
3. Transportation
4. Non-value-adding processes
5. Inventory
6. Motion
7. Costs of quality: scrap, rework and inspection

What is lean?

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 for Production and Services

A popular misconception is that lean is suited only for manufacturing. Not true. Lean
applies in every business and every process. It is not a tactic or a cost reduction program,
but a way of thinking and acting for an entire organization.

Businesses in all industries and services, including healthcare and governments, are using
lean principles as the way they think and do. Many organizations choose not to use the
word lean, but to label what they do as their own system, such as the Toyota Production
System or the Danaher Business System. Why? To drive home the point that lean is not a
program or short term cost reduction program, but the way the company operates. The
word transformation or lean transformation is often used to characterize a company
moving from an old way of thinking to lean thinking. It requires a complete transformation
on how a company conducts business. This takes a long-term perspective and perseverance.

The term "lean" was coined to describe Toyota's business during the late 1980s by a
research team headed by Jim Womack, Ph.D., at MIT's International Motor Vehicle
Program.
Lean Accounting is the general term used for the changes required to a company's accounting,
control, measurement, and management processes to support lean manufacturing and lean

thinking.

What is Lean Production in accounting

Lean production is an assembly-line methodology developed originally for Toyota and the
manufacturing of automobiles. It is also known as the Toyota Production System or just-in-time
production. Lean production principles are also referred to as lean management or lean
thinking.

What is lean cost management?

Lean management is an approach to running an organization that supports the concept of

continuous improvement, a long-term approach to work that systematically seeks to achieve
small, incremental changes in processes in order to improve efficiency and quality.
What is lean in finance?

Today, Lean is the predominant process management methodology for professional services
organizations—and it is rapidly transforming how accounting and finance functions are
managed in leading global institutions. Lean can improve the quality, timeliness, and overall
value delivered by finance and accounting teams.

What does the term lean mean in business?

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.

What are the principles of lean?

“Simply put, 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.

What is the lean enterprise?

Lean enterprise is the production and management philosophy that considers any part of the
enterprise which does not directly add value to the final product to be superfluous and in need
of elimination.

What is the meaning of lean thinking?

Lean Thinking is a business methodology which aims to provide a new way to think about how
to organize human activities to deliver more benefits to society and value to individuals while
eliminating waste.
What are the key principles of lean manufacturing?

“Simply put, 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.

Doing more with less by employing 'lean thinking.' Lean manufacturing involves never ending
efforts to eliminate or reduce 'muda' (Japanese for waste or any activity that consumes resources
without adding value) in design, manufacturing, distribution, and customer service processes.
Developed by the Toyota executive Taiichi Ohno (1912-90) during post-Second World War
reconstruction period in Japan, and popularized by James P. Womack and Daniel T. Jones in
their 1996 book 'Lean Thinking.' Also called lean production.