The term “lean,” in relation to business strategies, was actually developed on the manufacturing floor. In fact, some circles refer to it is as “lean manufacturing.”
The main goal in a “lean” strategy is to maximize value and minimize waste. In other words, how can we get the best results with the minimal resources?
The five principles of lean project management
Understand project value
Map your value stream
Ensure flow of the value stream
Let customer determine pull
Continually improve process
Project managers moved this strategy from its original factory setting — manufacturing floors, construction sites — and are using it to steer their project teams to success. If you’re curious how to adapt lean project management into your organization’s strategy, read on!
What is lean project management?
As mentioned earlier, the main doctrine of lean project management is maximizing a project’s value with minimal waste. Every business, regardless of what products or services they sell, would like to increase their profits and decrease the amount of resources they spend on production.
That’s where lean management comes in. Lean management functions with five principles. These principles set out to help companies reduce costs, improve the quality of what they’re selling, and increase consumer satisfaction.
Image courtesy of TheLeanWay
In order to really understand how to use lean management as your project strategy, it’s important you know the principles as decided by James P. Womack and Daniel T. Jones.
They are the authors of The Machine that Changed the World and Lean Thinking and have had a huge impact in developing lean project management outside of the construction and manufacturing umbrellas.
The five principles of lean project management are as follows.
1. Understand the value you’re providing
First and foremost, you should understand the value that your product or service provides to your target consumers. This is directly related to how you can price your products or services. If a product is not in high demand (ie, winter coats in July), you cannot expect to charge the maximum value successfully.
Once you accurately understand the value of what you’re selling — and have taken into account your market research, economic forecasting, etc. — you can determine what materials and/or resources you can do without.
2. Map the value stream
This part of the process requires visuals. Flowchart tools are a great way to create a visual representation of the value stream.
The value stream is the sequence of events that leads you to your deliverable. In the case of lean project management, your deliverable is the product or service you’re developing at an agreed-upon value.
Think of a value stream kind of like a river. As the river flows (ie, as one step in the project flows into another), observing managers can reach in and determine where excess waste is being created.
Image courtesy of Smartsheet
If you’re creating your first value stream map, you can start by mapping out all the steps your product takes to completion. This includes where the product was before you had it (ie in a warehouse or factory), and where it will end up (in a consumer’s home or workplace).
3. Make sure the value stream flows
You can’t control the flow of a stream in nature, but you can have significant control over your value stream. As a project manager using lean management, it’s your responsibility to ensure that your value stream flows.
Lean project management is all about understanding where you can cut down the amount of resources you use. By creating an optimized value stream, you’re able to clearly observe and avoid interruptions, and the need for rework. This, in turn, reduces waste.
Waste in this sense is not always physical. Lean project management can reduce the amount of time you waste waiting on steps to be completed. It can reduce product defects, or keep employees from overworking.
In other words, lean project management can help you work smarter and not harder.
4. Customer should determine the pull
This principle is also called the “pull approach”. The pull approach supports the belief that customers are the number one group of people who can determine production demand. By following this principle, overproduction is reduced, and in turn, waste is reduced.
By understanding consumer demand, project managers can develop a more accurate assessment of necessary inventory.
Related: Learn how to calculate inventory turnover to improve efficiency of inventory operations.
In order to do this correctly, your team has to have a pulse on the market and should be able to accurately determine demand even as circumstances change and develop. In addition, you have to be able to fulfill the demand in a timely manner before it dissipates. It doesn’t matter how great your parkas are if you can’t produce them in the necessary seasons.
If you’re going to function by the pull approach, you’ll need to prepare to communicate the customer pull and demand to your team quickly and continuously.
You can do all of this using the Kanban system, an offshoot of lean project management that allows you to communicate manufacturing needs in real-time.
Image courtesy of SlideShare
5. Continuously pursue improvement
Once you’ve developed your value stream, don’t make the mistake of thinking you’re done!
Part of lean project management is continuously reflecting and observing while trying to reduce waste. This pursuit of improvement should never end, as changes will always beget more changes.
Lean management is a great way to manage your product if you’re working with a scarcity of resources. It was, in fact, developed during wartimes when every scrap made a difference.
If your company is looking to cut costs without cutting corners, lean management may be the right choice for you.
Wondering if a project is right for you in the first place? Conduct a feasibility study to save the time and money so often wasted by pursuing fruitless projects.
Grace Pinegar is a lifelong storyteller with an extensive background in various forms such as acting, journalism, improv, research, and content marketing. She was raised in Texas, educated in Missouri, worked in Chicago, and is now a proud New Yorker. (she/her/hers)