How to Apply Lean Principles to a Small Business | Pie Insurance

The term “lean” is often linked with Toyota’s automotive business model, but having a lean workflow is not purely a manufacturing initiative. In fact, lean principles can be applied to businesses of every size and in nearly every industry.

Why is lean important?

Eliminating waste across your organization helps make room for lean processes that require less manual effort, space, capital, and time. Through communication and cooperation, thr miscues, mistakes, and missteps that many businesses encounter can be reduced and even eliminated.

What is a lean process?

In its simplest form, “lean” describes a way of thinking and acting that creates an intuitive, accessible, and streamlined environment for customers in a business.

There are five core principles of lean, according to the Lean Enterprise Institute:

1. Value: Put yourself in your workers and customers’ shoes and think about their needs. Use this insight to determine timelines, pricing, and expectations instead of guessing or using anecdotal data. To keep your team motivated in this process, explain how they fit into the bigger picture.

2. Value stream: This step involves creating a “value stream” of all of the steps and processes required to get the final product or service to your customers. This could include design, production, sales, delivery, human resources, and customer service. Understanding each step helps you determine if there are any wasteful elements.

3. Flow: After you’ve removed any unnecessary steps from the value stream, make sure that your production process still runs smoothly. This means that the missing steps haven’t caused any interruptions or delays. To improve flow, break down each team’s steps, level out their workloads, and create cross-functional departments.

4. Pull: When your company’s flow improves, the time it takes to get your goods or services to customers should be shorter. As a result, customers can “pull” what they need when they need it. Identifying customer pull can help you develop a more appropriate amount of inventory and staff.

5. Perfection: Optimization takes time. Even after you complete the first steps, you’ll still need to keep working to improve processes and eliminate waste. Perfection may be a moving target, but keep moving toward it. Continuing to refine your processes also helps your small business adapt to the inevitable shifts in customer demand.

What is the 5S system?

The 5S system is another way to organize your workflow that includes sorting, setting in order, shining, standardizing, and sustaining. It can be a useful system for getting organized and boosting productivity. Here’s how to apply each principle to improve your work environment:

1. Sort: Discard, donate, or reallocate any items that you no longer need.

2. Straighten: Organize the remaining items so you’re more efficient. For example, put items that aren’t used frequently in upper cabinets or shelves (think about how you might organize your kitchen).

3. Shine: Keep your workspace tidy so you can find items and identify problems more quickly.

4. Standardize: Color-code and label files, calendars, and other materials to make finding things easier. Create checklists for your teams to build in consistency. Consider standardizing meetings to only hold those that are necessary with only the staff pertinent to the topic. Keep all meetings as short and concise as possible.

5. Sustain: Develop habits to keep the work environment clean and organized, such as cleaning up one task before moving onto the next. Help your team improve its flow by setting “do not disturb” zones and time frames. You may also want to schedule a “no meeting day” to allow everyone to maintain focus without interruptions.

The 5S principles aren’t just limited to physical space; use them to organize processes and workflows as well. For example, use a project management system to assign tasks, quickly see the progress of projects, and share files and comments in one place so everyone knows what to prioritize.

More resources to read

For more tips and ideas for implementing lean in your small business, check out these articles:

1. Lean Action Plan by the Lean Enterprise Institute

2. 5 Ways You Can Bring Lean Management Practices to Your Business by American Express

Thanks for reading our educational resource! Any above reference to a specific company or product is meant for educational purposes only and is not specifically endorsed by Pie. If you’re a small business owner, see more small business resources or get a workers’ compensation quote in 3 minutes.