From managing workflows to delivering high-quality products, organizations today face a myriad of challenges when executing a project. Inefficient operations and a lack of visibility into the project management process hamper workflows and diminish stakeholder trust.
In 1990, Toyota envisaged and implemented lean project management in practice to identify bottlenecks and alleviate the above-mentioned inefficiencies. Following Toyota’s lean practices, leading organizations like Motorola and Starbucks leveraged the potential of lean project management practices to visualize workflows, measure the actual work progress, and enhance process efficiency, while improving profit margins and curtailing costs.
This guide offers a comprehensive overview of lean project management, including its key principles and benefits, to help you leverage it for your project management needs.
What Is Lean Project Management?
Lean project management is an agile methodology that provides value to the customer, improves product quality and reduces the time required to deliver projects. It does all of this by minimizing waste – that is, anything that does not add value to a project. This methodology was developed to optimize project processes by eliminating unnecessary activities, such as unproductive meetings, unnecessary documentation, unplanned execution, and unneeded iterations. Implementing lean project management practices allows businesses to minimize non-value-added activities and lead time between project steps. In a nutshell, lean project management maximizes value with the minimum amount of materials, equipment, labor, and space.
How Lean Project Management Methodology Was Created
After World War II, the Toyota Motor Corporation, a leading automobile manufacturer in Japan, dealt with inefficiencies and a sudden scarcity of resources. With an eye on managing these inefficiencies, Toyota developed and implemented a lean project management philosophy known as the Toyota Production System (TPS). The Toyota model led to the “transference” thesis, which asserted that manufacturing problems and technologies are universal management problems that can be solved by using lean principles.
Later, Toyota’s production system evolved into lean project management, which has become a universal project management tool to optimize operations and workflows.
This methodology helped Toyota enhance quality and reduce inefficiencies in work processes. Similarly, implementing lean project management practices can help organizations identify and reduce non-value-added activities from their workflows.
The Three Ms of the Lean Methodology
The lean methodology emphasizes the elimination of everything that doesn’t contribute to the final product. According to lean principles, it is important to eliminate three types of waste – Muda, Muri, and Mura, which are collectively known as 3Ms:
Muda
Muda in lean management is an activity that utilizes resources without adding any value to the business and customers. In order to improve efficiency and increase profitability, it is important to know which activities in the business process are unproductive and do not add value.
Muri
Muri refers to the overburdening and/or excessive use of employees and equipment. Over a certain period of time, Muri can result in employee absenteeism, illness, and burnout and can lead to mechanical breakdown. Standardizing the workflows and distributing the workload are the only ways to prevent Muri.
Mura
Mura means irregularity or the lack of uniformity. Production irregularities can decrease efficiency and productivity in the long run. Organizations can avoid Mura by leveling out the workload in the production line.
Using a lean project management methodology should help to reduce these three types of waste efficiently.
Benefits of Lean Project Management
Lean has proven to be an effective project management model for managing teams in some of the most demanding industries, such as software development, manufacturing, and construction. Using lean practices helps organizations improve efficiency, reduce lead time, lower inventory costs, meet critical success factors, and increase overall productivity.
The following are some of the benefits that organizations can incur by using lean project management.
Enhanced Productivity and Efficiency
From delayed deadlines to workflow inefficiencies, organizations encounter various difficulties while completing projects, and that’s where lean project management comes to the rescue. A lean project management approach helps identify non-value-added activities, allowing project managers to review and implement measures to improve overall productivity and workflow efficiency. Workforces can thereby contribute to activities that add value to the project process.
The lean process ultimately helps project managers focus on activities that provide a measurable impact on business results and empowers the team to optimize their workflow. Also, using a lean project management methodology can bring transparency across the entire operation, help managers and teams improve cross-functioning, and facilitate status reporting and the day-to-day execution of projects.
Improved Customer Satisfaction
Lean project management prioritizes customer satisfaction and helps deliver value-added products and services from the customer’s perspective. To improve customer satisfaction throughout their processes, organizations must understand the changing customer needs and improvise their processes to fulfill their requirements. Also, identifying each step in a business process and modifying or revising those that do not add value can save time, effort, and money. The lean methodology helps businesses build and nurture customer relationships, increase referrals, and create a mutually beneficial proposition.
Optimized Workforce Engagement
Globally, organizations are concerned about dwindling employee engagement, which has resulted in employee-driven trends like Quiet Quitting and The Great Resignation. This worry is understandable because low employee engagement is detrimental to organizational growth and directly affects productivity, increases employee turnover and promotes absenteeism.
To improve employee engagement, project managers can employ lean project management techniques. This methodology gives managers a clear view of project workflows, centralizes communication, and improves transparency across the project process. In addition, lean methodology empowers managers and teams to identify factors that affect performance and helps improve efficiency.
Increased Quality and Competitiveness
With today’s ever-changing market dynamics and increasing customer expectations, organizations need to continuously strive to improve project processes to maintain their competitive advantage. Lean project management helps establish a structured project process that can be tracked in all projects and operations. Lean methodology forces companies to identify the root causes of problems and address them proactively until they are resolved. This type of root-cause analysis is critical, and managers must work with cross-functional teams to mitigate the causes they identify. Lean practices also enable project managers to manage scope creep and project rework, resulting in better product quality.
Reduced Lead Time and Costs
The ultimate goal of the lean project management methodology is to maximize customer value while reducing lead time and costs across the board. Therefore, industries and IT organizations implement lean practices to achieve these ends. Organizations find that, by implementing lean, they can increase labor productivity, cut down redundant production cycles, reduce inventories, and minimize errors and storage costs. Additionally, lean methodologies reduce physical waste and waiting time between production steps while minimizing overproduction and over-processing.
The Three Pillars of Lean
1. Identify and Eliminate Waste
Every business process or project should provide exceptional value to customers. Thus, identifying and eliminating wasteful activities is an effective way to establish an efficient work process. Plus, reducing non-value-added activities allows organizations to identify opportunities to improve their performance.
2. Make Continuous Improvements
After identifying activities that bring no value to the organization, it is important to find ways to reduce or remove them. By continuously assessing and improving project processes, you can easily narrow down the root cause of inefficiencies and find effective solutions to minimize wasteful activities.
3. Measure Improvements
Continuous monitoring and tracking of improvements before and after a project helps locate the inefficiencies. An incremental and continuous process over a period of time will help you identify opportunities and add value to your business.
5 Key Principles of Lean Project Management
In 1996, James P. Womack and Daniel T. Jones refined the lean strategy and published the book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation. The goal of this book is to help organizations achieve operational excellence and add maximum value to customers. It describes a set of 5 management principles, tools, and best practices designed to identify and eliminate waste in work processes and to increase efficiency, which is described below.
Identifying Value
Creating and defining value for customers, stakeholders, and clients is the first core principle of lean project management. A value can be anything that adds value to the organization, satisfies the customer, or helps achieve a quality deliverable in a defined time frame. To maximize value, the organization should understand the customer’s expectations and develop a product that solves their problem. Creating a product from the customer’s perspective is essential to accomplishing this. To identify the value of each process or product, teams should practice lean methodology to evaluate redundant processes that don’t contribute any value to customers. Lean practices help teams to identify customer requirements and ensure the product fulfills those requirements. Also, using lean methodology in day-to-day operations will increase customer satisfaction, reduce project risk, and eliminate project waste.
Mapping the Value Stream
After identifying and ensuring the key value your organization provides, it is important to map the value stream. Value stream mapping (VSM) is a core principle in lean project management that helps organizations identify the waste across their entire workflow and work towards improving operational efficiency. It is a dynamic tool that visually represents workflow to help teams identify bottlenecks, mismanaged backlogs, unnecessary processes or costs, and technical delays, thereby improving end-product quality and process efficiency.
Defining a Value Flow
Today, many organizations are operating remotely or in hybrid setups. To allow these cross-functional teams to work most efficiently, it’s critical to give value stream steps in sequential order. Creating a sequential flow helps you break down every stage of the product development process and lets you identify mismanaged backlogs, dependencies, and timelines delayed due to team members’ scheduling. Once you’ve determined that waste, you then need to reconfigure the process to prevent future inefficiencies.
Developing a Pull System
A pull system encourages team members to take over or pull new tasks if they have the bandwidth. This sort of system can help teams collaborate, prioritize, reduce inefficiencies, and accomplish tasks faster. The concept of the pull system originated in the manufacturing industry, where it helps factories meet customer expectations by using efficient inventory operations. But these days, pull systems are used in many other industries to improve their workflow efficiency throughout the product life cycle.
Improving Continually
Continually improving workflow processes is a crucial action that helps organizations analyze their product value and optimize workflow. To identify areas for improvement, you can conduct daily meetings and review sessions to improve the overall process at any stage in your workflow. Implementing all five principles in the product development process will definitely help improve product quality and customer value.
Lean vs. Agile
In project management methodologies, Agile and Lean are two important methodologies that help businesses increase their efficiency and deliver high-quality results efficiently. However, both agile and lean project management methodologies differ significantly. Some of the key differences between Lean and agile are listed below.
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Lean Project Management Tools
The following lean project management tools help improve product development workflow, reduce waste, improve productivity, and increase customer value through continuous improvement.
Deming Cycle (PDCA)
The Deming Cycle is a simple lean management process that was developed by Dr. W. Edwards Deming in the 1950s. Also known as the Plan-Do-Check-Act cycle, or PDCA, this method defines four phases to achieve consistent results:
- Plan: Analyze your workflow and identify problems that require solutions.
- Do: Develop solutions to the issues by thoroughly analyzing data or collaborating with the team.
- Check: Determine whether your solutions are effective and make further improvements if needed.
- Act: Implement improved solutions and evaluate what you have learned.
Companies can implement this method with various organizational processes to achieve tangible results that significantly impact product value.
Lean Six Sigma Project Management (DMEDI)
Lean Six Sigma is a structured, measurable project management method that can prevent the waste of time and resources and helps promote project quality.
These are the five Lean Six Sigma steps, also known as DMEDI:
Define: Define your project scope and create an effective project plan. To do this, it is important to first identify and understand the customer’s requirements.
Measure: Evaluate progress and measure quantifiable results throughout the process.
Explore: To consistently achieve the project objectives, explore new ways to improve the process.
Develop: Create a comprehensive plan that includes project and financial resource needs.
Implement: Implement the project plan and execute the project as identified in each defined process.
Leverage Your Workflow With Lean Project Management
Various project management techniques, and methodologies can be used to dramatically reduce project timelines, increase customer value, and reduce costs. Many of these tools are easy to implement and yet can yield significant and immediate results. However, the challenge lies in sustaining your improvements and in providing value to the customers, both of which require a disciplined approach.
Rather than just implementing tools randomly, it is critical to choose one effective approach, like the lean method, and implement it fully. Lean project management helps to visualize the entire workflow, reduces non-value-added activities, improves customer satisfaction and systematically drives efficiency across the process.
The lean method has become ubiquitous in project management since it delivers value and optimizes workflows by reducing unnecessary steps in the production process, as well as reducing cost. Implementing lean project management practices can add more value to your business and drive it toward sustained profitability.
Frequently Asked Questions
What are the five lean principles?
The Lean Enterprise Institute (LEI), founded by James P. Womack and Daniel T. Jones in 1997, is considered the go-to resource for lean practitioners. According to Womack and Jones, there are five core lean principles: Identify value, create a value stream, create flow, and develop pull and perfection.
What is the difference between lean and agile project management?
Lean works best when a project has a fixed number of resources and a clear scope, but its technical requirements are undefined. In contrast, Agile project management is best suited to projects for which the business needs that will achieve the customer’s goals are undefined.
ABOUT THE AUTHOR
Aditi Malhotra
Aditi Malhotra is a Senior Marketing Communications Specialist and a tech enthusiast with a keen interest in the SaaS industry. With over a decade of experience, she writes insightful and informative content on how SaaS is transforming the future of work. Her expertise helps business leaders to understand the advent of new technologies and development in digital space and how to implement it effectively. In addition to her professional commitment, she finds pleasure in exploring new destinations and embracing her role as an army spouse.