Lean Strategy Definition

Cite this article as:"Lean Strategy Definition," in The Business Professor, updated March 22, 2019, last accessed August 6, 2020, https://thebusinessprofessor.com/lesson/lean-strategy-definition/.

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Lean Strategy Definition

Lean strategies are geared towards offering value to the customers. The main goal of these strategies is to offer value to customers by concentrating more on a value creation process. To enhance the creation of value, lean strategies focus less on optimization of assets and technologies and more on the flow of products and services as demanded by customers.

A Little More on What is Lean Strategy

Lean strategies eliminate waste throughout the entire manufacturing process instead of eliminating waste at specific production stages. By doing so, it creates less human effort, less production costs and less time and space. The whole strategy reduces manufacturing costs and manufactures more within the shortest time.

With lean strategies, firms are able to adapt to changing demands from customers. Information management also becomes simple with a lean strategy. The strategy helps firms to determine how much output can be produced with a given set of inputs. Seeing that the aim of firms is to increase profitability, all manufacturing operations should be made as efficient as possible.

Efficiency can be achieved in two ways:

  • Technical Efficiency – Here, a firm that produces the maximum amount of products given limited resources and capital is said to be technically efficient.
  • Economic Efficiency – This deals with minimizing manufacturing costs through wise allocation of resources to achieve the best output. A firm whose main goal is maximizing profits should also efficiently allocate resources to keep costs down.

To enhance the technical efficiency of a firm, methodologies and processes need to be changed and this is where lean strategies come in. A firm that has adopted lean strategies has the techniques and the tools to reduce time, human resource and space wastage.

References for Lean Strategy

Academic Research on Lean strategy

  • Impact of lean strategy on operational performance: a study of Thai manufacturing companies, Rahman, S., Laosirihongthong, T., & Sohal, A. S. (2010). Journal of manufacturing technology management, 21(7), 839-852. This paper analyzes the effects of different management practices in Thailand have affected the performance of organizations.
  • Relationship building, lean strategy and firm performance: an exploratory study in the automotive supplier industry, Jayaram, J., Vickery, S., & Droge, C. (2008). International Journal of Production Research, 46(20), 5633-5649. There are various lean strategies adopted by firms. This paper shows that for these strategies to be effective, a firm need to create a close relationship with suppliers and customers. It studies lean design and lean manufacturing. The author works with the hypothesis that creating relationships with suppliers and customers enhances the performance of a firm. Results of this study show that there are positive relationships between lean design and relationship building, relationships building and lean manufacturing and lean design and firm performance.
  • The strategic value of HRD in lean strategy implementation, Alagaraja, M., & Egan, T. (2013). Human Resource Development Quarterly, 24(1), 1-27. This paper examines HRD is applied in the implementation of lean strategy. The author observes that, for HRD to be relevant, firms need to include HRD professionals and HRD functions within an organization. This paper describes an organizational case in which HRD is applied in strategic planning of a firm.
  • Prefabrication: a lean strategy for value generation in construction, Björnfot, A., & Sardén, Y. (2006). (pp. 265-277). Catholic University of Chile, School of Engineering. Prefabrication has been applied in lean construction process but there are still issues of how beneficial prefabrication is to the construction industry. It is shown that prefabrication can help deal with value fluctuation in complex situations such as conventional construction where client value is not well defined.
  • A lean strategy to performance measurement–reducing waste by measuring’next’customer needs, Leong, M. S., & Tilley, P. (2008, July). In Proceedings for the 16th Annual Conference of the International Group for Lean Construction Safety, Quality and the Environment (pp. 757-768). University of Salford.  This paper analyzes how lean strategies are related to performance. The author observes that with a lean strategy, a manufacturing firm is able to anticipate the needs of the next customer and therefore reduce wastage during production.
  • Invited reaction: The strategic value of HRD in lean strategy implementation, Yorks, L., & Barto, J. (2013). Human Resource Development Quarterly, 24(1), 29-33. In this paper, the authors examine the implementation of a lean strategy in which HRD is an integral part of the process. The paper offers a model that firms can use to enhance lean strategy with HRD and which can be used in future research.
  • Lean strategy and accounting: the roles of the CEO and CFO, Fiume, O. (2012). Lean Accounting: Best Practices for sustainable Integration, 43-65. A firm’s management has a role to play in the implementation of lean strategy. This paper looks at how lean strategy is related to accounting and how CEOs and CFOs can enhance the process.
  • Lean strategy deployment delivers customer satisfaction at GE Healthcare, Pejsa, P., & Eng, R. (2011). Global Business and Organizational Excellence, 30(5), 45-55. GE Healthcare has faced several challenges in its implementation of combined services and unifying the strategies while at the same minding customer satisfaction. The author in this paper explores different ways lean strategy can be used to enhance customer satisfaction.
  • Human influence on the adoption of Lean strategy in the process industries: A case study of an Australian steel-manufacturer, Alony, I. (2010). When implemented the correct way, lean strategy can positively enhance manufacturing in process industries. This paper examines how human influence has affected the implementation of lean strategy in steel manufacturing factories in Australia.
  • Lean strategy, Collins, D. (2016). Harvard Business Review, 94(3), 63-68. Even though lean strategy has been popularized in most industries but there are still gaps on how the strategy is used. This paper aims at exploring all the aspects of lean strategy to give insights on how firms can apply them in manufacturing.
  • LEAN STRATEGY APPLIED IN THE ORGANIZATIONAL CHANGE PROCESS MANAGEMENT.,DOVAL, E. (2015). Review of General Management, 22(2). There have been so many changes in the manufacturing industry. However, most of the positive change is seen in organizations that have applied lean strategy which was developed by Toyota in 1990. This paper looks at the changes that have been seen in the management and lean management and how they form the basis for lean strategy.

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