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value to the product, which activities add no value but cannot be immediately
eliminated for various reasons, and which activities create no value and can be
immediately eliminated (or at least reduced substantially).
Create Flow in Each Value Stream

The third essential principle of lean is embodied in the word flow. When a
value stream has been completely described as unnecessary, non-value-adding
activities have been eliminated, the basic idea of flow is to arrange the remaining
activities sequentially, so that products will move smoothly and continuously from
one activity to the next. However, flow means more than ease of movement. Flow is
the lean principle that directly challenges the traditional “batch-and-queue” model of
manufacturing, where people and equipment are organized and located by function,
and products (and component parts) are manufactured in large batches. Lean
organizations strive to improve flow by reducing the size of production batches, and
in the process, they increase flexibility and lower costs.
Produce at the Pace (Pull) of Actual Customer Demand
Producing at the pace or pull of actual customer demand is the fourth key
principle of lean. One of the greatest benefits of moving from traditional batch-and-
queue manufacturing to continuous flow production is that lead times fall
dramatically. Reduced lead times and increased flexibility mean that lean
organizations can respond to actual customer demand rather than attempt to predict in
advance what that level of demand will be. This allows lean organizations to
substantially lower both finished goods and work-in-process inventories.
Strive to Continuously Improve All Business Operations
The fifth core principle of lean is continuous improvement, expressed in
Japanese by the word kaizen. Companies that implement lean adopt the mind-set that
it is always possible to improve any business activity, and they regularly conduct
kaizen events throughout their organizations to improve specific processes or
operations. Today, Toyota is recognized as one of the most “lean” business
enterprises in the world. Even more daunting, and humbling, is the fact that Toyota is
still striving to improve.
KEY TAKEAWAY
Lean control, or simply lean, is the system of nonfinancial controls used
to improve product and service quality and decrease waste. While popularized
through the dramatic successes of Toyota in auto manufacturing, lean processes
are used to improve quality and decrease waste in most service and
manufacturing industries around the world. In this section, you saw examples
of the seven deadly wastes (muda) and the five core principles of lean which
culminate in continuous improvement, or kaizen.
EXERCISES
1. What is lean control?
2. What types of industries might find lean controls valuable?
3. What does muda mean and what are some examples of it?
4. What are the five lean principles?
5. Pick a company you are familiar with—what would it need to do
differently to comply with the five lean principles?

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