Lean for Small Businesses: Where to Start

Lean is a way of running a business that came out of Toyota's production system after the Second World War. Its aim is simple to state: deliver what the customer values, with as little wasted time, effort and money as possible. It started in car factories, but the thinking works just as well in a plumbing firm, a dental practice or an online shop.

You do not need consultants, software or a factory floor to use it. Most of lean is a handful of habits: measuring how long things really take, removing steps that add nothing, and fixing the cause of a problem instead of working around it every week.

The five lean principles in plain English

James Womack and Daniel Jones summarised lean in five principles in their book Lean Thinking (1996). Translated for a small business:

1. Value. Start from what the customer would actually pay for. A customer pays for a working boiler, not for the second trip back to the merchant.
2. Value stream. Map every step from enquiry to payment, and mark which steps add value and which only add time.
3. Flow. Make the value-adding steps follow each other without waiting: no job sitting for three days waiting for a quote to be typed up.
4. Pull. Do work when the customer needs it, not in big batches just in case. Order stock to demand rather than to a hunch.
5. Perfection. Keep improving in small steps. There is always another wait or another rework loop to remove.

What lean looks like in a small business

Lean ideas are easiest to understand through examples. These are illustrations, not case studies:

• A heating engineer keeps a standard van stock list and a shadow board, so no job starts with ten minutes of searching.
• An accountancy practice stops batching invoices to the end of the month and invoices the day the work is finished.
• A small manufacturer times each step of its most common product and finds one step that is slower than all the others, so it adds a second person there instead of hiring across the board.
• A cleaning company writes a one-page procedure for its most-complained-about task and the complaints stop.

None of these needs investment. Each starts with measuring something that was previously a guess.

Score your business

The eight questions below cover the habits lean businesses share. Answer honestly: the point is to find your weakest area, because that is where to start.

How to start, step by step

1. Pick one process. Choose the one that causes the most trouble: late jobs, complaints or overtime. Do not try to change everything at once.
2. Measure it before you change it. Time it, count the errors or measure the waiting. Without a starting figure you cannot tell whether a change worked.
3. Walk it. Follow one job from start to finish and write down every step and every wait.
4. Remove one waste. Use the eight wastes as a checklist. Waiting and rework are usually the easiest to see.
5. Write the new method down. A one-page procedure stops the process drifting back.
6. Measure again after a month. Keep what worked, then move on to the next problem.

Common mistakes

• Starting with tools instead of problems. Kanban boards and 5S labels are only useful when they solve a problem you have measured.
• Doing it to people instead of with them. The person who does the job knows where the time goes. Ask them first.
• Cutting people instead of waste. Lean frees time. If the first result of an improvement is a redundancy, nobody will suggest the next one.