Lean Development: value creation or elimination of losses

Abstract

AIM OF THE PAPER

Initial point of continuous improvement and effective operation may be the need for creating value. Corporate interpretation of this concept appoints the applicable methodology and the management toolset. Nowadays there is an increasing attention on lean management that emphasises the goals of value creation in principles, but the focus is on locating and eliminating the waste elements of operational processes. The aim of the paper is to explore the corporate possibilities of utilising, enhancing or completing the benefits of lean thinking.

METHODOLOGY

The paper reviews the key issues and opportunities of continuous improvement through the analysis of barriers and conditions of lean management as well as the relationship between losses and value. The paper presents case studies about the application possibilities of lean thinking. However, “simple copy” of the examples in not possible because of the specific conditions, the experiences allow the corporations to find and manage the own problems.

MOST IMPORTANT RESULTS

Based on the corporate characteristics, it is feasible to find the balance between process and product orientation, and the focus on elimination of losses and value creation. In case of a limited standard product range, standard products and stable market demand, it is appropriate to focus on fighting against losses. Furthermore, the trust of company members is critical, because they can become the obstacles of development pursuits if dismissals or other withdrawals are presupposed.

RECOMMENDATIONS

The source of significant savings may be the elimination of losses found in processes, but it is not enough. If increasing the stakeholder value of the corporation is seen for the owners’ goals, it must be considered that it is achievable by increasing the customer value in the long run. It is reasonable that loss elimination has limited scope. Attention to creating new value can boost up the pursuits.