Lean Organization Definition

by Kyra Sheahan; Updated September 26, 2017

Lean is a term used in business to describe a simplified and minimalist approach to doing business. According to the Environmental Protection Agency (EPA), the lean methodology took off in the U.S. in 1980s as a way for companies to reduce overhead costs, streamline processes and production and eliminate waste.

History

According to the Lean Enterprise Institute, lean concepts were exemplified by Toyota in the 1930s when Kiichiro Toyoda introduced the Toyota Production System. In the late 1980s, Jim Womack, MIT graduate and founder of the Lean Enterprise Institute, led a research team that coined the phrase "lean production" to describe Toyota's concept.

Definition

Lean organizations are firms that have adopted the lean methodology into their business model. Any type of company can implement lean concepts into its organizational structure as these concepts are not limited to production and manufacturing industries. For example, Seattle Children's Hospital reports that through the use of checklists, continuous brainstorming and standardization, the medical facility is able to provide more efficient services to patients and make small improvements to eliminate waste.

Function

The lean concept looks for ways to eliminate unnecessary resources so that companies can operate with less. The process begins by identifying things of value. Steps that do not contribute to the value stream should be eliminated so that processes can be completed in a tighter sequence. This should be a continuous process so that businesses are always examining things of value and determining how to achieve optimum performance.

Benefits

According to the EPA, lean organizations are benefiting the environment. By operating within the lean methodology, companies are saving electricity and paper, reducing waste and getting rid of unnecessary chemical pollutants, all of which is good for the environment.

About the Author

Kyra Sheahan has been a writer for various publications since 2008. Her work has been featured in "The Desert Leaf" and "Kentucky Doc Magazine," covering health and wellness, environmental conservatism and DIY crafts. Sheahan holds an M.B.A. with an emphasis in finance.

Photo Credits

  • Comstock Images/Comstock/Getty Images