.Lean product development is an approach to developing products that focus on reducing waste, speeding up delivery, and increasing profit.
Dozens of successful companies, including John Deere, Nike, and Intel, use this approach to product development. Formulated initially by Toyota, lean development is an excellent approach for new businesses seeking to capture the most customer value with the least amount of waste.
Here’s what entrepreneurs need to know about lean product development.
Background: The History of Lean Product Development
Lean product development, or lean manufacturing, originates from Toyota in the late 20th century. The Toyota Production System was born from a need to meet the varying tastes of car buyers.
Ford’s factory model couldn’t meet the demand of the growing middle-class post-World War II. There was an increased interest in different shapes, sizes, and colors of cars. Consumers wanted different models, thereby requiring different materials, production lines, and skilled labor.
Toyota’s approach to meet this demand depended on two central tenets: jidoka and just-in-time. Jidoka is a Japanese phrase that roughly translates to “automation with a human touch.”
It refers to a method of quickly identifying and correcting issues that may cause faulty production. “Just-in-time” production focuses on refining and coordinating each step in the production process. Waste is dramatically decreased by producing only the materials needed for the next phase in the sequence.
The rest of the lean development methodology flows from these two core values. Toyota designed a system that minimizes waste while maximizing value to the customer in terms of product quality, price, and functional design. Since then, more companies have applied these values to software, consumer goods, and other manufacturing processes.
Principles of Lean Development
Stemming from jidoka and just-in-time are seven fundamental principles that encapsulate the approach to lean development. These principles dictate how an entrepreneur or new business can adhere to the lean development approach to deliver value and minimize inefficiencies. These principles are:
- Eliminate waste: waste includes anything which does not provide value to the end-user. Lean product development experts define waste very broadly, from “unnecessary movement of workers on the shop floor” to inventory deadstock and overproduction.
- Build quality: this is a disciplined approach to making sure products are well-crafted. It includes things like incremental development, automating tasks prone to human error, and constant feedback.
- Create knowledge: provide a way to capture experience and document learning throughout the process.
- Defer commitment: “To defer commitment means to wait to plan or commit to ideas or projects until you have a full understanding of business requirements explains one expert.
- Deliver fast: deliver a simple product to customers quickly and iterate and enhance new versions after that.
- Respect people: communicate effectively, resolve conflict proactively, respect others, and work as a team for the benefit of the end-user.
- Optimize the whole: every part of the operation must be optimized for one specific end goal – delivering value to the customer.
Lean development principles have been rewritten and applied to the product design context, as well as to starting a company. The Lean Startup, a 2011 book about product development, outlines how to avoid building a product that no one wants or needs by learning from Toyota’s original lean development principles. In today’s competitive economy, applying a lean product development approach can dramatically improve your company’s chance of success.
How to Use Lean Development
Lean product development begins by considering what specific value your product or service can provide for customers. What problem are you solving by developing this product? Do market research and competitive analysis to make sure the demand for what you have to offer genuinely exists.
Next, incorporate the principle of holistic optimization. Involve all stakeholders from the outset. Identify a partner who can work with your business from product design to sourcing to production management and logistics.
“Collaboration in the early stages of a project reduces the number of negative impacts and holdups that can happen down the line as progress continues. Getting manufacturing involved ahead of time allows for problems to be identified and resolved early before they cause deliverability issues later,” describes one expert.
Then, look at ways to eliminate steps in the process that are wasteful or inefficient. The next phase of your lean process seeks to optimize production – often simply constructing a minimum viable product for consumer feedback and testing.
An MVP is a version of a product with just enough features to allow customers to conceptualize what your final product will be and provide feedback accordingly. Respond to customer pull and iterate your initial vision based on what the market demands.
Finally, repeat the process until you’ve achieved perfection. Perfection, as defined by lean product development, is “measurable value with no waste.” It’s an extremely sustainable, profit-building method for product development. Inevitably, this approach benefits both consumers and brands.
Learn more about lean product development by working with the experts at Gembah.