Lean

Definition of ‘Lean’

The lean method originated from the lean manufacturing process developed in the 1980’s.

The lean methodology puts the customer at the center of the business and seeks to eliminate expenditure on anything which does not contribute to adding value to the customer.

Looked at from the customers point of view only a tiny fraction of actions taken by a business create value, the rest of the actions are to do with the way the business is organised and are considered to be wasted actions.

In lean manufacturing, actions such as overproduction, excessive inventories, product defects, waiting time, excess transport, excess movement, and excess processing of the product, all lead to wasted actions and need to be eliminated as far as possible.

The lean entrepreneur uses the lean approach during the product development phase to concentrate expenditure on costs which add value to the customer, and eliminate or reduce costs relating to wasted actions. By doing this the lean start up can lower its total costs, reduce its risk of failure and also eliminate the need for large amounts of outside funding to develop a product.

One method of achieving the lean startup method is for the business to issue a minimum viable product (MVP) into the market place. By using customer feedback on the minimum viable product, requested features can be added and unwanted features quickly removed, before a new version is released to the customer. This process can be repeated until the product is fully developed.

Using this method, the majority of the development expenditure is spent on features that add customer value, and wasted features are eliminated without further cost.

For further information see the Wikipedia lean definition.

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