A five-step thought process that Womack and Jones introduced in 1996 to guide managers through a Lean transformation. The five principles are:
- Specify value for each product family from the end consumer's point of view.
- For each product family, identify all steps in the value stream. Where possible, eliminate steps that do not create value.
- Ensure that the value-creating steps are performed in rapid succession so that the product finds its way to the customer without hiccups.
- Once this flow is established, let customers engage value through the pull principle in the next upstream activity.
- Once the value has been specified, the value streams identified, the redundant steps removed and flow and pull introduced, repeat this process over and over again until a state of perfection is reached in which perfect value is created without waste.
(Based on Womack and Jones 2010/2018, pg. 12.)
In 2007, Womack and Jones simplified the five steps to Purpose, Process and People:
Purpose: the primary purpose of any organization and the first step in any Lean thought process is the correct specification of the value the customer is looking for in order to solve the customer's problems in a cost-effective manner so that the organization can operate successfully.
Process: once the goal is specified, one focuses on the process (the value stream) used to achieve this goal. Generally, this is the combined result of three processes: product and process development, execution from order to delivery, and support for the product and the customer during the period the product is used. These primary processes are enabled by a variety of secondary, support processes within the organization and upstream.
The ideal process is one in which each step (action):
- Value is: the customer is willing to pay for the step because it provides value and would protest if the step were omitted;
- Capable is: he delivers a good result every time;
- Available is: it can be run at any time it is needed;
- Adequate is: he possesses the ability to maintain continuous flow in production;
- Flexible: it can run a series of different products within a product family through a process without batching and delays.
In addition, in the ideal process, the steps are linked by:
- Flow: the goods or services move immediately from one step to the next without interruptions;
- Pull: when continuous flow is not possible, each step downstream gets exactly what it needs from the previous step upstream;
- Leveling: from a pacemaker point, level the execution of the process while continuing to meet customer needs.
People: once the primary and supporting processes needed to create value for the customer have been identified, someone must be made responsible for each value stream. This value stream manager must coordinate the efforts of everyone involved in a value stream to steadily lead it to the customer and, in the meantime, continually drive performance to the next level. This requires the following:
- A master plan for the enterprise, often called strategy deployment;
- Frequent improvement cycles for each process, often conducted using A3 analyses that include value stream maps;
- Standard work with standard management for every step in every process.