What is lean project management? 5 principles explained

When you think of the word lean, you may think of food. Lean meats, like poultry and fish, are healthier than red meats, like steak and pork, because they have less fat. In other words, red meat has a surplus of fat as opposed to lean meat. When it comes to project management, surplus shows up as project defects, which can cause scope creep and reduce project value. Like the differences in types of meat, lean project management results in less surplus, which can keep your project healthier.

When you adopt the lean approach, your goal is to reduce waste and add value during every project phase. In this piece, we’ll explain what lean project management is and outline how to use this Agile methodology to improve your productivity. 

How was the lean project management methodology created?

Japanese engineers at Toyota invented the Toyota Production System (TPS) between 1948 and 1975, which served as the inspiration for what we know as the lean methodology today. The TPS was used to improve manufacturing and enhance interactions with suppliers and customers, as well as eliminate waste. 

Dr. Jeffrey K. Liker, author of “The Toyota Way,” outlines the principles of lean management in his book and explains how companies can apply the TPS to other industries. Liker also explains how TPS—and lean management as a whole—can eliminate various types of corporate waste. 

John Krafcik was the one to introduce the lean approach to project management in his 1988 article titled, “Triumph of the Lean Production System.” Krafcik wrote this article for his master’s thesis at MIT Sloan School of Management, and his research resulted in the best-selling book,  “The Machine That Changed the World.” Lean project management has influenced a whole subset of methodologies, including Agile, Kanban, and Scrum.

5 principles of lean project management

The five principles of lean project management serve as steps for how to reach prime customer satisfaction. Use these steps if you want the best chance of reducing product waste, staying within project scope, and meeting critical success factors.

1. Identify value

The first core principle in the lean project management process is to identify your product value. To do this, you need to know your stakeholder. Sometimes you’ll be creating project deliverables for internal stakeholders, while other times you’ll have a customer who’s an external stakeholder.

• An internal stakeholder is a shareholder of the project who monitors a product’s development because they have a stake in its success.

• An external stakeholder is a customer who buys the product or service and is affected by its quality.

Once you know who you’re building your product for, you can better determine how to make it valuable. For example, product value for an internal stakeholder may mean meeting an internal operations need. Product value to a customer may mean solving a customer problem or making the customer’s life easier. 

2. Map the value stream

Value stream mapping (VSM) is the next principle in lean project management. VSM is a visual tool that involves diagramming your current workflow and your ideal workflow from project initiation to completion. 

When comparing the two workflows, you can identify waste across each project management phase to maximize efficiency. 

Toyota identified types of waste you may find through VSM in lean manufacturing, but in parentheses, you can see how these items may translate to other industries:

• Overproduction (Unnecessary features): Overproduction and unnecessary software features can lead to added costs like extra storage, wasted materials, and useless inventory.

• Inventory (Mismanaged backlog): Inventory waste, waste from incomplete work, and mismanaged backlogs all incur unnecessary costs for storing inventory, transportation costs, and additional costs spent to complete work.

• Motion (Task switching): Motion waste is the unnecessary cost of internal motion by people or machines. This can take the form of redundant processes or an overabundance of business apps. In fact, the average knowledge worker switches between 10 apps up to 25 times per day, but 27% of workers say that actions and messages are missed when switching apps.

• Defects (Technical debt): Defects can result in costly repairs and a loss of materials. Technical debt can result in a loss of valuable time.

• Over-processing (Expensive tools): Over-processing can lead to unnecessary costs like upgrading a product that users didn’t ask for or don’t need. Similarly, money spent on expensive tools can be a waste if the tools aren’t worth it.

• Waiting: Waiting waste is the cost resulting from delayed timelines in final product deliverables.

• Transport: Transport waste is similar to motion waste and deals with external movement, like the unnecessary movement of product and materials. 

• Fragmented teams: Fragmented teams can result in wasted costs due to miscommunication, unnecessary meetings, and lack of strong collaboration.

VSM is the most important step in lean project management. Without it, you won’t have the visualization you need to notice flaws in your project life cycle and improve product quality for customers. 

3. Create flow

In this step, you’ll rework your project management plan to be more efficient by removing the waste you identified in step two. To do this, break down every stage of product development and reconfigure steps as needed. Use project milestones as checkpoints to ensure new waste doesn’t develop as the project progresses. 

For example, imagine you identified in step two that you have a mismanaged backlog and delayed timeline due to a bottleneck in team member scheduling. This is where you’ll determine how to remove those pain points and piece your project plan back together. 

Establishing open communication with your team members is the best way to ensure your VSM was worth the effort. Once you’ve taken time to identify and remove waste, your team can work together to prevent future inefficiencies and keep waste from building back up. 

4. Establish pull

Establishing pull means pulling work from the previous process stage as work is completed. This concept originated in manufacturing to help factories meet the exact demands of their customers with a “just-in-time” inventory system. However, a pull system is also helpful in other industries because it keeps your workflow moving efficiently. 

Example of a pull system in software development:

1. The tech designer finishes their task and flags the product for review.

2. The review flag signals the coding stage to begin.

3. Your coder finishes their task and flags the product for review.

4. The review flag signals the testing stage to begin.

5. The product tester finishes their task and flags the product ready for final review.

6. You conduct a final review of the product.

Establishing pull can help teams in various industries because it keeps work moving seamlessly through the project life cycle. Industries that produce customer-facing products will benefit from this system if they use pull signals to work backwards. That way, their team only produces inventory when customers need it. 

5. Continuous improvement

Lean project management isn’t a one-time thing—rather, it’s an iterative process. Striving for perfection is the fifth principle, which involves making continuous improvements to your workflow. 

Whether your customer is an internal or external stakeholder, their demands will be ever changing. This means you’ll need to assess your product value intermittently and regularly analyze your workflow for waste.

Lean project management tools

You can use the tools below to improve your product development workflow. When striving for continuous improvement, these tools will help you and your team reduce waste, improve productivity, and increase customer value. 

Deming cycle (PDCA)

Dr. W. Edwards Deming developed the Deming Cycle in the 1950s. His method, also known as the Plan-Do-Check-Act cycle, or PDCA, was a revision of an earlier three-step problem-solving method created in the 1920s by Dr. Walter Shewhart. 

There are four steps in the PDCA cycle:

• Plan: Investigate your workflow and identify any problems that need solving.

• Do: Find solutions to the problem by analyzing data or collaborating with team members. 

• Check: Monitor whether your solutions are effective and make improvements to your plan if needed.

• Act: Apply revised solutions and assess what you’ve learned.

The Deming cycle is a simple process you can apply to various organizational processes. When implemented correctly, this process can make a significant impact on your product value. 

Lean Six Sigma project management (DMEDI)

Lean Six Sigma is a lean management tool you can use to identify problems in your workflow. This tool has steps just like the Deming cycle, but it also has methods of analysis you can use alongside it. The Lean Six Sigma steps, also known as DMEDI, are as follows:

• Define: Define your project scope and plan goals

• Measure: Determine how you will measure success in your project

• Explore: Explore new ways to improve the project process

• Develop: Develop a fool-proof project plan

• Implement: Implement the project plan

The methods of analysis you can use with Lean Six Sigma include:

• Value stream mapping: As mentioned above, VSM can help you visualize the phases of your project management plan and identify areas of waste.

• Customer feedback surveys: Getting feedback from customers is a great way to assess project issues and increase product value.

• Gantt charts: Gantt charts are like bar graphs that can help you visualize project milestones.

• Root cause analysis (RCA): Use RCA to discover the root causes of problems and find solutions.

• Kanban: By visualizing your tasks and limiting work in progress, Kanban boards help you see how your work flows. 

You can decide which lean management method to try based on your industry, your product, and your team. You can also try various lean management methods on different project initiatives and see which works best. Regardless of which method you implement, make sure you’re using project management software to easily implement these methods of analysis. 

Why lean management is important

Industries like IT, construction, and education have adopted the lean methodology because of the many benefits it provides. Lean project management can improve product value by streamlining processes. 

Other benefits of lean management include:

• Increased innovation: Improves the project by sparking creativity

• Reduced waste: Reduces physical waste and waiting times between production steps, while also minimizing overproduction and over-processing

• Enhanced customer service: Provides what the customer needs—nothing more, nothing less

• Better lead times: Results in faster response times and fewer delays

• Higher quality products: Minimizes product defects by adding quality checks

• Improved inventory management: Prevents setbacks by monitoring inventory

Whether your company serves internal or external stakeholders, switching to lean thinking can simplify your work processes and create a more efficient project team. 

Improve your workflow with lean project management

Many companies work hard to produce high-quality products and leave their customers satisfied, but the lean methodology makes achieving these goals easier by removing bottlenecks and cleaning up production.

Regardless of which project management system you use, project management software can aid in process improvements. When you use software to streamline your processes, you can better visualize your project schedule, communicate with team members, and meet customer requirements.