What is Lean Management Information System? And How Does It Work

Overview

The principles of lean management systems urge the efficient use of resources, minimizing waste, and continuous improvements.

As the principles suggest, lean management is not a one-time process. It is an iterative process that seeks perfection and continues with improvements. The concept of lean management can be applied to any field, including information systems.

Let us discuss the key principles of lean management and their application for information systems.

What is Lean Management in Information Systems?

Lean information management in the information system is the efficient use of information, reducing waste time, and producing the relevant information.

Information systems can implement the key principles of lean management as well. Key features of the lean management information system will include the following.

  • The information system should produce reports if they add value to the management system. Adding value means reports and other outputs should help the management in the decision-making process.
  • The information system should produce information in real-time. A delay would make the information obsolete and it may affect the usefulness of the information.
  • The system should send reports only to the relevant persons.
  • The system should focus on waste minimization. It means avoiding duplication of data and reports.
  • Information users and providers should seek continuous improvements. It means reviewing the usefulness of the information and exploring ways to improve the quality of information.
  • The information system should produce flexible and customized information. Users must be able to receive tailor-made information as and when they need it.

An information system that is rigid and does not produce flexible information cannot be lean. The system should focus on value-added activities and minimizing waste. In an everchanging world of fast-flowing information, the management would need reliable and fast information from a robust information system.

Principles of Lean Management Information System

Organizations can fully utilize the lean management system in several functions. They must follow the key principles of lean management.

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Many organizations fail to achieve effective results because they take lean management as a one-time process. Lean is a process that seeks continuous improvement and a cultural shift through total adaption of the concept.

Information systems can also follow the principles of lean management.

Identifying Value

The first step is to identify the value of the system. It means to assess the needs and requirements of all users of information.

An organization can have internal and external information users. For example, the top management would need summarized reports of every department. Regulators or shareholders may be interested in seeking information that is relevant to them.

A lean information system must be able to identify these value addition metrics.

Value Mapping

It means to create and identify activities that add value. A lean information system would identify such processes that generate value for the system collectively.

Value mapping also means to identify and remove activities that result in waste. For information systems, these activities may include outdated information, unprocessed data, duplication of data, producing irrelevant reports, and so on.

Like any other lean system, the user here will be able to eliminate the “bottlenecks” as well.

Create Flow

Once the bottlenecks have been identified, the management can remove any waste activities. It will lead the management to create a smooth flow of information.

Creating flow means creating a systematic approach to processing information. For instance, the finalized financial reports should go through the hierarchy of control from an accountant to the manager and through an auditor, before they can be presented to the top management.

Establishing the Pull

A lean information system should be flexible and robust. It means it should produce information as and when needed by different stakeholders of the organization.

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A key element of establishing the pull here is to devise a customizable information system. Since management relies on the effective use of information, they must get information that is tailor-made to their needs.

A lean information system can reduce the waiting time here. It can drastically improve the flow of information and help an organization take strategic decisions in a timely manner.

Seek Perfection

As mentioned earlier, a lean system is not a single process. It seeks continuous improvements. A lean information system must also adopt the same philosophy.

A key way to achieve lean management is to seek perfection. True perfection does not exist, there will always be room for improvements. The organization must iterate the process from identifying the value, mapping, waste minimization, and the cycle continues.

The Five S model

There are several tools that an organization can use to implement the lean management framework. Some of these tools include:

  • The Five S Model
  • Kaizen
  • Kanban
  • KPIs

The Five S model is one of the most widely used tools in lean management.

The Five Ss of this model are:

  • Sort
  • Simplify
  • Scan
  • Standardize
  • Sustain

Sort

Sorting means prioritizing the resources. It also means the management should get relevant information. Irrelevant information and data should be either archived or discarded.

Simplify

Simplification refers to store information in a way that it becomes easily accessible. The management should be able to fetch valuable information as and when they need it.

A lean information system using the latest technology should be able to perform this task efficiently.

Scan

It refers to remove irrelevant information, resources, and processes. For some organizations, it may mean overhauling the outdated information system infrastructure as well.

The scanning process is akin to waste minimization and efficient use of the available resources.

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Standardize

It means to standardize the processes and rules that add value to the organization. It means to set the Dos and Don’ts of the organization as well.

A lean information system can be use of standardized protocols, intellectual properties, and data protection practices.

Sustain

Sustain means to keep the pace of continuous improvements. It is the iteration of all the four steps above to find perfection.

A lean information system will also develop newer standards quickly, looking for continuous improvements at all times.

Advantages of Lean Management Information System

A Lean management information system offers several advantages to an organization when implemented correctly.

  • It results in an efficient and robust information system.
  • It develops a flexible and customized system.
  • A Lean information system produces value addition activities and reduces the waste processes.
  • It helps an organization introduce standard protocols and policies.
  • A lean information system can help reshape the corporate culture of an organization.
  • It can reduce costs and maximize profits through value addition in the long run.

Disadvantages of Lean Management Information System

Despite its usefulness, the lean management information system can offer some limitations as well.

  • The cultural shift to implement lean management is difficult.
  • The adoption can be costly at first.
  • The process may seem overwhelming for many organizations.
  • The stress for continuous improvements may push the employees beyond limits in some cases.
  • If an organization fails to adapt to the lean management system, it may result in low employee morale.

Final Thoughts

Lean management can be implemented in information systems to produce effective and quality information. It can help the management to produce reliable, flexible, and customized information for their needs. It can help an organization to achieve standardized protocols and procedures as well.