Lagging Indicator

Indicators that measure results and outputs. They are easier to measure but "after the fact" and harder to influence.

Lateral Thinking

A way of solving problems using an indirect and creative approach via reasoning that is not immediately obvious. Lateral Thinking involves ideas that may not be obtainable using only traditional step-by-step logic. Introduced by Edward de Bono in his book The Use of Lateral Thinking (1967).

Last-In, First-Out

Abbreviated LIFO, a material or information flow system in which orders arriving earlier are delayed by new orders arriving on top of them.

Law of Large Numbers

A statistics theorem stating that, as the size of the sample of a random variable increases, its average will approach the theoretical average. In other words, the more times you roll a dice, the more likely the average of the rolls will come out to be 3.5. The insight is that we should be careful not to infer characteristics about a population from a small sample size.

Lead Time

The time required for an order to progress through a process or a value stream from start to finish. Lead time at a business level can be from initial inquiry through delivery and payment, or call to cash Lead time at the plant level is often is called door-to-door lead time. Lead time can also be measured in product design as being from concept to launch.

Leader Standard Work

The set of actions that a leader must perform daily, weekly, or monthly to ensure that their organization or team functions successfully.

Leading Indicator

Indicators that measure processes and inputs. They are harder to measure but easier to influence.


An operational philosophy based on maximizing customer value by minimizing waste.

Lean Accounting

The system of management accounting and controls that accurately report the financial impact of improvements that are made throughout a lean journey. Lean Accounting was developed in response to the fact that traditional accounting systems were developed to support large batch manufacturing, encourage non-Lean decision-making such as batch processing, maximizing local efficiency even when hindering flow, and the build-up and handling of costly inventory.

Lean Champion

A person with practical experience and knowledge in many aspects lean management system, techniques and methods who has been identified by the organization as a leader or key resource in promoting Lean practices.

Lean Journey

The ongoing process of learning, introducing and adapting Lean processes, principles, methods culture into an organization. It may also refer to such a personal journey.

Lean Manufacturing

A production management system characterized by the endless pursuit of waste elimination, resulting in the use of the minimum amount of manpower, materials, money, machines, space etc. to deliver value to the customer on-time. The Lean manufacturing model is based on the Toyota Production System.

Lean Six Sigma

The blending of Lean and Six Sigma philosophies, methods and tools into one cohesive approach.

Lean Startup

An approach for developing businesses, products or services that aims to shorten the development cycles and rapidly test the viability of a proposed business model. The Lean Startup approach uses a set of methods including experimentation, iterative product releases, root cause analysis, and validated learning.

See also Minimum Viable Product

See also Build-Measure-Learn

Lean Transformation

A systematic and organization-wide effort to introduce Lean philosophies, methods and tools into an organization. A transformation is a long-term effort that touches all aspects and every person in the organization, rather than a limited or localized project.

Lean Tools

A term encompassing the various methods, concepts, practices, techniques, systems, sub-systems, templates, formats and other aids to building, improving and maintaining a Lean operation.

Level Loading

The distribution of work volume, across people, processes or equipment over time to better balance them and achieve an even and smooth flow.

Line Balancing

The distribution of work tasks across people, processes or equipment within a production line so that each has the same workload in terms of time, enabling even and smooth flow.

Little’s Law

A queuing theorem that defines the relationship between work in process (WIP), throughput and lead time within a stable system. The long-term average number of customers in a system (L) is equal to the long-term average effective arrival rate (λ) multiplied by the average time (W) a customer spends in the system.

Lead time = WIP / Average Production Rate

For example, if there are 42 items in process, and the production rate is 7 per day, it will take a new item 6 working days to enter and exit the system.

Load-load Line

Local Optimization

Increasing the efficiency or effectiveness of one process or sub-system without consideration for the effect this may have on the efficiency of the whole system.

Lot-making Board

A tool for scheduling batch processes within a downstream pull system. A lot-making board collects the physical kanban cards that are released from containers as material is consumed. The board is located at the producing process, and visualizes all of the part numbers produced there. There is a place on the board for each of the kanban cards in the system. Lot-making boards allow information to flow to the production process more often, signalling what has been consumed. This allows information to flow in smaller increments than using a signal kanban. Lot-making boards also visualize the inventory consumption and highlight potential supply problems. Accurate use of a lot-making board requires discipline in limiting inventory, the creation of many kanban cards, and the timely return of kanban cards to the board.

Low Cost Intelligent Automation

The use of simple, low-cost mechanisms to automate processes to fit the needs of a process.

See also Karakuri

Low Hanging Fruit

Savings or improvements that are easy to achieve.

Lower Control Limit

A horizontal line plotted on a control chart representing the lowest process deviation that should occur if the process is in control.