Chapter 1
Defining Lean
In This Chapter
Defining Lean as a philosophy, a framework, a methodology, techniques, and tools
Probing the Lean pedigree — what it is and isn’t
Understanding Lean and Toyota — the history and the present
Figuring out how Lean fits in with the global family of business improvement systems
When you first hear the word lean, it conjures up an image. Most likely, you’re seeing a mental picture of thin people — like long-distance runners, or those aerobics junkies who somehow don’t seem to have an ounce of extra fat on them. Maybe you’re thinking about lean food — the foods that are lower in fat and, of course, much better for you. The term lean also implies a sense of speed and agility, with a sort of edge or underlying aggressiveness that recalls the rhyme “lean and mean.”
That’s because the word lean suggests not only a physical condition, but also a certain discipline — a mental toughness. The notion of lean carries with it a commitment to a set of principles and practices that not only get you fit, but keep you fit. People, who are lean, seem to be that way not just temporarily, but continuously. Lean people are committed to being lean; they act a certain way in their habits and routines. Lean isn’t a fad or diet — it’s a way of life.
Now take this concept and apply it to a business or organization. What does lean mean, business-wise? Back in 1988, a group of researchers working at the Massachusetts Institute of Technology (MIT), led by Dr. James P. Womack, were examining the international automotive industry, and observed unique behaviors at the Toyota Motor Company. Researcher John Krafcik and the others struggled with a term to describe what they were seeing. They looked at all the performance attributes of a Toyota-style system, compared to traditional mass production. What they saw was a company that:
Needed less effort to design, make, and service their products
Required less investment to achieve a given level of production capacity
Produced products with fewer defects
Performed its key processes — including concept-to-launch, order-to-delivery, and problem-to-repair — in less time and with less effort
Needed less inventory at every step
Had fewer employee injuries
They concluded that a company like this, a company that uses less of everything, is a “lean” company. Table 1-1 shows a contrast between a traditional mass production organization and a Lean enterprise.
And just like that, the term lean became associated with a certain business capability — the ability to “do more with less.” Lean organizations use less human effort to perform their work, less material to create their products and services, less time to develop them, and less energy and space to produce them. Lean organizations are also better oriented toward customer demand, and develop a higher quality of products and services in the most effective and economical manner possible.
The practice of Lean — from here on capitalized because, in this context, it’s a proper noun — is therefore a commitment to the set of principles and behaviors that not only gets your organization fit, but keeps it that way.
Table 1-1 The Lean Enterprise versus Traditional Mass Production
| Mass Production | Lean Enterprise |
| Primary business strategy | Focus is on exploiting economies of scale of stable product designs and non-unique technologies. A product-centric strategy. | A customer-focused strategy. Focus is on identifying and exploiting shifts in competitive advantage. |
| Organizational structure | Hierarchical structures along functional lines. Encourages functional alignments and following orders. Inhibits the flow of vital information that highlights defects, operator errors, equipment abnormalities, and organizational deficiencies. | Flat, flexible structures along lines of value creation. Encourages individual initiative and the flow of information highlighting defects, operator errors, equipment abnormalities, and organizational deficiencies. |
| Operational framework | Application of tools along divisions of labor. Following of orders, and few problem-solving skills. | Application of tools that assume standardized work. Strength in problem identification, hypothesis generation, and experimentation. |
In this book, we fill you in on the origins, applications, and continuing evolution of Lean, which is now an established science and a mature global practice. Although Lean has a toolset, it is much more than a set of tools. Lean is a philosophy, an approach to your life and work. Lean is a journey, without a predefined path or end state. It’s a way to go forward that guarantees continuous improvement. Lean isn’t a diet or a fad; it’s a disciplined way of life.
What Is Lean?
Lean is a broad catchphrase that describes a holistic and sustainable approach to using less of everything to give you more. Lean concepts aren’t new; companies large and small around the globe have practiced the techniques in various forms for decades. The term Lean can be described by the following ideas:
Maintaining an unrelenting focus on providing customer value
Respecting people most of all
Adopting a philosophy of continuous learning and everyday improvement
Using techniques for reducing variation and eliminating waste
Taking the long-term view
Improving value not just locally, but globally — across the whole “value stream”
Providing exactly what’s needed at the right time, based on customer demand
Leading by focusing not just on results, but
how results are achieved, where customer value is created, and by building capability in employees
Building long-term relationships with all its stakeholders, including employees, managers, owners, suppliers, distributors, customers, the community, society, and the environment
Keeping things moving — flowing — in a value-added, effective manner
Lean means less of many things — less waste, shorter cycle times, fewer suppliers, less bureaucracy. But Lean also means more — more employee knowledge and empowerment, more organizational agility and capability, more productivity, more satisfied customers, and more long-term success.
Although the term Lean was originally associated with manufacturing and production processes, Lean covers the total enterprise, embracing all aspects of operations, including internal functions, supplier networks, and customer value chains. A broad range of industries — including automotive, aerospace, banking, manufacturing, retail, construction, energy, healthcare, and government — have applied Lean.
The Shingo Prize, called “the Nobel Prize of Manufacturing” by
Business Week, was developed...
