Lean Everywhere

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Lean manufacturing has been around for a long time.  Many of the principles of lean were identified in Henry Ford's work before the US Great Depression of the 1930s, and significantly extrended by Kiichiro Toyoda and Taiichi Ohno during the middle of the last century.  Today, Toyota is regarded as the pre-eminent practioner of Lean Manufacturing, and "Lean Thinking", and the company is unique in many ways.  A few diverse (but non-random) examples:

  • Toyota is the only automotive company to grow from a looming/weaving company.
  • Toyota is the only automotive company that has invested in research to create a "car operating system" (yes, I'm talking software OS; not an operating methodology)
  • Toyota is poised to overtake GM as the world's largest automotive company, perhaps as early as 2008.  Despite a dramatic increase in competition in the key US automotive market, Toyota has consistently increased it's sales in the neighborhood of 10% per year over the last 10 years. 
  • Toyota has been extraordinarily open about its manufacturing processes -- guiding thousands of visitors, many competitors, on tours of its operating facilities -- and yet no other company seems able to duplicate its successes. 

Each of these unique Toyota attributes raises questions, but I'd like to dwell today on the last point.  How come no one has been able to duplicate Toyota's success, despite much concerted effort and an extraordinary openess by Toyota itself to competitors? 

In a nutshell, the "secret sauce" is not the operating method or visible artifacts -- it's the thinking process.  The relentless focus on experimentation, continuous learning, and the application of that learning to make improvements as a way of life.  This thinking process does not make Toyota a lean paragon by itself -- it is applied together with the idea that we should seek to provide the right goods and services, at the right price, at the right time, and at the right place with as little waste as possible.   

The idea is striking in its simplicity.  Basically, Toyota applies a scientific approach to meet consumer needs with minimum waste.  Of course, being simple does not equal being easy.   Also, the scientific approach does not replace the need for sound strategy, good people, and strong execution in all of their functional organizations -- in fact, this is one of the key insights: these traditional fundamentals of management are  not separate things from the experimentation, learning, and the application of learning for improvement.  The scientific thought processes infuse *how* these functions work. 

Equally striking, because this is not actually a manufacturing method, but is instead a thought process applied to meeting consumer needs without waste, we can all benefit from lean thinking -- even if we don't work in a plant or in a manufacturing group.  Just as marketing, finance, product development, and customer service organizations within manufacturering companies can benefit form lean thinking, so too can financial, consumer, communications, and service industries benefit from lean. 

This is not just my idea (if only I were smart enough to figure this one out by mysef!).  James Womack, lean guru and founder of the Lean Enterprise Institute advocates applying lean principles widely -- far beyond traditional manufacturing industries.  In particular, healthcare stands out as a beautiful target.  It's an industry that is actually a composite of the service, financial, manufacturing, and retail industries.  If ever there was an industry that consumers wanted to improve it's ability to provide the right goods and services, at the right price, at the right time, at the right place, with minimum waste, it is the US healthcare industry.   I don't say this lightly, or smugly, but clearly there is a lot of discontent with healthcare in the United States. 

Naturally, there's a lot more to applying Lean thinking than what I've described in a few paragraphs.  People spend their lives working to improve their ability to think lean, and apply lean principles.  Understanding the various types of waste all around us, developing the ability to see the waste for what it is, and learing to effectively use tools to reduce the waste in our environment is a continuous journey.  And I should note that while I'm a fan of lean thinking, I'm certainly not a "Lean Expert".  Work, and growth, is required -- for me as much as anyone else.    

Why bother with lean?  Really, why would we want to imitate an old and slow industry like manufacturing?  Especially given it's long and steady decline in the United States.  With the acceleating pace of change in the world, we need new ideas that can help us be agile and adaptive, don't we? 

Well, That's for my next post! 

Update: That "next post" is here.