Fundamental Concepts

From Lean Manufacturing to Lean (Almost) Everything

You can argue that the Lean Manufacturing concept had its glory days, and that there are a lot of limitations to it (some of them resulting from our own limited understanding of the fundamentals of the concept), but still: it’s not all bad.

For those who still wonder what lean manufacturing is

Lean manufacturing (or lean) is a systematic way of reducing waste while continuously improving the quality of the product, in accordance with the values desired by the customer.

The origin of lean manufacturing

Surprisingly, Henry Ford was not the initiator of the lean manufacturing.

The origins of lean manufacturing go back as far as 1450s at the Arsenal in Venice.

In the modern era, Henry Ford brought back to life the idea of integrated manufacturing processes, by standardizing the parts and the sub-processes involved, and creating the “flow production” – the (in)famous assembly lines.

The lack of variety in his product-offering was one of the reasons Ford’s model worked so well.

As soon as companies were trying to add some variety in their production processes, this model started to show its limits.

Taiichi Ono and Kiichiro Toyoda were those who found a way to put the two elements together: increased product complexity without compromising the quality of the final product and insuring the continuity in the process flow.

They called their invention the Toyota Production System.

James P. Womack analyzed the thought process that created the lean concept in The Machine That Changed the World.

The 5 Lean Manufacturing Principles

Later, in his other book Lean Thinking, he identified the 5 lean principles as follows:
1. Identifying and defining the value desired by the customer
2. Mapping the value stream (and trying to eliminate the waste-generating process steps)
3. Creating a continuous process flow
4. Establishing pull between the steps where continuous flow is possible
5. Pursuing perfection

As lean’s central concern is the elimination of waste and continuous improvement, it’s normal to see this concept applied outside of manufacturing, in other areas of the business, or in other types of business.

That’s how concepts like lean service, lean software development, and even lean startup appeared and flourished.

Lean service

In the service industry, the “waste” or the non value-adding activities were identified as follows:
– Delays for the customer
– Unnecessary movement (queuing at several spots, no one-stop shop, etc)
– Unclear communication
– Errors in transactions
– Low service quality
– Duplication of work or data collected.

Lean software development

Here the types of “waste” identified were:
– Defects (IT change management issues, low quality of execution)
– Waiting (slow response time from the application)
– Underutilized employee knowledge
– Excess inventory (hardware and data repositories)

Lean Startups

But maybe the most surprising new area of application is in startups.

Eric Ries was the first to adapt the lean management principles to tech startups.

As surprising as it may seem at first sight, the use of lean manufacturing in starting and growing a new company is actually quite appropriate.

Here are the reasons why this should work:
– Customer focus: One of the first lean principles says that you should seek the customers’ feedback. What is that your product needs to do to bring value to the customer?
– It eliminates “waste” by focusing on the MVP (the Minimum Viable Product)
– It continuously seeks perfection by constantly iterating on the MVP (improving the MVP based on the feedback collected from the customer).

But, independent of the industry or the area of an organization where lean is implemented, in order to be successful, it has to be a “cultural change” rather than a “technical change”.

A good book that could explain what the “culture” meant in the successful implementation of the Toyota Way is The Little Book of Ikigai.

The book has nothing to do with the technicalities of lean manufacturing, but everything to do with the lean principles of continuous improvement and constantly seeking perfection.