You can run… You can hide…
But LEAN thinking, systems and practices will become part of the way you manage your business – Like It Or Not.
Unless you have been away from the rest of the developing Western world for the last 25 years, the words “LEAN“, “Continuous Improvement” and “Toyota Production System” should already be engrained in your business vocabulary (and hopefully your way of doing business).
If not, let’s spend a minute looking at what LEAN is…
In 1988, MIT researchers led by James P. Womack were preparing an article for the Sloan Management Review to discuss initial findings of the largest global study ever undertaken of the vehicle manufacturing industry known as the International Motor Vehicle Program (IMVP).
Authored by John Krafcik, this article would describe for the first time a different management system that was out-performing traditional mass producers in the vehicle industry – the Toyota Production System.
In 1937, Toyoda Automatic Loom Works Ltd. strategically created Toyota Motor Co. Ltd from its automotive divisions.
Through its evolution, the organisation faced many challenges:
– Financial hardships;
– Government mandates during armed conflicts;
– Labour unrest;
– Material supply shortages,
– Economic trade restrictions.
So, how did this once loom manufacturer come to out-perform The Big Three producers of the West?
The researchers found that Toyota as a whole envisioned, and still does, to achieve production of what the customer wants – when they need it – without defect – in a continuous flow.
The DNA of the Toyota Production System is very much made up of the fundamental ingenuity of their Founder & Inventor Sakichi Toyoda, the relentless pursuit of unattainable perfection of Taiichi Ohno and the quality and mechanical effectiveness principles of Shigeo Shingo.
Finding integrated supplier and distribution systems, root cause problem solving, an improvement suggestion program, continuously enhanced training programs, the MIT researchers were beginning to discover “how” Toyota had eliminated waste to perform well above of their competitors.
This left Womack and Krafcik with the task of describing the entire Toyota Production System and its distinct advantages both simply and concisely.
Understanding the fundamental differences between the mass production systems of other producers and the led them to describe the Toyota Production System as LEAN Production.
25 years on, the myth of LEAN only being beneficial to manufacturers is still widely believed.
To a degree, the word Production perpetuates this myth however it depends on your understanding of what your business actually does.
You can begin to think differently about how to apply a better way of thinking and managing your business if we replace the word Production with the phrase Creation of Value.
Simply, Value is anything your business creates which customer is willing to pay for.
If an insurance firm explains to a customer that their claim cannot be paid for several weeks due to a backlog in processing – Value is not being provided.
At your favourite restaurant, if your meal arrives at room temperature and you have the pleasure of watching the rest of your party enjoy a sumptuous dinner while you wait for yours to be recooked – Value is not being provided, plus you’re hungry!
There’s a good chance that the non-manufacturing organisations in these examples are not using LEAN thinking to anticipate problems, design them out of their processes and continuously improve the ways they create value.
Today’s successful organisations understand LEAN as a Management System.
The application of Hoshin Kanri strategic planning, A3 problem solving and LEAN Design are just some of the methods that can be incorporated to build your value creating machine.
So, what if your business envisioned an organisation-wide application of LEAN?
That would mean you have to start by admitting there is a better way to do what you’re doing.
You would also have to dispel the myth that service, healthcare, financial and other industries cannot benefit from ways of engaging your team to bring out their innovative ideas to eliminate the many forms of waste.
Watch the video below that compares a Mass Production system against a LEAN Just-In-Time system then ask yourself – “Could my organisation be creating more value for our customers for less?”
If you’re not already out looking to become LEAN, you’ll eventually be faced with the choice to find a better way through demand or competition.
Then why not put LEAN in your sights?
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