One of the great things about books is that they will wait for you to find them. A good find for me recently was Lean Thinking by James Womack and Daniel Jones. Lean Thinking first appeared in 1996 and a new edition was published in 2003, but my attentions were focused elsewhere at those times. I came across this book as background reading for the business novel I’m now writing - and I was very impressed, even fired up about the concepts the authors put forth.
What these guys have been challenging is nothing less than the big, industrial economies-of-scale mentality that became standard in the Twentieth Century. The assumption that bigger is always more efficient than smaller. The notion that centralized mass production is less costly than local, small-lot production. Actually, the book asserts, these practices are often extremely wasteful. They drive costs skyward, rather than reduce them. They lead to big piles of inventory sitting there, waiting to be processed. Big carrying costs. Long waiting times for customers. Lousy delivery. Perhaps worst of all, industrial mass production forces us to accept is offered rather than delivering what we really want and need.
So I’m reading this, and I’m thinking, “Wow. This is great stuff.”
Why? Because if you can successfully challenge the mass-production mentality with a system that allows quick change-overs in what is being made and a high rate of throughput, you can achieve tremendous adaptability and flexibility in whatever you’re selling. (These concepts apply to many types of service businesses, by the way, not just manufacturing.) You also gain the potential for quicker turnaorund and faster delivery. Furthermore, you can do these things with a lot less money being tied up in inventory, and probably do it at lower overall expense through smaller facilities, far less waste, and so on. You put all that togeher and you can end up with a huge business advantage, especially if your organization can achieve it before your competitors do.
Anyway, that’s the vision. Womack and Jones use some terrific examples to make their points. Some are actual companies that have made the switch. Others are hypothetical, but they do a nice job of showing the reader the waste in industries like air travel (with the vaunted and expensive hub system), and in medicine (where the patient’s time is wasted in the name of efficiency for the healthcare provider). What these show is that what is often touted as being highly efficient is really not efficient at all. What is claimed to be efficient is the local process, not the system. Take for instance a machine that produces 1,000 cans a minute - but then those thousands of cans sit on shelves in a warehouse for six months.
Lean production builds upon the conceptual basis of the Toyota Production System. I was writing about TPS back in the 1970s and most of it made a lot of sense to me, despite the opposition and supposed impracticality here in the western world. Now, I don’t run a factory (I just write about it in novels), so I can’t personally vouch for the efficacy of Lean, but, man, these ideas really open things up.
Ah, but as with all visionary ideas, there are caveats and problems to be acknowledged. First of all, Lean Thinking, as a way of doing things, runs smack into a wall made up of standard operating practices: policies, metrics, culture and so on. It is hard out there in the real world to get people inside even just one organization to buy in and get up to speed on Lean practices. And the biggest potential of Lean is when it can cross organizational boundaries to include suppliers and customers. Which can be problematic in the extreme.
In the book, one gets the sense of the authors’ revolutionary zeal, which is necessary for change, but which can also lead to a further, subset of problems, as I have gathered from other reading and discussion. For one thing, the implementation of Lean is often conducted as a “program,” and as such it can often be marginalized and sabotaged by the powers invested in the status quo.
A even larger issue is that Lean has a few flawed assumptions of its own. Again, this is not my deduction; it’s from those in the know. In practice, in the zeal to eliminate waste, Lean can create its own chaos in the supply-chain flow. Lean can also become quite expensive, what with training and all those program activities, and it can become a major distraction even with the guidance of bright, well-intentioned managers. Worst of all, a company can implement Lean and yet have nothing to show for it with respect to bottom-line improvement.
The good news is that with the right strategy, and a judicious application of Lean principles and toolsets, Lean in alliance with a few other concepts can still achieve powerful results that do lead to major throughput improvements and bottom-line gains. One hint: you don’t have to and shouldn’t eliminate “waste” everywhere. What the Lean folks mistakenly identify as waste may in fact turn out to be necessary. Well, that’s what I’m writing about now. More on that at a suitable time.
But meanwhile and regardless, I do highly recommend Lean Thinking if you haven’t read it yet. The writing is serious, non-fiction prose, and a bit dense and a little long in places, but on the whole very good. Lean Thinking is worth the time of every manager - and indeed anyone who cares a lick about improving the systems, commercial and otherwise, upon which our civilization depends.