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How does lean fit together with Lean Startup concepts?

Michael Ballé
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Dear Gemba Coach,

I work in IT and discovered lean through the Lean Startup movement – now as I read more about it I find that lean is about the complete elimination of waste. How does that fit together?

That’s a rather deep question, actually. Lean is the generalization outside of Toyota and the automotive industry of the Toyota Production System (TPS). Toyota Motor Company defines the TPS as a philosophy of “the complete elimination of all waste.” There it is.

TPS did not emerge fully formed. Taiichi Ohno didn’t come down from Mount Fuji with the tablets of TPS and its commandments of kanban. The system grew organically and without any specific program out of the problems Toyota’s engineers set themselves to resolve and their tinkering in resolving them.

Toyota’s original founder, Sakichi Toyota turned his back on the carpentry family trade (still in the days of samurai) to develop an automatic loom to save labor for women slaved to their traditional looms. Sakichi tinkered night and day with his looms to make them as good as British ones – not an easy challenge without an established industry to back him up.

In the process, he came to realize that if a cotton thread broke, the loom would continue to produce bad material until stopped by an operator. This was obviously wasteful, so he came up with the famous andon system – a mechanical device that stops the loom autonomously when a thread breaks.

As loom engineers (and Taiichi Ohno amongst them) tinkered with this idea, they realized that there was no need to keep an operator per loom and, in the 1920s hit upon the idea of saving labor by having one person run multiple looms.

A New Industry Loomed

About that time, as he started the car production company within the premises of the loom factory, Kiichiro Toyoda, Sakichi’s son came to realize that having unneeded parts lying all over the place in times of sparse cash was wasteful, and he invented the concept of just-in-time (JIT) , (he phrased it in English), probably meaning “exactly on time,” what was needed, when needed, in the quantity needed – not more. He tinkered with the idea until all was stopped when the military took over the plant during the war.

After WWII, many out of work aeronautics engineers joined Toyota and with the notion of “takt” in mind – and Taiichi Ohno realize how wasteful it was to run around looking for parts at the beginning of the month and then hurrying to produce at the end of the month – he hit on another form of waste.

As he tinkered with the kanban supermarket system to make JIT concepts work, he further discovered that one-piece-flow as systematically more productive than small batch work. Yet another form of classic waste.

In the same years, another bunch of Toyota engineers figured out that having a press dedicated per part was wasteful in terms of capital use, and since they didn’t have the cash on hand to buy a press per part (or the volume to justify it) they began working on faster changeovers –-  purchasing the few fast changeover presses of an American company that went bankrupt stateside.

TQ and TWI

At the same time, Toyota engineers competed for the famous Deming prize and got up to speed in its total quality practices, deepening their understanding of how wasteful non-quality could be and the links with both standards (developed through yet another American-taught group in the form of the TWI program) and kanban.

Eiji Toyoda, who recently passed away at 100 years old, Kiichiro’s cousin visited Ford operations in the early 1950s, was struck by numerous inefficiencies and came back with the idea of a suggestions system. Contrarily to Ford, he did not seek the one brilliant idea, but saw it as a way to involve all operators in spotting waste in their own jobs.

In other words, the progressive development of TPS can be seen as the study of the various forms of waste generated by our production systems. To a large extent, the spread of lean outside of the automotive industry follows the same pattern. In each new field, the main difficulty is finding the dominant form of waste – which is rarely easy and involves quite a bit of tinkering and kaizen. Dan Jones has done a superb job of showing how lean in healthcare differs from Lean in, say, IT.

I remember wondering, when I co-wrote the preface to the French edition of The Lean Startup what kind of waste was Eric Ries addressing. It’s actually a rather fundamental waste – that of failed new product introduction. And sure enough, Toyota has developed several engineering learning practices to address it. The  minimum viable product (MVP) concept is not necessarily practical in all cases, but customer  immersion, distinguishing fixed from flexible, collaborating intensively with suppliers are all par for the course.

Lean Entrepreneurs

An easy mistake to make in lean thinking is looking for standard solutions – believing that if one adopts this or that lean technique, performance will improve and all will turn out fine. Lean thinking, really, is a science of waste – understanding all the forms of waste in detail and specific circumstances. This is also why lean thinking applies so broadly across industries. For instance, Dupont estimates that 33% of all food produced is wasted (http://fr.slideshare.net/DuPont/infographic-sustainable-food-systems-and-world-food-day-2013) with 33% of all food bought thrown away in the U.S. Lean thinking would probably not follow Dupont’s conclusions of using genetically modified seeds to improve yield in African fields but rather start tinkering with ways to reduce food wastage in consumption and the supply chain.

Taiichi Ohno is quoted as saying: “There is a secret to the shop floor, just as there is a secret to a magic trick. Let me tell you what it is. To get rid of waste you have to cultivate the ability to see waste. And you have to think about how to get rid of the waste you’ve seen. You must repeat this -- always, everywhere, tirelessly and relentlessly.”

The question for lean in IT is what kind of typical wastes can be seen in IT. Wasted money, time and energy on new products people don’t buy is one, for sure, but there are many others, such as the waste created by shifting project scope, unstable dev teams, buggy code and so on. Lean Startup has opened the debate of waste in entrepreneurship –- now we must tinker day and night until we fully grasp the situation and start seeing activities to highlight typical forms of waste, which someone will surely then enshrine as principles!

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