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What's your definition of lean?

8/13/2018
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Dear Gemba Coach,

My company is adopting lean, which has so many definitions that I find it confusing. What's your definition and why can’t all these lean experts agree?

What an interesting question, and indeed hard to answer – for a number of reasons. Let me try and share my personal definition. But first, a bit of background.

The term “lean” was coined in the mid-eighties to describe a set of manufacturing techniques discovered in the Japanese automotive industry, mainly at Toyota, by opposition to mass production. At the time of publication, in 1990, Toyota was half the size of General Motors and two-thirds the size of Ford. Today, Toyota boasts 50% more revenue than GM and 70% more than Ford. It is valued more than GM, Ford and Honda combined. It is also as profitable as BMW, a luxury boutique. Clearly, Toyota was doing something different back then, and clearly, this has worked and is still working).

The question is: what?

Right from the start, different people had different opinions on what lean meant – opinions which still resonate now, more than 15 years after lean became visible in management circles. The opinions fall into three broad categories:

  1. Operational excellence: Lean is what we do, but done better. To many, lean is a box of optimization tricks to make the current business model perform, by applying improvement tools to every process, one at a time. The assumption is that if every part works better, the whole should perform better as well. 
  2. Value stream organization: Lean is a different way to organize operations in order to maximize the flow of value to customers by establishing just-in-time throughout the supply chain, which requires kaizen – continuous improvement from the workers themselves in order to minimize waste. 
  3. Business strategy: Lean is a worldview change about how to look at competitiveness, from the relationships with customers, with employees and with suppliers based on a problem-based developmental approach of every person and a radically different way of thinking about business.

The common aspect to these three perspectives is that they all agree “lean” is a form of “gemba” management (gemba meaning the workplace, the real place, where things happen, and value is added). Lean is clearly different from traditional management because it assumes one can only management meaningfully from standing right where value is being added and by looking for a better way, through kaizen (step-by-step improvement).

Still, as you can imagine, these three different interpretations lead to very different characterizations and practical approaches to lean. Lean can be defined as:

  1. A set of techniques to identify and eliminate waste from operations.
  2. A system of organization principles to maximize value and eliminate waste.
  3. A competitiveness strategy based on satisfying customers by ever better products by developing deeper understanding and greater teamwork from every employee.

Is Toyota Relevant?

Supporters of the first approach consider that most of Toyota’s techniques originate from the wartime U.S. Training Within Industry programs – refined by Japanese precision and the influence of the American quality guru W. Edwards Deming. Lean is mostly used to take costs out of operations by applying lean “tools” – i.e. Toyota-inspired work analysis techniques to every process and generating savings. With this in mind, the techniques can be safely taken out of context and applied to any process, regardless of the bigger picture. This approach has generated an entire industry of lean consultants who will run “savings” programs by rolling out applying basic techniques across the board, mostly focused on “eliminating waste.”

Defenders of the second approach agree that spot optimization seldom leads to global – or lasting – improvement and concur that the production of value must be accelerated throughout the organization. To do so, their focus is on 1/ defining value more tightly (always a tricky exercise); 2/ mapping and clarifying the path of value through the organizational silos, and if possible changing the organization to reflect these “value streams;” 3/ making value flow by eliminating the traditional obstacles created by mass production, such as long batches and piece-rate productivity; 4/ pulling value across the organization by using new techniques such as kanban and other just-in-time tricks, so that work is produced only as needed, when needed, and in the quantity needed and, finally, in order to do all; 4/ constantly engage all employees in improvement by using the lean tools to identify waste and eliminated it – in the context of always accelerating the flow of value (or, technically, reducing the production lead-time between a single order and its delivery).

Proponents of the third approach take yet another perspective and seek overall competitiveness by obsessing on “one-time customer, lifelong customer.” This entails an obsessive attention to quality and delivery, starting with product or service design all the way to production and supplier integration. In order to keep one’s customers, one has to constantly improve the quality of the current products as well as broaden the product range by proposing innovative solutions. To achieve this, every employee is engaged by its management to think more deeply about what they do in terms of 1/ visualizing their work processes and job purpose; 2/ being more autonomous in problem solving; 3/ working better with colleagues across functional borders, in order to; 4/feel greater responsibility, take more initiative, and have more creative ideas. With this worldview, lean is a thinking approach to stimulate each person’s greater understanding of the purpose of their job in the chain of value as well as how to better cooperate with upstream and downstream activities. Not surprising, succeeding at this ambitious plan of better managing individual talents and energies requires a completely different approach to both leadership and management, notably transforming the traditional chain of command-and-control into a chain of help.

The first two meanings of “lean” are by now rather well understood and codified in terms of:

  • Operational excellence: codify Toyota’s improvement techniques and apply them piecemeal in any context.
  • Value-stream organization: study deeply Toyota’s core principles and extrapolate them in different industries.

And by and large, the feeling is that the reference to Toyota is no longer quite as relevant as when we were all learning this stuff. The consensus is that what was there to learn at Toyota was discovered, captured, and written down a while back and that it’s now a question of leadership will and disciplined execution. Indeed, several lean practitioners are now ready to look beyond Toyota for new inspiration.

How I Define Lean

Proponents of the third approach remain puzzled by Toyota’s amazing competitive success and not so certain that all is understood. Their hunch is that is we are really looking at a business system paradigm shift – the feeling we had in the 1990s – most cut and dried explanations will really be a reversal to the mean: normalizing Toyota’s differences into what business already does, with an added plus of lean culture.

For this set of lean people, Toyota today remains very relevant, not necessarily as an ideal, but certainly as long-lasting representative of a different way of thinking we have not quite grasped right now.

Which is, you’ll have to guess where I stand, and why my own definition of lean is “the project to understand what Toyota does differently and see whether this is meaningful outside of automotive.”

Luckily, as opposed to other Japanese companies, Toyota has made tremendous efforts to spell out their business system, particularly in the forms of the Toyota Production System (another Toyota name for it is the “Thinking People System,” which is quite telling):

  • Customer satisfaction;
  • Resting on the pillars of jidoka and just-in-time;
  • And the base of employee satisfaction through standardized work and kaizen;
  • Itself resting on the foundation of mutual trust between employees and management.

And the Toyota Way, regrouping the fundamental values of:

  • Continuous improvement: challenge, kaizen, and genchi genbutsu;
  • Respect for people: respect and teamwork.

As well as Toyota’s Business Practices of 1/ clarifying the problem, 2/ breaking down the problem, 3/Setting the target, 4/ Seeking root cause, 5/ developing countermeasures, 6/ Seeing the countermeasures through, 7/ Monitoring both results and processes and 8/ Standardizing successful processes. These practices are sustained by specific drive and dedication on:

  • Putting customers first;
  • Always confirming the purpose of one’s work;
  • Developing ownership and responsibility;
  • Visualizing work and abnormalities;
  • Fact-based judgment;
  • Thinking and acting persistently;
  • Speedy action in a timely manner;
  • Following each process with sincerity and commitment;
  • Thorough communication;
  • Involving all stakeholders.

This set of teachings, for lack of a better world, are there for anyone to study in the search of the true lean spirit – whatever that is in your specific context.

To my mind, there are two main reasons lean remains so hard to define in one single, stable way. First, the very extensive spread of perspectives on lean means that each person finds in lean what they seek – in a spectrum that goes from Tayloristic operational excellence to a Toyota-inspired full business strategy. Secondly, lean thinking continuously evolves, both at Toyota and in the understanding of observers and lean practitioners, so that it’s hard to pin it down and freeze it. Is a dead butterfly still a butterfly if it does not fly?

One of my favorite metaphors for lean thinking is seeing oneself as a green tomato plant – never red, never ripe, always growing.

16 Comments | Post a Comment
Bob Emiliani August 13, 2018

The lack of definition of the term "Lean" from the start (1988) and and the shifting definitions of "Lean thinking" over time (http://bit.ly/2w1VC9V) have surely complicated matters with respect to both comprehension and execution. It is true that "...each person finds in Lean what they seek...", which means CEOs seeking traditional cost (budget) cutting can (mistakenly) see Lean as helpful towards meeting that need. LEIs Lean Lexicon can help sort out the confusion. It is a useful companion to any Lean transformation effort.

Michael Ballé August 14, 2018

Great insight, Bob. I guess that's generalizable: we find what we seek.

Let me challenge you with it. Yes, many CEOs seek in lean a way to carry on with traditonal cost cutting. But many others also seek a new way to find competitiveness by managing differently and developping their people.

By focusing so much of your writing on the former aren't you distracting away from the latter? 

Lean is currently being assimilated to traditional management by adding the box "continuous improvement" to target setting, monitoring and dishing out consequences. This reduction of "lean thinking" turns it into one more management best practice to tick the box on the checklist, but misses the broader point of thinking differently as you well know.

More research on the CEOs who actually embrace lean thinkins a complete way to think and run their businesses would be a tremendous help to keep the difference of lean, the innovation of lean, relevant in these troubled (and troublesome) times!

Monica August 14, 2018

Michael,

I would like to highlight that lean remains hard to define is it is being applied in the out of culture context.

Toyota is not an entity in isolation, these practices were born  in Japanese culture. There are numerous assumptions these practices were based on. For example that company is family, company takes care of you in old age, colleagues are your only friends, you work for only one company your entire career.

In such a situation the "we" and "family" were very strong concepts , quite contrary to the western idea of self. This is something to be experienced to be defined.

Michael Ballé August 14, 2018

Monica,

Agreed, context matters - but that's kinda the point: what can we learn in different contexts. Culture is a notoriously slippery concept as well, equally hard to define, and really hard to use. 

My impression in Japan was that only Toyota suppliers truly follow TPS - so the distinguishing factor might not be national cutlure, although, for sure, many things are interpreted differently in Asia and in the West - or between Continental Europe and Anglo-Saxons for that matter ;^)

Monica August 15, 2018

I think there cannot be one distinguishing factor, any excellence we see in life is a culmination of many factors coming together to create a "ripe" situation, for excellence to take place. Similarly here culture is a key enabler, coupled with it the knowledge, the persistence and many other factors which we will not have insight to.

I think thats also an issue with role models, they show the end state not the journey or the factors invisible and visible which brought to fruition the excellence.

Michael Ballé August 15, 2018

Monica,

Thank you, very thoughtful comments - they made me think :^)

I agree with the analysis, but probably reach different conclusions:

1/ yes, there are a multitude of causes, which means we need to be looking harder for conditions, which might be harder to narrow down, but less so than factor by factor.

2/ Although there is unlikely to be one single distinguishing factor, this shouldn't stop us from looking for it - hypothesis testing - we'll discover more that way.

3/ agreed that role models show their end of their journey, but studying their own learning curve is very helpful. In the case of Toyota, we're not talking about just one guy, so studying different people's learning curve reveals patterns.

4/ which is why I believe in studying the learning curves of the CEOs commited to lean - each context is different, but they do hit upon similarities in creating conditions for leaner companies, and these similarities are congruent to some of the aspects of Toyota, so we're pretty sure we're onto something.

All this to say that recognizing that a topic is complex and contradictory is not a research strategy - we can recognize culture and etc., but still look for specific factors. For instance, one factor I've seen in common between CEOs Toyota suppliers in Japan and CEOs leading lean transformations in the West is a personal interest in TPS - what it is, how it works, what the implications are, etc.

Another way of saying it is searching for the trade-off curves of lean :^)))

Bob Emiliani August 15, 2018

Michael - RE: "By focusing so much of your writing on the former aren't you distracting away from the latter?" Unlike anyone else, my writing has long been a balance between a) how to achieve a successful lean transformation (research on CEOs who embrace Lean) and b) analyzing why Lean transformation processes fail (research on CEOs who don't embrace Lean). So, rather than distracting from one another, my writing is both comprehensive and complimentary, and provides a complete, rather than partial picture. One reason why a) has proven to have very limited impact among CEOs is because the causes of b) have been largely speculative (surface-level). My most recent b) work provides the deep-level details of disinterest in Lean and failure. The a) work is very easy to do, while the b) work is much more difficult -- though far more useful in terms of root causes and countermeasures. Over the last 25 years, I have taken an engineering approach to the problem by practicing (hands-on practice), studying, and writing how the product (Lean) both succeeds and fails in the hands of CEOs. Everyone knows, there is more to learn from failure than success, right? Yet it seems I am the only one to do this comprehensively and in detail. The question is, why not others? Is it a lack of ability, lack of interest, bad for business....?

Also, the CEO success factor, "personal interest in TPS," which you cite in your response to Monica, is trivial. Personal interest is a factor in any successful endeavor -- medicine, golf, chess, sailing, teaching, etc. That observation captures the shallowness of understanding that I have sought to correct in my work.

Tracey Richardson August 15, 2018

Hey Michael, 

I will make this pretty easy ;). 

So coming from the days before the word was used in the context it is today to describe something very dynamic with many facets--Ernie and I have developed "our" way to define it from our experience. 

Lean= The continuous process of "People Development"

When you think about the 2 parts of the Toyota Way it implies that, also the 10 Drive and Dedications points that are part of TBP are tangible actions that help us bring out some of the facets to "lean"--but all roads lead to people.

We liked to say at the plant we were a company that develops people that just happens to make cars.  This can translate to any industry. 

My 2 cents, Thanks Michael!!  Tracey

 

sid joynson August 15, 2018

When trying to understand Lean or any other subject, I find it useful to remember the words of Pavlov and Ohno.

“Doesn’t just be a collector of facts. Try to penetrate to the secrets of their occurrence, persistently search for the laws that govern them.”  Ivan Pavlov.

“Understanding is my favourite word. I believe it has a specific meaning - to approach an object/subject positively & comprehend its nature.” Taiichi Ohno.

The comments below are an attempt to apply this thinking to TPS/lean.

On my early visits to Japan I had seen that TPS was designed to achieve three main flows. From the combination of these flows Toyota had generated a torrent of competitive advantage. ---

-- 1) JIT/JIDOKA.  The output of a smooth, fault-free flow of existing & new products to customers.  This must give them;   what they want, when they want it, in the quantity they want.  The output of your organisation has three main dimensions P, S & E;  P, physical products. S, the services you provide to support them. E, the experiences (physical & emotional) your customers will enjoy when using them & in all their direct & indirect contacts with your organisation.  Your goal is to produce the best values of; Productivity, Quality, Cost (lowest ownership cost), Delivery (OTIF), & customer Delight in your industry. ---

-- 2) TPM. The smooth flow of materials, products & services through machinery, processes & systems. In this area the goal is to achieve Zero 5D’s.  Zero - Downtime. (Unplanned).  Zero - Delays.  Zero - defects. Zero - Damage /Danger to people. --- We must move from 2F’s to 2P’s. From finding & fixing problems, to predicting them & preventing their occurrence.                                    

---3) KAIZEN.  The flow of people’s ability (talent, creativity & Enthusiasm) to drive the waste elimination & continuous improvement process.  The goal in this area is to release & focus the total ability of all our people to achieve the goals in the first two areas. . The goal is also for our people to make their jobs; Easier, Faster Safer & more fun/enjoyable & fulfilling. ---

In the late 1980’s & early 1990’s, the tools & techniques I had learnt always worked, but we had difficulty sustaining the process. (Sounds familiar).What I had missed was the system for managing & sustaining the fourth flow, the flow of change itself.  This is the main function and focus for the management team.    Once we identified this missing element, we created a skill set to give managers the 3 A’s awareness, attitudes & abilities to do this.  As there wasn’t a Toyota word for it, we called the material we created;        

-- 4) TAOZEN . This is the management system to identify, create & sustain the flow of the correct changes throughout the organisation. The central theme of Taozen is;  ‘Star managers make their people shine.’  The role of the manger is not only to demonstrate their own ability, but more importantly to release,  focus & support the ability (talent, creativity and enthusiasm ) of the people they lead. ---

The system also requires a fundamental change in attitude within the organisation. The traditional organisational structure has the directors at the apex of the pyramid, with everyone else beneath them. The Taozen system requires the pyramid to be inverted. Directors now support managers, who then support their people who will then identify & support the needs of their customers. ---

Before we start a programme we insist the senior management team have two days to study this subject. This will give them a common understanding and vocabulary for their role in creating & sustaining the flow of the change process/environment to support the introduction of TPS. On the event we create a fishbone diagram showing the management action/causes that will to create the effect of, ‘Success for our company & our people’.  Now we have agreed as a management team the behaviour we expect, we can coach to support it.---

I find this concept of the four flows gives a clearer understanding of the overall process/nature of the TPS/Lean journey. It also helps everyone to understand their roles & goals to achieve it.---

The survival of your organisation depends upon engaging the ability all your people to improve these flows and your P, S and E’s faster than any existing or future competitor.  These 23 words are arguably the perfect business success plan. You should explain them to your managers and colleagues.

When you apply this thinking not only to your external & internal customer contact areas, but also down your supply chain, you will start to understand where & how Toyota’s amazing performance & competitive advantage is created. So much of this was lost when lean was extracted from TPS.

The vision we must share with our people is that our goal is to create an organisation that can compete successfully on the global battlefield, now & in the future, & is a secure, challenging, fulfilling, & enjoyable/fun place to work. -- No brainer really! ---                                                                                                            

Two final comments on the most essential element you must have in any change programme.

“There are three things that are essential to the successful introduction of Kaizen into your organisation.                                                                                                            The first is senior management commitment. The second, and equally important, is senior management commitment. And finally, and critical to your success is senior management commitment.” Masaaki Imai. - Closing comments at the end of a Kaizen Institute Study Mission to Japan in 1992.

“For this to happen (to successfully introduce TPS), the president must realise they are completely responsible.” Taiichi Ohno

 

 

Read Ardahji August 16, 2018

Thank you Michael Ballé. I agree with Kevin Meyer and Tracey Richardson... I prefer the term TPS as the "Thinking People System," not Toyota Production System. The 8th waste is not leveraging the employee knowledge and insights. Once employees are engaged and making improvements through the identification and elimination of waste, organizations should realize positive impact. The key is PEOPLE and more importantly leadership that is truly committed to making improvements beyond colorful slides, white boards, and such. Finally, we know the word KAIZEN is Japanese; however, lean is not. 

Alvin August 16, 2018

What a post! First class, I enjoyed it to say the least. It was great.......

For me lean simply means to be  effective and efficient in what we do.

Effective in positive change and efficient in implementing it. 

By being  effective and efficient at whatever we do!

We create a number of outputs such as the reduction of waste however we are not limiting our thinking to the reduction of waste.

Lean thinking can be seen to be extremely effective  in three main, let's say, catogories of business. 

Lean innovation,  Lean production or delivery and lean exploitation. 

All three areas require alternative approaches and skillsets in order to succeed however all are best served by being implemented in or by the most effective and efficient means possible. 

Lean innovation, for example,

1. effectively collect the relevemt information required to efficiently learn and prioritise opportunities. 

Just a few thoughts on how I choose to see lean. 

Alvin 

Michael Ballé August 17, 2018

Hi Sid,

I've never heard of Taozen - curious to hear more about it? What does it stand for? Where does it come from? 

Thanks for the comment,

Cheers, Michael

Bryan August 20, 2018

Firstly, really enjoying the discussion.

After reading the post and comments, I reflected on what It meant for me.  A slightly different thought entered my head; I think I believed each definition was correct at different points in my career/lean journey.

I think they are all right and Ideally, you'd have lean as a strategy, with your activity organised by value stream, overlaid with opex. Sounds like an amazing place to me.  Thinking Peoples System.

So are those definitions aligned with the maturity of the lean thinker or Organisation? What about the other way around - People who see lean as a business strategy, straight off the bat?  

Is the definition of lean effected/carved out of your mindset and the problems you have come up against or is that 'find in lean what you seek' point that Micheal made.

Just thought I'd throw that into the mix. 

 

Don Scott August 23, 2018

I have found 2 definitions useful. The first is a simple intro to lean and the second meant to be more thoughtful and complete.

LEAN: "Changing work to make it easier for 3 people; yourself, the previous person, and the next"

LEAN: “The ever-increasingly smooth, efficient, and sustainable flow of more, new, and better value from door to door and beyond to customers, employees, shareholders, and community”

Certainly these definitions leave out much of the discussion behind the challenges of Lean transformation, the progressive development of Lean, and the experience of practitioners. I use them as training aids to express the purpose behind Lean.

Janly August 31, 2018

Lean is a worldview change about how to look at competitiveness, from the relationships with customers.

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Peter October 12, 2018

Lean :

Continuous - improvements, to the standardised inputs and outputs of  the current condition towards the ideal condition.

                                                                                                              

 

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