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Leaner Thinking for Harder Times

10/16/2001
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I've been studying lean thinking and its spread for nearly twenty-five years and I've learned something very important for the current moment: the great lean leaps are always made in times of economic stress.

Taiichi Ohno at Toyota was able to push the Toyota Production System (TPS) through the entire Toyota Motor Company in 1950 during the great crisis that left Toyota on the brink of bankruptcy. He had been trying for several years but was making slow progress until the collapse in sales that forced Toyota to reduce its workforce permanently by 25 percent. Toyota offered employment guarantees to those who remained provided they learned to work together in new ways.

The first oil shock of 1973 was the moment Toyota seized to push TPS through its entire supply base in Japan. Ohno had formed the Operation Management Consulting Group at Toyota in the late 1960s for the purpose of teaching TPS to suppliers but there was little progress until many faced bankruptcy in the economic crisis of 1973-75 unless they learned to run their businesses according to lean principles.

The recession of 1981-82 (coinciding with the arrival of the first Japanese transplant) was the first time American car companies took lean thinking seriously.

The recession of 1991-92 marked a great leap in awareness of lean thinking by the aerospace industry, general manufacturing, and the European motor industry. This generated the lean conversion stories at Pratt & Whitney, Wiremold, Lantech, and Porsche that Dan Jones and I told about in Lean Thinking.

So now we have the recession of 2001. Its time for all of us to marshal our energies, focus our efforts and apply lean thinking all the way up and down our value streams. In my next communication I'll summarize the lessons from past crises on how to deploy lean thinking rapidly in the current crisis.

P.S. The Machine That Changed the World was launched in 1990 but truly found its audience in 1991-92 as the recession hit. Therefore I was not surprised to see in this week's BusinessWeek that Lean Thinking is back on the business books best-seller list as readers think about harder times. Both titles are available in the LEI bookstore.

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