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Lean Consumption, Lean Provision, and Lean Solutions

8/16/2005
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Here’s some good news for the Lean Community. We really are making the world’s factories better. I was recently in Spain where I toured a facility belonging to an American company whose U.S. operations I first visited in 1992. They were terrible at that time. In fact, it was classic mass production.

This company really wanted to do better and soon hired a Toyota veteran as head of operations to apply what he had learned. Dramatic progress soon followed. But then the veteran left and the company was sold. I had had no contact in some years and wondered what I would see on a visit to their operation in Barcelona. Had they been able to sustain their new lean system?

Happily, I found a truly lean operation headed by a veteran manager recently recruited from Valeo in France. He had added techniques that the company had learned from supplying Toyota to the lean methods already in place. I suddenly began to see that lean thinking at the plant level is now rippling across the world from many points of learning, with the waves reinforcing each other. To repeat, we really are making progress.

But when I look beyond the factory door, we are only getting started. Indeed, the biggest problem for the lean plant in Barcelona is the wildly gyrating orders from its retailer customers, driven by their batch-and-queue sales and logistics systems. (This forces the plant to keep large amounts of finished goods on hand to deal with surges in orders.) And my long trip to get there from Boston, through two self-sortation centers and many queues, was one more demonstration that no one in the travel industry has a clue about lean thinking.

A couple of years ago Dan Jones and I began to sense that the biggest future challenges for lean thinking would not be in the factory but in the world beyond. So we decided to focus our next book on the vast area between the factory and the customer.

As we thought about the problem, we decided that the place to start was with the end customer. That’s you and me in our role as consumers trying to solve our everyday problems. We needed to examine what consumers really want and the process they follow to solve their problems. We then needed to compare this with the process created by the provider, the firm or firms between the customer and the point of production.

We did what we always do, which is to carefully walk the consumption stream back from the customer and then the companion provision stream forward from the provider, looking at how they meshed. We didn’t have to walk far to realize that we were gaining major insights.

Most consumption activities are lengthy processes that require a lot of our personal time and effort. Meanwhile most provision streams, whether for manufactured goods or for services like healthcare or travel, are even more complicated and consume large amounts of provider time and resources. And they often mesh very poorly, creating frustrations and waste of many sorts.

Why? For a start, both providers and consumers have a hard time seeing the whole process and often have very different assumptions about what’s important. For example, most providers treat the customer’s time as if it’s free. However, when we take off our provider hats and put on our consumer hats – as all of us do every day – we realize that our time is often our most precious resource. It’s certainly not free and we would love to find a provider who doesn’t waste our time. If only providers and consumers could learn to see their combined value creation process and work smoothly together to take out waste while maximizing value!

We’ve just completed our three-year effort to understand the fundamental problems we all face as consumers and providers, remembering that all of us are both. Based on our analysis, we propose some simple but striking ways to make things much better for consumers, employees, senior managers, and investors.

I’m delighted to announce that the new book summarizing our findings, Lean Solutions, is available to the Lean Community as of today.

Dan and I feel that Lean Solutions is a major leap for lean thinkers. It breaks new ground, going beyond our approach in The Machine That Changed the World and Lean Thinking, to look at the total process of consumption in relation to the total process of provision. We think you'll find it provocative and we know you will find it fun as you think about your own consumption and provision experiences.

In my future letters, I’ll provide details on the new concepts of lean provision and lean consumption plus the lean solutions that can be achieved when these innovations are combined. In the meantime, Dan and I hope above all that you will find our new ideas helpful, whatever provision and consumption streams you participate in.

Best regards,

Jim

Jim Womack
President and Founder
Lean Enterprise Institute

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