Five Steps to the Lean Enterprise

Creating a sustainable competitive advantage

A glance at the shelves of the business section at the local bookstore will tell you that there are lots of people thinking about ways to achieve business excellence. Tom Peters, Peter Drucker, Jack Welch, and James Womack are just some of the writers who have tackled the topic. For a business manager with limited time and resources, it is all too tempting to go with the time-tested business classics, but they may not necessarily address the specific challenges present in every business and industry. It's far too easy to think tactically and make short-term fixes, rather than think long-term and create a sustainable competitive advantage. Too often the focus is on the month's or quarter's results, in order to survive, when we should be thinking about thriving.

In my industry experience, which ranges from building commercial and government electronics to conducting Apollo scientific research on the moon, serving on university staff, and participating in seismic oil exploration, I have learned a few basic principles for achieving sustainable superior results in a Lean enterprise.

Reduce Waste

This is the prime tenet of the Lean Enterprise movement, which is derived from the Toyota Production System. Waste permeates every business process, from the manufacturing shop floor to the design studio to the barbershop and the grocery store. Just think how much time, space, and effort are being wasted when you go into a store and see clerks overwhelmed in one department and standing around idle in another department. The company isn't doing a good job balancing the workload by cross-training the clerks to promote a smoother flow of work across all departments.

If managers look for waste and encourage employees to look for and eliminate waste, they can get a jump-start on cost reduction and meeting customer expectations. Many companies train Lean facilitators to systematically identify and eliminate waste, but the best approach is for all employees to be trained in basic skills, have visible management support, and have the tools to share their successes. The best approach I have found is to look at all business efforts as "value streams" that provide value to our customers. By plotting all the supporting actions that comprise the company effort to deliver a service or product, a detailed analysis can be done. This analysis can yield insight into which of those steps adds value and which do not from the customers' point of view. A good question to ask is: "Would the customer pay for this?" By eliminating steps that are wasteful, we can make our business more responsive to our customers.


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