VSM Lean

Where do you start with Lean? I decided to start with Management expert James P. Womack, Ph.D., the founder and senior advisor to the Lean Enterprise Institute, Inc., a nonprofit research, education, publishing, and conference company that he began in August, 1997, to advance lean thinking around the world. The intellectual basis for the Cambridge, MA-based Institute is described in a series of books and articles co-authored by Womack and Daniel T. Jones over the past 20 years. The most widely known books are:

Lean Thinking: Banish Waste and Create Wealth in Your Corporation, Revised and Updated

The Machine That Changed the World: The Story of Lean Production– Toyota’s Secret Weapon in the Global Car Wars That Is Now Revolutionizing World Industry

Lean Solutions: How Companies and Customers Can Create Value and Wealth Together

Gemba Walks is a collection of Womack’s essays on lean management, based on 10 years of walking value streams at a variety of companies.

From a podcast with Dr. Womack:

Joe: How did you ever coin the term Lean, I have never heard or read that story?

Dr. Womack:

Well, there was a simple need after 1986. The MIT team had actually started in 1979 to look at the future of the automobile, and that was in a time when we had had the first energy crisis and had a smog crisis and the body count was very high out on the highway and so forth. So it was a question about what’s the future of the auto. As we got into that project, we pretty quickly concluded that the old?fashioned kind of pollution, that smog ? not the new fashioned issue of greenhouse and all that ? that fuel consumption could be dealt with pretty dramatically, that fatalities could be cut.

The issue was not whether the auto system was going to continue its dominance. The question was who was going to succeed in dominating that industry. And of course, the Americans, they dominated it since very early in the game back in the time of Henry Ford, 1914, the opening of the new Highland Park Plant.

So they were used to running the show, and suddenly it turned out that people on the other side of the world also were intent on running the show and that created a great question of, “How can this be?”

How can it be that people in a country that was not very long ago just in ruins, could suddenly look like they were going to become the dominant players in this enormous industry. The MIT team sort of switched course in the early 1980s and set out to answer that question. By 1986, we were ready to do a much bigger project that was paid for by all the auto companies in the world, and all the big car parts companies, collectively, to go out and do a global benchmarking on not just production but product development, on supplier management, on customer management.

Customers actually need managing, bless them. If you’re really going to help them, you have to help them help themselves.

So we went across the world looking at how people were doing. And we did a lot of benchmarking. We had a young man who had been the first engineer hired at the NUMMI joint venture that GM and Toyota had in California. It was also the first manager to quit and Toyota I think, never forgiven me for that. I did not raid him. He just decided after two years that he, as an engineer, needed some business credentials and he would go to business school. He came to MIT, came to me. This is young John Krafcik and said, “Could I write a paper on what I learned at NUMMI if I came to the Sloane School of Management?”

I got out the project credit card and said, “Here you go. Not only can you write a paper, I want you to visit every assembly plant in the world and to do a global benchmarking. What do you think about that?” Well, he thought that was a pretty good idea.

At the same time, we set out to do benchmarking product development in collaboration, informal but very real collaboration, with the group at the Harvard Business School. We set out to do a benchmarking, a purchasing practice with a different group. Then we set out to also look at how customers were managed and helped.

As we began to gather all of the information and to analyze it, it was just striking how big the gap was between best practice on the Japanese side, and that of course was Toyota and Honda.

By the way, the worst practice on the Japanese side was not very impressive. And the best practice on the American side… So take best Japanese practice, compare it with best American practice, best European practice ? big gap ? and then take best Japanese practice and compare it with worst American and worst European practice and you have just a staggering gap.

So we said good grief, this is not a single?dimension thing better at running factories. This is better at running product development, better at running production, better at helping the customer, better at dealing with suppliers, and by the way, a better management system. This is not an accident. This is happening for a reason.

We began to create this whole notion of an enterprise that we were going to call an X enterprise, what are we going to call it? And that’s where we had a dilemma because we didn’t think this had anything to do with Japan. By the way, subsequently that has been shown to be absolutely the case. We didn’t think it had anything to do especially with Toyota, and subsequently I think that’s also been demonstrated to be the case.

So we can’t call it Japanism, we can’t call it Toyotaism with a T, and there was no point in calling it Toyodism with a D, that’s family. We’re going to call it Ohnoism, or how about Nakamuraism for the guy who invented the product development system or Kamiyaism for the guy who invented the selling system. Or Thai for the Toyota family that really had the idea for how to rethink the supply chain and purchasing. I mean, those names won’t work. What are we going to do?

So we got a whiteboard in the office at MIT. We had this team room. The first thing we did was push all the desks together and get rid of all the dividers so you had one great big table where the whole team sat around and did all their work and a great big whiteboard on the wall. I went to the whiteboard and I said look folks, this is 1987 in the summer. We’ve got articles we’re going to start publishing.

We have to have a name for this. What are we going to call it? It’s a real problem. On one level it’s just trivial. It’s a label that’s only as deep as the paper you write the label on, but people’s minds work in a way that they have to have a label for things and this is something new. So what do we call it? I suggested, and I’ll take a little credit for that, I said why don’t we name it for what it does?

You know, why don’t we do that? Let’s name it for what it does. So I wrote on the whiteboard it takes less human effort to design a comparable product, it takes less human effort to manufacture a product, it takes less human effort in the purchasing chain. It takes less effort everywhere you look at it, and by the way, fewer errors both reaching the customer, and fewer end process errors, so less errors, less effort, less time.

At that time, there was a big gap in time to market. Comparing say, General Motors and Toyota, sort of five years versus three or three and a half years, so less time, but wait a minute, less front to back, start to finish time in the factory. The reflection of that is inventories and, by the way, less inventories and, by the way, less plant space for a given amount of capacity and, by the way, fewer injuries because they really did find there were fewer injuries in a Lean process than in the old?fashioned, what was called mass production process, and on and on and on.

So it’s less, less, less, less, less to create more value. Then young John Krafcik said I’ve got it, let’s call it Lean. You know, less, less, less, less, Lean. I remember writing that word on the blackboard for the first time. And we all stood back and looked at it and said that’ll do, that’s enough, let’s get going. So that’s where Lean came from in ’87. By the way, it’s a terrible word, because, and a couple of reasons.

It does rhyme with mean. It also rhymes with green. Make of that what you will, but the problem with the term Lean is that it talks about less whereas, we had even written on the blackboard it creates more value with less of everything. The more value got left out of the term and all people heard was less.

For a lot of people, lean sounds like anorexic. We tried using the term in Germany and people literally thought it was anorexic. So therefore, it’s a very imperfect term. I don’t take any pleasure in it. We needed something. That’s what, as of 1987, we could come up with. There it is.

People periodically come up to me and say, well, why don’t you change it? Why don’t you call it the Q Factor, or why don’t you call it Flubber times two? I just say hey, you guys, that’s somebody else, on some others watch, that this is the name it’s got for my time and in the future, they’ll come up with other names, that’s fine. But for now, Lean is going to have to do it and let’s just get on with it.

Listen to Dr. Womack discuss Lean in this two part podcast. A Gemba Talk with Womack on Lean Another Gemba Talk with Womack on Lean

All Business901 Podcast are available at the Business901 iTunes Store or view the Mobile Version of Business901 Podcast

As my friend Dr. Michael Balle says, “Lean is not a revolution; it is solve one thing and prove one thing.”


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Bonus Material

My take on Lean and Six Sigma: There will always be a strong debate between Lean and Six Sigma people about using the 2 terms jointly. I am not positive of the lineage of it but I believe Michael George at the time of the George Group (later to be Accenture) coined the term. I assume he viewed the two methodologies as compatible and more effective in conjunction with each other versus separately. I am not even sure that many (Case in point being that many of today’s “Lean” consultants were trained as Lean Six Sigma Black Belts) disagreed at the time except for the very traditional Lean stalwarts.

Dr. Mikel Harry, credited as one of the founders of Six Sigma (while at Motorola) states that Six Sigma is not a culture and was developed as a quality tool to gain breakthrough performance for an organization. I adhere to that statement and think Six Sigma offers great opportunities for an organization and provides a very precise and workable structure in achieving this. I am not against the hierarchy of belts and the formalities of DMAIC, DFSS, etc. Many organizations need this type of structure to be successful. I am avid defender of Six Sigma in the Lean circles many times to the chagrin of others.

Lean was developed by the MIT group under Dr. James Womack from a study of automotive companies and more specifically the Toyota Production System. Its approach is based on continuous improvement with a direct correlation to PDCA and Dr. Deming’s philosophies. Lean made its first inroads in many companies and gains in popularities (IMHO) because of the ease of entry into the methodology. Removing waste and improving flow was Lean’s mantra in the 90’s and the tools of 5s and Value Stream Mapping soared in popularity. However, as Lean continued developing tools of A3, Hoshin and Standard Work became common place. But even more so, the culture of PDCA and the spirit of Kaizen started to take hold.

Six Sigma was the methodology of choice for many manufacturers as a result of the significant strides that GE and Motorola had made. Later, Lean seemed to gain and Six Sigma wane in popularity. Lean became the path to a customer as an enabler of some quick wins. You could then take the deep dive with Six Sigma when you wanted to get “serious”. As Lean continued to steamroll and Six Sigma still continued with somewhat lackluster performance many organizations and consultants dropped the attachment to Six Sigma and became “Lean”. Popularity does create a crowd. This may not be an entirely accurate description but it serves as a basis for my views and the following comments.

What makes Lean Six Sigma work? When you first start using any methodology, you are typically introduced through the tools. Using Lean initially versus Six Sigma makes perfect sense, it is an easier introduction. And why reduce variability on non-value activities? But sooner or later you get to the fork in the road. One path says Six Sigma and the other path is this thing they call culture (Lean). So do you want to take the deep dive with a breakthrough structured approach (still has a steep incline) or do you want to try and instill a culture of empowerment. There is not a right or wrong answer. You can take either. Where I disagree, is that you can take both.

Lean or Six Sigma

Six Sigma has always been about structure and tools. It is very, very good and does an outstanding job when applied properly. In Six Sigma thinking, you can use Lean tools initially and get to 95%. To finish the job, you use Six Sigma. And as a result, Lean Six Sigma was developed. If your organization grew out of the Motorola and G.E. world it seems like a perfect fit.

If you adopt the Lean mentality and the spirit of Kaizen (continuous improvement is not an event) you become immersed in the culture of Lean, as Dr. Balle wonderfully described in the Zen Story about the mountain.

Have you ever played yourself in a game? On a basketball court or even a simple game of checkers, sooner or later you have to pick a side to win. It is inevitable. This is the ultimate wedge between the two methodologies and can simply be stated. Six Sigma is a structured methodology and Lean is a cultural driven by a learn by doing approach. That is not to say that Six Sigma does not have its prototyping options and that Lean is not without statistical control (it did evolve from Deming). But it is saying that both are two completely different paths that you must choose between.

If you take the path of and see Lean as Lean, Six Sigma does not make sense and is not a compatible technology. There is a significant culture difference and approach. If you take the path of Six Sigma, you view Lean as only a set of tools nothing more and why not, Lean has a great toolbox. If you take the path of Lean you still can be just as efficient and just as effective as Six Sigma, you just do it differently.

I make no qualms about stating that I believe and follow a Lean philosophy. Lean works in my world much better. PDCA which is basically form a hypothesis, test it and adjust is what sales and marketing is all about.

I support the ideas of Lean and Six Sigma without hesitation. What I have trouble understanding is how you can be philosophically aligned in Lean thinking and practice Six Sigma. So I believe you must ask yourself; Which fork in the road do you take?