Lean Transformation: How to Change Your Business into a Lean Enterprise

Known in manufacturing among those striving to maximize productivity and create pull-scheduling of production as "the yellow book," Lean Transformation: How to Change Your Business into a Lean Enterprise is used across the globe by companies as they switch to lean production and management by empowered teams. Touted by lean production experts everywhere as practical, down-to-earth, and easy to read, it warns of cultural issues that are almost certain to arise, and gives management step by step instructions as it explains clearly in terms anyone can understand such concepts as continuous flow, value stream mapping, kanban, kaizen, six sigma, just-in-time (JIT), techniques for converting to quick set-ups, and other pillars of the Toyota Production System. Indeed, Toyota may have been the first, but Toyota is not the only company that excels at lean manufacturing. Dell Computers provides another model of a successful lean enterprise as do Harley-Davidson and Pella Windows. Learn why initial improvements of 40 percent in direct labor productivity and a 50 percent reduction in the space required for manufacturing are routine when production and assembly are converted to continuous flow. Lean Transformation is chock full of real life examples of value stream mapping, how kanban can resolve material supply issues, how kaizen brainstorming can result in startling improvements overnight, how just-in-time (JIT) frees mountains of money tied up in work-in-progress, why six sigma quality needs to be built in and not inspected in, how bottlenecks can be eliminated, kanban snafus spotted before they happen, and how instilling a championship mentality in cross-functional teams can lead to increased productivity and continuous improvement that doesn't stop after the initial kaizen event.

It doesn't take a genius to know that the low cost producer that meets customers "want" dates 99% of the time yet carries only two days inventory has a tremendous competitive advantage. So put value stream mapping, just-in-time (JIT), six sigma, kanban, kaizen, continuous flow, empowered teams, and all the other techniques you'll learn about in Lean Transformation to work. Order a copy for everyone involved in your transformation into a lean enterprise.

Foreword Lean Transformation is a leading indicator of a profound change in ourA business culture. Bruce Henderson started his career as a strategy consultant seeking to position businesses so they faced the minimum of competition. Jorge Larco began his business life as an operations manager running plants in a traditional manner. In a previous era they would have had no cause to talk to each other because strategists advising CEOs did not consider operations important and because operating managers lacked a strategic vision for the business extending beyond the walls of their plant. Today (after what they describe as a trip to Toyota boot camp) they are not only talking. They have jointly written a book on how to make lean operations the key strategy for businesses large and small. What's going on here?

The answer, I think, is that in a globalized economy with many mature industries it's impossible to avoid competition and critically important to answer a simple question: How can managers create value for customers by eliminating waste in routine operations in plants, engineering, purchasing, distribution, and retail. This is not to say that positional strategies are irrelevantHenderson's company has just consummated a gigantic merger to strengthen its position in several industries. It is to say that mere position is no longer sufficient. The list of mergers that have failed to produce their promised "synergies" due to lack of a lean operating plan is now very long. And down-stream customers, including you and me as ultimate consumers, are placing steadily higher demands on businesses to cut out the waste and perform. The strategists and business raiders of the 1980s have therefore given way to the new business hero of the late 1990sMichael Dellwho has created one of the world's most successful companies by eliminating wasted steps (like the retailer) and installing build-to-order pull systems to give people just what they want just when they want it.

In the pages of Lean Transformation the authors describe a simple method for making a Dell out of your business, beginning with high-level leadership initiatives to refocus the business, then quickly getting to the down-and-dirty steps needed to transform operations. After a careful reading of this fast-paced text, I hope CEOs will finally get it: Waste can only be eliminated and value created if you pay close attention to every action currently consuming your resources. Ask what's waste and what's value for the end customer, then eliminate the waste. And I hope operations managers will also get it: Brilliant operations employing lean principles is your company's smartest strategy almost without respect to the business you are in. Read Lean Transformation, take notes, screw up your courage, and then explain the new reality to your CEO!

I hope the readers of Lean Transformation (both CEOs and operations managers) will be at the forefront of the worldwide effort to transform lean thinking from a leading-edge concept into the standard operating practice in every industry. I'm certain the lean thinkers will win before we get very far into the new millennium and I advise the reader to heed Henderson and Larco's warning: If your firm starts down the lean path first you can always stay ahead but if you start later you may find it impossible to catch up! (By James P. Womack, President, Lean Enterprise Institute)