Extended case examples show health systems responding to consumer needs and provider realities with equal efficiency and effectiveness, and improved quality and patient outcomes. Further, contributors tackle the gamut of technological, medical, cultural, and business issues, among them: Initiatives of service-oriented architecture towards performance improvement Adapted lean thinking for emergency departments Lean thinking in dementia care through smart assistive technology Supporting preventive healthcare with persuasive services Value stream mapping for lean healthcare A technology mediated solution to reduce healthcare disparities Geared toward both how lean ideas can be carried out and how they are being used successfully in the real world, Lean Principles for Healthcare not only brings expert knowledge to healthcare managers and health services researchers but to all who have an interest in superior healthcare delivery.
This revolutionary approach is an outcome of lean thinking; however, PLM eliminates waste and efficiency across all aspects of a product's life--from design to deployment--not just in its manufacture. By using people, product information, processes, and technology to reduce wasted time, energy, and material across an organization and into the supply chain, PLM drives the next generation of lean thinking.
Now PLM pioneer Michael Grieves offers everyone from Six Sigma and lean practitioners to supply chain managers, product developers, and consultants a proven framework for adopting this information-driven approach. Product Lifecycle Management shows you how to greatly enhance your firm's productivity by integrating the efforts of your entire organization.
Most companies are seeing the returns of their efforts in lean methods diminishing, as the most fruitful applications have already been addressed. Here, Grieves reveals how PLM gives you an opportunity to make improvements both within and across functional areas in order to increase agility, optimize efficiency, and reduce costs across the board. He gives you the most comprehensive view of PLM available, fully outlining its characteristics, method, and tools and helping you assess your organizational readiness.
There's also proven examples from the field, where PLM is being widely adopted by leading companies, including General Motors, General Electric, and Dell, that are widely adopting the approach. With this book you'll learn how to: Develop and implement your PLM strategy to support your corporate objectives Engage all your employees in using information to eliminate waste Enable improved information flow Better organize and utilize your intellectual capital Foster an environment that drives PLM Lean manufacturing can only take your organization so far.
To bring your productivity to the next level and save remarkable amounts of time, money, and resources, Product Lifecycle Management is your one-stop, hands-on guide to implementing this powerful methodology. Unique coverage of manufacturing management techniques--completewith cases and real-world examples.
Improving Production with Lean Thinking picks up where otherreferences on production processes leave off. With a practicalfocus, this book encompasses the science and analytical backgroundfor improving manufacturing, control, and design.
Design-Thinking hat sich ebenso aus erfolgreichen Unternehmen in der Service-Umgebung etabliert. Many lost their way because they failed to recognize the changes taking place, or were too big to react quickly enough to shifting market conditions. Supplying Lean practitioners with a formal process for keeping up with technological advancements and shifting business requirements, The Future of Lean Sigma Thinking in a Changing Business Environment provides the tools to survive and prosper through the current business environment.
It introduces cutting-edge business solutions from the fields of chemical engineering, aircraft production, and business psychology, and explains how to integrate these concepts with proven Lean principles. Next, it reports on the latest advances in process understanding. The future of the company is at stake.
Can Tom and Rachel, supported by Andy Saito, a retired, reclusive Toyota executive, regain the trust and respect of the customer? Can a venerable but dying company implement Lean practices to every part of their business and learn a new, more effective way of managing? Shows you how to use the Lean quality improvement method to fix not just a manufacturing system, but an entire company, including management, design, marketing, and supply chain Written by Pascal Dennis, author of four books on Lean practices and winner of the coveted Shingo Prize for outstanding research contributing to operational excellence Originally developed by Toyota, the Lean approach to quality improvement has gained a worldwide following and helped turn around enumerable struggling businesses.
Lean thinking has expanded beyond its origins in repetitive manufacturing to other types of manufacturing processes such as process and product processes, and more recently to the administrative, supply chain, and operations management functions in a variety of industries.
Considering that supply chain costs, primarily procurement and transportation, can range from 50 to 70 percent of sales, it's surprising that this area has not been fully explored.
Applying Lean principles to procurement and purchasing processes identifies non-traditional sources of waste, and in some cases, creates a paradigm shift that results in additional benefits to the entire supply chain. This book is unique because it details the basic supply management concepts and processes i.
You have what it takes to start a business At the startup stage, before all of the marketing studies and prototypes, your most important source of competitive advantage is how well you understand yourself and can harness the passion inside you. The Startup Garden walks you through the process of determining what type of business best fits your hopes, dreams, and experiences.
From there, each chapter focuses on a particular skill you will need to operate your enterprise, providing a step-by-step examination of the business, financial, managerial, and marketing skills required to make your dream business a reality.
As the enterprise grows and develops, so will you. But for Bob Woods, another struggle to introduce lean manufacturing quickly rehashes production battles that he's long since fought. And not even the senior Woods, son Mike, or friend Phil and his colleagues really grasp what's in store for them.
Process Redesign for Health Care Using Lean Thinking is a response to a simple, but hard to answer, question and is the result of the experiences of a working doctor who was also the chief safety and quality officer of an Australian teaching hospital. At this hospital, he observed that the Emergency Department was staff by talented, well-trained, and respected doctors and nurses.
The facilities were modern, and the work load unexceptional, but the department was close to melt down. Bad things were happening to patients, everyone was blaming each other, lots of things had been tried but nothing was getting better and no one could explain why. There are difficulties with patient flow, congestion, queues, inefficient utilization of resources, problems engaging clinical staff in improvement programs, adverse incidents, and budget constraints.
Lean thinking and value stream analysis gives hospitals and health services struggling with these issues the insights they need to help themselves. This book provides a method that systematically turns those insights into working programs of service and system redesign.
The book is divided into two sections. The first section gives the background to the approach, and systematically works through the Process Redesign methodology, step-by-step. The goal of any process redesign is simple: the right care, for the right person, at the right time, in the right place, and right the first time.
This book helps the people who work in hospitals and health services realize these goals by working together. Lean Thinking for Emerging Healthcare Leaders: How to Develop Yourself and Implement Process Improvements aims to solve the issues in modern day healthcare by handing over the reins of the improvement process to healthcare professionals.
Putting those who are doing the work and are closest to the actual situation in the lead. The purpose of this book is to help you understand how to develop yourself and your leadership in such a way that will best benefit your team and your patients. This includes change management practices that will help to build commitment with your team members, colleagues, management, patients, and other stakeholders. This book educates you, as a leading medical professional, in the principles and values of Lean leadership and management.
It will teach you how to improve healthcare from the inside, making it safer, better, faster, more accessible, and more affordable. With this book we want to inspire, motivate, and stimulate you to lead continuous improvement—while being respectful to people—on your way to ideal care for every patient. The primary target audience for the book are medical professionals who have recently acquired leadership, management, or business responsibilities.
The book will also be of high value to those who obtained temporary leadership positions, like project leaders, problem solvers, change managers, and innovators. Because most of the teachings in the book are meta skills and ways of thinking, the book is easily relatable and transferable to other disciplines and even sectors.
There are many tools and concepts that lean companies employ to support the above principles and eliminate waste. Here are four that we find most helpful:. Typical measurements across 4 quadrants or aspects of business, with definitions of each measurement. A framework for a Control Plan which includes all the necessary information for sustaining improvements.
Lean Thinking, 2nd Edition. By Dan Jones and James Womack. Lean Thinking is about case studies from a wide range of industries, to distill out the essential principles of lean and explain how to apply them in a variety of environments. Lean Thinking, 2nd Edition quantity. Download Free PDF. James P. Womack, Lean Thinking. Aditya Rao. A short summary of this paper. Womack and Daniel T. Jones's classic book Lean Thinking has sold in the hundreds of thousands in a dozen countries.
Today, nearly seven years after the publication of the first edition— and given ample evidence that businesspeople are finding the book increasingly relevant—it is clearer than ever that lean thinking is the single most powerful tool available for creating value while eliminating waste, in any organization.
As economies have gyrated, stock markets have crashed, and the poster companies of the s have flown a ballistic trajectory, the lean exemplars profiled in the book—led by Toyota—have continued their methodical march from success to suc- cess by creating truly sustainable value for their customers, their employees, and their owners. In this revised and updated edition, on top of offering the wealth of practical material from the first edition, Womack and Jones now bring the story of the continuing advance of lean thinking up-to- date, and also share a range of new tools aimed at the successful application of lean thinking.
I am impressed. Drucker, author of The Post-Capitalist Society "The best current book on the changes reshaping manufacturing, and the most readable, too It shows how to create an industrial world in which workers share the challenges and satisfactions of the business.
It's a world in which assem- blers communicate with suppliers and dealers in a way that improves life for all of them. Read it. The most comprehensive, instructive, mind-stretching and provocative analysis of any major industry I have ever known. Why pay others huge consulting fees?
Just read this book. It is based on the Toyota lean model, which combines opera- tional excellence with value-based strategies to produce steady growth through a wide range of economic conditions. Meanwhile, the leader in lean thinking—Toy- ota—has set its sights on leadership of the global motor vehicle industry in this decade.
Instead of constantly reinventing business models, lean thinkers go back to basics by asking what the customer really perceives as value. It's often not at all what existing organizations and assets would suggest. The next step is to line up value-creating activities for a specific product along a value stream while ehminating activities usually the majority that don't add value.
Then the lean thinker creates a flow condition in which the design and the prod- uct advance smoothly and rapidly at the pull of the customer rather than the push of the producer. Finally, as flow and pull are implemented, the lean thinker speeds up the cycle of improvement in pursuit ofperfection. The first part of this book describes each of these concepts and makes them come alive with striking examples.
Lean Thinking clearly demonstrates that these simple ideas can breathe new life into any company in any indus- try in any country. But most managers need guidance on how to make the lean leap in their firm. Part II provides a step-by-step action plan, based on in-depth studies of more than fifty lean companies in a wide range of industries across the world. In Part IV, an epilogue to the original edition, the story of lean thinking is brought up-to-date with an enhanced action plan based on the experiences of a range of lean firms since the original publication of Lean Thinking.
Lean Thinking does not provide a new management "program" for the one-minute manager. Instead, it offers a new method of thinking,,,of being, and, above all, of doing for the serious long-term manager—a method that is changing the world. Womack is founder and president of the Lean Enter- prise Institute www.
Jones is founder and chairman of the Lean Enterprise Academy in the U. Also by James P. Womack and DanielT. The book's mission was to explain how to get beyond the financial games of the s to create real, lasting value in any business. Toward this end, it demonstrated how a range of firms in North America, Europe, and Japan took advantage of the recession of to rethink their strategies and embark on a new path. In our presentations to industrial audiences, we often point out that the only sure thing about forecasts is that they are wrong.
Which is why lean thinkers strive to reduce order-to-delivery times to such an extent that most products can be made to order and always try to add or subtract capacity in small increments. Instead of a recession in , the most ebullient econ- omy of the entire twentieth century charged ahead for five more years, into , extending a remarkable era in which practically anyone could succeed in business.
Given that the book was published years before our ideas were most needed, it's surprising how many readers took the advice in Lean Thinking se- riously during the best of times.
We have heard from readers across the world about their successes in applying its principles. Once reality caught up with our forecast, and the recession of gave way to the financial meltdown of , reader interest surged. Indeed, Lean Thinking reappeared on the Business Week business-books bestseller list in —nearly five years after its launch and with no publicity campaign—an unprecedented event, according to our publishers. Given clear evidence that readers are now finding Lean Thinking even more relevant in their business lives than when it was first published, we have de- cided to expand and reissue the book.
In Part I we explain some simple, ac- tionable principles for creating lasting value in any business during any business conditions.
In Part III, we show how a relentless focus on the value stream for every product—from concept to launch and order to delivery, and from the upstream headwaters of the supply base all the way downstream into the arms of the customer—can create a true lean enterprise that optimizes the value created for the customer while mini- mizing time, cost, and errors.
In the two new chapters of Part IVJ we bring the story of the continuing ad- vance of lean thinking up-to-date. We track the trend in inventory turns—the lean metric that cannot lie—across all industries, singling out one industry for special praise.
We also track the progress of our profiled companies. We dis- cover that as economies have gyrated, stock markets have crashed, and the poster companies of the s hailed in other business books have flown a ballistic trajectory, our lean exemplars—led by Toyota—have defied the fate of most firms featured in successful business books.
They have continued their methodical march from success to success and have done it the hard way by creating real and truly sustainable value for their customers, their employ- ees, and their owners. Finally, in the concluding chapter, we share what we have ourselves learned since about lean thinking and its successful application by describing a range of new implementation tools.
These begin with the concept of value stream mapping, which we have found to be a remarkable way to raise con- sciousness about value and its components, leading to action. In revising the book we have corrected a few minor errors and omissions in the original text.
However, we have been careful not to change the pagina- tion. We know that many organizations use Lean Thinking as a text to guide their change process, distributing copies widely and often including their dis- tributors and suppliers.
Thus we wanted to ensure that there will be no diffi- culty in interchanging the two editions. Today, nearly seven years after its publication, we are even more certain that lean thinking, as explained in Lean Thinking, is the single most powerful tool available for creating value while eliminating waste in any organization.
We hope that previous readers will use this new edition as an opportunity to renew their commitment to lean principles. And we especially hope that many new readers will discover a whole new world of opportunity.
Value 29 2. The Value Stream 37 3. Flow 50 4. Pull 67 5. The Simple Case 7. A Harder Case 8. The Acid Test 9. Lean Thinking versus German Technik Mighty Toyota; Tiny Showa A Channel for the Stream; a Valley for the Channel Our objective was to send a wake-up message to organizations, managers, employees, and invest- ors stuck in the old-fashioned world of mass production. Machine presented a wealth of benchmarking data to show that there is a better way to organize and manage customer relations, the supply chain, product development, and production operations, an approach pioneered by the Toyota company after World War II.
We labeled this new way lean production because it does more and more with less and less. As we started our travels across North America, then to Japan where many mass producers still reside and Korea, and on through Europe, we were greatly concerned that no one would listen. Perhaps the slumber of mass production was too deep to disturb?
More than , copies have been sold so far in eleven languages not counting the pirated Chinese translation. Their question was seemingly a simple one: How do we do it? In posing this question, they were not asking about specific techniques— how to organize teams, how to use Quality Function Deployment in product development, or how to poka-yoke mistake-proof production processes. After all, there is a plethora of very good books on each of these topics.
Rather, they were asking: What are the key principles to guide our actions? We had been busy benchmark- ing industrial performance across the world for fifteen years, but Machine focused on aggregated processes—product development, sales, production— rather than broad principles, and we had never ourselves tried to convert a mass-production organization into a lean one.
What was more, we had been so busy thinking through the initial leap from mass to lean production that we had not had time to think much about next steps for firms like Toyota. The idea for this book emerged direcdy from these questions. First, we realized that we needed to concisely summarize the principles of "lean thinking" to provide a sort of North Star, a dependable guide for action for managers striving to transcend the day-to-day chaos of mass production. This summary was hard for most readers to construct because the Japanese originators of lean techniques worked from the bottom up.
They talked and thought mostly about specific methods applied to specific activities in engineering offices, purchasing departments, sales groups, and factories: dedicated product development teams, target pricing, level scheduling, cel- lular manufacturing.
Although they wrote whole books describing specific techniques and a few high-level philosophic reflections as well such as the memoirs of Taiichi Ohno ,2 the thought process needed to tie all the meth- ods together into a complete system was left largely implicit.
As a result, we met many managers who had drowned in techniques as they tried to imple- ment isolated bits of a lean system without understanding the whole. After interactions with many audiences and considerable reflection, we concluded that lean thinking can be summarized in five principles: precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let the customer pull value from the producer, and pursue perfection.
By clearly understanding these principles, and then tying them all together, managers can make full use of lean tech- niques and maintain a steady course. These principles and their application are the subject of Part I of this book. With regard to the conversion process, we knew of one heroic example— the original lean leap by Toyota immediately after World War II—but only in sketchy outline. What was more, our most striking benchmark examples in Machine were the "greenfield" plants started from scratch by Japanese auto firms in the West in the s.
These were critical achievements because they blew away all the claims, so prevalent up to that time, that, to work, lean production somehow depended on Japanese cultural institutions.
Greenfields, however—with new bricks and mortar, new employees, and new tools—bore little resemblance to the lone--establislied "hrownfip. Our readers wanted a detailed plan of march suited to their reality, and one that would apply in any industry. We therefore resolved to identify firms in a range of industries in the leading industrial countries that had created or were creating lean organiza- tions from mass-production brownfields.
Observing what they had done seemed to be our best hope of discovering the common methods of becom- ing lean. In doing this, we did not want a survey to discover average practice but rather to concentrate on the outliers—those organizations recently moving far beyond convention to make a true leap into leanness. But where to find them? We knew the motor vehicle industry well, but we wanted examples from across the industrial landscape, including service organizations.
In addition, we wanted examples of small firms to'comple- ment household-name giants, low-volume producers to contrast with high- volume automakers, and "high-tech" firms to compare against those with mature technologies. In the end, through a lot of hard digging and some good fortune, we tapped into networks of lean thinking executives in North America, Europe, and Japan, and gained hands-on experience from a personal investment in a small manufacturing company.
Over a four-year period, we interacted with more than fifty firms in a wide range of industries and gained a deep under- standing of the human exertions needed to convert mass-production organi- zations to leanness. We describe our findings and prescribe a practical plan of action in Part II of this book.
To our delight, as we began to find our key examples, this book became an intensive collaboration between a group of like-minded people across the world. They believe passionately in a set of ideas, have made great progress in introducing them, and want to see lean thinking universally embraced.
At the end of this volume we list the firms and executives we have worked with and describe ways for you to join them.
Here let us simply express our profound appreciation for the hours, days, and even weeks many of them took with us. Because we needed to look at the entire firm, indeed at the whole value stream for specific products, running from raw material to finished good, order to delivery, and concept to launch, and because we needed to examine many things which would rightly be considered proprietary, we proposed an unusual way of working together.
In return for access to every aspect of the firm, including interviews with suppliers, customers, and unions, we offered to share our drafts with our respondents, asking for criticism and correc- tions. In the end we didn't lose anyone. Our method of working as outsider-insiders, perhaps first used fifty years ago by Peter Drucker for his landmark study of General Motors, The Concept ofthe Corporation,3 placed special demands for "transparency" on the authors.
There is today a profound and warranted skepticism about "business" books, both because they promise instant cures and because their authors—espe- cially consultants but sometimes academics as well—have financial links to the firms they write about.
We therefore need to assure you that we have no financial or consulting relationship of any sort to any of the individuals or firms we write about in these pages. Indeed, in most cases we have verified it with our own eyes by walking the production floor and spending extended periods in the engineering, marketing, sales, customer support, and purchasing functions and with product development teams.
As we began to write up our findings on how to make a lean leap in traditional, mass-production organizations, we began to realize that it is both possible and necessary to go even farther than any firms have done to date.
A wholly new way of thinking about the roles of firms, functions, and careers to channel the flow of value from concept to launch, order to deliv- ery, and raw material into the arms of the customer is now needed in order to achieve a further "leap.
There we also dream a bit about the next "leap. Perhaps some reader will be the first. After four years of exhaustive study of organizations around the world who are actually doing it, we now know how to succeed at leanness. As the examples will show, we know how to apply lean thinking, techniques, and organization to practically any activity, whether a good or a service. What's more, we now have a glimmering of the next leap beyond today's best practice.
In the pages ahead we'll explain in detail what to do and why. Your job, therefore, is simple: Just do it! It's the one word of Japanese you really must know. It sounds awful as it rolls off your tongue and it should, because muda means "waste," specifically any human activity which absorbs resources but creates no value: mistakes which require rectification, production of items no one wants so that inventories and remaindered goods pile up, processing steps which aren't actually needed, movement of employees and transport of goods from one place to another without any purpose, groups of people in a downstream activity standing airound waiting because an upstream activity has not deliv- ered on time, and goods and services which don't meet the needs of the customer.
Taiichi Ohno , the Toyota executive who was the most fero- cious foe of waste human history has produced, identified the first seven types of muda described above and we've added the final one. But however many varieties of muda there may be, it's hard to dispute—from even the most casual observation of what gets done in an average day in the average organization—that muda is everywhere. What's more, as you learn to see muda in the pages ahead, you will discover that there is even more around than you ever dreamed.
Fortunately, there is a powerful antidote to muda: lean thinking. It provides a- way to specify value, line up value-creating actions in the best sequence, conduct these activities without interruption whenever someone requests them, and perform them more and more effectively.
In short, lean thinking is lean because it provides a way to do more and more with less and less— less human effort, less equipment, less time, and less space—while coming closer and closer to providing customers with exactly what they want.
Lean thinking also provides a way to make work more satisfying by pro- viding immediate feedback on efforts to convert muda into value. And, in striking contrast with the recent craze for process reengineering, it provides a way to create new work rather than simply destroying jobs in the name of efficiency.
Value can only be defined by the ultimate customer. And it's only meaningful when expressed in terms of a specific product a good or a service, and often both at once which meets the customer's needs at a specific price at a specific time. Value is created by the producer. From the customer's standpoint, this is why producers exist. Yet for a host of reasons value is very hard for producers to accurately define. Business school-trained senior executives of American firms routinely greet us when we visit with a slick presentation about their organization, their technology, their core competencies, and their strategic intentions.
Then, over lunch, they tell us about their short-term competitive problems specifically their need to gamer adequate profits in the next quarter and the consequent cost-cutting initiatives.
These often involve clever ways to eliminate jobs, divert revenues from their downstream cus- tomers, and extract profits from their upstream suppliers.
Because we are associated with the concept of lean production, they are usually eager to label these programs "lean," although often they are only "mean. Usually there is an awkward silence, and then, if we aren't persistent, these issues quickly slip out of sight to be replaced once more by aggregated financial considerations.
In short, the immediate needs of the shareholder and the financial mind-set of the senior managers have taken precedence over the day-to-day realities of specifying and creating value for the customer. When we've gone to Germany, until very recently, we've found a reverse distortion of value specification.
For much of the post-World War II era, executives of private or bank-controlled companies could ignore the need for short-term financial performance and were eager to tell us all about their products and process technologies. The engineers running the companies!
Designs with more complexity produced with ever more complex machinery were asserted to be just what the customer wanted and just what the produc- tion process needed. But where was the evidence? In pressing this point, it often became apparent that the strong technical functions and highly trained technical experts leading German firms ob- tained their sense of worth—their conviction that they were doing a first- rate job—by pushing ahead with refinements and complexities that were of little interest to anyone but the experts themselves.
Our doubts about pro- posed products were often countered with claims that "the customer will want it once we explain it," while recent product failures were often ex- plained away as instances where "the customers weren't sophisticated enough to grasp the merits of the product. When we have traveled to Japan, also until very recently, we have encoun- tered yet a third distortion.
What's been really important for Japanese firms as they have defined value is where value is created. Most executives, even at firms like Toyota which pioneered lean thinking, have begun their value definition process by asking how they can design and make their product at home—to satisfy societal expectations about long-term employment and stable supplier relations.
Yet most customers across the world like products designed with an eye to local needs, which is hard to do from a distant home office. And they like products made to their precise order to be delivered immediately, which ocean shipping from a Japanese production base makes impossible. They certainly do not define the value of a product primarily in terms of where it was designed or made.
What's more, the stay-at-home-at-all-costs thinking of Japanese senior managers, even as the yen steadily strengthened, depleted the financial re- sources these firms needed to do new things in the future. The immediate needs of employees and suppliers took precedence over the needs of the customer, which must sustain any firm in the long term. Moving beyond these national distortions in the world's three most im- portant industrial systems and every country probably has its own unique set ,2 we are repeatedly struck how the definition of value is skewed every- where by the power of preexisting organizations, technologies, and undepre- ciated assets, along with outdated thinking about economies of scale.
One of the best and most exasperating illustrations of this backwards thought-process is the current-day airline industry. As frequent users of this service we have long been keeping detailed notes on our experiences and contrasting our own definition of value with that proposed by most compa- nies in this industry.
Our value equation is very simple: to get from where we are to where we want to be safely with the least hassle at a reasonable price. By contrast, the airline's definition seems to involve using their ex- isting assets in the most "efficient" manner, even if we have to visit Tim- buktu to get anywhere. They then throw in added features—like executive lounges in their hubs and elaborate entertainment systems in every seat—in hopes the inconvenience will be tolerable.
Just today, as this is written, one of us has traveled the 3 50 miles from his summer home in Jamestown in western New York State, across Lake Erie, to Holland, Michigan, in order to make a presentation on lean thinking to an industrial audience. What was needed was a way to fly from Jamestown direcdy to Holland both of which have small airports at an affordable cost. What was available was either an absurdly priced charter service from Jamestown to Holland total door-to-door travel time of about two hours or an eighty-mile drive to the Buffalo, New York, airport, a flight on a large jet to the Detroit sortation center of Northwest Airlines where the self-sorting human cargo finds its way through a massive terminal from one plane to the next , another flight on a large jet to Grand Rapids, Michigan, and a forty-mile drive to the ultimate destination.
The lower-cost option required a total travel time of seven hours. Why aren't airlines like Northwest and its global partner KLM and airframe builders like Boeing and Airbus working on low-cost, point-to- point services using smaller jets instead of developing ever-larger aircraft? And why aren't they developing quick turnaround systems for small jets at small airports instead of constructing Taj Mahal terminals at the absurd "hubs" created in America after airline deregulation—and long present in Europe and East Asia due to the politically motivated practice of routing most flights of state-controlled airlines through national capitals?
One hour of the seven hours spent on the trip just cited was taxiing time in the Detroit hub and a second was occupied with self-sortation inside the terminal. Few firms are aggressively promoting this definition of value because the airlines and airframe builders start their thinking with extraordinarily costly assets in the form of large aircraft; the engineering knowledge, tooling, and production facilities to make more large aircraft; and massive airport complexes.
This type of efficiency calculation, focused on the airplane and the hub—only two of the many elements in the total trip—loses sight of the whole. Much worse from the standpoint of value for the passenger, it simply misses the point. The end result of fifteen years of this type of thinking in the United States is that passengers are miserable this is not what they meant by value!
Europe and parts of East Asia are-not far behind. Lean thinking therefore must start with a conscious attempt to precisely define value in terms of specific products with specific capabilities offered at specific prices through a dialogue with specific customers.
The way to do this is to ignore existing assets and technologies and to rethink firms on a product-line basis with strong, dedicated product teams. This also requires redefining the role for a firm's technical experts like the inward-looking German engineers we just cited and rethinking just where in the world to create value.
Realistically, no manager can actually implement all of these changes instantly, but it's essential to form a clear view of what's really needed.
Otherwise the definition of value is almost certain to be skewed. In summary, specifying value accurately is the critical first step in lean thinking- Providing the wrong good or service the right way is muda.
Identify the Value Stream The value stream is the set of all the specific actions required to bring a specific product whether a good, a service, or, increasingly, a combination of the two through the three critical management tasks of any business: the problem-solving task running from concept through detailed design and engineering to production launch, the information management task running from order-taking through detailed scheduling to delivery, and the physical transformation task proceeding from raw materials to a finished product in the hands of the customer.
And 3 many additional steps will be found to create no value and to be immediately avoidable Type Two muda. At the same time, the initial ingot of material—for example, titanium or nickel—was ten times the weight of the machined parts eventually fashioned from it. Ninety percent of the very expensive metals were being scrapped because the initial ingot was poured in a massive size—the melters were certain that this was efficient—without much attention to the shape of the finished parts.
And finally, the melters were preparing several different ingots—at great cost—in order to meet Pratt's precise technical requirements for each engine, which varied only marginally from those of other engine families and from the needs of com- petitors. Many of these activities could be eliminated almost immediately with dramatic cost savings. How could so much waste go unnoticed for decades in the supposedly sophisticated aerospace industry? Very simply: None of the four firms in- volved in this tributary value stream for a jet engine—the melter, the forger, the machiner, and the final assembler—had ever fully explained its activities to the other three.
Partly, this was a matter of confidentiality—each firm feared that those upstream and downstream would use any information revealed to drive a harder bargain. And partly, it was a matter of oblivi- ousness. The four firms were accustomed to looking carefully at their own affairs but had simply never taken the time to look at the whole value stream, including the consequences of their internal activities for other firms along the stream.
When they did, within the past year, they discovered massive waste. So lean thinking must go beyond the firm, the standard unit of score- keeping in businesses across the world, to look at the whole: the entire set of activities entailed in creating and producing a specific product, from conceDt through detailed design to actual availahilitv. The organizational mechanism for doing this is what we call the lean enterprise, a continuing conference of all the concerned parties to create a channel for the entire value stream, dredging away all the muda.
Whenever we present this idea for the first time, audiences tend to assume that a new legal entity is needed, some formalized successor to the "virtual corporation" which in reality becomes a new form of vertical integration.
In fact, what is needed is the exact opposite. In an age when individual firms are outsourcing more and themselves doing less, the actual need is for a voluntary alliance of all the interested parties to oversee the disintegrated value stream, an alliance which examines every value-creating step and lasts as long as the product lasts.
For products like automobiles in a specific size class, which go through successive generations of development, this might be decades; for short-lived products like software for a specific application, it might be less than a year. Creating lean enterprises does require a new way to think about firm-to- firm relations, some simple principles for regulating behavior between firms, and transparency regarding all the steps taken along the value stream so each participant can verify that the other firms are behaving in accord with the agreed principles.
These issues are the subject of Part III of this book. Flow Once value has been precisely specified, the value stream for a specific product fully mapped by the lean enterprise, and obviously wasteful steps eliminated, it's time for the next step in lean thinking—a truly breathtaking one: Make the remaining, value-creating steps flow.
However, please be warned that this step requires a complete rearrangement of your mental furniture. We are all born into a mental world of "functions" and "departments," a commonsense conviction that activities ought to be grouped by type so they can be performed more efficiently and managed more easily. In addition, to get tasks done efficiently within departments, it seems like further common sense to perform like activities in batches: "In the Claims Department, process all of the Claim As, then the Claim Bs, and then the Claim Cs.
In the Paint Department, paint all of the green parts, then shift over and paint all the red parts, then do the purple ones. But this approach Irppnc the members of the denartment busv. So, it must be "efficient," right? Actually, it's dead wrong, but hard or impossible for most of us to see. Recendy, one of us performed a simple experiment with his daughters, ages six and nine: They were asked the best way to fold, address, seal, stamp, and mail the monthly issue of their mother's newsletter.
After a bit of thought their answer was emphatic: "Daddy, first, you should fold all of the newsletters. Then you should put on all the address labels.
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