Lean is a subset of profit improvement. Everything about lean will enhance profits, but there are a lot of profit enhancing ideas and strategies that have nothing to do with lean. I just thought I would point that out for the benefit of all of the folks out there who want to put every good idea under the lean umbrella.
In writing the blog one of my daily routines (beyond reading 40+ newspapers every morning) is to do a Google news search for ‘lean’. You might want to give it a try. You will find that most of the results are not actually news reports, but press releases from companies and people trying to promote their ‘lean-ness’. Among the legitimate news stories, you will find that many – probably most – of them fall under the cost reduction heading, but have nothing to do with lean.
Taichi Ohno said, “All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by eliminating the non-value adding wastes.” So the articles about increasing labor efficiencies, reducing the amount of excess material scrapped during production processes, minimizing carbon footprints and material going to landfills, and so much more have nothing to do with lean. They are probably good ideas. I don’t mean to discourage them – in fact I stand foursquare in favor of many of them – but they are not lean driven, not does the successful application of such ideas make an organization lean.
The problem seems to be taking the idea of “non-value adding wastes” out of context. In fact, any time you can reduce or eliminate a cost, and it does not detract from the value of the product you are selling, that cost was, by definition, a non-value adding waste. There is nothing new or lean about doing that. The history of work is one of ideas and technologies that eliminated non-value adding wastes, but the history of work is hardly one of continual evolution toward lean.
The debates and often confusion among and between lean and Six Sigma advocates stems from the fact that they get at the same root. When I went to Motorola University in the early days of Six Sigma and long before multi-colored belts were involved, the originators of the concept endlessly pounded on the mantra “The best quality producer is the shortest cycle time producer, and the shortest cycle time producer is always the best cost producer“. There is an awful lot done under the name of Six Sigma out of this context, as well.
The problem this dumping everything that reduces costs into the lean bucket causes is that it sends the message that organizations can become lean without making the fundamental changes in thinking and culture required to follow the Taichi Ohno and original Six Sigma principle. As a result, they leave the fantastic benefits of becoming truly lean on the table. It is also problematic and quite confusing when so many purveyors of knowledge, be they consultants or academics, miss this fundamental point and preach lean or Six Sigma outiside the context of cycle time and flow. They seriously mislead those who look to them for guidance and wisdom.
So how lean is your organization? Is inventory turning much faster? Is the time from beginning to end of core processes much shorter? Do your customers go from initiating contact with you to completion of that interaction much quicker? If the answer is no, then you are not particularly lean, no matter what you may have done to cut costs, reduce waste or improve the culture.