Overview of the Lean Enterprise Approach to Commerce
- Raphael L. Vitalo,
The Lean Enterprise model is a business improvement methodology and, for some, it is a comprehensive and strategic approach to conducting a commercial enterprise.
James Womack and his colleagues derived the approach from the findings of
their study of the Toyota Motor Company and other Japanese companies. They
compared the more successful methods that these companies employed to the approaches
used by a wide array of automotive manufacturing companies around the world.
The International Motor Vehicle Program located in the Center for Technology,
Policy, and Industrial Development at the Massachusetts Institute of Technology
implemented the study in 1985. Its goal was to enable automobile manufacturers
worldwide to advance the prosperity of their host countries and improve the
work life of industry employees by transferring knowledge of the more competitive
approaches implemented by Japanese companies such as Toyota. The study lasted
five years, had 36 sponsoring governmental and industry organizations, produced
116 scholarly publications, and culminated in the publication of The Machine
That Changed the World (Womack, Jones, and Roos, 1991). It introduced the term “lean
production” to characterize Toyota’s manufacturing strategy (i.e.,
the Toyota Production System or TPS) and contrasted it with “mass production,” which
was the norm.
Absent from that work was the recognition of W. Edwards Deming’s contribution
to Toyota’s success (Nemoto, 2009). Our research indicates that Deming’s
teaching was, in fact, the foundation of the Toyota Motor Corporation’s
success during the period of its emergence as an exemplary global automotive
manufacturing company (circa 1960–1990). Indeed, Dr. Shoichiro Toyoda,
the son of the founder of the Toyota Motor Corporation and its chair from 1992
to 1999, acknowledged this fact. “Everyday I think about what he [Deming]
meant to us,” said Dr. Toyoda. “Deming is the core of our management” (Quoted
in Burns, 2008). Nonetheless, Deming’s role with regard to Lean Enterprise
is largely unrecognized, and its incorporation of his teaching is quite limited.
Over the decade and a half following the introduction of Lean Manufacturing,
the Lean production model was refined and elaborated into “Lean thinking.” Its
guidance was applied to a wide variety of commercial enterprises, including
both manufacturing and nonmanufacturing businesses. During this period, its
authors expanded Lean thinking’s guidance by incorporating their understanding
of additional elements of Toyota’s strategic perspective, management
methods, and operating guidance. Despite the model’s expansion of perspective,
in practice, the main focus of Lean Enterprise applications has always been
on business operations.
The Purpose Lean Serves
As Vitalo and Bujak (2022) document, the ultimate goal Lean’s
approach to conducting commerce serves, as defined by the people who embrace
it and use it, varies. Since Lean Enterprise is not a formally developed model—that
is, it is not a set of knowledge logically derived from basic assumptions about
what commerce is, why people engage in it, and what its contribution to society
should be—there is no way to reason conclusively about its ultimate purpose.
It is what its practitioners use it to achieve. Some practitioners see its
purpose as a method for maximizing the profitability of a company by continuously
improving a business’s efficiency and reducing its costs. Others believe
that the Lean approach to commerce is about striving for perfection with a
focus on applying Lean tools (e.g., 6S, Kaizen, TPM) to accomplish this end.
Still others see it as a comprehensive approach to managing a business that
integrates the contributions of all stakeholders in a common effort to maximize
of value to customers.
What can be said with confidence is that Lean methods are capable
of advancing a business’s success by eliminating waste in everything it does. They
can also be used to maximize the delivery of value to customers, a purpose
certainly endorsed by Womack and Jones (2003) and their followers. Lean thinking
defines waste as any activity that does not materially change a product or
service output in a way that a well-informed and reasonable customer is willing
to pay for. A business adds value by introducing a new feature to its offering
or modifying its customers’ buying–benefiting experience in a way customers deem worthy of remuneration.
of the Purpose Lean Serves That Vital Enterprise’s
All the guidance on this web site related to implementing Lean
thinking assumes that the lean approach to commerce seeks to
provide customers an ever-more value ladened and success enabling product
or service and buying–benefiting experience by eliminating waste in everything
a business does, maximizing its delivery of value to its customers as defined
by the customer, benefiting all its stakeholders inclusively, and developing
that sustains these activities into the future. Waste is any activity or resource
expenditure that does not materially change a product or service output or
a customer’s buying–benefiting experience in a way that a well-informed
and reasonable customer can detect or, if detectable, does not value. Our definition
of value differs from that offered by Womack. He defines value as being any
of an offering or
experience that he or she deems important enough to pay for. We define value
as a feature of an object, activity, or setting that enables its recipients
to achieve the purpose they seek to accomplish in a way that satisfies their
preferences and provides a better life for everyone. A workforce capable of
and value enhancement is made up of people who are aligned, teamed, energized,
capable, and pioneering and empowered to apply their capabilities to continuously
improve the business (Vitalo, Byron, Bierley, & Holmberg,
understanding of the lean approach to commerce, a stakeholder
by or may affect the success of commerce. We include as a stakeholder,
that sustains all life.
The Components of Lean Thinking
In general, the Lean model contains management rubrics along
with much guidance for how one applies these rubrics and a set of methods,
termed “tools.” Management rubrics guide one’s behavior
in overseeing business operations and managing one’s relationships with
workers. Some typical high-level operations-related management rubrics are
- define value from the customer’s perspective,
- map the value stream for each business function,
- management from a value stream perspective,
- establish flow in every business process,
- establish pull in every business process, and
- strive for perfection.
Some operating-level management rubrics are
- respect all people,
- standardize work processes,
- go to where a problem is occurring and see what is actually happening,
- use systematic problem solving methods to eliminate problems.
Most Lean tools facilitate the discovery and elimination of waste.
Other tools, guide the discovery of opportunities to elevate the delivery of
value to customers. Some tools are complex such as Total Productive Maintenance.
It is a system of activities that ensures that every machine is always able
to perform its required tasks as expected. It includes methods for implementing
autonomous maintenance, predictive maintenance, and equipment improvement.
Other tools are constrained in their scope. 6S 1 is
one such tool. It ensures that every work setting is continuously maintained
in a manner specified in
each process’s standardized work document.2
The Outcomes Lean Applications
The outcomes that Lean applications produce vary based on the
purpose Lean methods are put to, what aspects of Lean thinking are incorporated
in the application, what constraints are applied by higher-level executives
with regard to the scope of the application and the decision-making authority
of the people implementing it, and how competent its implementers are in the
skills needed to apply Lean thinking.
When implemented by competent people with the aim of benefiting
all stakeholders inclusively and earnestly supported by executive decision
makers, Lean thinking increases the value received by customers, reduces
operating costs, and provides employees the opportunity to experience pride
in the products
they produce and the services they deliver. It also yields new learning, improved
employee engagement, elevated teamwork, and has raised the performance of businesses
on traditional measures of business success. The histories of companies applying
Lean thinking including Wiremold (Million, 2007), Danaher (DeLuzio, 2019),
and, most recently, General Electric (Kellner, 2020), attest to the benefits
it can deliver, as well as the outcomes produced by Kaizen improvement events
(see, for example, Bujak and Vecellio, 2014; Reed, 2004; Vitalo, 2005; Vitalo
and Guy, 2004; Vitalo and Lowery, 2003).
Bujak, C.J. & Vecellio, P. (2014). Kaizen applied to public
health improvement. Retrieved June 24, 2022, from http://www.vitalentusa.com/learn/kaizen_applied_to_public_health_improvement.php
M. (2019). The Danaher Business System vs. The Toyota Production System. How
are they the same? How are they different? Retrieved
June 24, 2022, from
Emiliani, M.L. (2007). Better thinking, better results. Center
for Lean Business Management, LLC.
Kellner, T. (2020). New energy: How GE embraced ‘Lean’ and
reinvented its birthplace. Retrieved June 24, 2022, from https://www.ge.com/news/reports/new-energy-how-ge-embraced-lean-and-reinvented-its-birthplace
Reed, M. (2004). Kaizen in action in Asia. Retrieved June 24,
2022, from http://www.vitalentusa.com/members/asia_ci.php
Vitalo, J. & Guy, M. (2004). Office Kaizen with customer
involvement. Retrieved June 24, 2022, from http://www.vitalentusa.com/learn/projects/office_kaizen_full.php
Vitalo, J. & Lowery, T. (2003). Improving product shipping.
Retrieved June 24, 2022, from http://www.vitalentusa.com/learn/projects/separator_kaizen.php
Vitalo, J. (2005). Core staging and setting Kaizen. Retrieved
June 24, 2022, from http://www.vitalentusa.com/learn/projects/core_set_full.php
Vitalo, R.L. & Bujak, C. J. (2019). The missing pieces in
the Lean Enterprise Model. Retrieved June 12, 2019, from http://www.vitalentusa.com/learn/missing_pieces_in_the_lean_enterprise_model.php
Vitalo, R.L. & Bujak, C. J. (2023). Life
An economic system for the good of humankind. Lowrey Press, Austin:TX.
Womack, J. P. & Jones, D. T. (2003). Lean thinking. New York: Free Press.
16S extends the original “5S” method
by adding Safety as the sixth concern.
2No lean literature provides
a truly systematic approach to applying Lean tools to improve business operations.
Also, none re-integrates Deming's contributions to Toyota's success. However,
there is such guidance. It is provided in Life
Enabling Enterprise: An economic system for the good of humankind (Vitalo
and Bujak, 2023).
See especially, Section III The Operations Component of the Life Enabling
Published June 29, 2022
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