Book Notes #40: Lean Thinking by James Womack and Daniel Jones

Lean Thinking shows the story of how American, European, and Japanese firms applied a simple set of principles called ‘lean thinking’ to survive the recession and grow.

Title: Lean Thinking
Author: James P. Womack and Daniel T. Jones
Year: 1996
Pages: 350

Lean Thinking is one of the first books written in America where the Term ´Lean´ was used.

Lean Thinking is a book written by James Womack and Daniel Jones that provides an overview of the Lean methodology and its principles, and how it can be applied to improve efficiency and effectiveness in various organizations and industries.

This book follows a previous highly successful book by Womack entitled The Machine That Changed the World

Both books address the revolution in manufacturing represented by the Toyota Production System of the Toyota Corporation of Japan. 

This type of manufacturing system is called a “lean system” and is contrasted throughout the book with the traditional “mass production” system of manufacturing epitomized by batch-and-queue methods.

As a result, I gave this book a rating of 8.5/10.

For me, a book with a note 10 is one I consider reading again every year. Among the books I rank with 10, for example, is Dale Carnegie’s How to Win Friends and Influence People.

Overview of Lean Thinking

Lean Thinking was launched in the fall of 1996, just in time for the recession of 1997. 

It told the story of how American, European, and Japanese firms applied a simple set of principles called ‘lean thinking’ to survive the recession of 1991 and grow steadily in sales and profits through 1996.

After a decade of downsizing and reengineering, most companies in North America, Europe, and Japan are still stuck, searching for a formula for sustainable growth and success. 

The problem, as Womack and Jones explain in Lean Thinking, is that managers have lost sight of value for the customer and how to create it. 

By focusing on their existing organizations and outdated definitions of value, managers create waste, and the economies of advanced countries continue to stagnate.

What’s needed instead is lean thinking to help managers clearly specify a value, line up all the value-creating activities for a specific product along a value stream, and to make value flow smoothly at the pull of the customer in pursuit of perfection. 

As Lean Thinking clearly demonstrates, these simple ideas can breathe new life into any company in any industry, routinely doubling both productivity and sales while stabilizing employment. 

But most managers will need guidance on how to make the lean leap in their firm. 

Even those readers who believe they have embraced lean thinking will discover that another dramatic leap is possible by creating a lean enterprise for each of their product families that tightly links all value-creating activities from concept to product launch, from order to delivery, and from raw materials into the arms of the consumer. 

This new concept takes the best features of the American, German, and Japanese industrial traditions and recombines them in a way that can be applied to every economic activity, from long-distance travel to construction to health care.

Lean Thinking provides a way to specify a 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.

The authors define value as capacity provided at the right time at an appropriate price, as determined by the customer.

In short, lean thinking is lean because it provides a way to do more and more with less and 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 providing immediate feedback on efforts to create 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.

According to Womack and Jones, there are five principles of Lean:

  1. Value
  2. Value Stream
  3. Flow
  4. Pull
  5. Perfection

As a result of transforming a batch-and-wait factory into a Lean factory, productivity will double, and lead times, as well as inventories, will be reduced by 90%.

Lean Thinking is one of the classics in American Lean Literature. This book contains many examples of implementing different Lean tools.

My Book Highlights & Quotes

“… We believe that the volatility—the perceived marketplace chaos—in these industrial activities is in fact self-induced, the inevitable consequence of the long lead times and large inventories in the traditional world of batch-and-queue overlaid with relatively flat demand and promotional activities—like specials on auto service—which producers employ in response…”

“… When carefully analyzed, these costs and revenue losses are often found to more than offset the savings in production costs from low wages, savings which can be obtained in any case by locating smaller flow facilities incorporating more of the total production steps much closer to the customer…”

“… The ability to get parts resupplied very quickly from the next level of the system, and therefore the ability to reorder in small amounts, is always the secret to reducing total inventories in a complex production and supply stream…”

“… Concentrate on managing the value stream for the specific service or good, eliminate organizational barriers by creating a lean enterprise, relocate and right-size tools, and apply the full complement of lean techniques so that value can flow continuously…”

“… Conventional wisdom among economists is that about half of the downswing of economic activity in business cycles is due to consumers and producers working off the inventories built up toward the top of the cycle…”

“… The problem here is not that there were too many firms involved. Each was appropriately specialized for its current task. The problem instead is that each firm was providing a partial product, often only looking inward toward its own operational “efficiency” while no one was looking at the whole product through the eyes of the customer…”

“… Classic batch-and-queue work conditions are hardly conducive to psychological flow. The worker can see only a small part of the task, there is often no feedback (much less immediate feedback), the task requires only a small portion of one’s concentration and skills, and there are constant interruptions to deal with other tasks in one’s area of responsibility…”

“… The important point about takt time was that when orders did not require the full utilization of equipment and workers, takt time was increased. The machinery was slowed down and each of the multiskilled workers in the Q cell performed several of the jobs in the cell while excess workers were put on other tasks around Lantech…”

“… No matter how many times his employees improved a given activity to make it leaner, they could always find more ways to remove muda by eliminating effort, time, space, and errors…”

“… The Toyota sensei applied their standard formula that machines should be available for production about 90 percent of the time and down for changeovers about 10 percent of the time…”

“… Converting a classic batch-and-queue production system to continuous flow with effective pull by the customer will double labor productivity all the way through the system (for direct, managerial, and technical workers, from raw materials to delivered product) while cutting production throughput times by 90 percent and reducing inventories in the system by 90 percent as well…”

“… Dedicated product teams in direct dialogue with customers always find ways to specify value more accurately and often learn of ways to enhance flow and pull as well…”

“… How can performance be improved? Sweat and longer hours are not the answer but will be employed if no one knows how to work smarter…”

“… Let’s just reemphasize the critical leap in embracing value stream thinking: Stop looking at aggregated activities and isolated machines—the smelter, the rolling mill, the warehouse, and the can-filling machine. Start looking at all the specific actions required to produce specific products to see how they interact with each other. Then start to challenge those actions which singly and in combination don’t actually create or optimize value for the customer…”

“… The types of activities which people all over the world consistently report as most rewarding—that is, which make them feel best—involve a clear objective, a need for concentration so intense that no attention is left over, a lack of interruptions and distractions, clear and immediate feedback on progress toward the objective, and a sense of challenge—the perception that one’s skills are adequate, but just adequate, to cope with the task at hand…”

“… By contrast, work in an organization where value is made to flow continuously also creates the conditions for psychological flow. Every employee has immediate knowledge of whether the job has been done right and can see the status of the entire system…”

“… In the lean enterprise, however, the workforce on the plant floor needs to talk constantly to solve production problems and implement improvements in the process. What’s more, they need to have their professional support staff right by their side and everyone needs to be able to see the status of the entire production system…”

“… Pull in simplest terms means that no one upstream should produce a good or service until the customer downstream asks for it…”

In conclusion, “Lean Thinking” is a valuable resource for anyone interested in understanding and implementing the Lean methodology.

The authors, James Womack and Daniel Jones, provide a comprehensive overview of the key principles and practices of Lean and offers real-world examples and case studies to illustrate the concepts.

The book also covers the importance of leadership, communication, and collaboration in the Lean process, and includes practical tips, tools, and checklists to help organizations implement Lean effectively.

It’s a must-read for anyone looking to improve efficiency, effectiveness and eliminate waste in their organization.

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