Lean Thinking

Dr. James Womack Speaks on Lean Thinking

July 30, 1999

Dr. James Womack, founder and president of the Lean Enterprise Institute, recently gave a presentation on the history and application of lean production theory. The presentation, titled "Lean Thinking for Process Development," was part of the 1999 Summer Business Trip for SDM students.

Womack holds a BA in political science from the University of Chicago, an MA in transportation systems from Harvard, and a Ph.D. in industrial policy from MIT. He has co-authored a number of notable articles and volumes over the past 20 years, including, "The Machine that Changed the World," and "Lean Thinking."

Womack started by setting the parameters for his discussion: "I define process as the way an organization gets from start to finish on any given product. This means every step that takes place from order to delivery, concept to launch, and raw material assembly to customer receipt."

Womack asserted that the book, "The Machine That Changed the World," which he co-authored with MIT Professor Daniel Roos and Daniel Jones, was one of the first to thoroughly examine Toyota’s highly successful business system. The book identified and examined several critical processes — including product development, supply chain management, customer management, production operations, and investor management — and concluded that Toyota was winning the car wars because it optimized the value delivered to the customer while minimizing the time, human effort, and capital required to create this value.

This insight led to Womack’s second major book, "Lean Thinking" and the foundation of the Lean Enterprise Institute, both of which were dedicated to the practical application of lean manufacturing theory. Womack advised that in order to become lean, companies must invert their standard thought processes and focus on the whole rather than the parts. "The fundamental objective is to shift the focus of management from the existing organization, technologies and assets to the product itself. This will allow companies to differentiate value from waste."

Womack then contrasted a typical manufacturer that "pushes" product on the basis of forecasts, to one that "pulls" products based on actual customer demand. "Instead of manufacturing products in a disconnected and geographically dispersed process, companies should recreate their process by working backward from the end product at the point of delivery to the customer. This permits the product to respond to the needs of the customer rather than being pushed ahead to keep existing assets and machinery fully occupied."

Womack offered examples of flawed production processes in which each fabrication and assembly step was efficient, but so widely dispersed and poorly coordinated that the start-to-finish process was inefficient. One example was a windshield wiper module that takes seven weeks to progress from raw materials to customer but requires only 20 minutes of fabrication and assembly work. Another example concerned military aircraft subassemblies. Many of these parts take 2.5 years to progress from raw materials to final assembly after traveling thousands of miles through many plants and dozens of departments within each plant.

In light of such examples, Womack argued that companies should tackle the challenge of completing fabrication and assembly steps in one room, preferably located near the product engineers, and in only a few days. "This is a new way of thinking that requires bold action and courage, but which can revitalize companies and whole industries. Surprisingly, most companies started out this way because they were founded in one room or one building with all design, fabrication, and assembly activities co-located. However, as they grew they lost sight of the initial efficiencies of their overall process in an effort to maximize the efficiency of each point in the process."

Womack advised that to start thinking lean companies must carefully identify their "current state," or all of the steps in their current value stream for each product family. They then need to envision a "future state" which can be achieved within a short period of time. In this state the valueless steps are removed and the remaining steps are conducted, to the extent practical, in continuous flow. By doing this companies can optimize the whole, instead of the parts, and maximize the value creation from a given set of inputs.