This is the 16th book in the series Learning Together and Leading Together where we are going through the Personal MBA plan curated by Josh Kaufman. Our goal is to get through 99 books this year. Do we read the whole book? Nope. We digest the summary(s) of the book and I give my thoughts and you give your thoughts. Feel free to follow along and comment if you would like.
The best summary I found on this book was found here by MIT.edu. (The link is to a pdf to download.)
Major points of this book are:
The 5 lean principles:
- Define value
- Identify the value stream and eliminate waste
- “The critical starting point for lean thinking is value”, which is defined by the customer, in terms of a product and/or service that meets the customer’s need.
- “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.” Align the organization toward products with dedicated product teams.
- Producers tend to continue making what they already are making, and customers tend to ask for products they are already getting, or minor variations thereon. Challenge this way of thinking to discover what customers truly need and want. Example: car manufacturers make cars, dealers sell cars, and customers ask for cars; however the actual product the customer needs is personal mobility. How can the extended enterprise better deliver personal mobility to customers?
- Determine the target cost of the product based on the resources required if all the muda (waste) is removed from the process; work toward achieving the target cost, allowing for reduced prices and/or better product features – leading to higher profit.
Identify the Value Stream and eliminate waste
The value stream is all activities necessary to deliver a product to customers
- Problem solving: Concept to design and production
- Info management: order taking, scheduling, delivery
- Physical transformation of raw materials to delivered product
Identify valuable activities vs. waste
- Type 1 waste: create no value but unavoidable with current technology
- Type 2 waste: create no value and are avoidable
- After eliminating waste in the value stream, make the value-added steps flow together continuously, with no stoppages or rework.
- Just-in-time production
- Eliminate specialized departments and batches of work done in those departments
- Instead of having large, high-speed machines and putting all machines of the same type in one location, use smaller machines and put all the different machines required to produce a single product into closely located “cells” in the exact sequence required.
- focus on the end product itself and the steps required to complete a single product – via dedicated, cross-functional product teams
- Ignore existing boundaries between companies, departments, and individual roles to envision a lean enterprise focused on “removing all impediments to the continuous flow of the specific product.”
- Redesign processes and tools to eliminate rework, scrap and stoppages so production of the product can flow continuously
- Deliver only what the customer wants, when the customer asks for it, rather than pushing products out and hoping customers want them
- “No one upstream should produce a good or service until the customer downstream asks for it.”
- Downstream activities use simple signals to indicate to upstream activities when more is needed.
- Right-size your tools and process so you don’t need to produce massive quantities of intermediate parts; be able to switch tools and machines so they can be quickly adjusted (in minutes) to produce different parts or product.
- The improvements process never ends: you must always strive to offer a better product while reducing waste.
- Do radical transformation to eliminate the largest sources of waste, and then do continuous incremental improvement to move toward perfection
- “Form a vision, select the two or three most important steps to get you there, and defer the other steps until later.” Keep your efforts focused for better results.
- Don’t settle for merely being better than your current competition; eventually someone will come along and beat you.
- Transparency across the entire value stream (suppliers, integrators, employees, distributors, etc.) is required to discover opportunities for improvement
It is easier, cheaper, and faster to start a company today than ever before. Just because you start something doesn’t mean it will succeed though. In fact it is easier, cheaper, and faster to fail than ever before. This is great news.
To know if you are going to succeed or fail though early is very important. How do you know? You must think lean. Every big company started off small. Every great idea met a niche in the beginning and grew from there. I meet so many people who want to have the next big idea and I press them on why? Instead I think you should have the idea that brings the most value to a small group of people. Then grow it from there. This book helps you understand how to help that idea grow. It is very effective and thought provoking.
If you need a copy of the book go here: [amazon_enhanced asin=”0743249275″ /]
Do you identify with this book? Are you thinking lean?