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Lean Transformation: How to Change Your Business into a Lean Enterprise Hardcover – January 1, 2010
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About the Author
Jorge Larco holds an MBA from Dartmouth, speaks five languages and has led dozens of conversions to lean in more than half a dozen countries. Bruce Henderson, a Wharton MBA, learned lean directly from Toyota. As CEO of $3.2 billion company, he led a transformation that involved some 30,000 people in more than a 100 manufacturing plants in 16 countries.
Excerpt. © Reprinted by permission. All rights reserved.
Foreword Lean Transformation is a leading indicator of a profound change in ourA business culture. Bruce Henderson started his career as a strategy consultant seeking to position businesses so they faced the minimum of competition. Jorge Larco began his business life as an operations manager running plants in a traditional manner. In a previous era they would have had no cause to talk to each other because strategists advising CEOs did not consider operations important and because operating managers lacked a strategic vision for the business extending beyond the walls of their plant. Today (after what they describe as a trip to Toyota boot camp) they are not only talking. They have jointly written a book on how to make lean operations the key strategy for businesses large and small. What's going on here?
The answer, I think, is that in a globalized economy with many mature industries it's impossible to avoid competition and critically important to answer a simple question: How can managers create value for customers by eliminating waste in routine operations in plants, engineering, purchasing, distribution, and retail. This is not to say that positional strategies are irrelevantHenderson's company has just consummated a gigantic merger to strengthen its position in several industries. It is to say that mere position is no longer sufficient. The list of mergers that have failed to produce their promised "synergies" due to lack of a lean operating plan is now very long. And down-stream customers, including you and me as ultimate consumers, are placing steadily higher demands on businesses to cut out the waste and perform. The strategists and business raiders of the 1980s have therefore given way to the new business hero of the late 1990sMichael Dellwho has created one of the world's most successful companies by eliminating wasted steps (like the retailer) and installing build-to-order pull systems to give people just what they want just when they want it.
In the pages of Lean Transformation the authors describe a simple method for making a Dell out of your business, beginning with high-level leadership initiatives to refocus the business, then quickly getting to the down-and-dirty steps needed to transform operations. After a careful reading of this fast-paced text, I hope CEOs will finally get it: Waste can only be eliminated and value created if you pay close attention to every action currently consuming your resources. Ask what's waste and what's value for the end customer, then eliminate the waste. And I hope operations managers will also get it: Brilliant operations employing lean principles is your company's smartest strategy almost without respect to the business you are in. Read Lean Transformation, take notes, screw up your courage, and then explain the new reality to your CEO!
I hope the readers of Lean Transformation (both CEOs and operations managers) will be at the forefront of the worldwide effort to transform lean thinking from a leading-edge concept into the standard operating practice in every industry. I'm certain the lean thinkers will win before we get very far into the new millennium and I advise the reader to heed Henderson and Larco's warning: If your firm starts down the lean path first you can always stay ahead but if you start later you may find it impossible to catch up! (By James P. Womack, President, Lean Enterprise Institute)
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Henderson and Larco organize their story in four parts:
- Part I Makes the case for the lean transformation.
- Part II Describes the tools required to implement (e.g. 5S, pull, flow, takt time, six sigma, standard work, visual management, kaizen events, etc).
- Part III Discusses strategies for spreading lean throughout the organization.
- Part IV Reinforces the criticality of sustaining progress.
"Lean Transformation" is well-organized and readable. It's a must read for all CEOs, CFOs, COOs, and those responsible for continuous improvement in their organization. The return on investment is worth the price.
The Dell example is dated, though the principles still relevant. The treatment of Six Sigma is light, and does not represent the integration which Michael George shares in his book Lean Six Sigma. On the other hand, the strategic alignment in Lean Transformation feels better addressed than in Lean Six Sigma. My hypothesis is that this strategic alignment is a key factor in long term sustainability of continuous improvement, whatever the flavor.
Heavily focused on discrete manufacturing as opposed to continuous process manufacturing, this classic remains close to the top of my list of 300+ books on Lean, Six Sigma and Process Improvement for executives who seek to better understand lean.
What is it not is a manual on the details of the different tools like value stream maps, Poka-Yoke, SMED, workflow/cell design, TPM, 5-S, Standard Work, Standard WIP, etc. It discusses all these topics, and you come away with an understanding of them and how they work together, but it doesn't go into the details of them and how to implement that other sources do.