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strategy and business
 / Summer 2005 / Issue 39(originally published by Booz & Company)


Leaning Toward Utopia

“You walk into an office and everybody looks busy, so you think it’s all unique, creative, and highly valuable,” says Kent Sears, the GM North America vice president of manufacturing processes and global manufacturing system implementation. “But we’re finding that 30 to 60 percent of it is repetitive, transactional, full of unnecessary reviews and redundancies, and not very creative at all.”

Hyundai Motor Company, the Danaher Corporation (manufacturers of tools and instruments), and General Electric Company have all invested heavily in lean thinking. Though they don’t always comment openly about it (Danaher is particularly publicity-shy), people close to the companies note its significant impact on current-day operations and its role in planning future performance.

Pratt & Whitney, a division of United Technologies Corporation, began its lean initiative in the early 1990s, eliminating one-fourth of its manufacturing space and putting every product into a “continuous flow” configuration, which attempted to eliminate pauses during the assembly process that slow production down. This effort shrank manufacturing time by 25 percent. After posting $250 million in losses in both 1992 and 1993, Pratt & Whitney has maintained consistent profitability since 1995. Recently, a U.S. Marine Corps report on Pratt & Whitney credited the company’s lean efforts for its success in winning Air Force contracts for the new Joint Strike Fighter and delivering its prototype engines on time and under budget.

“The purpose of lean thinking is not to cut your cost or inventory, but to change your strategy,” says Art Byrne, a veteran production executive who has led a series of lean thinking projects at GE, Wiremold, and Danaher. “When you make things flow in a smoother, more effective way, you can gain market share dramatically against your competitors. And if you get a three- to five-year head start, then eventually they can’t catch up, even if one of them starts to do it themselves.” Mr. Byrne is currently a partner at J.W. Childs, a Boston-based private equity firm that requires firms in which it takes a stake to adopt lean thinking. This policy assumes that the resulting productivity and management improvements will eliminate much of the investment risk. Indeed, ever since Toyota began the first lean initiative with its production system in the 1950s, the idea of eliminating risk — not the risk of external threats, but the danger of staleness, complacency, and expediency from within — has been central to lean thinking.

Making Sensei
“I studied the car industry for years,” says James Womack, “but I was never a car guy. Really, cars have all pretty much been the same since the Model T.”

The 56-year-old Dr. Womack is lanky, bearded, bespectacled, soft-spoken, and erudite. Born and raised in Arkansas, he has lived in the Boston area since 1973. He is prone to blurting out crusty, ironic asides, most of which touch on the fallibility of human nature. “America is a supersized nation,” he observed recently, “but it’s obsessed with leanness. That’s why Americans like our work so much.”

Daniel Jones, the same age as Dr. Womack, is also bearded with glasses. He lives in an English village called Ross-on-Wye near the Welsh border, and comes across as an update of an English country squire, enjoying the quiet pleasures of an epicurean life, and apt to chuckle when the production systems around him don’t yield it.

In 1979, both men were aspiring intellectuals with a common interest in public policy; they were advocates of free trade. Jim Womack, then completing a Ph.D. in public policy from MIT’s Sloan School of Business, had little interest in business per se, but he had an intimate familiarity with cars. As a teenager, he rode thousands of miles around the rural south with his father, a Veterans Administration caseworker and amateur mechanic who loved automobiles so much that he reminisced on his deathbed about fixing his Model T’s brakes. Dan Jones, a young economist of Dutch and English parentage, had studied with an associate of European Union founder Jean Monnet and had written a well-regarded monograph on the competitiveness of the British auto industry. That study in turn caught the eye of Dan Roos, an MIT professor known for organizing ambitious research projects. Dr. Roos recruited the two young postgraduates as part of a larger global team to write an MIT report called “The Future of the Automobile,” funded by a group of automobile industry–related corporations. Both researchers worked intensively on the project for several years, with Mr. Jones commuting to the U.S. several times a year to participate.

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  1. Victoria Griffith, “Welcome to Tesco, Your ‘Glocal’ Superstore,” s+b, First Quarter 2002; Click here.
  2. Bill Jackson and Conrad Winkler, “Building the Advantaged Supply Network,” s+b, Fall 2004; Click here.
  3. John Micklethwait and Adrian Wooldridge, “The Art and Practice of Japanese Management,” s+b, First Quarter 1997; Click here.
  4. Narayan Nallicheri, T. Curt Bailey, and J. Scott Cade, “The Lean, Green Service Machine,” s+b, Winter 2004; Click here.
  5. Lt. Col. Clyde M. Woltman, USMC, “United Technologies Corporation,” in 2001–2002 Common Findings, Secretary of Defense Corporate Fellows Program; Click here.
  6. Bob Emiliani, David Stec, Lawrence Grasso, and James Stodder, Better Thinking, Better Results: Using the Power of Lean as a Total Business Solution (Center for Lean Business Management, 2003)
  7. Dan Jones and Jim Womack, Seeing the Whole: Mapping the Extended Value Stream (Lean Enterprise Institute, 2000)
  8. Shigeo Shingo, A Study of the Toyota Production System from an Industrial Engineering Viewpoint (Productivity Press, 1989)
  9. James P. Womack, Daniel T. Jones, and Daniel Roos, The Machine That Changed the World: The Story of Lean Production (HarperCollins, 1991)
  10. James P. Womack and Daniel T. Jones, Lean Thinking: Banish Waste and Create Wealth in Your Corporation (Simon & Schuster, 1996; 2nd ed., Free Press, 2003)
  11. James P. Womack and Daniel T. Jones, Lean Solutions: How Producers and Customers Achieve Mutual Value and Create Wealth (Simon & Schuster, forthcoming)
  12. Institute for Healthcare Improvement:
  13. Lean Enterprise Academy:
  14. Lean Enterprise Institute:
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