Starting Lean

I’m often asked, “Where is the best place to start Lean in a facility.” I usually answer, “It depends.” What I mean is that there is no perfect answer to where a firm should start applying Lean principles and tools. It depends on each firm’s circumstances, needs, and priorities. What is appropriate for one firm is not necessarily good or right for another.

If a firm is capacity constrained, it makes sense to begin applying Lean at the process (or processes) which are constraining throughput and revenue generation. On the other hand, if a firm is market constrained (meaning they have a lack of demand), the firm should focus its efforts on breaking the market constraint rather than leaning internal processes (I know that Lean purists will scream and say why should a firm pass up on internal improvements while the lack of demand is being addressed, but often it becomes a question of where a firm’s focus and resource allocation should be directed.)

My own personal viewpoint is that Lean should be approached strategically, if circumstances permit. If Lean is truly about providing superior value, then value design and development is a strategic issue, not a tactical one. In this sense, the first Lean “tool” that should have primacy is Hoshin.

Please note I am not advocating Hoshin – the common approach to Hoshin has degenerated into an A3 “fill in the blanks” exercise that has little, if anything, to do with strategy.

Rather, a firm should undertake a strategic analysis of its current environment and develop a plan of action through which it can best position itself in the marketplace to develop a competitive advantage. This competitive advantage will be gained through a unique value proposition backed up by a value chain which is distinctly configured from that of the competition. From this point, Lean principles and techniques can be most effectively used to ensure that value chain activities are carried out in the most value-adding way possible.

The problem with starting with any Lean tool on an existing value chain is that, in many industries, there is a high likelihood that the value chain is identical to that of competitors. Where value chains among rivals are similar, it is likely that value itself is similar, and the basis for creating a sustainable competitive advantage does not exist.

In summary, starting Lean can be seen as either a tactical exercise where one gets into processes right away to reduce waste, or as an initiative which is part of an organization’s overall strategy for creating a competitive advantage through unique value. Where possible, I prefer to view it as the latter.

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