What’s wrong with LEAN?

Most people think “Lean” is defined by reducing waste, less resources, less buffers and less people. Reading the definition of Lean carefully shows that it is defined by “more customer value with less resources”, which means a reduction of resources AFTER the creation of a better flow of customer value!

In my opinion this misunderstanding has two reasons:

1. The term Lean, which was created by James Womack when he studied the Toyota Production System in the 1980s, implies a slim organization which is extremly slimmed like an anorexic athletic. I think the term Lean itself is misleading as for instance the term Sprint in Scrum. If Womack had called the system “VALUE”, he certainly would have created a different understanding.
2. The expression of “waste” and less resources, which is mentioned in the definition of Lean is much simpler to understand, than the term “customer value”.
3. The definition does not explicitly state “less resources AFTER creating more customer value”

The effect is that people simply start to identify waste by reducing “room to move” (aka Slack) in the organization, also in areas where slack and buffers are needed because of the variable rate of inputs and outputs. This leads to more waiting instead of creating a flow of work.

More evil, if people try to locally optimize groups or organizational departments with lean principals, the effects for the whole organization are in most cases far from perfect.

So, what should we do?

Start by indentifying value and how you can improve the flow of value. Increasing flow often means that you have to increase transaction cost, e.g. when reducing batch sizes.

Only after you have increased the flow you can start thinking of eliminating waste

First effectiveness, then efficiency

My favorite example is the organization of a fire department. Firefighters are only 1-2% of their working time active. Why is this? Because they should be available in case of fire. Only then is a fire department effective! If we organized them according to efficiency principles, people would end up in a waiting loop when they dial the emergency call.

Photo by Mathew Schwartz on Unsplash