How to be a lean machine

Inside Business Roger Trapp examines a book by gurus who want more from less

It was among the most influential of all management books. Widely regarded as an essential read for anybody trying to get to grips with what is going on in manufacturing, The Machine That Changed the World made its authors into near-gurus. Now two of the threesome responsible for that tome (James P Womack and Daniel T Jones) are back and aiming to repeat the trick.

Lean Thinking (Simon & Schuster, pounds 16,99) is in many ways a natural follow- on. Most obviously, there is still a lot of material on the awesome Toyota Production System that was described and analysed in such depth in the earlier book. But it is also logical to explain how the sort of approach that has transformed the motor industry can be applied to the likes of Procter & Gamble and Tesco as well as engineering companies such as Pratt & Whitney and Porsche.

Mr Womack, based in the US, and Mr Jones, the director of Cardiff Business School's lean enterprise research centre, are certainly keen to spread the lean message.

With its emphasis on getting more from less and cutting down on waste, the approach should be of huge appeal to those many corporate leaders who find themselves in straitened circumstances. The only problem is that there is no pretence it is easy.

There are certain similarities with business process re-engineering in that it entails a re-examination of the way things are done, so that they are focused on customer needs rather than on the requirements or limitations of the business. But, while business process re-engineering - at least partly because of the time at which it appeared - was hijacked by the downsizers, lean thinking appears to have more to offer those who want to expand their businesses. And by helping industries in developed countries to emerge from their stagnation, it could aid employment rather than reduce it.

This, suggest Mr Womack and Mr Jones, is because they are not just sitting down with a blank sheet of paper (as Champy, Hammer and the rest of the re-engineers advocated). Instead, they are starting from the position that companies must offer customers value of some sort. The objective is not just to shake out cost by paring down all the processes. It is to focus on what the customer needs "at a specific price at a specific time".

Having decided that "the critical starting point for lean thinking is value", the authors move on to set out the other key principles. The next step is to identify the "value stream", or set of all the actions required to bring a specific product (whether it is goods, a service or, increasingly, a combination of both) from concept to completion. This has rarely been attempted but "almost always exposes enormous, indeed staggering, amounts of 'muda' [waste]".

Step three is to get the value-creating steps that are left after this reappraisal to flow. This is difficult because it requires rethinking the conventional set-ups of organisations, even in these days of flatter hierarchies.

Reorganising into product teams and the like makes the next step easier. It enables companies to let customers pull the product from them as they need it, rather than pushing products on to a market that does not necessarily want them. From this it is, of course, a small jump to the sort of mass customisation that is becoming common in the car industry.

The power of these steps lies in the fact that they create a virtuous circle. As companies do all these things, they realise "that there is no end to the process of reducing effort, time, space, cost and mistakes while offering a product which is ever more nearly what the customer actually wants. Suddenly, perfection, the fifth and final principle of lean thinking, does not seem like a crazy idea."

So much for the vision. From this point on, the book starts to get bogged down in detail. It is all very well saying, as the blurb does, that the authors are not providing a programme for the one-minute manager, but that does not mean they have to head off in the opposite direction. Sure, there are a few vibrant examples but much of the text, not to mention the charts, comes over like a manual for production and operations engineers.

This is a pity because there is a lot of sense packed into these 300- odd pages.

For instance, in the section that sets out an action plan there is the command "Forget grand strategy for the moment" - a reference to the tendency of many organisations to respond to a crisis by asking themselves questions like whether they are in the right business. Some may really be in businesses without opportunities. But "it's all too easy to start blaming your industry rather than yourself," they write. Companies that change their cost base and shorten production lead times by eliminating waste can find that their prospects suddenly look very different.