A Lean Enterprise is defined as â€œa business system for organizing and managing product development, operations, suppliers, and customer relations. Business and other organizations use lean principles, practices, and tools to create precise customer valueâ€”goods and services with higher quality and fewer defectsâ€”with less human effort, less space, less capital, and less time than the traditional system of mass production.”
Womack and Jones describe Lean Enterprise in detail as follows:
â€œThe objectives for the lean enterprise are very simple: Correctly specify value for the customer, avoiding the normal tendency for each firm along the stream to define value differently to favor its own role in providing it. â€¦Then identify all the actions required to bring a product from concept to launch, from order to delivery, and from raw material into the hands of the customer and on through its useful life. Next, remove any actions which do not create value and make those actions which do create value proceed in continuous flow as pulled by the customer. Finally, analyze the results and start the evaluation process over again. Continue this cycle for the life of the product or product family as a normal part, indeed the core activity, of â€œmanagementâ€.
The mechanism of the lean enterprise is also very simple: a conference of all the firms along the stream, assisted by technical staff from â€œlean functionsâ€ in the participating firms, to periodically conduct rapid analyses and thenÂ take fast-strike improvements actions. Clearly someone must be the leader, and this is logically the firm bringing all of the designs and components together into a complete productâ€¦However, the participants must treat each other as equals, with muda as the joint enemy.â€
How does one create a Lean Enterprise ? How does that happen in a software organization ? Let’s explore this subject in the coming few weeks…
1. What is Lean, http://www.lean.org/WhatsLean/
2. Lean Thinking, Womack and Jones, pg 276