Over the next decade I have no doubt
that this lean business model will replace the
prevailing business model originally developed by Alfred
Sloan at General Motors, analysed and described in many
books by Peter Drucker and later refined by Jack Welch
at GE. The power of lean is the growing recognition by
leading organisations in all kinds of sectors that
Toyota, the lean pioneer, is the reference model for our
age. Quite rightly their common aspiration is to become
the Toyota of their industry.
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This is given added urgency as
corporations well down their own path to lean
demonstrate their ability to fundamentally redefine the
nature of competition in their industry, as their
competitors struggle to keep up. Just look at the big
strategic rethink going on at WalMart even before Tesco
opens its first Fresh and Easy store in the US market,
and the growing success of the acquisition and
turnaround strategy of early lean pioneer Danaher.
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The fundamental insight behind lean
is seeing that customer value is created by the actions
of lots of different people across many departments and
organisations. Linking these together into a seamless
end-to-end process or value stream for each product
family reveals literally hundreds of opportunities for
streamlining the flow, eliminating non value creating
steps and aligning the rate of flow with customer
demand. This is lean in operations that most people are
familiar with.
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But it applies throughout the
organisation, not just on the shop floor. All the
support activities in the office can be redesigned using
the same principles and tools. Indeed we need to learn
to see our organisations as a collection of horizontal
processes or value streams as well as the more familiar
vertical organisation of functions and departments.
Vertical functions are the right way to organise
knowledge but value is created by horizontal value
streams.
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