This blog is a transcript from Jim Womack on Lean Thinking: Past, Present and Future Keynote at the UK Lean Summit 2024 on the 23rd April. John is a Lean Author the Founder and Senior Advisor at the Lean Enterprise Institute. If you would like to watch this keynote, please watch the YouTube video below.
Jim Womack on Lean Thinking: Past Present and Future Background
Jim Womack and Dan Jones led MIT’s International Motor Vehicle Research Program (IMVP), which introduced the term “lean” to describe Toyota’s revolutionary management system.
Based on that research, Womack co-authored The Machine That Changed the World (Macmillan/Rawson Associates, 1990), Jim Womack on Lean Thinking (Simon & Schuster, 1996), Lean Solutions (Simon & Schuster, 2005), and Seeing the Whole Value Stream (Lean Enterprise Institute, 2011).
In addition, he founded the Lean Enterprise Institute in 1997 as a non-profit research, education, publishing, and conferencing company to ensure new knowledge about lean thinking and practices would be available to the worldwide public, making things better for individuals, organisations, and society. Womack’s leadership of LEI inspired global efforts to establish lean institutes in other countries, which ultimately grew into the Lean Global Network, chartered in 2007.
Introduction to Jim Womack on Lean Thinking: Past Present and Future
Dan Jones is my partner of 45 years in thinking about lean. The two of us have always been the big think long view people in this lean movement. It’s just our nature that we wanted to look backwards, look forward, where are we now, where have we been and where are we going.
I will spend just a few minutes talking about where we’ve been, where we are, and where we’re going. Where we’re going depends on you, not on me. You’re the Next Generation. So, where you go depends on what you do. What do I mean by lean? I always mention partly because my definition has changed a bit over time. We can agree it’s a way of thinking and it’s also a practice and you have to practice it.
Having No Gemba
I find if I’m not out looking at things, seeing real gemba things, I can’t think. When the pandemic came on, I thought, what a wonderful time to go to my island in Maine (it’s not my island, I share it) where I have a place where I live, and I’ll just write some great stuff. I sat down to do it and I had no gemba in my head. The years went by, and I wrote hardly anything for 3 years because you have to ‘go and see’ and that’s my version of practice.
This is all about experiments; there is no Grand Theory here. This is all empirically tested, it’s just PDCA. But wait a minute, do and A3 because that is so much bigger frame than PDCA. The idea was to create more value with less resource; ‘lean’. That’s how we got to the definition. I think that’s a good summary and people understand that. The problem with lean is that it also has a downside. By the way, it rhymes with meme. Lean and mean is very popular in management circles periodically when they’re in trouble. Time to be mean; ‘you’re gone’, is what that means. So that’s unfortunate.
Lean is Fragile
Lean is also fragile. When we were coming up with the term at MIT in 1987-88, there were two camps. One camp wanted to call it lean and that was my camp and I was the team leader, so we called it lean, there was no vote. The other camp (the HR people) wanted to call it fragile or fragile robust. Their point was that if people don’t believe it, if you don’t have engaged people and you don’t have managers that practice lean, it disappears. Magically, it disappears. I’ve seen so much non-lean.
I went to see something two years ago, you’d say there was ‘sort of lean’ and you come back and there’s no evidence that anything ever happened, it’s just gone. So, I thought the fragile people were making a good argument, but I also knew I couldn’t go around the world trying to sell senior management on fragile thinking, for fragile production to create a fragile enterprise. It’s just not what humans are prepared to do.
I now spend a lot of time thinking about that and about how to enable good work. At the frontline, that’s what managers are supposed to do, is enable good work and at every level of management, the manager needs to enable good work by the next lower level. Yet that’s not what managers think apparently in the morning most of the time. It doesn’t just happen. Someone has thought it through and said that every worker doing frontline work needs help. We all need help. Every manager at every level needs help. But when you get to the very top, well, that is a mystery, of how someone at the top who has no help, is able to do it.
Lean Enterprise
What do we want to do with this? We want to create lean enterprises. A lean enterprise starts with raw material and get all the way to the customer, or you start with a concept, and you get all the way to the customer with a product, a good, or a service, or some combination. And that’s what we’re trying to do, create a lean enterprise – which is a stable platform for creating value.
Toyota over the last 70 years has never laid off a permanent employee and they’ve been through a lot since 1950, when they laid off a third of the company in the great crisis. They were willing to create ballast in their organisation in the form of money, so that in this pandemic, to point sales were dramatically reduced. If you can’t make cars, what do you do? You make Kaizen. Then you’ve got folks working on improvement when you can’t make anything. And that’s a commitment they’ve made.
However there’s no such thing as guaranteed lifetime employment. A company that lives in the marketplace cannot make that guarantee, that’s ludicrous. But what Toyota have said is ‘if you will stand by us, we will stand by you’. For every worker at every level, you have to do the work, countermeasure things as problems arise and improve the work. That’s the only way the company can defend you. You do your work, you do it right and when there is a problem, you immediately correct it and then you constantly are taking it to a higher level. That’s the magic – if you can get your enterprise to do that.
Daily Management
That is created and sustained by daily management. Daily management is all about avoiding deviation and real-time resolution of every single thing that goes wrong. Then you’ve got improvement, and then you’ve got Hoshin. Hoshin for me (and I think for Toyota), it’s about the big stuff. Toyota for years and years has had a 3% a year improvement in fundamental productivity.
That’s every manager’s job, that’s what you do. Whereas Hoshin is the big stuff that’s going to move the needle, that is we’ve suddenly got to do something very different. We have to do a product that’s vastly better, we have to move to a region where we’ve never been. Those are the big things that are the Hoshin that they need to deploy on. So you’ve got daily management, you’ve got Kaizen for improvement, and A3 is the engine of Kaizen and then you’ve got the Hoshin. So that’s the lean enterprise. And we’ve been at this for a while.
Sakichi Toyoda, Jidoka and JIT
It’s shocking to think that Sakichi Toyoda, who started the Toyota empire, introduced Jidoka, in 1987. This was his automatic loom, with the automatic stop that could detect it had made a mistake. The loom could detect that a thread was broken, and it would immediately stop. That was 127 years ago and there’s still not as much Jidoka in the world as there ought to be. It’s been only 87 years since his son Kiichiro founded the car company and came up with the idea of JIT. By the way, they couldn’t do JIT. You can’t do JIT in total chaos. Any production scheduling system is going to be bad. Therefore JIT can’t save you, for example, from a pandemic.
The Toyota Group
They then put the Toyota group together, by the way, 300 companies in the group, equity interlock, they own each other. Toyota is actually a massive private business, and all 300 of those companies are stock market traded and less than 50% of the stock is available to the public. That’s not a bad idea for anybody.
The crisis in 1950 made it possible for Taiichi Ohno to push through all the things he wanted to do, tremendous resistance. Nobody wanted to do it. Everybody was a skilled trades guy, they loved to fiddle and rework and so it took a crisis to do it. The product development system in place since ’54, was interesting. The management system was created, Eiji Toyoda led the creation of the formalized management center system in ’65. TPS was formalized in ’67 for the big growth of Toyota.
The Operation Management Consulting Division
By the way, until 1967 there was no name for TPS, it was ‘just how we do things’. In ’67 they had these world-beater products, the Corona and the Corolla, they were ready to go and the other 299 companies in the Toyota group weren’t because they hadn’t been paying attention and doing what Toyota was doing. So, they put teams together.
And the operation management consulting division went out and did lean to people. It was very tough. They would create a model line at every company. They said they were going to do it now, we’re going to do it this week. As well as, we will not only do it but you will spread it to every part of your company. We’ll be back if you don’t. That set a terrible precedent for lean consultants. All the Western ones saw it, be a tough guy. The famous 5-day kaizen, we’re going to do kaizen to you. It was a terrible idea.
The Global Spread of Lean
For the most part, it’s really an important reason why we’ve not had the influence we wanted. Spectacular results, come back two years later, nothing there. They’ve done it over and over. Global spread started really in ’83 with the New United Motor Manufacturing, Inc. (NUMMI) deal (GM-Toyota). Then Burnaston was in 1989 and opened in 92’. Then Dan and I came out with “The Machine That Changed the World.” It’s a coincidence that I think really was the start of the S-curve in terms of adoption. In which in every country in every industry, it is fair to say, somebody has tried to do some lean, all over the world.
We keep track at LEI (Lean Enterprise Institute) of who’s on our mailing list of the people that give us their emails, before the pandemic we discovered that we had a name on our email list with a suffix from every country in the world except North Korea. We were certain that one of those other names from one of those other countries was actually North Korean intelligence checking in.
So, what an amazing thing, everybody in the world in every industry knew about this and so there was a great leap in interest, great leap in attempts to emulate it. It’s what I call ‘the first lean leap’. I would say from 1990 till the pandemic we were all thinking whoa, we’re making progress. But then the pandemic came along, and I’m on my island in Maine, looking out at the ocean, very gloomy, and decided to take stock of where I thought we were.
The ‘First Lean Leap’ Exhausted
I concluded pretty quickly that the first lean leap was exhausted. So many people had tried so many things and not that much of it could be sustained. Then JIT was getting credit for all shortages. When anybody says to you is JIT the cause of shortages, what you say is how much JIT, real Toyota-class JIT, do you think there is in the world? The answer is practically none.
The world’s run by MRP inside ERP in the big organisations and when you go down to the little guys they’ve still got excel for production planning. There’s no JIT out there. How can JIT be responsible for shortages when there’s no JIT? I’ve explained this over and over to journalists, but none of them get it. They don’t want to get it because a large part about journalism is figuring out who to blame. The story needs a bad guy, so the bad guy became us. We’re the good guys getting blamed as the bad guy, and as I say that felt like relevance lost.
Losing Relevance
Now software is eating the world. And when you look at AI & GPT and the fact that there was really no interaction with the lean community, I thought, wow, we’re going to be eaten too. We’re just going to disappear from the world’s mind share. In addition, are we relevant to green? Interesting question but that’s not what most greens think. We’re the guys who make it possible for you to have more stuff and if you’re a real green, stuff is bad. So you look at everything I’ve mentioned and you say, wow, we are losing our relevance, we should do something.
Well, that means it’s time for root cause analysis. But wait a minute, it’s even worse! I forgot about the fact that there’s no loyalty between organisations and employees. This really started back with Reagan and Thatcher. Shareholder value is the end all and be all – do what it takes, manage those earnings. We can suddenly arbitrage across the world and anything you can’t fix, which most managers would include everything they’ve got, can be outsourced to somebody in a country you never heard of in a company you never heard of and it’s not your fault.
So, when you think that we don’t have employees who stick with anything today and that young people just don’t know about loyalty, how many companies, unlike Toyota, could say over the last 70 years that they never let anybody go? No matter how bad things got, people are not loyal for a reason.
Lean is a Long Game, Not a Short Game
We have to turn that around. As I say, lean is a long game, it’s not a short game. It’s a long game in the cycles of learning, stable team, stable employers. And that’s not what the world has. You’ve got the stagnation doing on, and then you have Tesla, just deeply, deeply infuriating. I have gotten so many of those questions and quotes from what journalists called. They say things like Tesla have got this high-speed development process which is how they were able to do the Cybertruck in 7 years, Innovative management, they can pivot (and of course, Musk pivots endlessly, pointlessly), then about software-enabled products.
It says if you’re now a manufacturer, you don’t have to have the product finished or right because an OTA is going to take care of it. Of course, Musk sells that as all OTAs improve the product, but actually about 90% of them are fixing the product that you’ve already experienced problems with. It just sucked all the oxygen out of the room. Stodgy old Toyota versus heroic Tesla. So that’s a tough spot to be in.
Re-Work Movement
I looked at the cause of weaknesses and you can read those and reflect on them, how many of those things you’ve done. Doing lean to people. And our movement is almost entirely a rework movement because you say how much Lean Product & Process Development (LPPD) is there in the world, where you got the process that you need to fulfil on the product right, before you launch the product. Most people in OPEX go around and fix processes that never should have been put out the way they are. Or maybe were okay to begin with but through lack of daily management have just fallen off. So it’s a rework loop. When you think you’re doing improvement, you’re actually doing rework. We haven’t been able to do much about modern management which is a terrible thing. Modern management is a terrible thing. GE management, KPIs, top-down make your numbers.
Outsourcing
As a consequence, we have created less value than we had hoped. What can we do? Well, let me just say I’m here as an optimist. I’m not by nature so optimistic for the short term, I’m optimistic about the long term but even for the short term, and here’s why. We’ve now got a tailwind, the world geopolitically – remember how the Americans were going to run the world? Didn’t exactly work out that way. Without giving it a thought, you could move everything to China, India or to Burkina Faso where they’ve not heard about wages and you just show up and they work for 3 square meals a day. And that’s what managers did for a whole generation. They could either fix the mess they’ve got or offshore it, and that’s what they did. Now geopolitically, we can see this is very dangerous and is not sustainable.
Lean Shoring
Could employees again be assets rather than cost? Every company wants to say our employees are our most valuable asset. This is not true. Your employees are your biggest cost. What can we do about that? Is there now a once-in-a-lifetime, once-in-a-generation opportunity for what I call ‘lean shoring’? That things are going to be brought back, if not all the way to the UK, at least within Europe, if not in America, at least in neighbouring countries, and we could do it right.
But if we r’e-shore’ but don’t ‘lean shore’, what you get is just inflation. One of our most interesting experiments that we’ve done at LEI over the last 12 years is to work with GE Appliances, no longer a GE company, to re-shore appliance making to the US. Very dramatic, very hard, we have all struggled, but in the end, it’s been pretty amazing, and can be done. So, I’m an optimist.
Creative Engagement with the Tech World
Speaking of reasons for optimism, we now have creative engagement for the first time with the tech world. Our initial response to tech was it will go away; this too shall pass and we can get back to traditional Kaizen. But that’s not true. However, there is a way to make Kaizen possible without being wrecked by corporate IT, As Mike Moore discusses (keynote coming soon).
In addition, Fabrice Bernhard (Theodo) has also been exploring at what he calls agile tech (keynote coming soon). This is where you take the lean manifesto of 2001, put it in the mold and you drop a copy of Lean Thinking from 1996 that Dan and I did. Then put the two in together, close it, pressure heat and it pops open and you have the Lean Tech Manifesto, which is a melding of two very different ways of thinking and it’s really interesting and all of you should read it, it’s basically a review of what lean is.
I was shocked as I was reading Fabrice’s book, as every other page is about lean thinking and every other page is about the tech world and how we can put them together. The good news is it can be done. We can be part of the conversation again. We’re not enemies but allies, I hope.
We have an elaborated lean management system. We’ve worked with Toyota a fair bit to make sure we really understand this. We really had a lot of elements, a lot of pieces but we didn’t have the whole puzzle. Dave Brunt’s done great work with the Lean Enterprise Academy team to get the Lean Transformation Framework (LTF) into the hands of so many people and explain it in such an articulate way. Thank you!
Real Time Problem Resolution with Daily Management
So, we have daily management, we think we know how to do it but wait a minute, daily management doesn’t work unless you have real-time problem resolution. You see these production control boards that are all over the world now and it’s what I call the bored walk. You have the bored walk every morning, where everybody stands and looks at the board and it has listed all the things that went wrong yesterday. Now they’re going to go wrong again today but no, we’ve got some kludgy workarounds which might work and then we’ve got them all listed and the OPEX team will come around once a month to start their pareto to look for low-hanging fruit. The fruits already rotted on the ground by that point. So that’s not what we’re going to do.
Concurrent Engineering & Toyota’s Approach
I think we’re understanding that an awful lot of Kaizen is re-work and therefore we ought to get there first and we’re developing, I hope, the capability to do good Hoshin. There’s reason for optimism here. Toyota has taught us about concurrent engineering in a very visible example, EVs. They have been denounced for it with their hydrogen story (keynote coming soon). Remember, the point of concurrent engineering is ‘don’t take the first countermeasure that comes into your head’. Force yourself to think about alternative ways to countermeasure a problem. Toyota stuck with it, they’re working on BEVs harder than you might think. They’re working on PHEVs which, I love. I’ve drove them for 10 years. They’re working on, IC engines on hydrogen. It’s pretty easy, you just have to figure out where to get the hydrogen, which is the same thing for fuel cells.
We’ve now, I hope, began to teach people the idea of Concurrency along with simultaneity. Simultaneity means product development and process development are in 2 stages. So you can not start the process development until you finish the product development or if you have a real deep understanding of each other’s activity, you can actually squinch them up and that’s how you get to this rapid time to market. I think we’re making progress, as more people are understanding.
Toyota’s Recent Success
Finally, here’s some good news. Toyota’s doing great. This year, record production, 11 million units, record profits, record margins, record market share. Tesla, not so much. What Toyota’s going to come out with mostly is PHEVs – the plug-in hybrids. This is the gateway drug to electric vehicles. If you can learn how to charge your PHEV, where charging is not a range problem, then you can learn how to deal with your EV. I’ve done this myself.
I drove the very first plug-in hybrid Prius and did this for 10 years and then switched to all electric. I’m one of the three people in the world who has a BZ4X, which is a wonderful car, it just can’t go anywhere. That’s due to a misconception about what battery energy density was going to be but they’ll get it fixed. We’ve had to do all this excusing ourselves, we’re the old boring stody Toyota guys and then there’s this wonderful exciting future out there. We didn’t have anything to say, but now we do, so please say it. We’re doing the right thing.
Lean and Green
Furthermore, we’ve got some cases still to make here. First off, we’re not clearly enough explaining that lean can be the great enabler of green. Take the hydrogen car case, the EV car case. What’s wrong with them is they’re too expensive. What do we know how to do? How to take cost out of things. Therefore, our mission here is to enable green good things by making them cost affordable. Most of the resistance to green in the public is that it’s going to cost a whole lot of money for no benefit that I can see because carbon dioxide is invisible. ‘You’re going to make me pay a whole lot more for a car that doesn’t do a thing that my current car does?’ No. We have to change that around so let’s get to work on that.
Lean as the Countermeasure for Shortages
In relation to lean as the countermeasure for shortages. Here’s the deal: Black Swan events cannot be predicted, where they will happen, their amplitude, or their duration. Therefore, no production control system can protect you fully from Black Swans. What JIT can do is protect you from normal variation. That’s what it does so brilliantly. It detects it very quickly, it adjusts small amounts frequently. So, we have a problem there that we have to fix.
Operation Management Development Division
But whom leads what they call recovery at Toyota? Toyota says you can’t predict these big events but you can have a recovery method that will as quickly as possible get you back online and everything working again. Who should lead that at Toyota? It’s OMDD, the operation management development division. When Toyota has a plant burned down, the OMDD guy is on the ground as the chief engineer of the recovery and has a complete inventory of all of the equipment and all the skills available throughout the organisation. In Toyota’s case, that’s the entire group, the Toyota group of 300 companies.
So, the OMDD shows up and doesn’t have to take a lot of people with them, because at the company where the bad thing is happening, everybody is a trained problem solver. Every single person has done lots of 4-step or 8-step, Kaizen, been part of Hoshin. These people know how to solve problems and it’s in their DNA. For all the OPEX people, just think a little bit about whether you could get some credit and have some fun by being the recovery lead team for your organisation. Just think about that, it might be a new career for you!
Moving on, as a countermeasure for economic stagnation, the Bank of MUDA is still open folks. All you have to do is go down to the Bank of MUDA and take that MUDA and convert it into value and we could get productivity to go right up. Let’s do it if we get the chance.
Final Thoughts: Jim Womack on Lean Thinking: Past, Present and Future
Here’s a final thought that is important to me personally. We are transitioning from a founding generation, that’s me, Dan etc. who did not invent a single thing. We simply were good at writing down some things that people ought to know, and got an awful lot of people to go out and try an awful lot of things. It’s just natural that the first leap goes away. Subsequent leaps have to be done by next generations. I say those folks are the sustain and improve people. Dave (Brunt), Peter (Watkins) and David (Marriott), these guys are the sustain and improve generation. I was the get the trumpet and broadcast the message generation.
In my opinion we can have a second lean leap and I’m very encouraged. I think everyone is very lucky to have LEA. Look, it’s always difficult in what I call a ‘missionary activity’. I’ve always thought of us as ‘missionaries’. We’re trying to get people to change both their beliefs and their practices and that’s hard. Get people to change both what they say they believe in and how they actually behave. So it’s always hard to make that leap from founding generation to next generation but I think we’re making progress. I have hope as I say for relevance regained, that’s where we ought to be. So it’s up to you, not to me. I’m delighted with the work people are doing. It may be more important than you realise, and you should do it. Thank you.