What is Lean?

TPS "House" (courtesy of Lean.org)

So what is Lean? The concept of “lean” is based on the principles of the Toyota Production System (TPS). TPS was developed with the objective of identifying and reducing wasteful activities in manufacturing processes through education and involvement of the workforce in order to better serve customers.

While originally created for use in Toyota’s manufacturing facilities, wasteful activities inhabit all processes inside and outside of manufacturing. Many companies are reducing wasteful activities in office business processes and streamlining operations to be more efficient in serving their customers better. Lean has spread to many industries – traditional manufacturing, logistics and supply chains, supermarkets, service providers, healthcare, banking, transactional processes, sales, marketing – because the basis is so fundamental to business success and has a foundation of common sense. Lean implementation has saved companies billions of dollars through reduction of waste activities.

For a full list of the wasteful activities and some deeper dives into each, please go to the Lean Wastes page here.

The TPS “House” diagram is a demonstration of how TPS can be the foundation for improvement management and communication in an ideal situation. It appears complicated, but honestly it incorporates some simple ideas that can be implemented relatively quickly.

What would a lean organization look like (as a small business or sports organization)?

  • Reduced stockouts (concessions, ticket stock, merchandise, materials) through better forecasting and planning but without expanding inventories
  • Shorter leadtimes because of local sourcing and streamlining of logistics instead of reliance on distant suppliers
  • Improved facility and equipment maintenance with reduced downtime and wasted opportunities
  • Less employee “waiting around” time in concession stands while anticipating customers that may or may not arrive
  • Improved training ramp-up time for new employees on business systems (cash registers, ticketing systems, customer relationship management software, etc)
  • Reduced food spoilage and products going obsolete before being consumed
  • Faster customer service cycle times (customer orders, food quickly provided, customer pays)
  • Better organization inside and outside of office, with cleaner facilities
  • Happier, engaged employees whose ideas are valuable
  • Faster service, more accurate service, all of which leads to more service opportunities
  • Improved focus on what the customer wants and less time wasted on what the customer doesn’t want

Example of Investment and Return with LeanLarge companies employ departments dedicated to implementing lean or continuous improvement throughout their facilities. This is a hefty expense, but with an even healthier return on investment. Also, many large companies that have been using lean for extended periods of time may have their own version of the Toyota Production System. In addition, if their company lacks the skill sets for bigger problems they hire consultants that are experts in those fields. Simply having the resources necessary to invest in continuous improvement puts large companies ahead in the game.

Small companies and businesses would love to implement continuous improvement as well. However, where do they acquire the skill sets? Maybe their business model and revenues do not allow for a continuous improvement department or manager to exist. They also can’t afford to bring in consultants for extended periods of time. As a result, business managers and owners either have to rely on books about lean implementation or what they can find online. Unfortunately this research and learning takes them away from actually running their businesses and is counter-productive.

What about having a continuous improvement specialist available part-time or on a semi-regular basis? This is possible but until now this wasn’t readily (and affordably) available, for a couple reasons. First, it’s hard to drive a continuous improvement culture, where the managers AND workers are actively engaged in making things better, if no one is available full-time to show the way. Second, because of the limited financial resources small companies can supply, typical consulting firms won’t spend their time chasing small opportunities.

The sports industry has traditionally been the slowest when it comes to implementing new business ideas and concepts. When I attended the 2011 Baseball Winter Meetings and met with representatives from many baseball teams I learned that many of them have never heard of “lean” and were simply “doing things the way they’ve always done them.” In a marketplace where sports organizations may not have many (if any) direct business competitors but lots of indirect competitors (families choosing to go out to eat, go to the movies, or stay home instead of going to a ballgame) teams have to be swifter with customer service yet more efficient with how financial resources are spent. With razor-thin margins as it is, sports organizations have to find ways to get better.

To contact Lean Blitz you can go to the Contact page, or you can email Chad Walters here. Feel free to ask questions or to find more information about lean in sports or small business.

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