Learning To Evolve

International Journal of Operations & Production Management
Learning to evolve: A review of contemporary lean thinking

Peter Hines Matthias Holweg Nick Rich
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Learning to evolve
A review of contemporary lean thinking
Peter Hines, Matthias Holweg and Nick Rich
994
Lean Enterprise Research Centre, Cardiff Business School, Cardiff, UK

Keywords Lean production, Learning organizations
Abstract The application of lean thinking has made a significant impact both in academic and
industrial circles over the last decade. Fostered by a rapid spread into many other industry sectors
beyond the automotive industry, there has been a significant development and localisation of the
lean concept. Despite successful lean applications in a range of settings however, the lean approach
has been criticised on many accounts, such as the lack of human integration or its limited
applicability outside high-volume repetitive manufacturing environments. The resulting lack of
definition has led to confusion and fuzzy boundaries with other management concepts. Summarising
the lean evolution, this paper comments on approaches that have sought to address some of the
earlier gaps in lean thinking. Linking the evolution of lean thinking to the contingency and learning
organisation schools of thought, the objective of this paper is to provide a framework for
understanding the evolution of lean not only as a concept, but also its implementation within an
organisation, and point out areas for future research.
International Journal of Operations &

Production Management
Vol. 24 No. 10, 2004
pp. 994-1011
q Emerald Group Publishing Limited
0144-3577
DOI 10.1108/01443570410558049
Introduction
A brief history of lean
The origins of lean thinking can be found on the shop-floors of Japanese manufacturers
and, in particular, innovations at Toyota Motor Corporation (Shingo, 1981, 1988;
Monden, 1983; Ohno, 1988). These innovations, resulting from a scarcity of resources
and intense domestic competition in the Japanese market for automobiles, included the
just-in-time (JIT) production system, the kanban method of pull production, respect for
employees and high levels of employee problem-solving/automated mistake proofing.
This lean operations management design approach focused on the elimination of waste
and excess from the tactical product flows at Toyota (the Toyota seven wastes) and
represented an alternative model to that of capital-intense mass production (with its
large batch sizes, dedicated assets and hidden wastes). For a full account of these
systems, methods, processes and techniques see Monden (1983). Much of the early
work at Toyota was applied under the leadership of Taiichi Ohno to car engine
manufacturing during the 1950s, later to vehicle assembly (1960s), and the wider
supply chain (1970s). It was only at this latter point that supplier manuals were
produced and the secrets of this lean approach were shared with companies outside
Toyota for the first time. These manuals were written in Japanese, and it took almost
another decade before the first English literature was available (e.g. Shingo, 1981;
Schonberger, 1982; Hall, 1983; Monden, 1983; Sandras, 1989).
Still, the interest taken in lean by the western manufacturing community was limited
until the performance gaps between Toyota and other carmakers were highlighted
by the book The Machine that Changed the World, which also coined the term
The authors would like to acknowledge and thank Niall Piercy and Sharon Williams for their
contributions towards this paper.
lean production (or lean manufacturing) (Womack et al., 1990). The exploration of the
enterprise model, the infrastructure and practices that support lean production,
promoted explicitly a thesis of transference and the ability of non-automotive and
non-Japanese emulation based upon the premise that manufacturing problems and
technologies were universal problems facing management (Womack et al., 1990).
Sparked by the superior performance achieved by lean producers over the performance
of traditional mass production system designs, western manufacturers emulated the
shop-floor techniques, the structural parts of lean, but often found it difficult to introduce
the organisational culture and mindset. So many early lean efforts showed localised
impact only, and fell short of their intended impact on the overall systems performance
(Holweg and Pil, 2001). In this awareness period (up to 1990), the main weaknesses of
lean manufacturing were its automotive manufacturing-based view and limited
appreciation of how to handle variability in demand. The implementation was entirely
tool-focused, and generally neglected the human aspects of the high-performance work
system core to the lean manufacturing approach.
After 1990, there was a gradual widening of focus away from the shop-floor, a trend
often ignored by omission, error or design by many detractors. This process of
extension was also accelerated by the promotion of successful western case emulation
by businesses in diverse sectors that had adapted their production systems to include
a new design based upon lean principles (Womack and Jones, 1996). These principles
involved the identification of customer value, the management of the value stream,
developing the capability to flow production, the use of pull mechanisms to support
flow of materials at constrained operations and finally the pursuit of perfection through
reducing to zero all forms of waste in the production system (see Womack and
Jones, 1996). This evolution may be summarised as a focus on quality during the
literature of the early 1990s), through quality, cost and delivery (late 1990s), to customer
value from 2000 onwards, as shown in Table I.
Also during the mid-1990s, the value stream concept evolved and was seen to
extend beyond manufacturing or the single company, and stretch from customer needs
right back to raw material sources (Hines and Rich, 1997; Rother and Shook, 1998).
This provided the link between lean and the supply chain, as for the first time, the
production pull was extended beyond the boundary of the single factory to include
the up- and downstream partners.
The relationship between value and cost
A critical point in the lean thinking is the focus on value. Often however, value creation
is seen as equal to cost reduction. This represents a common yet critical shortcoming of
the understanding of lean. Therefore, let us examine the relationship between customer
value and cost in detail.
In 1996, Womack and Jones crystallised value as the first principle of lean thinking
(Womack and Jones, 1996). As such, lean had moved away from a merely
shop-floor-focus on waste and cost reduction, to an approach that contingently
sought to enhance value (or perceived value) to customers by adding product or service
features and/or removing wasteful activities.
This was a key development, as value was linked to customer requirements, and no
longer was simply define through its opposite, waste, on the shop-floor. Regardless of
whether an activity appeared to be wasteful from a shop-floor point of view or be
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995
Dissemination of
shop-floor practices
JIT techniques, cost
Manufacturing,
shop-floor only
Automotive vehicle
assembly
Shingo (1981, 1988)

Schonberger (1982, 1986)
Monden (1983)
Ohno (1988)
Mather (1988)
Literature
theme
Focus
Key business
process
Industry
sector
Shingo (1981,
1988)
Table I.
The evolution of lean
thinking
1980-1990 Awareness
Womack et al. (1990)

Hammer (1990)
Stalk and Hout (1990)
Harrison (1992)
Andersen Consulting (1993, 1994)
Automotive vehicle and

component assembly
Best practice movement,

benchmarking leading to
emulation
Cost, training and promotion,
TQM, process reengineering
Manufacturing and materials
management
1990-mid 1990 Quality
2000+Value system
Capability at system level

Value stream thinking, lean
enterprise, collaboration in the
supply chain
Cost, process-based to support flow Value and cost, tactical to strategic,
integrated to supply chain
Order fulfilment
Integrated processes, such order
fulfilment and new product
development
Manufacturing in general often High and low volume
manufacturing, extension into
focused on repetitive
service sectors
manufacturing
Bateman (2000)
Lamming (1993)
Hines and Taylor (2000)
MacBeth and Ferguson (1994)
Holweg and Pil (2001)
Womack and Jones (1994, 1996)
Abbas et al. (2001)
Rother and Shook (1998)
Hines et al. (2002)
Mid 1990-2000
Quality, cost and delivery
996
Phases
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costly, it is the customer that ultimately decides what constitutes muda[1], and what
does not.
Figure 1 highlights the relationship between value and cost, and shows how
products or services can be plotted with regards to their relative cost-value proposition
to the customer. The further above the cost-value equilibrium a product/service can be
positioned, the more attractive proposition it is to the customers. The cost-value
equilibrium denotes the situation whereby the product provides exactly as much value,
which the customer is willing to pay for, as the product costs. This migration from a
mere waste reduction focus to a customer value focus opens essentially a second
avenue of value creation:
.
Value is created if internal waste is reduced, as the wasteful activities and the
associated costs are reduced, increasing the overall value proposition for the
customer.
.
Value is also increased, if additional features or services are offered, which are
valued by the customer. This could entail a shorter delivery cycle or smaller
delivery batches, which might not add additional cost, yet add customer value.
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Objectives
Lean as a concept has evolved over time, and will continue to do so. As a result of
this development, significant confusion about what is lean, and what is not has
arisen a fact clearly observable at both academic and practitioner conferences in
logistics and operations management. The key objective of this paper is therefore to
provide a framework that explains the developments of the lean concept over time.
The questions we seek to answer are:
.
What are the key stages of the lean evolution?
.
Within these stages, what are the key criticisms? And subsequently;
.
Are these criticisms justified?
Overall, we seek to set a vision to help companies to see where they can evolve to in
their lean thinking, as well as developing a framework to understanding this using
organisational learning theoretical underpinning, in particular the framework
suggested by McGill and Slocum (1993).
Figure 1.
Relation of value, cost
and waste
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998
Criticism of lean
Introduction
In its development over time, critics either from within or outside the lean movement
have rightly pointed to various gaps in lean thinking. As lean thinking evolved
however, these gaps changed. Table II gives a summary of the gaps in lean thinking
and its main critics over time.
This evolution is largely driven because of the shortcomings of lean that surfaced as
organisations progressed on their learning curve, as well as the extension of lean
thinking into new sectors with different settings and constraints. Key aspects of this
criticism are the lack of contingency and ability to cope with variability, the lack of
consideration of human aspects, and the narrow operational focus on the shop-floor.
Let us examine these in more detail.
Lack of contingency
There is still a general misunderstanding of the contingent nature required to apply
lean thinking. Indeed, the otherwise excellent Learning to See publication from the
Lean Enterprise Institute (LEI) failed in its first incarnation to have an appropriate
focus on demand variability and quality issues (Rother and Shook, 1998). However, this
lesson had been learnt by the time that the extension Seeing the Whole was published
in 2002 (Jones and Womack, 2002).
This having been said, for many companies the major focus of lean implementation
is still the shop floor and their search for competitive advantage has yet to rely on the
more recent lean integrative approaches. Indeed, the car industry, the mother of lean
thinking, is still largely in this shop-floor dimension and has focused largely on
optimising the car assembler and first tier supplier tier (Holweg and Jones, 2001).
The paradoxical situation of piecemeal lean application is that the most productive car
plants in Europe produce into the highest level of finished stocks in Europe.
What is needed in the car industry is an aligned supply that provides strategic value
to the customer, by building cars to customer order (Holweg and Pil, 2001). Interestingly,
this is a conclusion reached by Monden, who codified the Toyota production system in
1983. However, even Toyota in Japan has so far failed to produce more than two-thirds of
their cars to real customer order[2]. The result of this build-to-forecast approach across
Europe is that there are currently $18bn of unsold vehicles held in European markets,
and 350,000 units in UK alone (see Fisher, 1997; Holweg and Jones, 2001; Holweg and Pil,
2001; Holweg, 2003 for more detail).
Human aspects
A further aspect that has attracted criticism is that lean production systems could be
viewed through a Marxist lens as being exploitative and high pressure to the shop floor
workers. Chief among the critics in this area are Garrahan and Stewart (1992) in their
studies of the UK Nissan facility, a site that repeatedly has achieved the highest output
of cars per worker in Europe[3]. In a similar vein, Williams et al. (1992) suggest that
lean production is de-humanising and exploitative. Although such left-wing authors
have failed to gain widespread support for their views, they have however raised an
important point for those academics and practitioners interested in applying lean
thinking, namely that lean should be regarded as more than a set of mechanistic
hard tools and techniques and the human dimensions of motivation, empowerment
Main critics
Key gaps
2000+
Global aspects
Understanding customer value
Low volume industries
Strategic integration
E-business
Bateman (2000)
Christopher and Towill (2001)
van Hoek et al. (2001)
Mid 1990-1999
Coping with variability
Integration of processes
Inter-company relationships
Still mainly auto
Integrating industries
Davidow and Malone (1992)
Cusumano (1994)
Goldman et al. (1995)
Harrison et al. (1999)
Suri (1999)
Schonberger and Knod (1997)
1990-mid 1990
Mainly auto
Human resources, exploitation of workers
Supply chain aspects
System dynamics aspects
Williams et al. (1992)
Garrahan and Stewart (1992)
Rineheart et al. (1993)
1980-1990
Outside shop-floor
Inter-company aspects
Systemic thinking
Auto assembly only
Carlisle and Parker (1989)

Fucini and Fucini (1990)
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Table II.
The main gaps and
criticisms of lean
thinking
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and respect for people are very important. Indeed, the present authors would argue that
these elements are key to the long-term sustainability of any lean programme,
regardless of the industry sector.
Scope and lack of strategic perspective
Linked to this last criticism is the almost complete lack of discussion of strategic level
thinking in lean programmes as opposed to discussions of how to apply a series of
different tools and techniques until quite recently. Again the current authors would
argue that this gap has led to a lack of sustainability of many lean transformation
programmes. In particular, the use of policy deployment and other strategy formation
and deployment tools is of central importance (see for instance, Hines and Taylor, 2000;
Hines et al., 2002). Earlier references to such strategic thinking are either consigned
to isolated academic papers (such as Tennant and Roberts, 2001) or Japanese texts
(such as Akao, 1991), neither of which reached a mainstream lean readership.
Coping with variability
Another focal point of the criticism was the ability of lean production systems and
supply chains to cope with variability, a key aspect of the lean approach. Indeed, in
order to add value to the customer the lean approach seeks to find ways to manage
variability and to create capacity by utilising assets more effectively than in traditional
systems.
Various lean approaches, such as mixed model scheduling and level scheduling
(also referred to as heijunka), had earlier been developed to do this. However, in the case of
demand variability, these approaches have sought to flatten or control demand, as the
original lean pioneers came from fairly stable demand environments industries, such
automotive sector supply chains (at least downstream of the assembler). This high-volume
and repetitive demand character suits the application of kanban pull-scheduling.
However, such kanban-style solutions can be inflexible and thus have attracted criticism
from authors such as Cusumano (1994) and Schonberger and Knod (1997).
As a result, many detractors confused pull and kanban, assuming that the latter tool
was the only way of achieving customer-driven scheduling. In many other sectors
though, demand variability was a main inhibitor to the implementation of lean in
general, and kanban in particular. As a result, various contributors proposed agile
solutions (inter alia: Goldman et al., 1995, van Hoek et al., 2001). The agile school
introduced a greater emphasis on dealing with customer demand variability, flexible
assemble-to-order systems, creating virtual supply chains and greater use of IT tools.
Some of the main differences are summarised by Christopher et al. (1999) in Table III.
Learning steps from prescription to contingency
Four stages of organisational learning
Lean has evolved considerably over time. The four stages of lean thinking defined here
are indeed closely related to the stages of development of organisational learning. This
will be demonstrated using McGill and Slocums (1993) four type classification of
organisational learning. The first type of organisation is what McGill and Slocum call
the knowing organisation. This type of organisation, as in the first lean awareness
stage, believes that there is a best way of doing things that is well established and is
closely associated with the scientific management of the likes of Max Weber (1964)
Lean
Agile
Satisfy the customer by adding value

and eliminating waste
Long-term relationships with supplier
Measure output-criteria, e.g. quality, cost and
delivery (QCD)
Smooth workflow
Plan ahead
Reduce stocks to a minimum throughout
Satisfy the customer by configuring to

order
Fluid clusters of suppliers, virtual supply chains
Measure customer satisfaction
Allow for unpredictability
Face the unpredictable
Supply chain stock reduction is not
the key
Source: adapted from Christopher et al. (1999)
and Frederick W. Taylor (1911). Within this type of organisation efficiency is key and
firms tend to be bounded by an underlying philosophy of rationality. In the lean case,
this rationality would include the mindset that waste is bad and should be removed,
where waste is often defined with an introspective engineering definition of value. Such
companies may also be described as adaptive or single-loop, and can only be
successful if competing in a mature and static environment (Argyris and Schon, 1978).
The evolution of the lean concept can be likened to organisational learning, both for
the general lean movement and firms who progress along this four-stage lean maturity
matrix. Here, organisational learning may be defined as the process of improving
action through better knowledge and understanding (Fiol and Lyles, 1985, p. 803).
Dodgson (1993, p. 377) describes organisational learning as:
The ways firms build, supplement and organise knowledge and routines around their
activities and within their cultures and adapt and develop organisational efficiency by
improving the use of the broad skills of the workforce.
Such learning takes place through a phased process of information acquisition,

information distribution, information interpretation and use, knowledge transmission
and storage (Huber, 1991; Nevis et al., 1995). The evolution of lean thinking along such
a learning organisation spectrum is shown in Table IV.
Stage 1 Cells and assembly lines
Turning firstly to the evolution from prescription to contingency, the awareness and
quality stages of lean involved the highly prescriptive application of a set of tools and
methods. These tools are well documented to include kanban, 5S (housekeping), single
minute exchanges of dies (SMED changeover time reduction) and cellular
manufacturing (e.g. Monden, 1983; Schonberger, 1986; Harrison, 1992). However, even
at this pre-1995 point in time, arguably the dominant paradigm in the field of
organisational design and change had moved to a contingency approach (Child, 1977).
Such an approach would suggest that there was no one correct best practice
approach that is highly effective for all organisations (Donaldson, 1996, p. 51).
However, in order to understand what the lean movement was at this point it is
important to make reference back to the industries in which lean thinking was
primarily being deployed, namely the automotive industry and other discrete
product or engineering sectors with very similar organisational environments in
terms of volume produced, product variety and their nature of component assembly.
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Table III.
The main differences
between lean and agile
Table IV.
The development of a
contingent evolved lean
approach
Organisational learning
Knowing organisation
Single-loop learning
Management by
objectives
Mid 1990-1999 Value stream
Lean principles
Value stream mapping
Prescriptive one best way;
Toyota is best
Thinking organisation
Understanding
Single (and some often ineffective
organisation
double) loop learning
Single-loop learning
Management by objectives Management by fact
Highly prescriptive best

practice approach
1990-mid 1990 Shop-floor
Learning organisation
Double-loop (and some Deutero
learning)
Management by fact
Contingency involving: customer

value, policy deployment, size,
industry, technology
2000+ Value system
1002
Prescription/contingency Highly prescriptive

tool-based approach
1980-1990 Cell and line
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As such, one might argue that as long as lean thinking was applied within these very
similar environments its lack of theoretical contingency was of little importance.
However, this view would be contradicted by many, as even this limited but relatively
homogeneous range of firms would still face differences in environment (Burns and
Stalker, 1961), organisational size (Child, 1975), organisational strategy (Chandler,
1962) and technology (Woodward, 1965).
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Stage 2 Shop-floor
McGill and Slocums second type of organisation is the understanding organisation,
which may be likened to the second shop-floor lean stage. Such organisations are
governed by a set of core values and management practices that are designed to clarify,
communicate and reinforce the companys culture. In this case, the lean quality stage
has firms imbibed in a prescriptive best practice lean approach that is largely centred
on the manufacturing area. As such they are often not open to further change and
expanding their learning experiences. A typical response when discussing the
application of lean with such firms is that yes, we are doing lean, even if they are only
applying it in limited islands of excellence on the shop-floor.
Stage 3 Value stream
To counter this prescriptive one best way approach advocates of lean thinking in the
third quality, cost and delivery (QCD) stage started to re-position lean thinking as
based on a set of five key principles that it was claimed could be applied across a wide
range of industrial settings (Womack and Jones, 1996). Indeed, a series of cases of this
application were provided in this text. However, most of these cases are still drawn
from component based manufacturing industries and involved the common
application of kaikaku (i.e. improvement via breakthrough events, as opposed to
kaizen, continuous improvement) events deployed by Japanese consultants Shingjutsu
and their followers.
In spite of these shortcomings, there was the start of an awareness that individual
value streams (or specific supply chains) should be individually mapped and
contingent solutions found for their improvement (Hines and Rich, 1997; Rother and
Shook, 1998). This having been said there was still a significant focus on the one best
way which would typically be answered by the question what would Toyota do?
This still largely prescriptive picture of lean thinking is well summarised in Womack
and Joness framework for the lean leap (Table V) which defines a one best way
which, although containing a good deal of sensible advise, tends to ignore the various
contingent features discussed above.
This third type of organisation is best described as the thinking organisation,
which typically focuses on a set of problem-solving management practices, as in the
order fulfilment-focused QCD-stage lean firm. However, as in the thinking
organisation, these solutions may be criticised as being piecemeal and providing
discrete and identifiable solutions, but generally just within one business process.
Typical the use of value stream mapping within the order fulfilment[4] process would
be seen here. However, within this order fulfilment process, there would be a high
degree of questioning and challenging of existing practices characterised by
double-loop learning (Senge, 1990). Such a lean organisation typically ignores a range
of other key processes such as new product development (NPD) and the development of
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Table V.
Time frame for the
lean leap
Phase
Specific steps
Get started
Find a change agent

Get lean knowledge
Find a lever
Map value streams
Begin kaikaku
Expand your scope
Create a new organization
Reorganize by product family
Create a lean function
Devise a policy for excess people
Devise a growth strategy
Remove anchor-draggers
Instill a perfection mind-set
Install business systems
Introduce lean accounting
Relate pay to firm performance
Implement transparency
Initiate policy deployment
Introduce lean learning
Find right-sized tools
Complete the transformation Apply these steps to your
suppliers/customers
Develop global strategy
Transition from top-down to
bottom-up improvement
Time frame
First six months
Six months through year two
Years three and four
By the end of year five
Source: Womack and Jones, 1996
new business opportunities. Such a company would typical rely heavily on a single
process diagnostic tool such as Toyotas information and physical flow mapping tool
popularised by Rother and Shook (1998).
Such firms also tend to assume that improvements should be based solely on
improvements in quality, cost and delivery in the belief that in improving these areas it
will create customer value. In some parts of mature industries, such as the automotive
supplier sector, this may be a reasonable assumption but the current authors believe
this is a dangerous assumption in most other instances. Indeed, in many or most other
cases the customer values a wider and more complex range of tangible and intangible
attributes such as brand, image, environmental issues and local production. As such,
these types of organisation may be criticised for their limited scope and focus. Kiernan
(1993) suggests that the linear approach adopted by this type of organisation virtually
precludes the ability to step back and ask more fundamental, difficult and useful
questions. Such questions may include: should we be in the industry at all? The result
of this often poor strategic alignment is often a scatter blast approach of initiatives
with many acting in conflict. Such organisations are unlikely to achieve sustainable
improvement against customer desired value attributes.
Stage 4 Value systems
The fourth value system stage of lean thinking involves a much greater degree of
contingency, as it moves past the rhetoric of customer value to include approaches
to the active capture of customer needs such as the value attribute approach described
in Hines et al. (2002). In addition, this is linked to the active use of contingent
strategy deployment using policy deployment (Hines et al., 2000). The application of
policy deployment takes into account the various contingent factors impinging on
an organisation such as their size, industrial sector, industrial dynamics and
technology employed. As such, using this fourth lean value system stage, a unique
contingent approach is created using a range of tools drawn from diverse management
approaches such as the earlier lean manufacturing, six sigma, marketing, agile
manufacturing, system dynamics, theory of constraints, and revenue management.
The last phase of McGill and Slocums model is the learning organisation, here
likened to the lean value system stage. Such organisations seek to maximise the
learning opportunities of employees, suppliers, customers and even competitors.
However, here each change is viewed as a hypothesis to be tested and by checking
the results of the experiment, the learning organisation learns how to undertake the
experiment better the next time. Within this context tools such as four fields mapping
(see Dimancescu et al., 1997 for details) would be employed within the lean value
system firm within its contingently defined key core processes with bottom-up
implementation plans validated by the catch balling process with the firms policy
deployment approach (Hines et al., 2000; Hines et al., 2002). Such an approach facilitates
learning, and widespread double-loop learning could be expected.
Indeed, the various value stream maps from the different core business processes
may also be the basis for what Bateson (1972) calls deutero-learning involving the
ability to learn how to learn. The types of methods and approaches that one would
expect to see to illustrate this would include supplier associations (for inter-company or
network learning: see Hines and Rich, 1998), real-time strategy formation and policy
deployment (for strategic and operational people alignment), attention a range of key
business processes (Dimancescu et al., 1997) and strong evidence of learning by doing
activities rather than classroom training. The question that advocates of this level of
lean would ask is what should Toyota do?
Conclusions and outlook
In this paper, we have reviewed lean thinking and its evolution over time, and after more
than a decade after the seminal work The Machine that Changed the World, we have
identified and outlined four key stages in its development. Lean as a concept has
undergone a significant evolution and expansion beyond its origins in the auto industry,
and its narrow definition around shop-floor improvement. Many critics thus were
rightfully attacking lean at their respective time, yet often neglected the fact that lean
has, and continues to develop. Such a process of evolution has maintained the adherence
to the lean principles developed by Womack and Jones (1996) but has explored different
applications and contingencies faced by organisations during the adaptation (the
change process at existing rather than new facility designs) process. As such, this
development is one of testing the boundaries of lean thinking and the contingent
modifications of the approach (within sectors, across businesses etc.) rather than any
fundamental change to the lean enterprise design logic. Many critics arguments still
concern the subsystem of lean production, as defined in the early 1990s, omitting the
developments that have happened after that juncture. We also acknowledge that the
development of lean has led to confusion with regards to what constitutes lean, and what
does not. We thus have come to the following main conclusions:
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Lean exists at two levels: strategic and operational. The customer-centred

strategic thinking applies everywhere, the shop-floor tools do not. This has led
frequently to confusion, or led to misunderstanding as to where to apply lean.
We therefore encourage the use of lean production for the shop-floor tools
following Toyotas example, and lean thinking for the strategic value chain
dimension[5].
The second fact is that lean has evolved, which often is not acknowledged in the
criticism. The shop-floor tools have largely been imitation of Toyota,
nevertheless lean has evolved on the basis of its five principles, and long gone
beyond a mere factory shop-floor application.
Organisations that miss the strategic aspect (value creation, and understanding
customer value) and assume that quality, cost and delivery equal customer value
(a common mistake in shop-floor myopic implementations), only address the
cost axis (c.f. Figure 1). This has lead to point optimisation in the supply chain.
A particular example here is the island optimisation of vehicle assembly plant,
yet a sub-optimisation of their complete supply chain (Holweg and Pil, 2001;
Holweg, 2003).
Lean is one of the most influential new paradigms in manufacturing, and has
expanded beyond the original application on the shop floor of vehicle manufacturers
and component suppliers in the auto industry, ranging from heavy industries such
as primary metals (notably Alcoas production system see www.alcoa.com) to
aerospace businesses (Financial Post, 1999; Womack and Jones, 1996). In particular
when applied to sectors outside the high-volume repetitive manufacturing
environment, lean production has reached its limitations, and a range of other
approaches to counter variability, volatility and variety have been suggested. Here,
the often quoted lean-agile debate is applicable, discussing whether an agile or a lean
strategy, or even a hybrid approach is most suitable (Naylor et al., 1999; Christopher
and Towill, 2001).
From a strategic point of view however, you can integrate other approaches
(particularly the tools they offer) without contradicting the core objective of lean to
provide customer value. In other words, any concept that provides customer value can
be in line with a lean strategy, even if lean production tools on the shop-floor, such as
kanban, level scheduling, or take time, are not used. And in fact, there are a range of
complimentary approaches that can, and have been, used in conjunction with lean
(see Figure 2).
In particular, we refer to the concepts considering production capacity, quality,
responsiveness of the manufacturing system, demand variability, availability of
production resources, and production control approaches. These concepts are not part
of the lean production methodology, but can be used in support of a wider lean
strategy. For example, a focus within lean thinking is to create capacity by removing
waste with the application of improvements in overall equipment effectiveness (OEE),
and subsequently, the overall supply chain effectiveness (OSCE) (Rich and Francis,
1998), and overall vehicle effectiveness (OVE) (Mason et al., 2001). Added to these
existing approaches is the need to increase process capability and attack wasteful
bottlenecks. As such the contingent application of tools and methods from six sigma
and the theory of constraints (TOC) are useful additions (Goldratt, 1990). Six sigma
Learning to
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Figure 2.
Lean A framework
attacks sources of variation by applying a rigorous set of quality tools, which are
highly compatible with existing lean approaches (George, 2002). The thinking
derived from the theory of constraints is also useful as it helps focus on capacity
constraints particularly where two or more capacity constraints collide in a value
stream (Moore and Scheinkopf, 1999). These additional perspectives help to create
a more rounded and focused tool-set for applying lean in order to create capacity at
the constraint resources.
In conclusion, we found that the distinction of lean thinking at the strategic level,
and lean production at the operational level is crucial to understanding lean as a whole
in order to apply the right tools and strategies to provide customer value. Much of the
discussion in academic circles about lean thinking still centres around the shop-floor,
which exhibits a limited understanding of what contemporary lean approaches are
about. To counter this lack of knowledge, we have attempted to summarise how the
lean concept has evolved from production toolkit, through single supplier-customer
focus dyad, to a strategic value proposition. The resulting lean value system
encompasses a value-adding network of operations across companies, with the goal
of providing a series of contingent value proposition to individual final consumers.
This focus on the final customer is still missing in most lean supply chains, and least of
all it is found in the auto industry where lean originates. The optimisation of such
a networked system is determined by the value created to the customer, and not by
localised performance measures within subsystems, such as the factory or the
distribution channel.
In terms of moving this agenda forward, research is called for that looks at how lean
value systems can be created in a green-field environment rather than lean
approaches just seeking to rectify the errors of earlier generations. In addition, the
application of this approach will clearly require a contingent application, which very
likely will be unique both to a particular value system and industrial sector. Further
research is called for to see how this may be achieved in under-researched sectors, such
as low-volume manufacturing and service environments like health care, which are still
in early stages of their lean evolution.
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Notes
1. Muda is the Japanese word for waste, in the sense of wasted effort or time.
2. The remainder of cars is generally made for export to Europe, the United States or elsewhere,
and are used to buffer the build-to-order service to domestic customers.
3. Labor productivity in terms of hours per vehicle, or annual vehicle output per employee are
the standard measures used in the auto sector, and were also used by Womack et al. (1990).
4. Order Fulfilment refers to the process covering all activities from the receipt of an order, its
production scheduling, raw material purchasing, parts delivery, production, storage and
distribution to the final customer.
5. An interesting corollary of this is that even though some observers staunchly hold the to do
lean you must apply kanbans line, Toyota are now using a version of theory of constraints
in Japan that they term tie-tie.
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160. Mikael Brnnmark, Richard J. Holden. 2013. Packages of Participation: Swedish Employees Experience
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195. Jos MoyanoFuentesDepartment of Business Organization, Marketing and Sociology, University of
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202. Paul M. GibbonsFaculty of Engineering, Bristol University, Bristol, UK Colin KennedyEngineering
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205. Dharmasri WickramasingheDepartment of Textile and Clothing Technology, Faculty of Engineering,
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223. Todd A. BoyleSchwartz School of Business, St Francis Xavier University, Antigonish, Canada Maike
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229. Christine Pasquire and Glenn BallardLouise BildstenIndustrial Marketing, Department of Management
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247. Paul M. GibbonsFaculty of Engineering, Industrial Doctorate Centre, Bristol University, Bristol, UK
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249. Mathew Tsamenyi* and John CullenStefan SchillerDepartment of Management and Engineering,
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250. Michel Leseure and Mel HudsonSmithManuel F. SurezBarrazaGraduate School of Business
Administration and Leadership (EGADE) Zona Centro, Tecnolgico de Monterrey at Toluca, Toluca,
Mxico Juan RamisPujolOperations Management and Innovation Department, ESADE Ramon Llull
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a useful explanation of practice. Journal of Purchasing and Supply Management 16:1, 41-50. [CrossRef]
252. Ben CleggAlberto BayoMorionesDepartment of Business Administration, Public University of Navarre,
Pamplona, Spain Alejandro BelloPintadoDepartment of Business Administration, Public University of
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University of Navarre, Pamplona, Spain. 2010. 5S use in manufacturing plants: contextual factors and
impact on operating performance. International Journal of Quality & Reliability Management 27:2,
253. Catalina PerezUniversity of Girona, Girona, Spain Rodolfo de CastroUniversity of Girona, Girona, Spain
David SimonsCardiff Business School, Cardiff University, Cardiff, UK Gerusa GimenezUniversity of
Girona, Girona, Spain. 2010. Development of lean supply chains: a case study of the Catalan pork sector.
Supply Chain Management: An International Journal 15:1, 55-68. [Abstract] [Full Text] [PDF]
254. Ben CleggM.P.J. PepperSchool of Management and Marketing, University of Wollongong, Wollongong,
Australia T.A. SpeddingSchool of Management and Marketing, University of Wollongong, Wollongong,
Australia. 2010. The evolution of lean Six Sigma. International Journal of Quality & Reliability
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257. T. Joosten, I. Bongers, R. Janssen. 2009. Application of lean thinking to health care: issues and
observations. International Journal for Quality in Health Care 21:5, 341-347. [CrossRef]
258. Kieran Conboy. 2009. Agility from First Principles: Reconstructing the Concept of Agility in Information
Systems Development. Information Systems Research 20:3, 329-354. [CrossRef]
259. Carsten Wagner, Peter Nyhuis. 2009. A systematic approach to analysis and design of global production
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260. Hongyi Chen, Ryan TaylorExploring the impact of lean management on innovation capability 826-834.
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Trading off between heijunka and just-in-sequence. International Journal of Production Economics 118:2,
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263. Stephan VachonDepartment of Logistics and Operations Management, HEC Montral, Montreal, Canada
Alain HalleyDepartment of Logistics and Operations Management, HEC Montral, Montreal, Canada
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Canada. 2009. Aligning competitive priorities in the supply chain: the role of interactions with suppliers.
264. Todd A. BoyleSchwartz School of Business and IS, St Francis Xavier University, Antigonish, Canada
Maike ScherrerRathjeInstitute of Technology Management, University of St Gallen, St Gallen,
Switzerland. 2009. An empirical examination of the best practices to ensure manufacturing flexibility.
Journal of Manufacturing Technology Management 20:3, 348-366. [Abstract] [Full Text] [PDF]
265. Su Mi DahlgaardParkJostein PettersenDivision of Quality Technology and Management and Helix
VINN Excellence Centre, Linkping University, Linkping, Sweden. 2009. Defining lean production:
some conceptual and practical issues. The TQM Journal 21:2, 127-142. [Abstract] [Full Text] [PDF]
266. Su Mi DahlgaardParkManuel F. Suarez BarrazaGraduate School of Business Administration and
Leadership (EGADE), Technologico de Monterrey at Toluca, Toluca, Mexico Tricia SmithESADE
Graduate School, Barcelona, Spain Su Mi DahlgaardParkInstitute for Service Management, Lund
University, Lund, Sweden. 2009. Leankaizen public service: an empirical approach in Spanish local
governments. The TQM Journal 21:2, 143-167. [Abstract] [Full Text] [PDF]
267. Eva Hy Engelund, Gitte Breum, Alan Friis. 2009. Optimisation of large-scale food production using
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268. Tyson R. Browning, Ralph D. Heath. 2009. Reconceptualizing the effects of lean on production costs
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269. Maike Scherrer-Rathje, Todd A. Boyle, Patricia Deflorin. 2009. Lean, take two! Reflections from the
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274. Colin Herron, Christian Hicks. 2008. The transfer of selected lean manufacturing techniques from
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275. Bo JrgensenConProC, Copenhagen, Denmark Stephen EmmittDepartment of Civil and Building
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276. Rod GappGriffith Business School, Griffith University, Bundall, Australia Ron FisherGriffith Business
School, Griffith University, Bundall, Australia Kaoru KobayashiGriffith Business School, Griffith
University, Bundall, Australia. 2008. Implementing 5S within a Japanese context: an integrated
management system. Management Decision 46:4, 565-579. [Abstract] [Full Text] [PDF]
277. Dale Kung, Dinu Philip Alex, Mohamed Al-Hussein, Siri Fernando. 2008. Application of lean thinking
to improve the productivity of water and sewer service installations. Canadian Journal of Civil Engineering
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278. Ibon Serrano LasaIndustrial Management Department, Mondragon University, Mondragon, Spain Carlos
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Basque Country, San Sebastin, Spain Rodolfo de Castro VilaBusiness Organization, Management and
Product Design Department, University of Girona, Girona, Spain. 2008. An evaluation of the value stream
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279. Isabel Maria Bodas Freitas. 2008. Sources of differences in the pattern of adoption of organizational and
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280. E.D. Adamides, N. Karacapilidis, H. Pylarinou, D. Koumanakos. 2008. Supporting collaboration in the
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International Journal of Operations & Production Management

Learning to evolve: A review of contemporary lean thinking

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About Emerald www.emeraldinsight.com

The Emerald Research Register for this journal is available at

Lean Enterprise Research Centre, Cardiff Business School, Cardiff, UK

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International Journal of Operations &

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JIT techniques, cost

Shingo (1981, 1988)

Womack et al. (1990)

Automotive vehicle and

Best practice movement,

1990-mid 1990 Quality

Capability at system level

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Carlisle and Parker (1989)

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Satisfy the customer by adding value

Satisfy the customer by configuring to

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Source: adapted from Christopher et al. (1999)

Such learning takes place through a phased process of information acquisition,

Mid 1990-1999 Value stream

Highly prescriptive best

1990-mid 1990 Shop-floor

Contingency involving: customer

2000+ Value system

Prescription/contingency Highly prescriptive

1980-1990 Cell and line

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Find a change agent

Six months through year two

Years three and four

By the end of year five

Source: Womack and Jones, 1996

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Lean exists at two levels: strategic and operational. The customer-centred

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systems: a knowledge-based perspective. International Journal of Operations & Production Management