Many people think that lean thinking is about cutting expenses, slashing budgets, minimizing waste. It’s not.
Lean thinking methodologies are about maximizing customer value
while minimizing waste.
The practice was popularized decades ago by Toyota when they adopted the principles of lean thinking. Toyota’s findings, and subsequent actions, helped elevate the company’s ranking within the automobile industry.
How Toyota first applied lean methodologies.
With automobile plants all around the world, Toyota decided to evaluate its entire manufacturing process. Do processes make sense? Is the effort worth it? Does the customer value it?
The company conducted a simple design-thinking exercise, asking customers about the ashtrays in their cars. Answers ranged from: “What, I have an ashtray?” to “I guess I need an ashtray because cars always come with them.”
But the real question Toyota wanted answers to was: What color is your ashtray? And the findings were equally vague. Customers had no idea.
Toyota’s big wake up call.
No surprise here … we already gave you the spoilers.
- Customers placed little to no value on having ashtrays in their cars.
- They placed even less value on what color their ashtray was.
This feedback was critical for Toyota because when the ashtrays arrived at Toyota plants around the globe, they were silver … Toyota spent millions and millions of dollars repainting the silver ashtrays, black.
Why? Because Toyota assumed that customers preferred black ashtrays.
From now on, the company vowed, it would measure value based on customer feedback – not assumption. Toyota removed ashtrays from all vehicles, and this no-brainer decision saved the company millions of dollars every year.
Back here in the US, big auto manufacturers who weren’t practicing lean thinking, continued to paint and install ashtrays in cars because that’s what they’d always done. That obviously worked in Toyota’s favor.
Using lean thinking methodologies across 100 other items in its vehicles, Toyota retained high customer value in its cars, while minimizing waste on features that offered no value to customers.
Only minimize waste on no-value items.
Remember, in lean practices, it isn’t about simply minimizing waste. That’s secondary.
- Only minimize waste on features/activities/services that provide no value to your customers.
- You must measure value.
This is where value and design thinking converge. Design thinking is how you measure value in your customer’s eyes, your citizen’s eyes, your user’s eyes.
What value do government services provide to me as a citizen?
If you don’t know and understand that – and you’re just trying to cut waste – you’re probably doing more harm to your value proposition than you realize. Always look at the whole metric, big picture focus. And make sure you measure value and waste before making decisions.
In the next post, we’ll look at Design Thinking and North Star.
Resources: See book Lean Thinking by James P. Womack and Daniel T. Jones.