Lean has a longer and more color ful history than most of us think, with

Lean strategy

The Toyota Production System is 

more than just tools, cost reduction 

(cost reduction is an outcome, but not 

an objective), and waste reduction. 

Taiichi Ohno’s book

3

 is about speed: 

reducing cycle time from order to deliv-

ery while maintaining high quality at 

the lowest possible cost. 

It takes Toyota less than two years 

to design a new car and begin pro-

duction. General Motors, in contrast, 

requires three to four years. 

By providing exactly what the cus-

tomer wants in the shortest possible 

time, Toyota creates extremely happy 

customers and a clear competitive 

advantage. Quality and cost are impor-

tant, but speed is the key.

In a competitive marketplace, other 

companies can copy your design and 

they can emulate process improvement, 

but they can’t replicate speed or cul-

ture. That is how you can stay ahead of 

the pack. 

Likewise, anyone can imple-

ment the Lean tools to reduce costs or 

improve quality, but not everyone can 

get faster or establish a culture of con-

tinuous improvement. 

Toyota is happy to give tours of 

their factory because they know that 

even if outsiders see the inner work-

ings of their production facilities, 

few can copy their speed or culture 

because American managers can’t let 

go of the reins and trust their employ-

ees to make decisions. 

Just like the German tank com-

manders, if supervisors on the factory 

floor aren’t allowed to make decisions 

or respond to day-to-day events, the 

pace of production will remain slow and 

opportunities for innovation are missed.

36

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SEPTEMBER 2012  

▲  

DIGGER 

35

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Strategy is built on the following 

elements:

Vision — communicating a target 

state.

Getting the right people in the 

right positions, particularly supervi-

sors, managers, process engineers and 

others who design business processes. 

This includes getting rid of the wrong 

people, who can be like a cancer in 

the organization.

Agility — the ability to quickly 

move from one strategy to the next as 

situations change. 

Speed — execution, time to market, 

cycle time, and so forth.

As a leader you have a lot to do. 

If there is one thing that can serve 

as a unifying factor in determining 

your operations strategy, let it be your 

customers. You can communicate a 

compelling mission, develop strong, 

cross-functional teams, push decision-

making down to the lowest possible 

level, and foster a culture of continu-

ous improvement, but ultimately these 

things won’t matter without steady 

attention on the customer. Strong lead-

ership combined with constant focus on 

the value you provide your customers 

adds up to competitive advantage. 

Rick Pay is the principal of The R Pay 

Company LLC, a management consult-

ing company based in Portland, Ore. He 

appears regularly as a speaker and is a 

frequent contributor to national publica-

tions. For more information, log on to 

www.rpaycompany.com. This article is © 

2012 Rick Pay, all rights reserved.