Lean manufacturing or lean production has been around since the 1990's when Toyota made the management philosophy more mainstream by introducing the Toyota Production System or TPS. Lean manufacturing is a systematic method for the elimination of waste within a manufacturing system. Leaning out the process refers to the reduction of non-value added steps related to creating a product or service. Toyota's lean approach to manufacturing focuses on seven wastes to improve overall customer value.
Lean production is still prevalent today and practiced by many organizations globally. With greater global exposure and responsibility to customers worldwide, many organizations are asking if leaning out production processes is enough to compete. More customers desire rapidly released innovative products and services. Organizations are compelled to respond and integrate current lean practices with innovation to exceed customer expectations. This critical paradigm shift is one of the greatest challenges facing production and service driven companies today.
According to a 2015 Boston Consulting Group innovation survey, 79 percent of respondents ranked innovation as a top-three priority at their company. Another outcome from the same survey suggested that respondents seek to speed up their processes and embrace new technologies. They see well-run, lean processes as essential to this transformation. These results mean organizations and their leadership have a vested interest in creating methods to intersect lean and innovation practices.
In a lean environment, every employee is a master problem solver. Lean companies have a built-in foundation of a workforce capable of producing innovative solutions. This contributes to an innovating organization. The challenge is to link the lean practices to the innovative solutions and execute the solutions to create products and services that customers desire.
The innovation spectrum can range from incremental improvements all the way to disruptive innovative products and services. A well-balanced organization will promote employee engagement in creating all types of innovative ideas. A good example of a disruptive innovation was the initial introduction of the iPhone. Variations and upgrades to the iPhone have been less dramatic, but still important. As the iPhone matures, Apple seeks both continued incremental improvements to this current money-maker, and the next generation of disruptive innovative products to exceed customer expectations. Employees at all levels contribute to these breakthroughs.
An organizational lean design alone can't deliver the promise of innovation. If both lean and innovation frameworks are integrated successfully the positive result might be disruptive and a competitive advantage. This is the challenge for many senior leaders as they recognize the importance of not only a lean manufacturing or corporate environment, but the need to continually innovate to exceed their customer's expectations.
Lean Innovation Case Study
Nike has a long-standing reputation of producing cutting-edge footwear for athletes in all genres. Few people understand the very disciplined and methodical approach that Nike has embraced to be a market leader. Nike's commitment to drive flawless and innovative product execution that is aligned with the next best thing is impressive. To execute at a consistent, high-level Nike has found a way to integrate ingrained lean workplace principles with innovation that is the cultural norm.
Nike has two overarching goals or pillars:
- Make Today Better (Lean)
- Design the Future (Innovate)
Make Today Better is Nike's lean philosophy, which is evident at every turn in every building where they have a presence. Lean manufacturing has long been a hallmark of their approach within factories and how they advance sustainable manufacturing practices. Lean manufacturing is a business system at Nike and a continuous improvement opportunity aimed at producing the highest quality product while eliminating waste. Employees are empowered to work in teams to improve operations. Those closest to problems are encouraged to solve them.
Design the Future through innovation is key to Nike's ongoing success and market leadership. With around 785 contracted manufacturers, over 1 million factory workers, and over 500,000 unique products, Nike understands the importance of innovating on a grand scale. Under the Design the Future pillar, Nike has a specific goal: unleash innovation! The key commitments linked to the unleash innovation goal are:
- Build sustainable innovation capabilities across the business to drive a disruptive innovation agenda
- Develop and prototype an index to drive and measure how sustainability is integrated into our innovation portfolios
- Develop tools, processes, and systems to establish metrics to measure impact that can be shared as a part of the index, without compromising the competitive nature of innovation
While it would be commendable for any organization to have a focus on either a lean or innovation strategy, Nike has found a sustainable way to integrate both methodologies. It’s built a workforce and culture that encompasses all that a lean manufacturing environment embraces and it drive disruptive product innovation. Employees everywhere within Nike understand and feel personally vested in the connection between lean practices and innovation. The Nike approach drives both built-in quality and disruptive innovation, all while paving the road for Nike to run by their competition for years to come.
The escalation of the critical need for organizations to design a strategy grounded in both lean practices and innovation to compete globally is top-of-mind for many senior leaders. Taking the widely exercised lean manufacturing principles made popular by Toyota many years ago and extending the methodology to include innovation will be a key driver to success. A lean innovation approach can assist companies and senior leaders in not only driving quality products and services aligned with customer expectations but with the agile development of disruptive innovation geared toward creating the next great thing. Those that can adopt and execute a lean innovation approach will be well-positioned to gain market share and a competitive advantage.
Lean Manufacturing, Lean Innovation