April 14, 2014

What is a Lean Enterprise?

A lean enterprise is a high productivity enterprise.  Lean enterprise gives equal emphasis to effectiveness and efficiency.

Effectiveness is providing goods and services that customers value.

Efficiency is producing goods and services that customers value at a cost that gives profit to the organization.

Profit  = Value to the customer (Price to the producer) - Cost of production.

A lean enterprise simultaneously focuses on  product enhancements that increase value to the customer and product value engineering and production methods efficiency engineering to reduce the cost of production.

Definitions and Explanations by others

What is a Lean Enterprise?
A Lean Enterprise produces more with existing resources by eliminating non-value-added activities. To be competitive in today’s global economy, companies must work to eliminate overproduction caused by traditional scheduling systems and only make what customers want when they want it. Lean establishes a systematic approach to eliminate wastes, create flow, and develop and implement a long-term plan to streamline your operations for success. Begin a Lean Enterprise Transformation by learning to see your business as one integrated set of processes and then systematically eliminating waste across your entire company – from shop floor to front office.


What is a Lean Enterprise?
Taiichi Ohno, the founder of the Toyota Production System, defined it this way: “All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time by removing the non-value-added wastes” (Ohno 1988). This is a simple and efficient explanation of a complex system and culture.

A lean enterprise applies TPS principles to all aspects of its business.

Customer Focus – Only the customer can define the value of our product or service. All else is waste.
Eliminate Waste – Waste is anything that the customer does not need and will not pay for. All employees must be empowered to eliminate waste.
Improve Flow – Small amounts of product or service moving quickly according to customer demand. Customers will pay for time.
Quality “Built-in” to Processes – Make it right, instead of inspecting later
Respect for People – Develop your people and your partners.
Continuous Improvement – No amount of improvement is ever enough.



Industrial Engineering Knowledge Revision Plan - One Year Plan

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