Lean Enterprise

Lean enterprise is a practice focused on value creation for the end customer with minimal waste and processes. The term has historically been associated with lean manufacturing and Six Sigma (or Lean Six Sigma) due to lean principles being popularized by Toyota in the automobile manufacturing industry and subsequently the electronics and internet software industries.

Principles for lean enterprise derive from lean manufacturing and Six Sigma principles:

There are five principles, originating from lean manufacturing, outlined by James Womack and Daniel Jones

There are key lean enterprise principles originating from Lean Six Sigma principles. These principles focus on eliminating 8 varieties of waste (Muda) and form the acronym DOWNTIME:

These 8 varieties of waste are derivative from the original 7 wastes as defined in the Toyota Production System. They are:

The 8th waste of non-utilized talent was not recognized until post-Americanization of the Toyota Production System.

The lean startup principles, developed from 2008 from lean manufacturing, also now contribute to our understanding of lean enterprise:

Henry Ford developed a process called assembly line production. This is a manufacturing process in which parts are added as the assembly moves from work station to work station where parts are added in sequence until final assembly is produced.

Alfred Sloan of General Motors further developed the concept of assembly line production by building a process called mass production that allowed scale and variety. This process enabled large amounts of standardized products to run through assembly lines while still being able to produce more variety and compete against Ford's single offering.

Kiichiro Toyoda studied the Ford production system and adapted the process in order to have smaller production quantities. He built a production system called Just-in-Time Manufacturing for Toyota along with Taichi Ohno. It's worth noting too that kaizen, the process of continuous improvement, was developed in the 1950s by Eiji Toyoda along with the Toyota Production System.

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