Origin of Lean and its evolution to current state

I get lot many questions on lean definition and the origin and history of Lean manufacturing? What is lean manufacturing? Where can we trace the origin of Lean manufacturing and who is the father of Lean production?

Lean is a management philosophy that emphasizes on maximizing efficiency and minimizing waste in an organization. It is based on the principles of the Toyota Production System, which was developed by Taiichi Ohno in the 1950s and 1960s. It is a set of techniques that organizations use to improve their performance and efficiency.

In this blog post, I will provide a detailed overview of the what lean means, origin and history of Lean manufacturing, the key lean principles which are the foundation of Lean manufacturing and evolution of Lean into the current state.

Definition of Lean?

There are many ways in which practitioners and authors have tried to define Lean. All of them are correct. There is no hard and fast definition of Lean that everyone should adhere to. For me, I define lean as below.

“A principle driven, tool-based philosophy that focuses on eliminating waste, so that all activities / steps add value, from the customers perspective”

The above definitions fits the best. It talks about what Lean is, about the key principles on which Lean was founded and points towards the what Lean asks us to do.

Let’s explore this definition of Lean before we delve into its origin, history and evolution.

Lean is not just a tool that you can be plug in and use. Its is a philosophy that you need to internalise before you use it. This philosophy has a few principles to guide us on the process improvement path. It is supported by a tool kit that you can use to achieve the desired results. And the end result is to make processes efficient by eliminating waste and adding value.

And, you have to do all of the above from the customers perspective. The guiding principle is to see what is important for the customer. Not for the company, not for the stakeholders, not for the project teams, but for the customer.

The Toyota Production System and Origin of Lean

Taiichi Ohno developed The Toyota Production System (TPS) in the 1950s and 1960s.

Taiichi Ohno was an engineer and industrialist who was born in Japan in 1912. He is one of the most important figures in the field of Lean manufacturing. And is credited with developing the Toyota Production System (TPS), which later became known as Lean methodology.

Ohno started his career at Toyota in the 1930s as a factory worker. He quickly moved up the ranks and became an engineer. His primary task was to improve the efficiency of the company’s production processes. Ohno was particularly interested in eliminating waste and improving productivity.

During World War II, Japan faced a shortage of resources and had to maximize efficiency and minimize waste to produce goods for the war effort. Ohno, observed that traditional mass production techniques resulted in a lot of waste, including overproduction, waiting, unnecessary motion, overprocessing, excess inventory, and defects.

Ohno set out to eliminate this waste. He developed a set of techniques and principles that collectively became known as the Toyota Production System or TPS. Ohno’s work on TPS was soon recognized as a powerful tool for improving efficiency and productivity, and it was later adopted by other industries and organizations outside of Toyota.

Ohno’s book “The Toyota Production System: Beyond Large-Scale Production” written in 1988, is one of the most important books on Lean manufacturing. The TPS was a major influence in the development of the Lean methodology.

Origin of Lean

The TPS was highly successful at Toyota and eventually became known as Lean manufacturing. The principles of Lean were later adopted in other industries and became known as Lean management or simply Lean.

Thus, Toyota Production System (TPS) is considered to be the origin of Lean. Taiichi Ohno is regarded as Father of Lean Manufacturing.

The concept of Lean thinking is based on the idea of creating more value for customers with less work. Lean achieves this by identifying and eliminating waste, improving flow, and creating pull based systems. Lean is not just about manufacturing but about improving business processes and delivering value to customers.

A variety of industries such as healthcare, construction, and service sectors, such as retail and banking, have adopted and implemented Lean methodology to improve efficiency and reduce waste.

Evolution of Lean Methodology

Once the larger businesses and organisations outside of Toyota understood the importance and effectiveness of Lean, many started adopting and practicing the same. This lead to evolution of Lean from TPS to its current state. Every sector and industry type has different requirements from the methodology. They started tweaking and experimenting with the Lean tools, making them more relevant for their business situations.

Lean in Manufacturing sector – 1980s

In the 1980s, the manufacturing industry began to experience a shift towards the adoption of Lean methodology.

One of the key drivers for adoption of Lean in the 1980s was the increasing competitiveness of the global marketplace. Companies were under pressure to improve their operational efficiency in order to stay competitive and meet the demands of their customers. The best fit methodology to achieve these objectives was Lean manufacturing.

Look at Boeing. In the early 1980s, Boeing faced significant challenges in terms of production efficiency and on-time delivery. By adopting Lean principles, they were able to streamline their production processes, reduce waste, and improve overall performance. As a result, they were able to reduce lead times by 50%, improve on-time delivery by 80%, and increase productivity by 30%.

Adoption of Lean in Services and Healthcare sector – 1990s

In the 1990s, Lean methodology began to gain traction in service industries and the healthcare sector as well. This was due to the recognition that these industries, like manufacturing, also had issues with waste and inefficiency. The implementation of Lean in these industries was not without challenges, but many companies saw significant improvements as a result.

One major challenge in implementing Lean in service industries and healthcare was the lack of tangible products. In manufacturing, it is easy to see and measure waste, such as excess inventory or defects. However, in service industries and healthcare, waste often takes the form of non-value-adding activities or delays. Identifying and measuring this type of waste can be more difficult.

Another challenge was the resistance to change. Many employees in service industries and healthcare were comfortable using traditional ways of working. They were hesitant to adopt a new methodology. Overcoming this resistance required effective communication and training.

Despite these challenges, many companies in service industries and healthcare saw significant improvements from adopting Lean. For example, in the 1990s, a hospital in the US implemented Lean principles, resulting in a 40% reduction in patient wait times and a 30% reduction in the length of stay. A call center implemented Lean principles and saw a 30% increase in productivity and a 50% reduction in call handle time.

These successes demonstrated the potential for Lean to improve efficiency and effectiveness in service industries and healthcare. Just as it had in manufacturing. More and more organizations from these industries started adopting lean.

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Evolution of Lean and Six Sigma – 2000s

The evolution of Lean methodology continued in the 2000s with the introduction of Lean Six Sigma. The combination of Lean and Six Sigma was driven by the need to improve the efficiency and effectiveness of business processes by reducing waste and variability. The goal was to achieve a higher level of performance by implementing a data-driven approach to process improvement.

One of the key benefits of combining Lean and Six Sigma is the ability to address both the speed and quality of a process. Lean methodology focuses on eliminating waste and increasing flow, while Six Sigma focuses on reducing variability and improving quality. By combining these two approaches, organizations were able to achieve both speed and quality improvements in their processes.

For example, GE Healthcare, a division of General Electric, implemented Lean Six Sigma in the early 2000s and achieved significant improvements in their processes. They reported a 50% reduction in errors, a 30% reduction in cycle time and a 20% increase in customer satisfaction. These improvements led to a cost savings of over $250 million for the division.

Additionally, many other industries such as finance, IT, and retail also adopted Lean Six Sigma in the 2000s. The healthcare sector also began to adopt the methodology, with many hospitals seeing improvements in patient care and satisfaction, as well as cost savings.

Evolution and Expansion of Lean in new industries – 2010s

In the 2010s, Lean methodology continued to evolve and expand into new industries. The principles of Lean, which focus on eliminating waste and continuously improving processes, proved to be highly effective in improving efficiency and reducing costs in manufacturing. As a result, many industries began to adopt Lean techniques, including construction and education.

Construction companies found that Lean principles can be useful in improving the efficiency and safety of building projects. By using techniques such as visual management and standardisation, construction companies were able to reduce waste, increase productivity, and improve communication and collaboration among workers.

According to a case study published in the Journal of Construction Engineering and Management, a construction company implemented Lean techniques and achieved a 45% reduction in construction time and a 20% reduction in costs.

Education also began to adopt Lean principles in the 2010s. Many schools and universities recognized that Lean techniques could be used to improve the efficiency and effectiveness of their operations. By eliminating waste, standardizing processes, and continuously improving, educational institutions were able to reduce costs and improve the quality of education. For example, a school district in the United States implemented Lean techniques and achieved a 15% reduction in costs, a 25% increase in graduation rates, and a 30% increase in attendance.

Toyota Production System – House of Quality

Chronological order of Origin of Lean and its evolution

We spoke about the origin and history of Lean in the broader terms. There were many events which shaped the origin of Lean and its evolution into the current state.

I have listed down all the important events in History of Lean starting from Toyota Production System to the latest changes to Lean thinking and addition of lean tools. Please click here to read the detailed, chronological events in history of lean manufacturing.

In addition, one should also know about the 7 principles of Lean. These principles shaped the Lean thinking and are considered to be the foundation of Lean origin. Please click here to read about these 7 principles of lean.

Lean adoption and implementation in various industries and sectors through the evolution journey was not without challenges. Read about the examples of lean implementation and application in manufacturing, healthcare, education, services and construction in a separate post here. It also talks about the challenges faced in Lean implementation and how organizations overcame the same.

Hope this post throws light on history of lean and how lean originated and evolved into the current state. Let me know if I have missed any important development that is worth capturing. Comment below and share your views. I will talk about origin of Six Sigma in my next post. Don’t forget to subscribe to get a trigger once this post is published.

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Sachin Naik

Passionate about improving processes and systems | Lean Six Sigma practitioner, trainer and coach for 14+ years consulting giant corporations and fortune 500 companies on Operational Excellence | Start-up enthusiast | Change Management and Design Thinking student | Love to ride and drive