Lean Corner

From Lean Manufacturing to Lean Enterprise: A transformation towards extended operational excellence

Lean Manufacturing: optimizing production processes
Lean Enterprise: Extending operational excellence throughout the organization
Benefits and challenges of the transition to Lean Enterprise
Lean 4.0: Combining Lean and Industry 4.0

Lean Manufacturing, developed by Toyota in the 1950s, revolutionized the way manufacturing companies managed their operations, focusing on reducing waste and improving efficiency.
Over time, however, Lean principles have extended beyond production to the whole organization, forming the concept of Lean Enterprise. This evolution shows that Lean principles can be applied across the entire corporate value chain. Today, we’re even talking about Lean 4.0

Lean Manufacturing: optimizing production processes

Origins and principles of Lean Manufacturing

Lean Manufacturing originated in Japan, with the introduction of the Toyota Production System (TPS) under the impetus of Taiichi Ohno.
The objectives were simple:

Improve production by reducing waste
Improve product quality
Reduce manufacturing costs.

To achieve this, Lean focuses on reducing waste (mudas), in seven categories: overproduction, waiting time, unnecessary transport, inappropriate processes, unnecessary inventory, unnecessary movements and production of defects.
But Lean is not just about chasing waste; it’s also about exploiting all the levers for growth.

Limits of Lean Manufacturing

Although Lean Manufacturing has transformed production lines, its limits have become apparent when companies have sought to apply these methods to other functions, such as administrative management, human resources or the Supply Chain more generally.
As flows are often not limited to production alone, and the need to improve efficiency in all spheres of the organization led to an extension of Lean principles to departments other than production, giving rise to the concept of Lean Enterprise.

Lean Enterprise: Extending operational excellence throughout the organization

Extending Lean throughout the organization

Having outgrown its initial framework (production), the Lean philosophy is now perceived as a relevant method for generating maximum value for the customer with the least possible waste. Interest in Lean now extends to administrative services (Lean Office), product development (Lean Product Development), IT (Lean IT), the supply chain (Lean Supply Chain) and many other corporate functions.

Lean Office: optimizing administrative processes

Let’s take the example of Lean Office, which applies the principles of Lean Manufacturing to administrative environments. Almost total dematerialization makes problems harder to detect. It is therefore essential to clearly identify the organization. Staff have a high level of training, which implies a high degree of autonomy and less rigorous standards than in the manufacturing sector, for example.

Yet, as in production, the aim is to reduce waste, which can manifest itself in various forms: waiting time, human error or excessive accumulation of information. Office work, which is generally more flexible than production line work, also offers unique opportunities for continuous improvement.

Lean Product Development: optimizing the product development cycle

A second example might be Lean Product Development, which focuses on optimizing the new product development cycle. By integrating Lean principles from the earliest stages of design, this methodology aims to develop the product or service in question in a short space of time, while at the same time delivering high performance and a good margin for the company in the long term. The aim is to achieve good quality, while avoiding delays and cost overruns, with the whole company taking part in the innovation process.
In a previous article, we dealt in more detail with the subject of “Lean Product Development”, which you can find here: Applying Lean Product Development for Your Next Product (iobeya.com)

Extended collaboration and flows with external partners

As we have seen, Lean is integrated into multiple departments of the company (Lean Enterprise). But it goes even further by involving external partners in this optimization process. For example, Airbus is asking some of its suppliers to adopt tools such as iObeya, a visual management platform that promotes real-time collaboration around the company’s objectives. This enables better coordination throughout the supply chain, optimizing flows as a whole.
For its part, ID Logistics has extended Lean to its customers by integrating collaborative processes. This shows that Lean principles now apply far beyond the company’s walls, encompassing the entire product/service value chain.

Benefits and challenges of the transition to Lean Enterprise

Adopting Lean Enterprise helps to improve responsiveness, increase customer satisfaction and reduce costs across all corporate functions. By optimizing not only production, but also administrative, logistics and management processes, companies gain in efficiency and flexibility. Waste is reduced in all areas of the organization, from production to purchasing and customer service processes.
Despite its many advantages, implementing Lean Enterprise is not without its challenges. The first obstacle is often resistance to change. Moving from a siloed approach to Lean-based integrated management requires a profound cultural transformation.

Lean 4.0: Combining Lean and Industry 4.0

Lean 4.0 is the combination of Lean principles and Industry 4.0 technologies. The idea is to combine digitalization with Lean practices to achieve operational excellence and all the benefits of digitalization.
The ultimate dream: to produce unique products at mass production costs, while considerably increasing flexibility and efficiency. Digitization won’t bring new ideas, but it will multiply the impact of lean by facilitating the exchange of data and information.

But several key success criteria/factors need to be present:

Good recovery and processing of incoming data
Standardized & clear processes
Use of input and output data to fine-tune and steer the business.

A great example of success is Sanofi, which adopted the digital Visual Management system iObeya to strengthen its Lean Manufacturing practices. This enabled the company to improve efficiency, achieving gains of 20 million euros, a 25% faster decision-making process, and enhanced collaboration across its 90 production sites. By integrating these tools, Sanofi optimized its processes while facilitating problem-solving and innovation throughout its industrial ecosystem. Learn more: Sanofi Elevated Lean Manufacturing System and SQCDP Practices (iobeya.com)

Lean Manufacturing gave us the foundations for optimizing manufacturing processes, but it has evolved into Lean Enterprise, a model that applies to all company functions, far beyond just the shop floor.
Today, with the advent of Lean 4.0, Lean integrates digital technologies to offer even greater flexibility and responsiveness.

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