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Observations on Lean Dynamics

This blog provides observations on the topic of lean dynamics -- on what "lean" really means, common misconceptions, and how it applies to companies, government agencies, and other types of organizations today.


Is "going lean" different from being flexible?

Is the reason for going lean limited to cutting costs? This is an important question raised by the Industry Week article, Small Manufacturers Need to be Agile, Not Lean. Small businesses (like many other organizations) are often told that lean is about cutting out the waste. Yet, as this article points out, driving out excesses is hardly something new for small companies, particularly today, since many must already keep costs low in order to compete. So why bother? Becaus

Uncertainty — the key to profitability?

During this time of business uncertainty, it can be helpful to look back at observations written during the previous economic crisis to see what we might learn. A Harvard Business Review article, titled Embracing Uncertainty Rather than Whining About It discussed a timely point raised by economist Frank Knight in his classic book, Risk, Uncertainty, and Profit. Knight's thesis was that uncertainty presents ”the only sustainable source of profit in a competitive economy.” Mo

Cost-cutting vs. customer satisfaction

Traditional thinking dictates that creating value takes striking the right balance between a range of desired outcomes. Quality is compromised for low prices; speed is prioritized over service. But the consequences of making such compromises can be quite serious, as described in the Business Week article, “Satisfaction Not Guaranteed: How Cost-Cutting Can Backfire When it Ignites Consumer Rage.” The article points out how major firms, from Home Depot to Northwest Airlines,