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August Newsletter from the Lean Academy |
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I have always thought that lean is much more than improving the
efficiency of existing equipment, factories, supply chains, hospitals
and service facilities. Lean teaches us to learn to see and improve
the processes we are responsible for. It also challenges us to look
up and out and cooperate with others to streamline the whole process
from end to end, often across several organisations.
But ultimately lean is about re-examining the end product or service
being delivered to customers. Does it really meet their needs at an
acceptable cost without wasting their time? And is it sustainable and
can it continue to generate an adequate return on investment? If we
are honest we would have to conclude that in many cases it does not -
we are actually delivering the wrong product through the wrong
facilities in the wrong place using the wrong equipment. Our business
model is actually a relic of the era of mass production and mass
consumption.
Recognising this dilemma does not solve it! One of the key
constraints may be the technology - which is still being designed by
engineers resolutely focused on developing the next bigger,
all-singing all-dancing piece of equipment. Other constraints may be
the drag of existing assets and careers tied to the existing business
model.
However lean engineers are always thinking about developing
right-sized tools and lean entrepreneurs are always thinking about
how these might be used in new business models that ultimately
replace existing providers. We can see similar opportunities in the
three great growth industries of our time - transportation,
communications and healthcare.
One of the examples readers remember from Lean Thinking is the
holiday flight to Crete, which took 13 hours door to door for 7 hours
of actual travel time. Very little has changed about the process of
flying on holiday in the last decade - except you can do it more
often, from more places, to more destinations and for a lot less
money. You just squeeze your knees between the seats, switch off with
a good book and look forward to getting there.
Things have not got much better when we travel on business. In some
cases they have got worse - it is a nightmare trying to schedule
convenient connections between medium sized cities in Europe - and a
growing hassle connecting through massive hub airports. I just spent
five days getting up before the crack of dawn and taking two flights
via hubs, in order to do a day's work. Smaller jets carrying business
travellers are now relegated to distant parking stands and often,
after two bus trips and fighting my way through the terminal, I end
up boarding the plane next to one I just left! In an exceptionally
crazy 70 hour week I did 23 hours of valuable work - and then spent
the weekend recovering my sanity!
But help is on the way. Video conferencing is getting better all the
time - making some trips unnecessary. But equally the advent of the
new very light jets promises to usher in a new era for the business
traveller. In Lean Solutions we showed how point-to-point on-demand
air taxi operations from local airports could save us all a lot of
time and hassle. The Eclipse, the Hondajet and others from Cessna and
Embrair are just the beginning of the story. Building and financing a
viable business model and the necessary air traffic infrastructure
come next. However the impact on the existing airlines and airport
operators is likely to be profound.
This is a similar story to what has happened in communications - the
PC replaced the mainframe and mobile operators are now challenging
old telecom monopolies. I think we are on the threshold of a similar
revolution in healthcare delivery.
There is a growing recognition that bringing diagnosis and treatment
closer to patients rather than centralising them in big general
hospitals will improve outcomes for many while saving time and cost.
Health entrepreneurs and even retailers are thinking about new
healthcare business models. This in turn depends on equipment
providers developing smart, right-sized diagnostic and treatment
equipment that can be used for self-diagnosis in the home or in local
treatment centres. Existing equipment suppliers still seem wedded to
bigger machines. Who is going to provide the right-sized technologies
to make this happen?
I hope you have a good summer.
Yours sincerely
Daniel T Jones
Chairman, Lean Enterprise Academy
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