ASP, The Art and Science of Practice: Three Challenges for a Lean Enterprise in Turbulent Times

Abstract

A lean enterprise ties together and synchronizes all elements of its value-delivery system to provide for the needs of target customers. Organizations applying lean concepts in a systematic manner have been highly successful from operational, market, and financial perspectives. Once effectively in place, however, lean value-delivery systems can be more easily derailed than their leaders imagine, particularly in turbulent times. We identify three potential challenges for lean enterprises: (1) locked operating model: failure to change the value-delivery system in response to market and economic disruptions; (2) backward drift to pre-lean practices: regression toward wasteful inventory accumulations, backlogs, and complexity; (3) lean islands: isolation of lean practices within the walls of the company. Our observations at Quadrant Homes as it navigated the Great Recession, supplemented by our research at other companies, leads to recommendations for lean organizations to apply in countering these challenges.