Subject To Change: Creating Great Products & Services for an Uncertain World

The Emergence of Lean Manufacturing

The shortcomings of the waterfall method were part of the impetus for developers to create a new model. In the search for alternatives, Lean Manufacturing, a system developed at Toyota in post-war Japan, was a source of inspiration. In that production environment, consumer demand was low, and a strategy based on reducing unit costs and creating economies of scale wasn't proving to be effective. Reducing waste became a new focus. There were the obvious techniques (e.g., reducing inefficient manufacturing processes and wasted effort), but several more unexpected methods were developed that were equally effective. One of these was to shift from using sales forecasts to drive production schedules and instead let actual consumer demand drive production. Cars were not built in advance, but rather once an order was placed. This required establishing an extremely tight feedback loop between what was actually sold and the production line. The payoff was reduced overproduction and transportation costs. Over time, the responsiveness this engendered expanded to the entire production cycle.