So Why Did Pascal Dennis Update a Classic Book?

I spoke with Pascal Dennis this past week and had the chance to ask him a few questions about the recent publication of his new book Lean Production Simplified, Third Edition: A Plain-Language Guide to the World's Most Powerful Production System.The two previous editions of this book have been very successful with Lean practitioners at all levels within organizations, and these books have proven to be the best introductory texts to Lean methodology on the market. Here are a few of the questions I asked him and his answers follow.

What motivated you to originally write the book Lean Production Simplified?

I wrote the first edition of Lean Production Simplified hoping to share what I’d learned at Toyota. It had been my blind luck to work with patient senseis. I felt that if I could explain things simply, then perhaps I had gained a certain level of understanding. During the past 20 years, I’ve been the sensei helping companies apply the Toyota system or Lean. My practice has taken me far from the Toyota shop floor – into hospitals, power plants, container terminals, and research laboratories.  I’m certain that I learn as much as I teach. And the more I learn, the more I think of Socrates -- "The more I know, the more I realize I don’t know."

Why did you write the 3^rd edition? 

We must learn the Toyota system – and not just in manufacturing.  Hospitals, banks, universities, software developers, government agencies and other service providers are also hungry for Lean thinking and methods. Customers will no longer accept substandard safety, quality, delivery, or cost performance. 

Who composes the audience for this book?

Leaders and learners at all levels in manufacturing and in the ‘undiscovered countries’ – healthcare, financial services, the process industries, software development, construction, universities and the public service.

What’s different about the 3^rd edition?

I’ve added many more examples from outside the factory (e.g. design, engineering, administration, etc.) and from the industry sectors I previously mentioned. I’ve also included study questions at the end of each chapter.  My hope is that this third edition will be a working book, and that I’ll continue to find in the gemba, filled with highlights and notes in the margin. My study of aikido had prepared me for the Toyota “way.” I understood that it was a "do" or path, and that the Toyota shop floor was a dojo -- a place where you practiced a profound art or worked on your technique and on yourself.  Indeed, before stepping on to the shop floor, I felt like bowing -- a sign of respect for my team, organization, and the art of management. I still feel that way.  

What are your thoughts on Pascal's book Lean Production Simplified? Did it help you understand the objectives of a Lean initiative and enhance a successful journey?

What Can Lean Do for the Banking Industry?

The banking industry comprises many accounting, regulatory, process, and management challenges, and because its customer-satisfaction and efficiency rates are ripe for improvement, many feel Lean improvement initiatives can transform these financial institutions. A book published just this month titled Lean for Banks: Improving Quality, Productivity, and Morale in Financial Offices, authored by Bohdan Oppenheim and Marek Felbur,shows how Lean and Six Sigma can significantly improve the efficiency of bank operations.

During a recent conversation with Bohdan Oppenheim, I asked him: "Why should financial organizations choose Lean as a methodology to transform and improve their culture and results?" Here is his complete response: 

Few traditional banks are aware that they have vast reserves of productivity. Typically in such banks, both managers and staff work extremely hard, often overtime. Their intuition tells them that there is no reserves left in the system, and that the system is "as Lean as it can be." The knee-jerk reaction is to blame this frantic pace on an excessive amount of work and a lack of employees. The solution appears to hire more employees, but this often has the opposite effect. With more people hired, the system becomes even more difficult to manage, more convoluted, and less efficient.

Fortunately, an excellent solution exists: Lean Thinking. In Lean, employees transition from fighting crises to increasing both customer satisfaction and bank competitiveness. Work becomes more predictable, stable, and pleasant. It soon becomes truly shocking to both management and staff how much work can be accomplished in the same amount of time and with the same resources, simultaneously improving productivity, quality, cost, work morale, and customer satisfaction.

The effects of Lean can be dramatic: up to doubled productivity in the entire system; process times cut by 50-90%; the number of errors reduced by 50-90%; development time for new bank products reduced by half; approval time cut by 90%; modest capital investments (only training); dramatically better human relations at all levels; and, most importantly, vastly better customer satisfaction and company competitiveness.

When faced with stiff competition, traditional companies brutally cut costs, usually by massive layoffs, head-count reductions, and by overworking the remaining employees and suppliers. Without addressing underlying systemic problems, these cuts simply eliminate needed resources and therefore slow down the operations. This causes more frantic work pace, loss of quality, and decreasing customer satisfaction. When this happens, additional customers and profits are lost, resulting in even more cuts and more layoffs. This spiral of failure can easily lead to collapse.

In contrast, Lean focuses on recovering productivity reserves by waste elimination. This in turn leads to lower costs, higher quality, and increased customer satisfaction. Lower operating costs enable banks to keep the employees on the payroll because they will be needed as customer satisfaction attracts more business. During the Lean deployment period, the employees can address those improvements for which there was never enough time, contributing to better productivity and quality. So, the success spiral occurs without layoffs.

One of the most pervasive myths in banking industry is that higher quality requires higher costs. This may be true in the superficial sense of marble floors in front offices, but is totally wrong in terms of the cost of operations. Lean demonstrates that a high quality of operations is actually the least expensive. In Lean, we avoid the high costs of mistakes, errors, defects, rework, delays, frustrations, and subsequent crises, and focus instead on making operations better and better.

The bank industry seems to be one of the last Lean frontiers, delayed no doubt due to the severe 2007-2011 crisis and subsequent massive layoffs in the industry. However, pioneering banks, listed in the book, are rapidly implementing Lean. 

Do you agree with Bohdan's assessment? In which area do you feel Lean can acutely improve financial institutions and the banking industry?

Book Talk: Lean Book Gift Ideas for the Holidays

What lean book would you give for the holidays this year?

There are many different types of lean books, and what you buy for a particular person depends on who they are and what they would find interesting or useful – not just on whether the book is good.

So I’ll offer some suggestions in different categories. But I encourage you to post comments with alternative suggestions.

Healthcare: We now have a sizable number of books for those in healthcare, including Healthcare Delivery in the USA, Lean Hospitals, Health Care Will Not Reform Itself and Pursuing Excellence in Healthcare, as well as a variety of healthcare books that do not have a lean focus. For those seeking something for training purposes, consider 5S for Healthcare, the first in a new series of such materials, or Value Stream Mapping for Healthcare Made Easy. Also, some soon-to-be-available books include Optimizing Emergency Department Throughput and Successful Collaboration in Healthcare.

Green and Lean: Green Intentions and Compression are the two books we have published so far about the relationship between lean principles and sustainability. Both are works that could prove fascinating to anyone interested in this area.

High-Level Lean: We have many books for those in the highest leadership positions (check our Leadership – Strategy section). Our newer books include Flexibility: Flexible Companies for the Uncertain World by Gil Eapen and Critical Success Factors Simplified by Marvin Howell.

Information Technology: We publish several IT-related books, including Lean Six Sigma Secrets for the CIO, A Tale of Two Systems, Lean Performance ERP Project Management, and Lean Software Strategies.

Accounting and Metrics: An important and often overlooked area. Recent publications include Making the Numbers Count and The Basics of Performance Measurement, Second Edition.

Training: Our Shopfloor books are always a good bet. Also browse through our sections of 5S and Visual Controls, Mistake Proofing, Quick Changeover, TPM and Value Stream Management.

Case Studies: Our newest book in this area is Mr. Lean Buys and Transforms a Manufacturing Company. Consider also our Insights on Implementation series, as well as Andy & Me, which is fictional, but an enjoyable and educational novel.

I’ve only skimmed the surface of our hundreds of products. Please add your own recommendations.

Happy shopping!