"Lean" is an approach to business pioneered by Toyota. Most manufacturing businesses focus on making the biggest batches they possibly can, to take advantage of economies of scale. The problem is that this produces a great deal of subtle waste (or "muda," Japanese for waste). First, large batches may not be appropriate to what the customer needs. While it may be cheaper to produce, more value can be provided to the customer when you provide exactly what they want, when and where they want it.

Working in batches tends to be a vicious cycle. Purchasing a large piece of equipment which works in batches probably slows down the process of switching between output types (i.e., different product models or sizes). Because switching is slower, it encourages doing more in a batch at once, which encourages buying a bigger machine which can make the batch faster, which encourages doing more in the batch...

This results in huge inventories of unfinished goods sitting around in warehouses all over the world, waiting for their next step. The book runs through the steps required to create a can of soda, starting with mining the aluminum at the mine, and shows numbers for the muda. The can in various stages of production (stamping, painting, filling, sealing) sits in warehouse for over a year and travels thousands of miles to go to the different production plants in the process. Besides shipping and storing costs, there are extra costs incurred: for example, the cans have to be washed multiple times, since they collect dust while they are sitting around waiting for production!

The lean approach focuses on right-sized tools, just-in-time fulfillment, and pull-based systems. That is, a customer order initiates the production system, which produces a smooth flow, where the product is always in motion, until it is delivered into the customer's hands. The book lists off many examples of companies which reduce their production time from months or years to weeks or days, thereby slashing inventory, being much more agile in response to market changes, and generally making customers happier because they can deliver exactly what they need shortly after it is requested.

The book is pretty dense and most of the key concepts are laid out in the first few chapters, so I only skimmed the last half. (Also, it's only directly relevant to physical manufacturing businesses, a type of venture I've never been involved in, and don't plan to.)

One thing that did keep me interested was the profiles of all the companies who converted to lean thinking. Not because of the conversation process so much, but just becoming aware of how many businesses out there are chugging away, cranking out what one CEO called "spectacularly mundane" products. Soda cans, bumpers, panes of glass, wire routing systems, palette shrink-wrap machines - it's amazing how many types of products are produced to make our modern lives what they are. Most of these are things we never see. The palette shrink-wrap, for example, is just used in warehouses and shipping - end users never see either the shrink wrap, or the machines which produce them. But there are many companies out there that do nothing but build these things. Just another astonishing day in the free market.