For years manufacturers have created products in anticipation of having a market for them. Operations have traditionally been driven by sales forecasts and firms tended to stockpile inventories in case they were needed. A key difference in Lean Manufacturing is that it is based on the concept that production can and should be driven by real customer demand. Instead of producing what you hope to sell, Lean Manufacturing can produce what your customer wants...with shorter lead times. Instead of pushing product to market, it's pulled there through a system that's set up to quickly respond to customer demand.

Lean organizations are capable of producing high-quality products economically in lower volumes and bringing them to market faster than mass producers. A lean organization can make twice as much product with twice the quality and half the time and space, at half the cost, with a fraction of the normal work-in-process inventory. Lean management is about operating the most efficient and effective organization possible, with the least cost and zero waste.

OVERALL ORGANIZATIONAL CHARACTERISTICS:

	TRADITIONAL MASS PRODUCTION	LEAN PRODUCTION
Business Strategy	Product-out strategy focused on exploiting economies of scale of stable product designs and non-unique technologies	Customer focused strategy focused on identifying and exploiting shifting competitive advantage.
Customer Satisfaction	Makes what engineers want in large quantities at statistically acceptable quality levels; dispose of unused inventory at sale prices	Makes what customers want with zero defect, when they want it, and only in the quantities they order
Leadership	Leadership by executive command	Leadership by vision and broad participation
Organization	Hierarchical structures that encourage following orders and discourage the flow of vital information that highlights defects, operator errors, equipment abnormalities, and organizational deficiencies.	Flat structures that encourage initiative and encourage the flow of vital information that highlights defects, operator errors, equipment abnormalities, and organizational deficiencies.
External Relations	Based on price	Based on long-term relationships
Information Management	Information-weak management based on abstract reports	Information-rich management based on visual control systems maintained by all employees
Cultural	Culture of loyalty and obedience, subculture of alienation and labor strife	Harmonious culture of involvement based on long-term development of human resources
Production	Large-scale machines, functional layout, minimal skills, long production runs, massive inventories	Human-scale machines, cell-type layout, multi-skilling, one-piece flow, zero inventories
Operational capability	Dumb tools that assume an extreme division of labor, the following of orders, and no problem solving skills	Smart tools that assume standardized work, strength in problem identification, hypothesis generation, and experimentation
Maintenance	Maintenance by maintenance specialists	Equipment management by production, maintenance and engineering
Engineering	"Isolated genius" model, with little input from customers and little respect for production realities.	Team-based model, with high input from customers and concurrent development of product and production process design

MANUFACTURING METHODS:

	TRADITIONAL MASS PRODUCTION	LEAN PRODUCTON
Production schedules are based on…	Forecast — product is pushed through the facility	Customer Order — product is pulled through the facility
Products manufactured to…	Replenish finished goods inventory	Fill customer orders (immediate shipments)
Production cycle times are…	Weeks/months	Hours/days
Manufacturing lot size quantities are…	Large, with large batches moving between operations; product is sent ahead of each operation	Small, and based on one-piece flow between operations
Plant and equipment layout is…	By department function	By product flow, using cells or lines for product families
Quality is assured…	Through lot sampling	100% at the production source
Workers are typically assigned…	One person per machine	With one person handling several machines
Worker empowerment is…	Low — little input into how operation is performed	High — has responsibility for identifying and implementing improvements
Inventory levels are…	High — large warehouse of finished goods, and central storeroom for in-process staging	Low — small amounts between operations, ship often
Inventory turns are…	Low — 6-9 turns pr year or less	High — 20+ turns per year
Flexibility in changing manufacturing schedules is…	Low — difficult to handle and adjust to	High — easy to adjust to and implement
Manufacturing costs are…	Rising and difficult to control	Stable/decreasing and under control