“Ovidius” University Annals, Economic Sciences Series

Volume XXII, Issue 1 /2022

Decoding the Lean Enterprise

Sorin-George Toma
Ștefan Catană
Cătălin Grădinaru
University of Bucharest, Faculty of Business and Administration, Romania
[email protected]
[email protected]
[email protected]

Abstract

Several factors, such as the rapid adoption of new and disruptive technologies, the COVID-19
pandemic, worldwide expansion of globalization, rising inflation, climate change, demographic
shifts, geopolitical instability, and military conflicts, have deeply influenced the economic and
business landscape at a global level. The appearance and development of lean philosophy,
principles, and practices have proved to represent a turning point in the evolution of the business
world and a possible solution for enterprises to cope with these challenges. The paper aims to define
and briefly characterize the concept of lean enterprise. To attain the goals of the paper, the authors
used a qualitative research method based on a desk research investigation. The paper contributes to
a better understanding of the concept of lean, in general, and lean enterprise, in particular. Also, it
briefly analyses some of the key characteristics of lean enterprises that lead to their business success.

Key words: lean enterprise, lean, business organization, enterprise, business

J.E.L. classification: L2, M00

1. Introduction

The last decades have testified the emergence of a highly competitive global market environment.
Several factors, such as the rapid adoption of new and disruptive technologies, the COVID-19
pandemic, worldwide expansion of globalization, rising inflation, climate change, demographic
shifts, geopolitical instability, and military conflicts, have deeply influenced the economic and
business landscape at a global level (Giles et al, 2022; World Bank, 2022; World Economic Forum,
2022). Therefore, business organizations, irrespective of their size and industry, have to cope with
numerous challenges and face serious threats all over the world (Săseanu et al, 2014; Toma et al,
2016). They are born, live and, eventually, die, being in close relationship with their capacity to
provide ongoing value for their customers. In this respect, their top management has to think not only
in a strategic manner (Toma et al, 2015) but also in an innovative and entrepreneurial one (Grădinaru
et al, 2017; Marinescu et al, 2017; Toma et al, 2018a).
The appearance and development of lean philosophy, principles, and practices have proved to
represent a turning point in the evolution of the business world. During the time, it has been proved
that enterprises following a Lean path, irrespective of their size and industry, obtained long term
improvements (Sayer et al, 2007). Consequently, “Going Lean” has become a mantra for any
business organization that seeks to achieve business excellence. It shows how these organizations
that provide products and/or services have abandoned the old way of doing things and embraced lean
philosophy (Ruffa, 2008).
The paper aims to define and briefly characterize the concept of lean enterprise. The structure of
the paper is as follows. The second section reviews the scientific literature. The research
methodology is illustrated in the third section of the paper. The findings of the paper are shown in
the fourth section. The last section displays the conclusions.

762
 “Ovidius” University Annals, Economic Sciences Series
Volume XXII, Issue 1 /2022

2. Literature review

During the past decades, characterised by hyper-competition and high uncertainty all over the
world (Toma, 2013), various methods, tools and techniques have been designed, implemented, and
updated in the business processes and activities of enterprises in order to obtain and preserve their
competitive advantage. In this respect, quality management (Toma et al, 2009), Six Sigma (Toma,
2008), marketing mix (Catană et al, 2021a; Catană et al, 2021b), corporate social responsibility
(Toma et al, 2011), balanced scorecard (Toma et al, 2010), organizational learning (Toma, 2012;
Marinescu et al, 2013), and lean management (Marinescu et al, 2008) are only some valuable
examples. Moreover, today’s Fourth Industrial Revolution requires enterprises to rapidly implement
lean manufacturing (Wiegand, 2016; Buer, 2021), digitalization and the Internet of Things (Tohănean
et al, 2018; Toma et al, 2018b), and adopt green business models (Toma et al, 2019).
There is a plethora of scientific research in the literature related to the lean concept, in general,
and the lean enterprise, in particular. Lean means “not using a lot of something” or “not wasteful”
(The Britannica Dictionary, 2022, p.1) and is a „business management practice aiming to deliver
greater value for customers with fewer resources” (David et al, 2016, p.1) that seeks to change the
basic systems of a company to better satisfy the changing customer needs (Johnson, 2014).
As a managerial system that blends methods with culture (Hinds, 2017), lean management
constitutes a “style of management, where few managers are employed, allowing decisions to be
taken rapidly” (Collin, 2006, p.229) whereas lean production represents a methodology focused on
waste reduction (e.g., overproduction) in order to allow a business organization to become more
competitive (The Chartered Management Institute, 2004). It is worthwhile to emphasize that lean
production systems can reduce overall costs at the same time as preserving quality standards (Jackson
et al, 1996). Despite the inexistence of an agreed definition, the lean enterprise is considered as:
 „a group of individuals, functions, and legally separate but operationally synchronized
companies” (Womack et al, 1994, p.93).
 a sum among lean development, lean procurement, lean manufacturing, and lean
distribution (Karlsson et al, 1996).
 „a sociotechnological construct since it is based on the combination of human and
technological subsystem” (Paez et al, 2004, p.304).
 an organization that not only does not waste money but does not have too many employees
in relationship with its works (Brookes, 2011).
 “a business entity in which the internal organization and operations are always in
synchronization with the needs of the market and geared to creating sustainable value for
all stakeholders while eliminating waste in all activities” (Tsigkas, 2013, p.1).
 “primarily a human system” as “it is common for people to focus on specific practices and
tools that lean and agile teams use, such as Kanban board, stand-up meetings, pair
programming, and so forth” (Humble et al, 2015, p.9).
 a business organization that applies lean thinking methodologies in its production processes
(Caldwell, 2020).
 a company that is concentrating on value creation while eradicating waste (Hayes, 2021).
In the last decades, more and more business organizations have become lean enterprises in order
to boost their performances (MacInnes, 2002).

3. Research methodology

To attain the goals of the paper, the authors used a qualitative research method based on a desk
research investigation. The desk research was based on the study of secondary sources of data
(Hague, 2022). In the beginning, the authors detected and gathered various secondary data by
deploying a wide literature review. Then, they revised numerous articles and books identified in
several Romanian libraries (e.g., the Central University Library Carol I of Bucharest ) and electronic
databases (e.g., SAGE, Taylor & Francis). In the end, the authors classified, analyzed, and
synthesized the information and, devised their paper.

763
 “Ovidius” University Annals, Economic Sciences Series
Volume XXII, Issue 1 /2022

4. Findings

A comprehensive literature review allowed the authors to reach several interesting and valuable
results. They identified the following main characteristics of the lean enterprise:
 The roots of lean enterprises are to be found in Japan. After the end of the Second World
War, the Japanese automotive industry succeeded in becoming one of the most successful in
the world largely due to the emergence and development of the Toyota Production System
(TPS). During the time, the TPS was transplanted abroad by the Japanese automakers and
parts makers. The 1980s witnessed the appearance of numerous elements of TPS in the
United States of America and Europe: „slimmed-down inventories, smaller processing lots
and shortened changeover times, bar-coded kanban cards, „idiot-proof” features on
equipment, lighted andon display panels above factory workplaces to indicate where
problems were occurring, and sequenced withdrawal of parts and materials in accordance
with the „pull” precepts of just-in-time manufacturing” (Shimokawa et al, 2009, p.xv). This
is why some of the practices of lean are originated from the TPS such as (David et al, 2016):
- total quality management (TQM);
- Just-in-Time (JIT);
- reduce stock waste;
- reduce in-process travel etc.
 Lean thinking is at the core of lean enterprises. It can be encapsulated in five major principles
(Table no. 1). The creation of lean enterprises imposes a new way to think about the
relationships between companies, principles regarding their behaviors, and greater
transparency (Womack et al, 2003).

Table no. 1. The five principles of lean thinking

Principle Content
1 Precisely specify value by specific product. Value can only be defined by the ultimate
customer.
2 Identify the value stream for each product.
3 Make value flow without interruptions
4 Let the customer pull value from the producer.
5 Pursue perfection.
Source: (Womack et al, 2003, p.10,16)

 A lean enterprise is primarily a business organization. It is focused on a plethora of specific

elements as follows:
- quality increasing;
- waste elimination;
- delays reduction;
- total costs reduction;
- unnecessary bureaucracy elimination;
- continuous improvement;
- JIT delivery;
- lead times reduction;
- customer-focused and driven;
- unused warehouse spaces elimination;
- efficient response to market demands etc.
 Lean enterprises are fundamentally human and learning organizations. They cultivate and
nourish an organizational culture that welcomes well-trained, motivated and conscious
employees who fully understand the importance of lean philosophy, principles and practices.
This is why their commitment to lean values is essential. It is basically a culture of „trust and
empowerment, rather than command and control” (Jones et al, 1999, p.15). Through the
continuous improvement of their skills, employees can take action to find solutions to
operational problems and, therefore, contribute to the business success of the enterprise. The
best lean professionals have to continuously learn by reading articles and books, taking

764
 “Ovidius” University Annals, Economic Sciences Series
Volume XXII, Issue 1 /2022

classes and putting theory into practice. In other words, lean means learning continuously
(Graban, 2016).
 A lean enterprise encompasses several lean processes and activities such as lean
procurement, lean manufacturing, and lean distribution. All of them are parts of a lean system
in which products and services are not only created but also delivered in the right quantities,
to the right destinations, in the right moment, and in the proper conditions (MacInnes, 2002,
p.1). For example, lean manufacturing highly contributes to delivering the needed products
and/or services and a higher value to the customers at the highest possible quality using the
least amount of resources of the enterprise.
 As business organizations, lean enterprises establish their specific goals. In this respect, the
following purposes are essential:
„- Improve quality.
- Eliminate waste.
- Reduce lead time.
- Reduce total costs.” (MacInnes, 2002, pp.3-4)
These characteristics show that lean enterprises have succeeded in becoming successful business
organizations in a hyper-competitive global business world.

5. Conclusions

The topic of lean has become a subject of interest for numerous researchers and practitioners
worldwide, mostly in the last decades. Lean refers not only to principles and values but also to
practice. As a consequence lean enterprises have appeared and expanded in all sectors all over the
world.
The paper contributes to a better understanding of the concept of lean, in general, and lean
enterprise, in particular. Also, it briefly analyses some of the key characteristics of lean enterprises
that lead to their business success.
This study may be broadened by future researches that can take into consideration the
identification and analysis of other characteristics of lean enterprises.

6. References

 Brookes, I. ed. 2011. International Business English Dictionary. Glasgow: HarperCollins Publishers.
 Buer, S.-V., Semini, M., Strandhagen, J. O. and Sgarbossa, F., 2021. The complementary effect of
lean manufacturing and digitalisation on operational performance. International Journal of
Production Research, 59(7), pp.1976-1992.
 Caldwell, G., 2020. Lean Enterprise: The Essential Step-by-Step Guide to Building a Lean Business
with Six Sigma, Kanban, and 5S Methodologies. Dover, DE: Alakai Publishing LLC.
 Catană, Ș. and Toma, S.-G., 2021a. Marketing mix in healthcare services. Ovidius University Annals,
Economic Sciences Series, 21(1), pp.485-489.
 Catană, Ș. and Toma, S.-G., 2021b. Marketing mix and corporate social responsibility in automotive
industry–Case study: Mazda Motor Corporation. Annals of' Constantin Brancuși' University of Târgu-
Jiu, Economy Series, 1, pp. 205-209.
 Collin, P. H., 2006. Dictionary of Business. 4th edition. London: A&C Black.
 David, S. M. C. and Found, P., 2016. An implementation model for lean and green. In: A. Chiarini,
P. Found, N. Rich, eds. 2016. Understanding the Lean Enterprise: Strategies, Methodologies, and
Principles for a More Responsive Organization. Cham: Springer. pp.1-30.
 Giles, C. and Smith, C., 2022. IMF warns of ‘multiple challenges’ to global economic recovery.
Financial Times, 25.01.2022. [online] Available at: <https://www.ft.com/content/e43e33b5-d4a4-
462c-ac3a-5901d3beb278> [Accessed 10 June 2022].
 Graban, M., ed. 2016. Practicing Lean: Learning How to Learn How to Get Better…Better.
Colleyville, TX: Constancy Inc.
 Grădinaru, C., Toma, S.-G. and Papuc, R., 2017. Entrepreneurship in the world: The analysis of the
Global Entrepreneurship Index in the period 2015-2017. Ovidius University Annals: Economic
Sciences Series, XVII(2), pp.14-18.

765
 “Ovidius” University Annals, Economic Sciences Series
Volume XXII, Issue 1 /2022

 Hague, P., 2022. Market Research in Practice: An Introduction to Gaining Greater Market Insight.
4th edition. London: Kogan Page.
 Hayes, A., 2021. Lean Enterprise. Investopedia, 02.07.2021. [online] Available at:
<https://www.investopedia.com/terms/l/lean-enterprise.asp> [Accessed 10 June 2022].
 Humble, J., Molesky, J. and O’Reilly, B., 2015. Lean Enterprise. Sebastopol, CA: O’Reilly Media.
 Jackson, T. L. and Jones, K. R., 1996. Implementing a Lean Management System. Portland, OR:
Productivity Press.
 Jones, C., Medlen, N., Merlo, C., Robertson, M. and Shepherdson, M., 1999. The lean enterprise. BT
Technology Journal, 17, pp.15-22.
 Johnson, C., ed. 2014. The Lean Management Enterprise. McKinsey & Company, January 2014.
[online] Available at:
<https://www.mckinsey.com/~/media/mckinsey/industries/consumer%20packaged%20goods/our%2
0insights/the%20consumer%20sector%20in%202030%20trends%20and%20questions%20to%20co
nsider/2014_lean_management_enterprise_compendium.pdf> [Accessed 11 June 2022].
 Karlsson, C. and Åhlström, P., 1996. Assessing changes towards lean production. International
Journal of Operations &
Production Management, 16(2), pp.24 – 41.
 MacInnes, R. L., 2002. The Lean Enterprise Memory Jogger: Create Value and Eliminate Waste
Throughout Your Company. Salem, NH: GOAL/QPC.
 Marinescu, P. and Toma, S.-G., 2008. Implementing lean management in the Romanian industry.
In: T. Koch, ed. 2008. Lean Business Systems and Beyond. New York: Springer. pp.269-276.
 Marinescu, P. and Toma, S.-G., 2013. Training programs- Training and development alternatives for
students. Procedia Economics and Finance, 6, pp.306-312.
 Marinescu, P., Toma, S.-G., Miulescu, G.-F. and Grădinaru, C., 2017. Entrepreneurship: from
education to innovation. Manager, 26, pp.146-156.
 Paez, O., Dewees, J., Genaidy, A., Tuncel, S., Karwowski, W. and Zurada, J., 2004. The lean
manufacturing enterprise: An emerging sociotechnological system integration. Human Factors and
Ergonomics in Manufacturing, 14(3), pp.285–306.
 Ruffa, S. A., 2008. Going Lean: How the Best Companies Apply Lean Manufacturing Principles to
Shatter Uncertainty, Drive Innovation, and Maximize Profits. New York, NY: AMACOM.
 Sayer, N. J. and Williams, B., 2007. Lean for Dummies. Hoboken, NJ: Wiley Publishing.
 Săseanu, A.-S., Toma, S.-G. and Marinescu, P., 2014. Feminine leadership and organisational culture.
Manager, 19(1), pp.144-150.
 Shimokawa, K. and Fujimoto, T, 2009. The Birth of Lean: Conversations with Taiichi Ohno, Eiji
Toyoda, and Other Figures who Shaped Toyota Management. Cambridge, MA: The Lean Enterprise
Institute.
 The Britannica Dictionary, 2022. Lean. [online] Available at:
<https://www.britannica.com/dictionary/lean> [Accessed 11 June 2022].
 The Chartered Management Institute, 2004. Dictionary of Business & Management. London:
Bloomsbury Publishing.
 Tohănean, D., Toma, S.-G. and Dumitru, I., 2018. Organizational performance and digitalization in
Industry 4.0. Journal of Emerging Trends in Marketing and Management, 1(1), pp.282-293.
 Toma, S.-G., 2008. What is Six Sigma? Manager, 8, pp.152–155.
 Toma, S.-G and Naruo, S., 2009. Quality assurance in the Japanese universities. Amfiteatru Economic,
11(26), pp.574-584.
 Toma, S.-G., Marinescu, P. and Hudea, O.-S., 2010. From the tableau de bord to the balanced
scorecard. Revista Economică, 4(51), 2010, pp.280-285.
 Toma, S.-G., Stanciu, C. and Irimia, E., 2011. Landmarks in the evolution of social responsibility of
organizations in the twentieth century. Proceedings of the 5th International Scientific Session
Challenges of the Knowledge Society. Bucharest: PRO Universitaria Publishing House. pp.1352-
1360.
 Toma, S.-G., 2012. A pilot study on the relationships among organizational learning,
change, and sustainability in a responsible Romanian higher education institution.
Amfiteatru Economic, XIV (32), pp.420-435.
 Toma, S.-G., 2013. Economia Întreprinderii. București: Editura Universității din București.
 Toma, S.-G. and Grădinaru, C., 2015. From military strategy to business strategy. Strategii
Manageriale, 31(1), pp.227-233.
 Toma, S.-G., Marinescu, P. and Grădinaru, C., 2016. Strategic planning and strategic thinking. Revista
Economică, 68(5), pp.168-175.

766
 “Ovidius” University Annals, Economic Sciences Series
Volume XXII, Issue 1 /2022

 Toma, S-G., Peptenatu, D., Andronache, I., Ahammer, H., Pintilii, R-D., Draghici, C-C. and Simion,
A. G.,
2018a. The creative economy in Romania, a key factor of economic integration in the
European Union. In: Dima, A., ed. 2018. Doing Business in Europe. 329–350. Cham: Springer.
pp.329-350.h
 Toma, S.-G and Tohănean, D., 2018b. Internet of Things, digitalization and the future of business
models. Strategii Manageriale, IV(42), pp.130-137.
 Toma, S.-G. and Tohănean, D., 2019. Green business models: The case of a German automaker.
Quality-Access to Success, 20(S2), pp.635-640.
 Tsigkas, A. C., 2013. The Lean Enterprise: From the Mass Economy to the Economy of One. Berlin:
Springer.
 Wiegand B., 2016. Lean and Industry 4.0 – Opposites or Complements? [online] Available at:
<https://michelbaudin.com/2015/10/11/lean-and-industry-4-0-opposites-or-complements-wiegands-
watch/> [Accessed 5 June 2022].
 Womack, J. P. and Jones, D. T., 1994. From lean production to lean enterprise. Harvard Business
Review, March–April 1994, pp.93-103. [online] Available at: <https://hbr.org/1994/03/from-lean-
production-to-the-lean-enterprise> [Accessed 7 June 2022].
 Womack, J. P. and Jones, D. T., 2003. Lean Thinking: Banish Waste and Create Wealth in Your
Corporation. New York, NY: Free Press.
 World Bank, 2022. Global growth to slow through 2023, Adding to risk of ‘Hard Landing’ in
developing economies. Press Release, 11.01.2022. [online] Available at:
<https://www.worldbank.org/en/news/press-release/2022/01/11/global-recovery-economics-debt-
commodity-inequality> [Accessed 3 June 2022].
 World Economic Forum, 2022. Prospects of the global economy after Covid-19. 10.03.2022. [online]
Available at: <https://www.weforum.org/agenda/2022/03/prospects-of-the-global-economy-after-
covid-19/> [Accessed 2 June 2022].

767