Opposites

Managers often confuse "Lean" and "Agile". In athletics they are often similar. In business, they are opposites.

A lean business does one thing really, really well, with steady volume. There is no extra staff, facility or capital. A hot dog stand is lean: One guy and a cart. He can make money as fast as he can complete an order and exchange cash. If 12 people show up at once, Hot Dog Man can still only complete one transaction at a time, so 11 customers wait.

An agile business is the opposite- it actually has extra capacity this is sometimes unused. Restaurants don't use all of their capacity in the afternoons, but that's when staff are prepping materials for the evening rush, washing dishes, wrapping silverware,etc. When customers start arriving the staff moves from prep to driving revenue. When customer traffic slows later in the evening its back to the "non-revenue" activities that have to be done to later drive revenue.

But just as Hot Dog Man can't serve 12 people at once, the restaurant can't approach the degree of lean Hot Dog Man enjoys. Each has accepted it's trade off: flexibility or simplicity. High fixed and variable expenses vs. low.

You can't do both. The expectations of your customer will define which way you need to set up your plant.

Or rather, the kind of customer you wish to attract will determine if you need to be lean or agile.

Peter

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