How Useful is the Lean Startup that has Evolved after SMED?

In the early times, businesses found it time-consuming and expensive to change from one model of their product to another, in terms of equipment production changes. In 1950, Shigeo Shingo, a Japanese industrial engineer checked with Japanese automakers, including the Toyota and helped them in making a lot of small process adjustments over a few months, which reduced the change-over time from a few days to only a few minutes! This process that lowered inventory levels with lower costs and higher quality in the least time possible is what was known as SMED (Single-Minute Exchange of Dies).

This practice of SMED quickly spread throughout Japan and made Japanese companies more competitive and profitable. This practice led to increase of smoother startups in Japan with standardized change-over processes and improved consistency and quality. Today, Lean Startup provides the same manufacturing and processing levels to test new ideas and utilize them on small scale before investing in large scale production.

Before this lean transformation came into existence, product development was based on assumptions about what customers wanted. This product development would take lot of time and money and by the time the product was launched in the market, the customers would have a different mindset.

Earlier, new startups would often try to replicate large companies that they aspired to become one day, in terms of product development. But, this would only lead to lots of expenses, which smaller startups would not be able to afford. Lean Startup educated businesses that a startup was not a smaller version of a large company. It was a temporary organization that worked upon different ideas of product and business development, before expanding into a larger company. Larger companies considered only the cost of doing business, neglecting the efforts and time involved in the amount of waste that has to be borne in traditional product development methods. And on the other hand, smaller startups are coming up with new ideas of product development in order to reduce wasted efforts, time and money involved.

In the present market, work has become digitized and the software industry is growing even more, which is resulting in more and more smaller startups coming up. This makes larger companies see their market share being nibbled by smaller competitors. Businesses have now started becoming aware of the huge amount of waste and risks involved in the product development processes that were used earlier, due to which they have started shifting to lean practices. They have started experimenting with smaller and faster experimental methods for product development to get early feedback from customers before investing too much time and resources into expanding their productions.

Thus, this new method of Lean Startup has been successful at reducing costs and bringing the businesses closer to their customers. But, this is not as easy as it seems. It requires lots of planning, lots of alternative plans to be kept in hand, efforts involved, support from every member of the team, training and organization for updating changes from time-to-time and discipline to follow the planned structure or product development.