Supply Chain Digest recently ran a great piece by Jim Womack, the founder of the Lean Enterprise Institute who points out that while this may be the worst recession some of us can remember, recessions are part of the natural cycle (and severe recessions do happen every two to three decades and they are, in fact, an incredible opportunity for success). Those who rise to the challenge and get lean and innovative will emerge from the recession victorious, while those who don’t … well, we won’t have to worry about them much longer, will we?

In his article on how lean thinking was forged in similar economic times, Jim notes that as the Japanese economy entered a steep recession back in 1950, the Toyota Motor Company ran out of cash, which was tied up in inventory for products that customers no longer wanted. Under the control of bankers, the company was split into separate firms, dividing the sales and marketing functions from the product development and production functions. This created a crisis which could have put the company out of business. Instead, the leaders of the production function developed what was to become the Toyota Production System.

Starting with a few simple ideas — minimize lead time (to free up cash), remove waste (to reduce costs and enhance quality), and take action now — the founders of Lean (Taiichi Ohno, Kikuo Suzumura, and Eiji Toyoda) used their scientific discipline to understand the current state, document improvements they believed would improve matters, implement those improvements, measure the results, and use these findings to continually refine the process. Over time, these improvements were refined and assembled into the Toyota Production System, mainly to explain it to suppliers. But these improvements, which led to the great company Toyota is today, were made when the company was struggling for its very survival … proving that true winners — who won’t be too busy coming up with excuses as to why they can’t develop, deliver, and market — are born during periods of chaotic markets and falling demand.