There is a widespread belief that the primary benefit of a lean business system is lower costs. And there's no doubt that lean methodologies can help a company get costs under control. The perception that lean means cost cutting is often reinforced because many companies turn to lean when they're in financial trouble and need to reduce costs in order to survive.
But the most significant economic benefit of lean is that it acts as a powerful enabler of profitable growth. The ultimate objective of a lean business system is the elimination of waste from all business activities and processes. Eliminating waste creates new available production capacity by reducing the time spent on non-productive, non-value-adding activites. More importantly, this "new" capacity is essentially free because you're already paying for the resources that provide it.
Think of what you could do if you were given a significant about of new production capacity that essentially costs you nothing. Work that you've always avoided because it was unprofitable now may look very profitable. And customers that you were never able to do business with because of cost issues suddenly come back on the radar screen. In short, having production capacity that's essentially free greatly expands your opportunities for generating new revenues.
So, yes, lean can help you control costs. But lean is much more about enabling profitable growth than about cutting costs.
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