Necessary Costs

Too often organizations are broken up into functional silos that are disjointed, rivalistic, and unable to effectively communicate with eachother. This is the opposite of Lean. Instead, businesses should be organized into Value Streams that are focused on their customers. Managing by Value Streams allows for the quickest flow of information and materials possible with each Value Stream establishing its own performance metrics based on that Value Stream's customer's definition of value.

Non-Value Adding structural costs are largely the result of decisions that were made in the past with regard to how the business is to function. When looking to eliminate waste it is necessary to revisit and re-evaluate those decisions and look for opportunities to reduce those necessary costs as much as possible.

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