2.02.2007

Lean and The Long Tail

            A while back I had the pleasure of attending a talk by Chris Anderson, editor of Wired magazine and author of the best-selling book The Long Tail. He also writes a blog on the topic of the book.


            Anderson’s thesis stems from the fact that Internet technology makes it possible for online sellers to offer a far broader range of products than brick-and-mortar stores. What this means (besides consumers having more choices) is that the future of business is selling many more products, but each in a smaller quantity. And it means that “blockbuster,” best-selling products (which will still exist) won’t reach the level of sales of past blockbusters. Those past records were set, Anderson argues, at least partly because consumers were buying blockbusters because they didn’t know about many other choices – which has now changed.


            Anderson offers plenty of compelling evidence in support of his arguments, but the evidence is hardly necessary. We now understand the Internet to a degree that makes the sheer common sense of the trend he describes is clearly evident. (And that’s not meant as a criticism of the book. Sometimes the value of a book lies in articulating realities, in helping us look beyond the forest to see the trees.)


            So what does this have to do with lean? Quite a bit, actually.


            First, as manufacturers and producers increasingly find themselves required to make a higher mix of low-volume products, they must adapt their methods so the per-unit cost of production is no greater for a low-volume product than for one made in high volumes. (That was the theme of an earlier posting on Lean Strategies in a Low-Volume World.) This requires the kind of waste elimination and continuous improvement that a lean strategy provides.


            (It may also require a shift in thinking about lean, which some people mistakenly think only works in high-volume environments.)


            Second, the Internet buyers of low-volume products are typically dispersed across broad geographic areas, or even across the globe, a distribution reality that requires a super-efficient supply chain. Here, too, you need commitment to a lean strategy to achieve that efficiency.


            Third, one of the great benefits of lean is that frees up production capacity. But that doesn’t necessarily mean capacity to produce greater volume of your existing products. It can also mean capacity to produce new products – which is what you need in the world of the Long Tail.


            I could go on, but I think you see my point.


The subtitle of Anderson’s book is “Why the Future of Business is Selling Less of More.” To make that future a reality, you need to be lean.


 

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